FCC pushes new rules for broadcasters

The Federal Communications Commission took aim Thursday at advertising agreements that critics say allow broadcast stations to dominate media markets.

A proposal from Chairman Tom Wheeler — which will be considered at the agency’s monthly open meeting on March 31 — would change the way broadcast stations can share resources and jointly negotiate with cable and satellite companies, a senior FCC official said Thursday.

Currently, broadcast companies can only own one of the top four stations in any market. Broadcasters can, however, retain separate ownership while pooling advertising sales resources under Joint Service Agreements (JSA) and other resources under Shared Services Agreements (SSA).

Critics of the broadcasting industry say this setup allows broadcast companies to practically control multiple broadcast stations without technically violating the FCC’s limit of one major station per market.

The proposal to be considered at the FCC’s March meeting would change that. Under Wheeler’s proposal, any broadcaster that sells 15 percent or more of another broadcaster’s advertising time under a JSA would have an “ownership interest” in that broadcaster.

The agency would establish a waiver process for any broadcaster that wants to attempt to convince the FCC that its JSA serves the public interest.

The FCC would also ask for comment on how to consider ownership of broadcasters that share things besides advertising sales resources, such as personnel or equipment, under SSAs.

Wheeler’s proposal would also take steps to prohibit any of the top four broadcasters in the same market from jointly negotiating with cable and satellite companies over programming arrangements. Smaller broadcasters would have to convince the FCC that their joint negotiations are not in bad faith.

Under the current “retransmission consent” system, which allows broadcasters to negotiate with cable and satellite companies over compensation for broadcast programming, broadcasters can band together to gain leverage over cable and satellite companies.

Wheeler’s proposal comes as Congress looks to reauthorize the Satellite Television Extension and Localism Act, the law governing the video marketplace, which expires at the end of this year.

As the House Energy and Commerce Committee looks to reauthorize the law, the Republican committee leadership is considering a bill that would also end broadcasters' ability to jointly negotiate with cable and satellite companies.