The FCC should deny Local TV’s request to...

The FCC should deny Local TV’s request to transfer control of three TV stations to Dreamcatcher Broadcasting under shared service agreements (SSAs) as part of Local’s proposed $2.73 billion sale of 19 TV stations to Tribune (CD July 2 p2), said Free Press and Put People First in a petition to deny filed Monday (http://bit.ly/13Pfmaf). The stations are in Hampton Roads, Va., and Wilkes-Barre, Pa., areas that have market overlaps with Tribune newspapers and thus a conflict with FCC cross-ownership rules, said the petition. Tribune “seeks to evade” the cross-ownership rules by using Dreamcatcher as a “shell corporation” to own the stations while Tribune provides them with services under SSAs, said the petition. Former Tribune President Ed Wilson owns Dreamcatcher, and the company was created shortly after the proposed merger was announced, the groups said. “For all intents and purposes, Tribune would control the Dreamcatcher stations and daily newspapers that serve the same communities as these stations, thereby violating” the commission’s cross-ownership rules, said the petition. Tribune disagreed with the groups’ characterization, and told us it’s preparing a response to their petition. “The transactions have been structured in compliance with FCC rules and precedent,” a Tribune spokesman told us in an email. “A transaction can be legal and still not be in the public interest,” responded Andrew Schwartzman, who represented Put People First in the petition and has opposed media consolidation for many years with the Media Access Project. “Any transaction that has the same result as a violation of the Commission’s local ownership rules is necessarily contrary to the public interest,” said the petition. If the commission does grant Local’s request to transfer the stations to Dreamcatcher, it should make the approval conditional on the outcome of any rulemaking related to the FCC’s 39 percent national television ownership cap, the groups said. The FCC is circulating a draft NPRM seeking comment on possible elimination of the UHF discount (CD Aug 14 p1). The Tribune/Local merger would put Tribune’s nationwide coverage at 44 percent if the discount didn’t exist, the groups said. “Absent the UHF discount, the proposed assignment of all Local TV stations including these three licenses to Tribune would violate the national television multiple ownership rule,” said the petition. The commission should also address the Local TV request as a full panel rather than through the delegated authority of its bureaus, said the petition. The matter merits the attention of the full commission because “the use of SSAs to evade the Commission’s ownership rules is an unresolved question,” the groups said, referring to a pending application for review in the Media Council Hawai'i ownership case (CD June 21 p20). Delaying a full commission ruling on SSAs and the ownership rules could lead to “additional litigation” or “harm parties to such SSAs because they will face the problem of unwinding them” if the commission grants the Media Council of Hawai'i Application for Review, the groups said. “These transactions raise novel questions of law, fact, and policy, and thus must be acted upon by the full Commission rather than the Media Bureau,” said the petition.