JSAs

Chairman Pai says the Media Bureau is immediately ending the heightened scrutiny of joint sales and shared services agreements. 

The FCC announced a consent decree with Media General by which Media General agreed to pay a $700,000 “settlement payment” to the U.S. Treasury to settle the investigation of its attempts to enforce the provisions of a joint sales agreement with Schurz Communications.

The FCC’s Democratic majority has voted to preserve TV and radio station ownership restrictions, including a ban on owning both a daily newspaper and a nearby broadcast station, according to people familiar with the vote.

The court’s decision sets in motion activity on a number of fronts. First, the commission, while in the midst of its first-ever broadcast incentive auction, will have to participate in mediation with public interest groups. Second, the commission will have to quickly finalize a Notice of Proposed Rulemaking. Third, it will have to collect comments and reply comments, perhaps complete new ownership studies, analyze the record these actions create, and in the next six months, conclude proceedings that have been underway for more than 10 years.

It also sharply criticizes the commission for failing to complete the last two mandated reviews of its rules, with special attention paid to ownership regulations.

How far can a court go in ordering broadcasters to comply with the terms of a contract?  By trying to get a court to enforce a contract signed with a broadcaster, is the suing party infringing on a licensee’s control over its broadcast station license? These questions are addressed in a letter that the FCC released this week, sent to a federal district court in connection with a dispute between two big TV companies over the termination of a joint sales agreement between TV stations in Georgia.

Media General has incurred the wrath of the FCC for continuing to operate Gray’s WAGT Augusta, Ga., under joint sales and shared services agreements. It’s one the wackier cases I’ve seen in a long time. Media General, it seems to me, is taking a big gamble, given it’s pending $4.6 billion merger with Nexstar, and I’m not sure why.

Twelve lawmakers told the FCC today they are “extremely disturbed” to learn that the FCC is conditioning grants of station transfer on broadcasters’ terminating JSAs before they would otherwise have to. The 12 said they were all supporters of the law grandfathering JSAs until 2025.

Just this week, the trade group succeeded in getting a rider attached to the new budget bill grandfathering current JSAs. And in October, it managed to derail another Tom Wheeler anti-broadcasting measure — eliminating the so-called exclusivity rules that effectively block the importation of distant signals into markets. While there are more challenges ahead in the new year, the NAB leadership and staff should spend the holidays reveling in their accomplishments.

Congress on Friday sent President Barack Obama a bipartisan but deficit draining year-end budget package that includes language allowing broadcast joint sales agreements that were in existence at the time of last year’s FCC rule change to continue. NAB spokesman Dennis Wharton said: “NAB salutes the bipartisan leadership of both parties in correcting a punitive regulatory overreach that would have unfairly harmed millions of local television viewers. With this action, Congress sends an unmistakable message that it continues to value broadcasting as an indispensable source of news, entertainment and lifeline information every day across America.”

As part of a federal funding bill that’s expected to pass soon, joint sales agreements would be grandfathered until at least 2025.

The Wall Street Journal reports that TV broadcasters are on the cusp of turning back one of the toughest pieces of regulation to hit them in decades. The rule, put in place last year by the FCC, cracks down on sharing agreements between local TV stations, arrangements that have helped broadcasters grow without violating federal ownership limits. Journal subscribers can read the full story here.

A bipartisan group of House lawmakers introduced a bill that would exempt TV stations in joint sales agreements from unwinding them under a new FCC rule. Rep. John Shimkus (R-Ill.) introduced the bill, which would grandfather current JSAs allowed by the FCC prior to the new rule passed in March 2014 in a party-line vote.

A Senate bill that would exempt TV stations in current joint sales agreements from being forced to unwind the deals under a new FCC rule, was voted out of the commerce committee 14-10. But the bill, authored by Sen. Roy Blunt (R-Mo.), is not out of the woods yet.

Broadcasters in joint sales agreements may get some relief from an FCC rule passed last year that would force many TV stations to unwind deals that were previously approved by the agency. On Thursday, the Senate Commerce Committee is expected to vote on a bill that would grandfather existing JSAs already in place when the FCC voted along party lines in March 2014 to attribute ownership limitations to any JSA where one station sells more than 15% of the ad time of another station in the same market.

Many in Congress would no doubt like to stick it to FCC chief Tom Wheeler for some of his bold moves. Now they have a chance. Four senators have introduced a bill that would grandfather existing JSAs. Passage would give a nice boost to broadcasters who do nothing but provide a superior news and entertainment TV service to the American public free of charge. And it would show that Congress still has some say in FCC affairs. Addendum: The NAB is going to ask the FCC to give broadcasters more time to move their channels during the incentive auction repack. The FCC should grant it because it just can’t be done in 39 months.

Tthe FCC’s Media Bureau has issued a notice confirming that the deadline for bringing JSA arrangements into compliance with the revised rules adopted by the commission last spring has been extended for six months to Dec. 19, 2016. Mark your calendars.

FCC Chairman Tom Wheeler and Commissioner Mignon Clyburn say the commission’s revised JSA policy is working to protect competition and diversity in local TV markets, resulting in “real and replicable progress of which the broadcast industry should take note.”

Last spring, the FCC decided that certain TV joint sales agreements (JSAs) may create attributable interests for the purposes of determining compliance with the multiple ownership rules. And, thanks to that change, JSAs that do create such interests have to be filed with the commission. The filing requirement is effective as of today, which means that copies of all existing TV JSAs that create attributable interests will have to be filed with the FCC within 30 days, i.e., by Nov. 28.

The Government Accountability Office dinged the FCC in report released Monday for failing to collect enough information to judge TV station joint-operation deals. The commission has “not collected data or completed a review to understand how broadcaster agreements are being used and the potential impacts with respect to its media ownership rules and the corresponding policy goals of competition, localism and diversity,” the GAO says.

Over the past few weeks, we have begun to see how the FCC’s decision in March to curtail the use of joint sales and shared services agreements is impacting the business.Three groups have proposal three different plans to come into compliance with the new rules. Of them, Nexstar’s arrangement with Pluria Marshall is the potential win-win.

When the FCC voted at its March 31, 2014 meeting to deem television joint sales agreements involving more than 15% of a station’s weekly advertising time as an attributable ownership interest, it announced that broadcasters that are parties to existing JSAs would have two years to modify or terminate those JSAs to come into compliance. That date, it’s now known, is June 19, 2016.

Citing possible danger to local broadcasters and their viewers, five Democrats ask FCC’s Wheeler “to adopt a waiver policy that does not penalize JSAs that were structured and executed prior to the issuance of the new rules.” New waivers should be given, they urge, to JSAs “that promote more or better local news, public affairs and emergency information, diverse programming such as foreign language and expanded ownership opportunities for minorities and women in broadcasting.”

Broadcasters’ challenge of the FCC’s order banning JSAs will be heard in the U.S. Court of Appeals in Washington, a court seen as more sympathetic to the broadcasting cause. But supporters of the new rules have asked that the case be transferred to the appeals court in Philadelphia, which has in the past upheld strict broadcast ownership limits.

The National Association of Broadcasters is poised to ask the D.C. Circuit Court of Appeals to overturn a March FCC vote that requires broadcasters to unwind many of their advertising sales resource sharing arrangements, according to a source familiar with the matter.

It asks the appeals court in Washington to overturn the FCC’s new “processing guidelines” for TV station applications proposing sharing arrangements and contingent financial interests, calling their adoption “arbitrary [and] capricious.”

Under the compromise provision included in the satellite bill today, broadcasters with JSAs who apply for a waiver from the FCC will, assuming the measure is eventually signed into law, be able to keep their sharing agreements intact for 18 months after the agency ultimately rejects a waiver, or Dec. 31, 2016, whichever is later.

As part of a House telecom committee proposal for STELA legislation, broadcasters with JSAs who applied for a waiver from the FCC would be able to keep the sharing arrangements intact for 18 months after the agency ultimately rejected a waiver request, or Dec. 31, 2016, whichever is later. The compromise JSA language is expected to be included  in the STELA reauthorization bill that  is scheduled for a House Energy and Commerce Committee vote tomorrow.

The news that the association has given the FCC a week to reverse its tough new SSA stance reflects mounting frustration among broadcasters who are seeking FCC approval of deals that involve the alphabet soup of ownership rule work-arounds. I’ll be watching next week in hopes its May 8 cease-and-desist deadline is more than bluster.

Broadcasters must show that the JSA and any “related agreements or interests” do not provide them “with the opportunity, ability and incentive to exert significant influence over the programming or operations of the brokered station,” the FCC says. It adds that it will consider waiver requests on “an expedited basis.”

Media Bureau Chief Bill Lake says the JSA crackdown that the FCC approved in a 3-2 vote last Monday (March 31) was originally proposed by the agency in 2004. He also said that while the FCC regularly granted new JSAs over the past decade, the agency also has regularly warned broadcasters that a crackdown might be coming.

This week, after nearly four decades of gradually and carefully loosening the rules governing how many TV stations a broadcaster may own and where it may own them, FCC Chairman Tom Wheeler took an abrupt U-turn, deciding to more strictly enforce the local ownership rule. He threw out years of precedents, and he did so in a punitive way.

The new rule bans new joint sales agreements in which one station sells 15% or more of the advertising time of another separately owned station in the same market. In addition, most existing JSAs will expire within two years unless the commission grants an exemption.

The FCC chairman’s contention that eliminating joint sales agreements will open up new opportunities for minority and women to become TV station owners ignores the fact that TV broadcasting is no longer a business for small operators, regardless of their gender or color. It’s a business for behemoths with negotiating clout. On the other hand, if Wheeler called off the incentive auction tomorrow, there would be all kinds of TV stations available for all kinds of buyers, including minorities and women.

“One of the results [of the proposed JSA crackdown] … will be the opening up of broadcast licenses for minorities, women, small entrepreneurs, because they’re currently being sucked off the market,” the FCC chairman told a congressional hearing Tuesday.

NAB President Gordon Smith tells FCC Chairman Wheeler that his proposed crackdown on JSAs has already financially damaged the industry and could eventually cost jobs. “It’s time to take a step back and reevaluate,” says Smith in a letter to the chairman.

Rep. Richard Neal today asked the FCC to grandfather existing JSAs between broadcasters. The Massachusetts Democrat says the agreements lead to benefits including localism and diversity.

Instead of prohibiting new JSAs and forcing current ones to unwind in two years unless they can get a waiver, the NAB said the commission should set conditions for legitimate station sharing deals, including requiring the brokered licensee to retain control over at least 85% of the station’s programming; keep at least 70% of ad sales revenue and “maintain at least 20% of station value in the license itself.

In a public notice, the FCC’s Media Bureau says it’s particularly concerned about same-market sharing deals that include contingent financial interests. Commissioners Ajit Pai and Michael O’Rielly say they’re opposed to the such a move.

At issue at a hearing today was a GOP-backed discussion draft of legislation to reauthorize the Satellite Television Extension and Localism Act, or STELA. One of the provisions included by subcommittee Republicans could impede the ability of the FCC to follow through for years on its plan to block and undo JSAs.