2014 Quadrennial Review Unlikely to Lead to Much Change, Attorneys Say

The FCC’s 2014 Quadrennial Review of broadcast ownership rules is unlikely to lead to substantive change in the commission’s rules, several broadcast attorneys and industry observers told us. Comments on the quadrennial rulemaking were due last week, and though many commenters asked for rule changes, some didn’t seem to think such changes were likely. The review is mandated by Congress.

The notice of further rulemaking “describes an impossibly high standard to relax the ownership restrictions,” NAB said in its comments (CD Aug 8 p7). Though some said the FCC’s policy shift on sharing agreements and Chairman Tom Wheeler’s reputation for swift action could mean this review will go differently than its 2010 predecessor, several others said the commission’s failure to resolve the 2010 review, the other large tasks facing the FCC, and the politically thorny nature of media ownership mean the 2014 review won’t lead to much change. “I am always hopeful for regulatory review, but the FCC has a lot on its plate,” said BIA/Kelsey Chief Economist Mark Fratrik, who assisted NAB with its recent quadrennial review comments.

Many broadcast attorneys who want FCC ownership regulations relaxed pointed to the commission’s timeline for the review as a sign that FCC action on ownership matters isn’t coming soon. Wheeler has said the review is planned to lead to recommendations in June 2016 (CD April 7 p1) -- two years in the future, when he may no longer be FCC chair, several broadcast attorneys said. Wheeler’s stated interest in closing loopholes in the FCC’s ownership rules may fly in the face of that argument, said Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman. “For better and for worse, the signature characteristic of Chairman Wheeler’s administration has been to move decisively and quickly on major matters,” said Schwartzman. However, Wheeler may have too many major matters in front of him to take up more media ownership issues, several attorneys told us. With the incentive auction and two major mergers tying up the commission and the Media Bureau, changing ownership policy anytime soon may be too much, they said.

The 2014 review Further NPRM’s similarity to the 2010 version is another indication it won’t likely have a different result, several broadcast attorneys told us. Though the 2014 Further NPRM does take a different approach to cross-ownership rules and other specifics, CBS and Fox simply re-filed their 2010 comments last week. Schwartzman compared the review and the responses to it to a loop in time. “There’s a ‘Groundhog Day’ aspect to this,” he said. “The basic responses haven’t changed.” However, he said the places in the review Further NPRM where the FCC has tentatively concluded that it will do something -- such as removing the radio cross-ownership rule -- could indicate likely commission action. Schwartzman doesn’t want ownership rules relaxed, but the FCC “tends to do what it proposes,” he said.

The commission should change its rules to make shared service agreements (SSAs) attributable, Schwartzman said. Though the Further NPRM calls only for making such arrangements attributable, the commission’s 2010 review has provided the FCC with enough record to change the rule, and doing so would fit with recent commission policy on joint service arrangements, he said. However, broadcast attorneys told us that, while JSAs and SSAs look similar, rules for SSAs would be much more complicated for the FCC to create. While JSAs are precisely defined to involve ad sales, SSAs can range widely, from deals to share news choppers to almost completely combined staff. The difficulty of defining and regulating such a broad category of deals makes such a rulemaking unlikely, and a more difficult push than the FCC’s rule making JSAs attributable, the attorneys said.

Another possible obstacle to new ownership rules coming from the 2014 quadrennial review is litigation, broadcast attorneys told us. NAB, the Prometheus Radio project (represented by Schwartzman) and others have already challenged in federal court the 2014 review and the FCC’s ending of the 2010 review (CD June 2 p3). The case is in the U.S. Court of Appeals for the D.C. Circuit, and public interest groups have asked for the venue to be changed to the 3rd U.S. Circuit Court of Appeals, where a previous attempt to change the FCC’s ownership rules foundered.