FCC Approves Gray’s Top 4 Duop in Sioux Falls

It took 16 months, but on Tuesday the FCC finally approved Gray Television’s purchase of Red River Broadcast’s NBC affiliate KDLT Sioux Falls, S.D., for $32.5 million, even though it already has another network affiliate, ABC affiliate KSFY, in the market.

The action, in essence, constitutes a waiver of the FCC’s local ownership rules barring ownership of two stations in small markets and of two top-rated stations (typically network affiliates) in all markets.

The FCC was undeterred by Monday’s decision by the U.S. Court of Appeal in Philadelphia that vacated the FCC’s 2017 order relaxing the local ownership rules. Broadcasters, the agency said, could own two stations in any market and the FCC would consider approving top-four combos on a case-by-case basis.

In the Sioux Falls order, the FCC noted that the court’s “mandate” in the case has not yet been issued so that the FCC’s order relaxing the rule is still in effect. “Furthermore, the commission intends to seek review of that decision,” the FCC said.

What’s more, the FCC said, “even if the rules in effect prior [to the FCC relaxation action at issue in court] applied here, the unique circumstances in this case would justify a waiver of such rules.”

The FCC noted that as a general matter it has the authority to waive any of its rules if it believes it would serve the public interest.

This case was closely watched by other broadcasters as a possible precedent for combinations of other top-four rated stations. They hoped it would set clear criteria for such duopolies.

In its order, the FCC concluded that the potential public interest benefits of the Sioux Falls duopoly outweighs the public interest harm that cable operators had argued would result.

“The record demonstrates that permitting Gray to acquire KDLT-TV is likely to produce definite, verifiable, and transaction-specific public interest benefits,” the FCC said.

“If the transaction is approved, Gray commits to take a number of steps to improve the service KSFY-TV and KDLT-TV offer to those living in the Sioux Falls market.

“First, it will add at least 28 hours per week of local news programming across KDLT-TV and KSFY-TV. This is more local news programming than either station currently airs in an average week.

“Second, Gray will open a news bureau in Pierre, the capital of South Dakota, to provide better coverage of state government.

“Third, Gray will install a state-of-the-art weather radar that will enable it to provide more accurate information about severe weather in the Sioux Falls market.

“Fourth, Gray states that it will add a multicast channel to one of its satellite stations, KPRY-TV, to expand over-the-air distribution of NBC programming.”