FCC Proposes Maximum Fine for Violation of Local Television Ownership Rule

On July 7, 2021, the FCC released a Notice of Apparent Liability for Forfeiture (“NAL”) against Gray Television for its apparent violation of the local television ownership rule, which prohibits a single entity from owning or controlling two of the top four stations in the same DMA. The FCC proposed a $518,283 fine, which is the maximum permitted under the FCC’s forfeiture guidelines for the specific violation.

The NAL focuses on Gray’s acquisition in July 2020 of the non-license assets, including the CBS affiliation, of Station KTVA(TV), Anchorage, Alaska, from Denali Media. Gray already owned Station KTUU-TV, the Anchorage NBC affiliate. The CBS and NBC stations were ranked numbers one and two in the market. Following the acquisition, Gray began airing the CBS programming on full power station KYES-TV in the Anchorage DMA. In March 2021, Gray moved the CBS affiliation to a low power television station it owns in the Anchorage market. Because Gray acquired only the non-license assets of Station KTVA, it did not have to file an application requesting FCC consent to a license assignment. Nonetheless, the FCC concluded that the transaction violated Note 11 to the multiple ownership rules that was adopted in 2016. That note essentially provides that the prohibition on owning two top-four stations extends to transactions in which an entity enters into an agreement to acquire a network affiliation. The FCC concluded that Gray’s acquisition of the CBS affiliation when it already owned the Anchorage NBC affiliate violated this note, which prohibits licensees from executing agreements that result in the sale or swap of an affiliation of another station in the DMA if doing so results in non-compliance with the top-four prohibition.

The FCC proposed the statutory maximum fine of $518,283 due to the duration of the violation and other factors, including Gray’s failure to contact Commission staff about the permissibility of the transaction, or to file a request for waiver. The FCC noted that Gray operated two top-four rated stations in the Anchorage market for over seven months during a period when television stations benefitted from “record-setting political advertising expenditures in the months leading up to the 2020 election.”

The NAL is the first step in the FCC’s enforcement process. Gray has thirty days to pay the fine or to file a response to the NAL.

If you have questions about the NAL or the FCC’s multiple ownership rules in general, please contact any attorney in our office.