FCC Revokes JSA ‘Midnight Regulation’

FCC Chairman Ajit Pai on Friday afternoon announced that the commission was revoking a number of orders and reports issued in previous Chairman Tom Wheeler’s term, what Pai called “midnight regulations.”

Pai said: “In the waning days of the last administration, the Federal Communications Commission’s bureaus and offices released a series of controversial orders and reports. In some cases, commissioners were given no advance notice whatsoever of these midnight regulations. In other cases, they were issued over the objection of two of the four commissioners

“And in all cases, their release ran contrary to the wishes expressed by the leadership of our congressional oversight committees. These last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward. Accordingly, they are being revoked.”   

Among the orders rescinded was one requiring tougher scrutiny of any joint sales and shared services agreements proposed by broadcasters. Wells Fargo analyst Marci Ryvicker commented that this item immediately rescinds “any banned transactions involving JSAs. In other words, the ‘intense scrutiny’ that the FCC has employed on broadcast station transactions involving both NEW and OLD JSAs is gone. This is a HUGE step, in our view, towards allowing more station M&A.”

NAB spokesman Dennis Wharton said: “NAB is pleased that Chairman Pai is eliminating unlawful and arbitrary processing guidelines governing broadcast joint sales and shared service agreements. “These regulations unfairly punished smaller broadcasters attempting to conserve resources to reinvest in localism and high quality programming. Broadcasters vying to compete with increasingly consolidated pay TV giants should not be stymied by overly-burdensome regulation.”

Not pleased with the actions, which she described as “take out the trash day,” was Democratic Commissioner Mignon Clyburn. “It is a basic principle of administrative procedure that actions must be accompanied by reasons for that action, else that action is unlawful. Yet that is exactly what multiple bureaus have done today. The bureaus rescind prior bureau actions by simply citing a rule that allows them to do so, when in prior invocations of that rule there have been oft-lengthy explanations for the reasoning behind the actions. It is disappointing to see this chairman engage in the same actions for which he criticized the prior chairman.”

Pai has long maintained that the FCC under Chairman Thomas Wheeler had overstepped its bounds, suggesting that he would steer the agency in a direction more favorable to big phone and cable companies. In a December speech, he said the FCC needed to take a “weed whacker” to what he considered unnecessary regulations that hold back investment and innovation. Rules in jeopardy include “net neutrality,” which bars internet service providers from favoring some websites and apps over others.