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FCC SEEKS
COMMENT ON MEDIA OWNERSHIP RULES REVISIONS Comments Due March 5,
2012; Reply Comments Due April 3, 2012
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The FCC is seeking comments
on proposed changes to its media ownership rules and a variety of
ownership-related issues which could have broad implications for
broadcasters. Comments are due March 5, 2012, with reply comments
due April 3, 2012. Because the FCC’s inquiry
is wide-ranging, and the Commission requests data to support comments that
are submitted, we encourage you to consider now whether you would like to
participate in this important proceeding. The FCC’s proposed media
ownership rule changes include: Local Television
Ownership Current Rule: An entity may own two TV stations in a Designated
Market Area (“DMA”) if the stations’ Grade B contours do not overlap, or
if one of the stations is not ranked among the top four stations in the
market (the “top-four prohibition”) and at least eight independently owned TV
stations will remain in the DMA after ownership of the two stations is
combined (the “eight voices test”). Proposed Rule: The FCC proposes to eliminate the Grade B
contour overlap provision of the rule, but to retain the top-four prohibition
and the eight voices test, stating that the Grade B contour is an analog
concept that is irrelevant following the conversion to digital TV
broadcasting. In other contexts, the FCC has found the current Noise
Limited Signal Contour to be the digital equivalent of the analog
Grade B contour, but in this instance the FCC has instead opted to rely
solely on DMAs in proscribing the television ownership rule. The FCC
recognizes that this proposal will particularly impact geographically large
DMAs, where two stations may be situated far apart, and seeks comment on how
to accommodate such situations. The FCC tentatively proposes to
grandfather ownership of existing combinations that would no longer comply
with the new rule. Other Issues: While the Commission proposes to retain the
top-four prohibition and the eight voices test, it requests comments
regarding whether the bar these rules create for the creation of TV duopolies
in smaller markets should be subject to a waiver standard, especially when a
combination would promote additional local news. The Commission also
asks whether the advent of digital multicasting, which allows broadcasters to
program numerous program streams, eliminates the need for a rule prohibiting
common ownership in local television markets. Local Radio Ownership Current Rule: An individual or entity may always own a single
AM and single FM station combination, no matter what size market is
involved. An individual or entity may own an attributable interest
in: (1) up to eight commercial radio stations in radio markets
with 45 or more radio stations, no more than five of which can be in the same
service (AM or FM); (2) up to seven commercial radio stations in radio
markets with 30-44 radio stations, no more than four of which can
be in the same service; (3) up to six commercial radio stations in radio
markets with 15-29 radio stations, no more than four of which can be in
the same service; and (4) up to five commercial radio stations in radio
markets with 14 or fewer radio stations, no more than three of which can be
in the same service, provided that an entity may not own more than
50 percent of the stations in such a market. Proposed Rule: The Commission tentatively proposes retaining the
current market limitations or “caps,” and the AM/FM subcaps,
but seeks comment on whether any changes to the numerical limits and market
tiers can be supported. Specifically, the FCC seeks comment on whether
it should allow additional common ownership in the top tier – those markets
with substantially more than 45 stations. The Commission notes that
some markets have more than 100 stations, yet the ownership limit is the
same for those markets as for markets with 45 stations. Other Issues: The Commission seeks input on the impact of
digital radio broadcasting on the technological and economic differences
between AM and FM stations, and on the impact that the introduction of
digital broadcasting should have on the AM/FM subcaps. Newspaper/Broadcast
Cross Ownership Rule Current Rule: The rule prohibits common ownership of a
full-service broadcast station and a daily newspaper if: (1) a
television station’s Grade A service contour completely encompasses the
newspaper’s city of publication; (2) the predicted or measured
2 mV/m contour of an AM station completely encompasses the newspaper’s
city of publication; or (3) the predicted 1 mV/m contour for an FM
station completely encompasses the newspaper’s city of publication. Proposed Rule: The FCC proposes to modify the rule modestly to
presumptively favor requests for waivers that seek the combination of a daily
newspaper and either a radio or a television station in the top 20 DMAs
with a newspaper/TV combination, subject to the existing top-four prohibition
and the eight voices test described above. The FCC also proposes using
DMA definitions, rather than the Grade A service contours, for proposed
newspaper/TV combinations. Other Issues: The Commission asks whether it should eliminate
the newspaper/radio restriction in all markets, or otherwise relax the
restriction. It also seeks comment on the continued use of contours (as
opposed to Arbitron markets) for determining whether the rule is triggered
for proposed newspaper/radio combinations. Radio-Television
Cross Ownership Current Rule: Subject to the local television and local radio
rules, an entity may own up to two television stations and four radio
stations in a market, as long as at least 10 independently owned media voices
would remain post-merger, and an entity may own up to two television stations
and six radio stations, or one television station and seven radio stations,
in a market as long as at least 20 independently owned media voices would
remain post-merger. Proposed Rule: The FCC proposes to eliminate this rule in its
entirety. The FCC tentatively concludes that the rule’s elimination
will not significantly contribute to broadcast consolidation, because the local
radio and local television rules will remain in effect. Shared Services
Agreements and Local News Service Agreements The Commission also seeks
generalized information related to shared services agreements and local news
service agreements, including whether such arrangements should be subject to
the FCC’s attribution rules. The Commission also seeks input on the
benefits and detriments of such agreements on the Commission’s goals of
competition, localism and diversity; the degree of influence that such
agreements create; and whether such arrangements should require some form of
disclosure. Benefits of Ownership
Combinations That Are Currently Prohibited It is noteworthy that the
Commission invites submission of information, including data on cost savings,
to demonstrate any benefits that would result from media outlets being able
to enter into combinations that are currently prohibited, or would be
prohibited under the new rules. Specifically, the FCC asks about
cost-savings that might arise from the combination of two TV stations in
markets where duopolies are prohibited, or from radio station combinations
and cross-media combinations that are impermissible. If you have questions about
the Commission’s proposals, or would like to participate in submitting
comments, please contact our office. February 2,
2012 |
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This memorandum is intended only as a general discussion of these issues and should not be regarded as legal advice. We would be pleased to provide additional details or advice about specific situations if desired. Copyright © 2012, Lerman Senter PLLC 2000 K Street NW,
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