WASHINGTON—The American Television Alliance (ATVA) has submitted a letter to the Federal Communications Commission (arguing that broadcasters are using loopholes to evade meaningful agency review of broadcast transactions.
ATVA is backed by pay TV providers and associations.
In the filing, ATVA said that under the 1996 Telecom Act, the FCC is required to review transactions involving television stations to ensure they serve the public interest.
ATVA also noted that the commission must evaluate potential harms to consumers and local communities, including higher prices, reduced competition and diminished local news coverage when a broadcast station group owner tries to combine two or more major national broadcast network affiliations within a single market.
Increasingly, however, ATVA noted that broadcasters are exploiting loopholes to sidestep reviews.
ATVA’s filing contends, for example, that Sinclair is using “affiliation swaps” loopholes to avoid reviews.
Rather than directly acquiring a competing station with a major network affiliation, ATVA cited examples of where Sinclair first acquired that station’s network programming rights—such as ABC content—a transaction that does not trigger the review process.
It can then place that programming on a secondary digital “multicast” channel of a station it already owns, temporarily carrying, for example, both CBS and ABC programming under a single broadcast license.
Then, ATVA argued, Sinclair submitted an application to acquire the now stripped-down station itself. Because the second station no longer carries a “Big Four” network at the time of the sale, the resulting transaction appears less significant on paper and often receives only a cursory review. After the deal is approved, Sinclair can then shift the ABC programming back to the newly acquired station, the ATVA contended.
“Sinclair’s recently approved transactions demonstrate how broadcasters use affiliation swaps or changes to consolidate within local markets while avoiding Commission review or public comment,” the letter said. “The Commission should put an end to these practices. It should modify its rules in order to ensure proper oversight over such transactions, and to limit the increasingly widespread consolidation in the television marketplace.”
ATVA also stressed that Sinclair CEO Chris Ripley told Wall Street analysts during an April 30 first-quarter earnings call that duopolies, or “double-ups,” are core to Sinclair’s strategy due to their inherent operating efficiencies.
ATVA made the filing as part of the quadrennial regulatory review.
