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How come JSAs don't have a grandfather?

Monterey Licenses is competing in a market where the switch from contour- to Arbitron-based market definitions has lowered the ceiling on what constitutes a legally-sized station cluster. However, the cluster of the market's dominant owner has been grandfathered into permanent existence, while Monterey faces a divestiture deadline...of sorts.

Why is there a difference in treatment? According to David Oxenford of Shaw Pittman LLP, his client, Monterey, has entered into a JSA in the Fargo-Moorhead ND-MN market to better compete with Clear Channel. Since Clear Channel owns its stations, they are grandfathered. At the same time, Monterey has been given two years to discontinue its JSA. A petition to reconsider the JSA death sentence has been filed.

In a brief filed with the Third Circuit Court, the argument was made that, "To compete with the dominant player on a more equal footing in the local advertising market, Monterey has entered into a JSA with a non-commonly owned station in that market. Yet were the stay lifted, Monterey would have to divest itself of the JSA within two years, while the dominant player's ownership interests would be grandfathered for as long as it owned its stations in the market."

Another situation, involving another Oxenford client, is that of Mid-West Family, which competes in the far-flung market of Traverse City - - a market where seemingly over-sized clusters were already in existence prior to Telecom 1996 because of the combination of a large geographical area and a dearth of high-powered signals. The accumulation of numerous modestly-juiced stations was a necessity to cover the market, and was perfectly legal under the contour definition, since many of the co-owned signals did not overlap. The new Arbitron definition changes that.

Also from the Third Circuit brief: "As many, if not most, of the high-powered broadcast stations in major markets are already owned by major broadcast companies, the only way that new entrants can assemble a cluster of stations that can be competitive with these established dominant owners is by acquiring multiple low-power stations in a market."

TVBR observation:
The overriding argument is that the changes which seemed sensible to some, and were intended to foster competition, may in many cases have done just the opposite. We say they seemed sensible to some because they never seemed very sensible to us. Two things seemed obvious to us from the get-go: 1) The new rules were going to entrench in perpetuity over-sized clusters immunized from equally-sized competitors by the very same rules they are grandfathered from conforming to; and 2) instead of clearing up market anomalies, the new rules would simply replace one set of anomalies with another. The evidence that we were correct is just starting to trickle in, and we expect it to continue to build. Hey TV, get ready. You're next!

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