FCC's Clyburn Urges Balanced Approach to Media Ownership Rules

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By Bryce Baschuk  

March 18 --The Federal Communications Commission should seek a “balanced” approach to its plans to tighten broadcast TV ownership rules in order to help small broadcast owners, FCC Commissioner Mignon Clyburn told reporters March 18.

The FCC is planning to vote March 31 on an order that seeks to adjust the agency's media attribution rules to take into account the use of some joint sales agreements (JSAs) and shared services agreements (SSAs) among broadcast TV stations. JSAs and SSAs, which combine advertising and resources between TV stations that compete in the same market, are sometimes used to circumvent the commission's media ownership rules.

Some critics of the FCC's forthcoming media ownership rulemaking argue that restricting the use of JSAs and SSAs could harm minority media ownership and other public interest goals.

“There are abuses that need to be addressed, but there are also opportunities we want to nurture and support,” Clyburn said at an event hosted by the Free State Foundation. “What you'll see on the March 31st agenda is a pathway towards a balanced process that will take into account both goals.”

March 31 Vote

Clyburn, a Democrat who served as the first African American FCC chairwoman in the interim period before FCC Chairman Tom Wheeler was appointed and confirmed. She plays a critical role in Wheeler's effort to adjust media ownership rules. The two Republicans on the five person commission have voiced their opposition to the proposal and a vote by Clyburn against the rulemaking would sink the order. Clyburn declined to say how she planned to vote on the order.

Clyburn cited Section 257 of the Communications Act of 1934 as part of the agency's responsibility to reduce barriers to entry for entrepreneurs and small businesses. She added that addressing Section 257 and enforcing the FCC's statute regarding media ownership “are not mutually exclusive goals.”

The FCC currently prohibits broadcast companies from owning two or more full power television stations in the same local market. If the rule change is approved an owner of one broadcast station in a market that sells 15 percent or more of the advertising time for another competing station in the same market will be considered to have an ownership interest in that station. The FCC will provide companies who exceed current ownership restrictions two years to unwind their relationships or they may seek a waiver from the new rules.

If approved, the change could deal a significant blow to broadcast companies like Sinclair Broadcast Group Inc. by forcing them to modify or terminate existing arrangements. New FCC attribution rules could impact “some or all” of Sinclair's advertising revenue from such arrangements, the company said in a recent filing with the Securities and Exchange Commission.

Market Reactions

Clyburn downplayed recent market reactions to the FCC's proposal to incorporate JSAs and SSAs into the commission's media ownership rules. “I am confident that when the market comes to terms with that we will have a recalibration that reflects the great value of those properties,” she said.

Stocks of broadcast station owners--like the Nextstar Broadcasting Group Inc., Sinclair and Gray Television Inc.--dipped March 17 following a gloomy analyst report on the FCC's regulatory impact on the broadcast industry. Marci Ryvicker, an analyst for Wells Fargo Securities LLC, downgraded broadcast stocks because “we just see the regulatory environment worsening in the near term,” the March 17 report said.

To contact the reporter on this story: Bryce Baschuk in Washington at bbaschuk@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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