FCC Decides No Change Warranted for 1996-era Ownership Rules

The day after Christmas – and literally just before a court deadline —  the FCC on a 3-2 vote issued a Report and Order resolving its 2018 Quadrennial Review of the FCC’s media ownership rules.  The FCC was under a court order to resolve this proceeding by December 27.  IBA’s Washington counsel, David Oxenford, summarizes the decision:

In the Report and Order, the FCC concludes that it should retain its existing media ownership rules, with some minor changes.  The FCC principally addressed three areas.

  1. It retained the general prohibition on common ownership of two full-power TV stations ranked in the top four of audience share in a market.  It also retained the policy of allowing such combinations on a case-by-case basis, upon a showing that the combination would be in the public interest. It declined to adopt any specific criteria to determine when case-by-case exceptions would be granted.  The Commission made some minor changes to the manner in which it determines which stations are considered to be in the top 4 in any market.

The Report and Order did change a note to the ownership rules by determining that a station group may not own one full-power TV station that is affiliated with a top-four network in a market and acquire the programming of another top-four station in that market and place that programming on an LPTV or Class A TV station or on a multicast stream that is affiliated with the acquiring station.  FCC policy currently prohibits such programming acquisitions where the programming is moved to a full-power station controlled by the acquiring party – this decision extends he prohibition to transactions where the programming is moved to a commonly controlled LPTV, Class A station, or a multicast stream of the acquiring station.  The Report and Order grandfathers existing situations that would violate the new rule.  Note that this restriction does not prevent a network from making such a change on its own, or seemingly to situations in “short markets” where there are fewer stations than networks.  It is only triggered by an agreement or series of agreements with another in-market competitor that  results in the transfer of the top 4 programming of one station ownership group to another.

  1. The Report and Order retains the current radio ownership rules, determining that they are still needed because of the FCC’s conclusion that over-the-air radio is a market that is separate from that of other audio and advertising media.  Because it treats radio as an independent market, the FCC rejected calls from the NAB and other broadcasters to relax the local radio ownership rules, not wanting to allow further consolidation in this market for over-the-air radio.  The Report and Order did make permanent the interim contour-overlap methodology that has long been used to determine ownership limits in areas outside the boundaries of defined Nielsen Audio Metro markets and in Puerto Rico.
  2. The Report and Order rejected any change in the Dual Network rule that prevents common ownership or control of two of the Top 4 TV networks (ABC, CBS, NBC, and Fox).

Chairwoman Rosenworcel issued a separate statement supporting the decision.  Republican Commissioners Carr and Simington issued dissenting statements arguing, among other things, that the majority overlooked the very real competition for audience and advertisers from digital media that did not exist in 1996 when these rules were adopted.



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