Wheeler’s Office Planned to Circulate Proposed Order on Sharing Agreements, says FCC Official

FCC Chairman Tom Wheeler’s office had planned to circulate a draft order Thursday that would attribute TV joint sales agreements (JSAs) for the purposes of calculating ownership, but the item is expected to be delayed until March, an agency official told us. The order would have treated the attribution of TV JSAs the same way as for radio, counting as 15 percent toward ownership, the official said. It’s not clear why the item may be delayed. The item would also have included a further notice of proposed rulemaking on media cross-ownership, the official said.

Wheeler’s office also told a group of public interest officials and representatives from cable and satellite that it’s contemplating taking action soon on broadcaster sharing agreements, according to attendees at the meeting last week. The proposed attribution of TV JSAs was what touched off opposition to the commission’s previous ownership proceeding (CD Nov 29/12 p5). Wheeler yanked the last quadrennial media ownership review draft order early in his tenure (CD Dec 16 p1), and has since said the agency is looking at TV sharing agreements (CD Jan 13 p1). The 15 percent threshold of attribution was in a draft of the order that Wheeler yanked, agency officials have said. An agency spokesman declined to comment for this story.

Wheeler’s office arranged the meeting with officials from Public Knowledge, Free Press, Charter Communications, Dish Network and others, and his staff indicated he was “very seriously contemplating taking action,” said public interest attorney Andrew Schwartzman, who was at the meeting and represents Free Press on media ownership. Schwartzman said Wheeler’s office was careful not to indicate specifically what might be planned. But another meeting attendee told us Wheeler’s staff at first indicated plans for him to take a strong stance on stopping companies from using sharing arrangements to circumvent media ownership rules, but later backed down from that position. An ex parte filing reporting on the meeting was filed by Free Press last week in docket 09-182 (http://bit.ly/1dOYHqP).

There has been a widespread perception that deals including shared service agreements and JSAs won’t be approved without the eighth floor’s say-so, said broadcast attorneys and public interest officials. “There is greater scrutiny from the eighth floor to the” Media Bureau, said a broadcast attorney experienced in handling deals involving sharing agreements. “The bureau has to run them by the eighth floor."

Uncertainty about the commission’s stance on sharing agreements has also been fueled by statements by Wheeler that he would be paying attention to such deals and a statement from the bureau as it approved the Tribune buying Local TV and Gannett acquiring Belo deals, said broadcast attorneys and public interest officials. “We remind stations and interested parties that our public interest mandate includes giving careful attention, on a case-by-case basis, to the economic effects of a transaction and its consistency with the Commission’s policies under the Act taken as a whole, including our policies in favor of competition, diversity, and localism,” said the bureau. Its recent back-and-forth with Sinclair over the deal to buy Allbritton has also fueled a perception of increased scrutiny, the attorneys said. It shows the bureau is still processing such deals, however, one attorney pointed out.

Wheeler should take “a fresh look” at sharing arrangements because they are “legal fictions,” said Free Press Research Director Derek Turner. He said it’s likely that some grandfathering provisions would be involved if the commission addresses sharing agreements, but he believes “the era of blatant deals” involving sharing arrangements may be coming to an end.