The Third Circuit Court of Appeals had some problems with the FCC’s media ownership rules, but the ease with which television duopolies can be formed – and it isn’t easy – was not one of them. The NAB, which favors the possibility of such combos, notes that the DC Circuit found rules making TV duops difficult were arbitrary and capricious, and it is asking the Supreme Court to step in and ideally reach the same conclusion as NAB – that the DC Circuit got it right.
The NAB told RBR-TVBR that it will be arguing that relaxation of the television cap rules in smaller markets is necessary to allow owner/operators to remain competitive with other media platforms.
FCC rules allow television duopolies as long as they do not combine two of the top four stations in a market (which usually means combinations of two Big Four network affiliates are impossible) and that there must be eight independent ownership voices operating in the market after the combination is formed. Since many small markets do not even have eight stations, duopolies are impossible from the get-go.
Ironically, it is in small markets where the need for them is most dire. Small market operators face many of the same fixed costs as do large market broadcasters; however, the small population served limits the amount of income they can hope to earn. With increased competition for MVPDs and internet video program services small market television broadcasters have faced challenges remaining competitive.
NAB will bring its petition to the Supreme Court on Monday 12/5/11.
The DC Circuit long ago said the FCC’s ownership caps were arbitrary and capricious. NAB’s Dennis Wharton noted that the Court will often step in when two lower courts examine the same issue and arrive at different conclusions.
The NAB would also like to see broadcast-print cross-ownership restrictions erased. It has taken no formal position on the local radio caps, which were substantially liberalized by Telecom 1996, but is generally in favor of “continuing relaxation” of those caps as well.
The most recent Third Circuit ruling largely upheld the FCC’s rules, but ordered them to rework the entire program to expand broadcast ownership diversity, which has the perverse side effect of killing off unbuilt construction permits by temporarily disallowing extensions to eligible entities. The Court has also been of two minds about the cross-ownership issue, and ordered it to be revisited because of a possible procedural defect tied to a pro-cross-ownership editorial penned by former FCC Chairman Kevin Martin that appeared in the New York Times.
A new ownership order is said to have been circulated among the sitting commissioners that would largely keep the ball on the same line of scrimmage where Martin left it, keeping most of the ownership rules intact but allowing cross-ownership in the largest markets.
Media watchdog Free Press is making noise about FCC Chairman Julius Genachowski’s neglect of broadcast issues in general, and his apparent willingness to sign on to the Martin plan in particular. It, along with may other activist groups, is also concerned about the lack of attention to diversity issues.
Free Press is also a prominent voice among the watchdogs who have objected to the use of SSAs and other forms of LMAs to form alliances between local television stations that allow them to develop operational efficiencies while following the rules on ultimate ownership. They argue that it reduces the number of journalistic points-of-view in most markets where such arrangements exist.
One of the biggest bones of contention is Honolulu HI, where Raycom and MCG Capital have just received FCC blessings for a three-station arrangement on a cold, hard reading of the rules that was accompanied by an FCC promise to revisit the issue both at licensing renewal time for the stations involved, and as part of its quadrennial review of ownershop regulation.