FCC to Break Up Big TV Stations

Despite a GOP outcry, new rules will limit coordination between TV stations.

Shoppers look at televisions at Walmart during the Black Friday sales on November 23, 2012 in Quincy, Massachusetts. Black Friday, the start of the holiday shopping season, has traditionally been the busiest shopping day in the United States.  (National Journal)

Overriding intense Republican opposition, the Democratic leaders of the Federal Communications Commission voted Monday to crack down on media consolidation.

The new rules bar multiple broadcast TV stations in the same market from sharing a single advertising staff. Democratic FCC officials argue that major TV companies around the country are using "joint sales agreements" to undermine the agency's media-ownership caps.

The FCC bars any company from owning more than one of the top four TV stations in a market. By selling ads for multiple stations, companies have been able to dodge the FCC's ownership cap while effectively controlling several stations, the agency officials said.

The goal of the TV ownership cap is to ensure that viewers have access to a diverse range of views in the media and that no single corporation is able to dominate the flow of information.

While the TV stations serve local markets, major media companies such as Sinclair own dozens of stations around the country.

"The commission has long imposed limits on concentration of ownership for use of the public's airwaves," FCC Chairman Tom Wheeler said. "Today, what we're doing is closing off what is a growing end run around those rules."

But Republicans warn that the new rules will force small local TV stations off the air. They argue that the joint-sales deals help stations save costs and focus more resources on covering news important to their local communities.

Ajit Pai, a Republican FCC commissioner, said the order is the "most problematic" he has encountered in his two years at the agency. The agency's other Republican, Michael O'Rielly, called it an "unjustified step backwards."

The Republican commissioners argued that the FCC should be loosening — not tightening — its media ownership rules. Limitations on how many newspapers a TV company can own in a market are especially outdated, they argued.

Even Democratic Commissioner Mignon Clyburn expressed some concern that the new TV ownership rules could hurt small and minority-owned stations. But she signed on to the proposal when the chairman's office agreed to outline more details about how small stations can apply for a waiver to continue their joint-sales deals.

In a statement, the National Association of Broadcasters said the FCC made an "arbitrary and capricious decision" — a hint that the group plans to sue to block the new regulations. The House Energy and Commerce Committee is advancing a bill that would force the FCC to complete a larger review of its media-ownership rules before it could break up the joint-ad deals.

But the action won cheers from liberal advocacy groups. Craig Aaron, the president of Free Press, said the new rules will "stop broadcasters from using shell companies to skirt the agency's ownership limits."

"It's time for conglomerates to start playing by the rules," Aaron said. "Divesting some of their stations could open the door for truly independent and diverse owners to enter a marketplace conglomerates have controlled for years."

The rules will bar new joint ad deals and will give stations two years to break up their existing agreements.

Some have speculated that Wheeler is trying to drive down the value of broadcast TV stations to encourage them to sell their licenses for auction to cellular carriers. Wheeler called the theory "baloney" in a press conference following the agency vote.