FCC’s March 31 meeting fraught with anti-broadcaster bias

The agenda FCC Chairman Tom Wheeler has set for the commission’s next meeting on March 31 reveals an unyielding focus on undermining local television broadcasters as the agency moves not-so-separately toward the incentive spectrum auction slated for 2015.

Wheeler has said he wants to use the quadrennial review of multiple ownership rules to impose more restrictions on broadcasters, rather than reduce regulations as was intended when the review process was established.

Instead, the Chairman announced his intentions to implement an extensive wish-list of the cable and wireless industries that he represented before his appointment, including:

1. Prohibiting most joint sales agreements between TV broadcasters,
2. Prohibiting TV stations that are not commonly owned from jointly negotiating retransmission consent agreements with Pay-TV companies, and
3. Exploring the potential repeal of the network nonduplication and syndicated exclusivity rules which keep Pay-TV companies from importing distant TV signals that infringe on local stations’ exclusive rights to network and syndicated programming.

Wheeler also has indicated he wants to review how shared services agreements work, but leave untouched the FCC’s rules prohibiting joint newspaper-broadcast cross-ownership and TV-radio cross-ownership.  To date, he has made no mention of the use by Pay-TV companies of agreements similar to JSAs and SSAs in retransmission consent and other negotiations.

At least one commissioner, Republican Mike O’Rielly, has criticized Wheeler’s agenda as “flawed and not in the public interest.”

“My meetings and the record indicate that the JSA portion could significantly impair the ability of broadcasters with diverse voices to offer local programming, such as news, to meet consumer needs.

“Moreover, the proposal would establish a very subjective ‘Mother-May-I’ approach to obtain or retain a JSA, which is a recipe for market uncertainty and reduced offerings,” O’Rielly said in a statement.

O’Rielly’s concern is well-founded as Wells Fargo securities analyst Marci Ryvicker this week downgraded TV station groups’ stocks citing the “worsening” regulatory environment, despite the fact she likes “the underlying fundamentals of the business.”

Some of the regulatory pressures at the FCC also are in play in Congress as lawmakers advance a five-year reauthorization of the Satellite Television Extension and Localism Act (STELA) before it expires Dec. 31.

Pay-TV companies are using the STELA process to insert similar language regarding JSAs, SSAs and retransmission consent into that law, though their push to move local broadcasters from the basic to more expensive tiers was quashed in one key committee last week.

A former FCC official said last week that Pay-TV’s long-range goal with their STELA proposals is to bypass local broadcasters, buy programming from broadcast networks directly and share the advertising revenue.

“A policy change of this magnitude should be debated transparently and comprehensively, not rushed through STELA wearing a false ‘market failure’ masque,” said Fred Campbell, executive director of the Center for Boundless Innovation in Technology and former chief of the FCC’s wireless bureau.

In this scenario, which surprises no one, the benefit to Chairman Wheeler’s agenda is the eventual freeing up of broadcast TV spectrum for sale by the FCC to wireless companies in what is characterized as a “voluntary” incentive spectrum auction.

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