FCC to consider tougher rules for local TV stations

WASHINGTON -- The Federal Communications Commission is set to consider tougher rules for local TV stations that would prohibit some of their joint negotiations with cable companies and limit deals between broadcasters to jointly sell advertising and share other services.

The proposals Thursday by FCC Chairman Tom Wheeler came as the agency prepared to start another broad review of its media ownership rules, as required every four years.

Wheeler wants to begin the latest review with the tentative conclusion that the FCC should not loosen restrictions on joint ownership of TV stations and newspapers in the same markets.

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He is asking his colleagues to approve the local-TV restrictions at their March 31 meeting and begin the lengthy process of soliciting public comment on whether to change other media ownership rules.

“Chairman Wheeler is taking steps to protect consumers and preserve local broadcasting by preventing the erosion of competition in local broadcast markets,” the FCC said. “These steps will curtail practices that have put upward pressure on cable prices.”

Wheeler wants to prohibit the top four TV stations in any market from joining together to negotiate with cable companies for fees to carry their broadcast signals, a process known as retransmission consent.

Congress intended such negotiations to be done one-on-one, said a senior FCC official speaking on background. But increasingly large stations in the same market have banded together to bargain with cable TV providers, causing total retransmission fees to skyrocket from $28 million in 2005 to $2.4 billion in 2012, the FCC said.

There are signs the higher fees are being passed on to cable TV customers through increased fees, the agency said.

The cable industry has lobbied to prohibit such joint negotiations.

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“FCC Chairman Wheeler deserves high praise for addressing the broken retransmission consent market and moving to correct one of its most serious flaws -- the collusion practiced by dozens of TV station owners, who are supposed to be competing with one another,” said Matthew Polka, president of the American Cable Assn., an industry trade group.

During the March 31 meeting, commissioners are also scheduled to vote on a rule that considers a broadcaster to have an ownership in any station for which it sells 15% or more of its advertising time.

Last month, the Justice Department told the FCC that so-called joint sales agreements, under which stations team up to sell advertising, allowed some broadcasters to circumvent rules limiting the number of stations they can own in a market. It called for tougher regulations.

Counting such agreements against the FCC’s ownership caps probably would limit severely limit the practice, although the agency has said it will consider waivers. Under the proposed rule, stations with such agreements would have two years to end them or apply for waivers.

Wheeler also wants the FCC to consider rules for other joint deals, known as shared services arrangements, which allow TV stations in the same market to share services such as employees, administration and news helicopters. The agency will consider what types of shared arrangements TV stations must disclose.

Broadcasters have said they need joint deals to remain competitive.

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The FCC has been struggling for years with how to revise its ownership rules in the face of major changes in the media landscape. Public interest groups have strongly opposed any loosening of the rules.
The financially troubled newspaper industry has lobbied hard to allow more combinations with TV and radio stations in the face of declining readership as consumers increasingly turn to the Internet for news.

Rules in place since 1975 generally prohibit the ownership of TV stations and newspapers in the same market. But the FCC frequently has granted waivers, such as with Tribune Co.’s ownership of the Los Angeles Times and KTLA-TV.

In 2007, the FCC loosened the cross-ownership rules, largely in the top 20 TV markets, but a federal appeals court tossed out that decision. Another proposal to loosen the rules, offered by former Chairman Julius Genachowski, stalled in 2013.