NAB Files Media Ownership Reply Comments with Appeals Court

The NAB blasted the FCC's revised media ownership rules in reply comments filed this week with the 3rd Circuit Appeals Court in Philadelphia, where the rules were stayed last September. Much of what the filing contained reflected the NAB's brief filed with the court last August.

Specifically, the NAB went after a restriction on mergers among the four top-rated stations in any market. The NAB argued that the restriction is balderdash, because it doesn't take into account that the financial situation of top-fours in small- to mid-markets is quite different from that of large markets.

"The uncontroverted record evidence shows that top-four stations in small- and mid-size markets are either suffering losses or barely breaking even," the filing said. "Most low-rated network affiliates (generally the third- and fourth-ranked stations) in markets 51-210 lose money."

Losses at the average low-rated affiliate station in markets 101-125 increased seven-fold between 1993 and 2001 to over $250,000 a year, the NAB said.

The filing goes on to point out that, under the top-four restriction, no mergers at all would be allowed in 81 of the 150 small- and mid-sized markets with more than one local station, only one merger in 35 more. In other words, in more than 77 percent of the markets most in need of the benefits of common ownership, the top-four rule blocks relief, the brief states.

The NAB argued that the FCC contradicted itself by asserting mergers among top-fours would yield no public interest benefits because "such stations generally are already originating local news."

"This sweeping generalization obscures the reality established in the administrative record: Although 85 percent of top-four stations provide local news, only 60 percent of fourth-ranked stations do so, and only 38 percent of such stations actually produce their own local news," the NAB barked.

Without consolidation relief, the NAB said, there's very little likelihood that the amount of news will increase significantly among small-to-mid-market top fours.

"Given the incontrovertible evidence that many top-four stations are financially struggling, a rule that prevents common ownership of top-four stations on the ground that no public interest benefit will result is irrational," the filing said.

An additional waiver process for the top-four restriction is equally irrational, the broadcast lobby said.

The NAB also challenged the FCC's authority to change the way radio markets are defined. The proposed change involves swapping a contour-based system with Arbitron ratings. The result would be that a single radio station may be counted in more than one market, therefore kicking in ownership restrictions not applicable under the contour system.

The NAB's filing made no hay about the 45-percent audience reach cap that the organization opposes.