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LIN: Share and Share Alike

WASHINGTON — LIN Media, the owner of threedozen broadcast-TV stations, has signaled that it might be willing to give up some spectrum in the upcoming incentive auction and share TV channels.

But first it needs to know whether or not the Federal Communications Commission will loosen duopoly rules and allow LIN to own stations it is now running through sharing arrangements.

Cable operators, meanwhile, are trying to push the FCC in the opposite direction.

At a meeting with members of the Incentive Auction task force earlier this month, LIN VP and chief technology officer Brett Jenkins suggested the company was at least considering the option of giving up some spectrum.

He told the FCC that in order to “analyze auction scenarios” it needed to know how the auction would be designed; the timing of a next-generation transmission standard; whether or not there would be flexible waivers for spectrum use by broadcasters, potentially for data as well as traditional broadcasting; and how stations would be priced.

PRICING INFO SOUGHT

The FCC “scores” stations, valuing them for determining bid prices. The scoring question has been much on the minds of the Expanding Opportunities for Broadcasters Coalition, a group of broadcasters interested in putting spectrum in the auction at the right price.

According to FCC rules, bidders do not have to identify themselves, so the coalition’s membership remains a carefully guarded secret. But a source said LIN was not among their ranks.

Even as Jenkins suggested LIN might be interested in channel-sharing — essentially giving up a portion of a station’s spectrum to the auction — LIN also indicated the FCC would need to allow some other types of sharing to seal such a potential deal.

“We did note that one way the FCC could incentivize broadcasters regarding the auction would to be to offer ownership relief,” LIN Media senior counsel Joshua Pila confirmed, “such as converting sharing arrangements into ownership.”

LIN had not made any commitment on that front, Pila said. But according to agency documents, LIN president Vince Sadusky, in a separate meeting with FCC commissioner Jessica Rosenworcel, made a strong pitch for why such sharing arrangements should be allowed.

Cable operators, led by the American Television Alliance, have been pushing the FCC in the other direction, trying to get those sharing agreements disallowed as de facto violations of federal local-ownership rules.

Sadusky came armed with a slideshow about how sharing arrangements were in the public interest and how they provided the scale necessary to provide localism and diversity, not to mention competing with less-regulated distributors like cable and satellite operators.

The American Television Alliance, a coalition of cable and satellite operators pushing the FCC to tighten its rule on sharing agreements, was having none of it.

“LIN argues SSAs are good for consumers. It’s one thing if they share news trucks, but they shouldn’t be allowed to collude in a market,” ATVA spokesman Brian Frederick said. “LIN owns two of the four network affiliates in some markets. How is that a good thing for consumers? Further, TWC and Dish, for example, can’t jointly negotiate in a market.”

Arguably, the FCC has been leaning more in the direction of cable’s position on joint agreements than toward opening the floodgates.

Under prior chairman Julius Genachowski, the agency proposed further limiting some sharing arrangements by making them attributable as ownership interests.

ST. LOUIS PRECEDENT

And under new chairman Tom Wheeler, the FCC disallowed a JSA in St. Louis as a condition for approving Gannett’s acquisition of Belo Media.

In the Gannett-Belo situation, the commission decided the St. Louis JSA was not in the public interest, and signaled it would look at sharing arrangements involved in transactions on a case-by-case basis going forward.

LIN has a total of seven sharing arrangements: two grandfathered local-marketing agreements in Providence, R.I., and Austin, Texas; four shared-service agreements/joint-sales agreements in Dayton, Ohio; Topeka, Kan.; Savannah, Ga., and Youngstown, Ohio; and an SSA in Albuquerque, N.M.

All were necessitated by FCC duopoly rules that limit TV-station ownership and would prevent LIN from owning those stations outright. LIN argues those rules are outdated and in need of reform.

LIN’s Sadusky also said broadcasters needed some help, given that multichannel video distributors have no local ownership limits and can jointly negotiate for ad sales via interconnects.

TAKEAWAY

Broadcasters may try to leverage spectrum auction to solidify local market concentration.