NAB Challenges FCC’s Tough SSA Criteria

The NAB made good on its earlier threat, today asking the U.S. Court of Appeal in Washington to stop the FCC from using strict new criteria for evaluating shared services agreements (SSAs) in its review of TV station transactions.

The criteria, issued in a March 12 public notice by the FCC staff without a vote of the full commission, constitute a “categorical presumption against” deals involving SSAs and financial arrangements between stations in the same markets.

The presumption “operates as a practical prohibition” against deals that were previously deemed to be “legitimate,” the NAB said in its petition.

The NAB said the FCC’s action violates the notice and comment requirements of the Administrative Procedures Act, is “arbitrary, capricious” and oversteps the staff’s delegated authority.

The public notice is part of the FCC’s effort to close loopholes that have allowed broadcasters to operate two stations in small and medium markets where the FCC rules they may not outright own them.

Under an SSA, stations in the same market shares facilities, programming and services.

Last month, the FCC, by a 3-2 voted, effectively banned joint sales agreements, which often complement SSAs. Under a JSA (joint service agreement), one station in a market sells the advertising time for another in the same market.

In a letter to the FCC, the NAB two weeks ago warned that it would take action against the agency if it did not cease using the new guideless by May 8.