McAdams On: Regulatory Coercion

ABOUT, FACE—The Federal Communications Commission has been allowing joint and shared service agreements for years. Now it’s suddenly affecting an about-face. On March 6, FCC Chairman Tom Wheeler wrote in a blog post that joint service agreements would be attributable under ownership rules if one station accounted for at least 15 percent of the ad sales of another.

Four days later, the item appeared on the agenda for the commission’s March 31 general meeting. Two days after that, the head of the FCC’s Media Bureau sent out a notice that it was going to “apply careful scrutiny” to pending and future JSAs going forward because of “a concern that has arisen in our review of proposed transactions in recent months and years.”

Does that mean that the commission has handled JSAs improperly for years? If so, why is it suddenly qualified to do so now? Beyond that, what is the justification for ramming through JSA re-attribution in less than a month? And why now?

According to a February article in “The Wall Street Journal,” there are 128 JSAs in place across the country. The FCC hasn’t tracked them, so we can’t be sure where they are, but it’s safe to assume they’re in smaller markets. The presumed justification for unwinding these JSAs is that doing so is in the public interest, which also is the foundation of the commission’s media ownership rules.

The theory behind limiting TV media outlet ownership in a given market is that it promotes a diversity of opinions and news topic coverage. Whether or not this is a demonstrable reality, no one knows, and the commission apparently has no interest in finding out. It’s simply using the appearance of being a consolidation watchdog to drive more TV stations into the incentive auction.

The auction statute says broadcaster participation is “voluntary,” and not to be coerced. Wink, wink. Nudge, nudge.