FCC Chairman Tom Wheeler told a House panel March 15 that the FCC does not consider JSAs in deal transactions subject to Congress' grandfathering legislation.
During a House Appropriations Committee hearing on on the FCC's budget, Wheeler was asked by Rep. Kevin Yoder (R-Kan.) about a letter Wheeler received from a dozen senators last week. The letter, from Democrats and Republicans alike, accused Wheeler of skirting the new legislation, attached to an appropriations bill late last year, that grandfathered JSAs in existence before the FCC's March 14 decision to make most of them attributable as ownership interest.
Yoder said JSAs had a lot of upsides, including saving millions of dollars, allowing for the only Spanish-language station in his home state of Kansas, and even saving lives.
Yoder said he understood there had been concerns about bad actors, but added that it appeared the FCC had "thrown the baby out with the bathwater." He then noted that it was the Appropriations Committee that added the language grandfathering the agreements in place in March 2014. "That language did not say: 'Unless the parties change hands.'"
Yoder said the FCC's unwinding of JSAs in merger reviews violated not only the spirit but the letter of the law and asked Wheeler to defend the decision.
Wheeler said the FCC's position was that the grandfathering of JSAs only applied to those in existence before March 2014 and that JSAs did not convey when a license was transferred, and in fact, the transfer was instead the end of one license and the beginning of a new one.
"The precedent at the commission has always been that when a license is sold, and a new license is issued to a new buyer, it is a new license. And the terms and conditions that were once ascribed to the previous license and the previous owner, do not transfer." He said the FCC had held that to be true for 30 years, "across a vast array of cases."
He said that when the license goes away, and a new license is issued, the terms and conditions of the "deceased" license don't transfer.
Commissioner Ajit Pai, who voted against the JSA decision, said the legislation, as he saw it, did not leave wiggle room for license transfers. But he also signaled that the legislation was not as buttoned-down as it could have been. "I think Congress certainly needs to be much more specific next time, if necessary, to make sure this doesn't happen again."
Yoder said he agreed with Pai that the intent of Congress was to protect the agreements now being eliminated.
Wheeler countered that he agreed with Gray Broadcasting, which told the FCC it did not think the new law grandfathered its JSA because it had not been a party to the JSA. That was in relation to the sale of some Schurz stations to Gray.
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