Standard General-Tegna at the FCC: Process or Prejudice? (Guest Blog)

Roslyn Layton
Roslyn Layton

Standard General’s acquisition of some 60 broadcast stations from Tegna would create the nation’s largest minority-owned and woman-led broadcast company in U.S. history and enshrine historic jobs commitments and a neutrality agreement for all Tegna unions. In addition to an $8.6 billion investment in local media, the transaction supports Federal Communications Commission (FCC) and Biden administration diversity goals. The transaction passed review unchallenged by the Department of Justice. However, it has been sidelined by the chair of the FCC, which controls the transfer of broadcast licenses. The deal has languished for more than 400 days, a record for the FCC which normally processes such rule-compliant TV license transfers in 182 days.

In March the FCC’s Media Bureau, with the support of chair Jessica Rosenworcel, referred the transaction to the Media Bureau’s administrative law judge on the issues of station staffing levels and retransmission fees for pay TV providers. This was unusual and something which has never happened for such a simple transaction. Moreover, the parties have already resolved these issues with agreements to maintain current station news staffing levels for at least three years following closing and the waiving of all contract rights that might have increased retransmission fees for pay TV providers from the transaction. Furthermore, these two issues — station staffing levels and retransmission fees for pay TV providers — are statutorily outside the FCC’s authority, a fact which the full commission itself has noted in every prior TV transaction in which these arguments have been raised.

One interpretation of the FCC chair’s action is that Democratic Party leaders want donor Byron Allen to win the deal (his first attempt to acquire Tegna fell apart), not Soo Kim, a Korean-American entrepreneur. So sending the deal to regulatory purgatory while the deadline to close the transaction expires (May 22) is a way to kill the deal without having to take a commission vote. GOP commissioners Carr and Simington have called for a vote in the meantime.

Outraged at the lack of fairness and progress on diversity goals, Sen. Bob Menendez (D-N.J.), co-sponsor of the The Broadcast Varied Ownership Incentives for Community Expanded Services Act (Broadcast VOICES Act), threatened to hold up the reconfirmation of Democratic FCC member Geoffrey Starks if Rosenworcel doesn’t call for the vote. This would lead the FCC with two Republicans and one Democrat, chair Rosenworcel. Key civil rights and social justice groups Asian Americans Advancing Justice, National Action Network, National Urban League and UnidosUS have urged Rosenworcel and the FCC to take the vote. They do not ask for one outcome versus another, just that the process is served.

The FCC was chartered to protect the public interest in the transfer of telecommunications licenses. Its commissioners now have more information in front of them than any TV transfer transaction ever. The full commission has both the power and the obligation to execute FCC process for license transfers. A vote on the Standard General-Tegna deal would restore the trust which has been muddied by the ALJ mix-up. Sometimes democracy is just about taking a vote, rather than passing the buck.

Editor's note: The author has no relationship with the parties nor financial interest in the transaction.

Roslyn Layton

Roslyn Layton, Ph.D. is a regulatory scholar at the Center for Communication, Media and Information Technologies at Aalborg University.