The FCC's Regulatory Loophole: A Threat to Local TV Markets
The Federal Communications Commission (FCC) is facing a unique challenge as the American Television Alliance (ATVA) calls for a closer look at a regulatory loophole that could significantly impact local TV markets. This loophole allows TV station owners to combine major network affiliations without undergoing the rigorous public interest reviews typically required for traditional station ownership transfers.
A Growing Concern
The issue has come to light as a small number of owners have been buying up multiple ABC, CBS, FOX, and NBC stations in a single market. The ATVA's letter highlights a concerning trend: station groups are using affiliation swaps and multicast arrangements to create what are known as Big Four duopolies. These duopolies involve common ownership or control of multiple stations affiliated with the leading national networks, which can have far-reaching consequences.
The Loophole and Its Impact
The loophole lies in the current FCC procedures. Transfers or assignments of broadcast licenses that create duopolies are subject to scrutiny to determine their public interest impact. However, broadcasters have found a way around this process. They secure a network affiliation agreement from a competing station without acquiring its license, then distribute that network's programming via a secondary digital multicast channel on a station they already own.
This strategy allows them to establish a duopoly without the need for a full public interest review. Sinclair Broadcast Group, for instance, has employed this tactic in Gainesville, Florida, and Tulsa, Oklahoma. By adding NBC programming as a multicast channel on an existing station, they can later seek approval to purchase the now-deaffiliated station's license, which appears less consequential.
The ATVA's Concerns
The ATVA argues that this loophole allows broadcasters to consolidate control over valuable programming rights and advertising markets while evading meaningful oversight. They contend that these maneuvers undermine the commission's ability to assess the benefits and drawbacks of market concentration, including potential increases in programming costs and reduced local news coverage.
A Broader Perspective
This issue is not isolated. The ATVA references past FCC efforts to address similar loopholes, but recent court decisions have altered some ownership restrictions. Without action, the ATVA warns, these practices will accelerate consolidation in the television industry, further concentrating control of the nation's airwaves in fewer hands.
The Way Forward
The ATVA recommends that the FCC modify its rules to ensure proper oversight of affiliation-related transactions and curb further consolidation in local television markets. They emphasize that consumers deserve consistent regulatory review whenever major network affiliations are combined, regardless of the transaction's technical structure.
In conclusion, the FCC's regulatory loophole is a significant concern for local TV markets. Addressing this issue is crucial to maintaining the diversity of local television service and protecting the public interest in an era of rapidly evolving digital broadcasting technology.
