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Deals Caught Between Rock(efeller) and Hard Place

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Broadcasters are facing a double whammy in Washington when it comes to increasing their station ownership profiles. That prospect could make it tough for FCC chairman Tom Wheeler to move on modifying ownership rules, or to decide on “supergroup” deals currently in the pipeline.

Before exiting her post as acting FCC chairwoman, Mignon Clyburn circulated an item triggering a study of the impact of FCC media ownership rules on Hispanic ownership.

Followers of the peripatetic course of the FCC’s inaction on its four-years-overdue quadrennial media ownership review will remember that a minority ownership study became a key factor. It helped delay then-FCC chair Julius Genachowski’s proposal to loosen the newspaper/broadcast crossownership rules. The new study could make it tougher for the FCC to take any action before taking that information into account.

Wheeler has signaled that the quadrennial needs to be completed given that the next review is due next year. However, that could mean rolling both into one and finishing sometime in 2014, say observers both inside and outside the commission. But there is new pressure to hold off on any decision until yet more studying is done.

New Pressure Applied

The newest push comes from Sen. Jay Rockefeller (D-W.Va.), former boss of current FCC Democrat Jessica Rosenworcel and chair of the powerful Senate Commerce Committee. Rockefeller sent a letter to Wheeler two weeks ago saying he thinks the commission should delay decisions on recent broadcast mergers—including Sinclair purchases, Gannett- Belo and others—until the GAO has completed a report on the use of shared services agreements.

Rockefeller also asked the FCC to look at the use of shared services agreements (SSAs) by those potential merged broadcast partners as it considers deals, making sure to collect necessary info to gauge their impact on competition and consumers.

Cable operators, led by the American Cable Association, have been asking the FCC to factor in the use of SSAs to get around local ownership limits and coordinate retransmission consent negotiations. Rockefeller in May asked GAO to look into SSAs, particularly in situations where full ownership would violate media limits.

Rockefeller said he was not taking a position on any deals in the pipeline. He added it “may be wise for the FCC to wait to approve any pending transaction that involves SSAs or related arrangements until GAO has completed its study and issued its report.” Rockefeller did not say when that might be.

In an ACA follow-up letter to Wheeler, the association said it was all for waiting for the GAO report and suggested that the best way for the FCC to collect more data would be to raise the merger reviews to the full commission level rather than let the FCC’s Media Bureau handle them.