The National Association of Broadcasters says the FCC Media Bureau's guidance on how it would review TV station sharing arrangements is illegal ("arbitrary and capricious") and has asked the commission to rescind it within the week (by May 8).
Why May 8? "[B]because we did not want the FCC to simply not respond and think this was an open-ended request," said NAB spokesman Dennis Wharton.
And if the FCC doesn't, would the association take the FCC to court? "No final decision has been made on a possible court challenge," he said. "We are still discussing that option with our Board."
According to a copy of a letter from NAB to the commission dated May 1, NAB says the public notice, Processing of Broadcast Television Applications Proposing Sharing Arrangements and Contingent Interests, is arbitrary and capricious.
NAB points out that in its March 31 decision to make TV station joint sales agreements (JSAs) over 15% attributable as ownership interest included no decision on any other kind of sharing agreement and, in fact, expressly said that vote “does not disturb other sharing agreements, such as those that allow stations to share facilities, provide local news production assistance, or share administrative and technical personnel, and any operational efficiencies and related potential public interest benefits created by these agreements will continue.”
Given that statement, said NAB, "The Public Notice’s pronouncement that the Media Bureau immediately will regulate SSAs with contingent interests by applying different and greater scrutiny cannot be reconciled with the approach adopted in the March 31 Decision."
In addition, said NAB, the bureau's actions are "fatally premature" because the FCC is, in effect, regulating on "speculation and conjecture" since the FCC has not adopted the standards the public notice suggests the FCC will use.
"In sum, the Public Notice violates the Administrative Procedure Act. It cannot be squared with the March 31 decision, reflects unreasoned action, and sends conflicting signals to broadcasters as to the rules of the game for sharing arrangements," says NAB. It wants the FCC to withdraw the notice and stop applying the stricter standards to sharing arrangements.
In a March 12 public notice, the Media Bureau essentially provided notice that henceforth, in reviewing license transfers or assignments with associated financial agreements, it would scrutinize all sharing arrangements based on how they operate and the incentives they create.
The Media Bureau, which is taking the action under its delegated authority, so the commissioners don't get to vote on it, said it will look at deals on a case-by-case basis, but suggested unless applicants prove that they are arms-length deals, it could be a high hill. The bureau said it was not creating new underlying rules of policies, "but we owe it to the interested public to share our concern that such a combination of operational and financial relationships raises issues of consistency with our rules and policies, which will have to be considered carefully in our public interest review," said Bureau chief Bill Lake in a statement.
