NAB To FCC: Revisit Station Ownership Rules

The traded group says the commission’s decisions retaining, and even making more stringent, “unnecessary local TV station ownership and attribution rules and crossownership restrictions on local radio, TV and print newspapers do not serve the public’s interest in competitive and vibrant local broadcasting, fail to reflect competitive changes, are contrary to statute, and are arbitrary and capricious.”

The NAB on Thursday asked the FCC to reconsider its recent order on media ownership rules in which the commission opted to keep provisions that NAB says are outdated and ignore “tectonic shifts” in the competition that TV stations face today.

In August, as part of a congressionally-mandated review of it rules, the FCC voted to retain the regulations. NAB said it wants the commission to reconsider its decisions to:

  • Retain the local television ownership rule.
  • Ratchet up that rule by attributing TV joint sales agreements.
  • Require disclosure of virtually all agreements by TV stations to share services, regardless of their nexus to core station operations.
  • Retain the 1970s-era print newspaper/broadcast crossownership ban.
  • Maintain existing restrictions on radio/TV cross-ownership.

NAB said: “Rather than retain or expand these rules, the vast and continuing changes across the media landscape dictate that they be eliminated or substantially loosened.”

The 1996 Telecommunications Act requires the FCC to review its ownership rules every four years and repeal or modify those no longer necessary in the public interest as the result of competition, NAB noted, adding that “Despite this directive, the FCC nevertheless elected to maintain rules originating from a time when (1) three broadcast TV networks dominated the marketplace; (2) cable and satellite provided no meaningful alternatives, let alone ones offering hundreds of channels with thousands of original programs; and (3) the internet, over-the-top video services and social media did not exist. The expert agency’s conclusion that these tectonic shifts have had no real competitive impact on local broadcast stations is untenable.”

The FCC, NAB said, ignored “extensive empirical evidence that NAB submitted about broadcasters specifically and the marketplace generally.” Instead, it “improperly” relied on “woefully outdated data … makes numerous conclusions without citing any “evidence” other than its own unsupported assertions … and even cites evidence that does not actually support the FCC’s position.”

In addition, NAB said the FCC did not support its decisions with “any studies, serious research or new arguments explaining why the decades-old broadcast-only ownership rules should remain in place, let alone unchanged.”


Specifically, NAB addressed the following:

Local TV Rule — “Looking at its decisions on specific rules, the FCC had no legal or evidentiary bases for retaining the current numerical limits or either prong — the eight-voices test or the top-four restriction — of the antiquated local TV rule. The FCC’s sole basis for retaining the rule is its unjustifiable belief that broadcast TV stations compete for audiences and advertisers only among themselves.”

TV Joint Sales Agreements (JSAs) — “Rather than reforming the local TV rule to reflect current realities, the FCC did the exact opposite, making the rule more restrictive by attributing most same-market TV JSAs, without even trying to show that a more stringent rule is in the public interest given current competition.”

TV Shared Service Agreements (SSAs) — “NAB also urges the commission to reconsider its vastly overbroad and unnecessary mandate that TV stations disclose virtually all sharing agreements made with other stations, whether in the same market or different markets, and no matter how far removed from core station operations. This new rule epitomizes disclosure for the sake of disclosure, rather than for any demonstrated regulatory need.”

Cross-Ownership Rules — “The FCC merely supposes that a connection exists between its ownership rules and viewpoint diversity — even while conceding that it has not demonstrated such a connection; ignores the transformation in how Americans obtain, create and share news and information through internet websites, social media and applications; applies an irrational double-standard in analyzing the sources that contribute to viewpoint diversity; and selectively relies on older, less precise data while disregarding the latest and most relevant material in the record.”

Promoting Diversity — “Finally, the FCC should reconsider its rejection of NAB’s proposal to create an incubator program. Adopting such a program would provide a practical, effective method for increasing ownership diversity.”

NAB’s petition follows a lawsuit it filed last month with the U.S. Court of Appeals for the D.C. Circuit challenging the FCC’s media ownership order as “arbitrary and capricious.” It is not alone, at the same time, the newspaper trade group, the News Media Alliance, also filed to overturn the FCC’s rules, especially the broadcast-newspaper crossownership ban. However, after asking the FCC for reconsideration, NAB filed a motion on Friday with the D.C. Circuit Court of Appeals withdrawing the lawsuit because parties cannot seek reconsideration at the FCC while petitioning against the same order through the courts.

A bright spot for broadcasters is that when this matter is considered, the FCC will presumably have a more deregulatory-minded chairman at the helm.

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Mike Henry says:

December 2, 2016 at 1:34 pm

The NAB seems to not understand why at least some of these rules are in place. They claim that FCC hasn’t demonstrated why the top four rule or eight-voices test contributes to ownership diversity, but the rules that they want would stifle diversity in ownership and editorial autonomy in news. There are lots of duopoly examples already that show what deregulation could cause to television news. Besides, what makes them think that station ownership deregulation won’t endanger the companies that already exist? The NAB should look to Canada as an example; for all they know, it could lead to ABC, NBC, CBS and Fox trying to buy out their affiliates piecemeal, creating a Canada-style ownership structure where few private owners exist and the major networks dominate station ownership.