FCC Launches Investigation Of Media General

The FCC has launched an investigation into whether Media General is usurping control of Gray Television’s WAGT Augusta, Ga., an NBC affiliate that it has been operating under joint sales and shared services agreements.

The FCC has “initiated an investigation and plans to issue a Letter of Inquiry within the near future in order to determine … whether a hearing would be appropriate under Section 312 of the Communications Act,” FCC Deputy General Counsel David Gossett said in a court filing yesterday.

Section 312 is the FCC’s death penalty provision, outlining the grounds by which the agency may revoke a broadcaster’s license.

That Media General would rile up the FCC for the sake of a single small-market JSA is surprising, given that it and Nexstar Broadcasting Group are asking the FCC to bless their $4.6 billion merger.

Media General did not immediately respond to an email and call for comment.

The investigation is the latest twist in a legal and regulatory feud that began when Gray bought WAGT along with the other Schurz Communications stations.

The FCC approved the deal on Feb. 12 on certain conditions, including that Schurz and Gray terminate the WAGT JSA with Media General, which operated WAGT in tandem its ABC affiliate, WJBF.

Eager to comply with the conditions, Gray notified Media General that it was ending the JSA. The deal closed on Feb. 16.

But rather than accept the dismissal, Media General sued Schurz and Gray in Georgia state court and won an injunction against Gray “interfering with Media General’s continued performance of the joint sales agreement” or selling WAGT in the FCC’s upcoming spectrum auction.

At Gray’s request, the case has been moved to federal district court.

The FCC weighed into the dispute yesterday in the form of the Gossett letter, asking the Department of Justice to pass it along to the federal court.

The letter says, in essence, that Media General is out of line in trying to preserve the JSA. “The commission has ordered that the JSA not continue once Gray consummated its acquisition of WAGT,” it says.

In addition, it says by trying to block Gray from selling the station in the incentive auction, Media General “has also violated Section 310(d) of the Communications Act.” That provision prohibits transfer of broadcast licenses without FCC authorization.

“Our submission is solely that federal law and policy preclude Media General’s seeking injunctive relief to require further implementation of the JSA or to deny Gray control of the decision whether to sell the station, in the incentive auction or otherwise,” the letter says.

“It does not preclude an appropriate damages remedy for any private injury that a court may find to have occurred.”