FCC fires another salvo to gut exclusivity rules

The chief of the FCC’s media bureau last week took another swipe at the exclusivity rules that provide the underpinning of TV broadcast localism but, like Chairman Tom Wheeler who has proposed eliminating the rules, failed to note any potential benefit of doing so. Bureau chief Bill Lake feebly argued only that the rules are old and, therefore, should be repealed. While it makes sense to review longstanding rules, such review is pointless if effectiveness in achieving a Congressional mandate is not given due consideration, especially in light of the minimal burden the rules  place on the FCC for achieving their intended goal.

In his blog post Lake fails to reflect any understanding of the very real privity of contract issues that will be present if the FCC eliminates the rules. A local station that suffers when a cable operator imports a distant signal cannot simply sue the cable operator or the distant station because they have no contract with them to sue over. 

Instead, they have to appeal to their network or syndicated programming partner, parties that may be reticent to turn around and sue their other partners. Financial resources that are better invested in serving the local community would, instead, be funneled into costly legal battles.

Further, Lake’s post reveals no effort to reflect on past experience in making such a policy change or to rigorously study the potential effects of repealing the rules. In 1980, when the Commission eliminated the syndication exclusivity rules, and in 1988, when they reinstated them, the commission backed their decision with massive economic studies that anticipated the effect of eliminating and reinstating the rules. In this proposal, despite the fact that cable TV has more than double the number of subscribers they had in 1988 – and the attendant increase in market power – the commission does not appear to have conducted any serious analysis of the market.

The exclusivity rules continue to serve as the bedrock for local journalism, public affairs programming, and emergency warnings and recovery efforts, in addition to advancing local economies wherein small businesses can promote their products and services.  Absent the ability of a local station to protect its investment in exclusive licensing of expensive content, one can hardly expect anything other than the eventual demise of that station. Many broadcasters view this likely result as the intended goal, to compel more stations into the “voluntary” incentive spectrum auction.

A TAB  delegation met  with the Media Bureau and each commissioner’s office regarding Wheeler’s proposal Aug. 31. The ex parte filing disclosing the arguments TAB presented are available here.

Questions?  Contact TAB's Oscar Rodriguez or call (512) 322-9944.