Broadcasters have been making a last ditch pitch for the value of joint sales agreements as the FCC prepares to tee up an item making some of those attributable as ownership interest.
According to sources, the FCC is planning at its March meeting to propose that any station for which more than 15% of their ad sales are handled by another station will be considered co-owned with that station for the purposes of local and national ownership caps.
Such a rule is already in place for radio dating back a couple of decades.
National Association of Broadcasters executive VP and general counsel Jane Mago met with Media Bureau chief Bill Lake to not only make the case for the positive, but to argue the public interest harms that would result by making those agreements attributable. She also suggested the change would be illegal.
"Changing this rule without consideration of the larger context of the local television ownership rules, which have not been adapted to current market conditions, is arbitrary and capricious," she told Lake according to an FCC filing. There are rules against agencies adopting rules that are arbitrary and capricious.
Mago suggested that grafting the radio-related rules onto TV was not a good fit.
"[S]ubstantial differences between local TV and radio make it irrational to assume that JSAs should be treated the same for both sectors. TV JSAs are a response to direct competition from other video services and it would be highly disruptive to attribute these arrangements without broader consideration of the entire ownership rule ecosystem."
Mago was talking to the Media Bureau chief, but according to multiple sources, Wheeler is set on his course toward JSA attribution for TV, and likely has three votes.
Two of those are not likely to be Republicans. Commissioner Ajit Pai is on the record on the value of such agreements, while Commissioner Michael O'Rielly took to his blog to talk about the issue.
"JSAs and SSAs have never been officially codified in FCC rules, but over the years, the Commission has not only allowed these contractual relationships to go forward, it has sanctioned them in various transactions," he wrote.
"Based on all available data, I think it is fair to say that the media marketplace is far more competitive than it was decades ago when the FCC’s media ownership rules were established, or in 2002 (completed in 2003) or 2006 when they were last reviewed. That is why I would be perplexed and deeply concerned by a push to abruptly switch gears and tighten the rules as part of a media ownership proceeding. Such a move would conflict with the spirit, intent and wording of the statute. It would also likely harm the public interest if fewer stations could offer local news, especially in smaller communities."
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.