FCC Gets Pitched On Sharing Limitations

Public interest watchdog groups held a lobbying session at the FCC earlier this month, making a case for barring joint sales and shared services agreements in which the stations share management or in which one of the stations in the combo sells 15% or more of the advertising time of the other.

Watchdog groups have resurrected a proposal to ban most TV sharing arrangements — in response to FCC Chairman Tom Wheeler’s recent announcements that he is considering beefing up agency scrutiny of the combinations.

Under the proposal, which public interest groups pitched during a behind-the-scenes lobbying session at the FCC earlier this month, joint sales and shared services agreements in which the stations share management or in which one of the stations in the combo sells 15% or more of the advertising time of the other would be barred.

In addition, the proposal, which was originally presented by watchdog groups to the FCC in 2012, would bar sidecar deals under which:

  • One broadcaster provides “all or substantially all” of the local news programming for the other station.
  • One station negotiates retransmission consent deals for the other.
  • Both stations use all of the same facilities.
  • More than half of one station’s revenues go to the other.

The proposal was presented to Gigi Sohn, Wheeler’s special counsel for external affairs, and other aides to Wheeler on Jan. 22, according to a lobbying disclosure filing posted on the agency’s website Thursday.

Also attending the meeting were representatives of Time Warner Cable, Charter Communications, DirecTV and Dish Network, the disclosure filing said.

Among the groups represented were Free Press, Public Knowledge, the United Church of Christ Office of Communication and the Institute for Public Representation, the FCC filing said.

BRAND CONNECTIONS

Matt Wood, Free Press policy director, said in the disclosure letter: “Representatives from these organizations and companies explained the many harms stemming from broadcaster ‘sharing’ agreements expressly designed to avoid the commission’s local television ownership limits and other rules.”

The pay TV industry reps at the meeting told FCC officials that research had shown that retransmission consent fees are higher in markets where stations use SSAs to collaborate on negotiations, the disclosure letter added.

“The pervasive use of non-disclosure clauses in retransmission consent agreements limits the amount of publicly available evidence on the magnitude of these fees and how they are affected by joint negotiations, but all of the available evidence suggests this is a serious problem,” the disclosure filing added.

Andrew Schwartzman, a long-time attorney for watchdog groups who was at the meeting, said Sohn and the other FCC representatives did not divulge what sort of SSA crackdown Wheeler has in mind — or even when the chairman might make his move.

“We did all the talking,” Schwartzman said. “He [Wheeler] has said he is going to do something, but I don’t know what the ‘something’ is,” Schwartzman added.

Schwartzman also said pay TV industry representatives didn’t back a specific proposal during the lobbying session. “They were describing the problem, not the solution,” Schwartzman said.

TWC has previously asked the FCC to prohibit broadcasters from using joint sales or other sharing agreements to collaborate on retrans negotiations.

Station transactions that include SSAs and JSAs, which allow stations to save money by combining key operations, have been routinely by the agency in the past.

But Wheeler announced his intent to “do things differently on what were called these shell corporations,” or SSAs, during a town hall meeting in Oakland, Calif., earlier this month.

Wheeler also recently put a hold on station sale applications that include SSAs, while he decides what he wants to do about them, according to communications attorneys.


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