NAB Looking to Next FCC to Reverse Media Ownership Rules

The NAB will look to the next FCC to reverse media ownership rules instead of the courts, said a petition for reconsideration filed with the commission Thursday. NAB already had filed a court challenge of the 2014 quadrennial review with the U.S. Court of Appeals for the D.C. Circuit, but it filed a motion to withdraw that petition for review Friday. The decision to pursue the matter at the FCC indicates NAB believes the upcoming Republican-controlled FCC will be more sympathetic to the association’s arguments than the courts, a possibility that was foreseen by some broadcast attorneys following the case (see 1611090061). “This is not a surprise,” said Georgetown University Institute for Public Representation Senior Counselor Andrew Schwartzman, who represents Prometheus Radio Project in its court challenge of the media ownership rules. Nexstar Broadcasting and Connoisseur Media also filed recon petitions with the FCC against aspects of the media ownership rules.

The FCC is still Democratic controlled, but broadcast attorneys and Schwartzman said the process triggered by the recon petitions means President-elect Donald Trump will take office before the earliest point the FCC could issue a decision on the matter. There's uncertainty about the Trump administration's views on communications matters, but it's believed the next FCC will favor standard Republican stances on deregulation and not opposing consolidation, said several broadcast attorneys. Commissioners Ajit Pai and Michael O'Rielly already said they favor loosening media ownership rules, and they likely will be deciding the fate of the recon petition, said a broadcast attorney. "Procedurally, going to the FCC now still gives NAB the ability to pursue the matter in court later" if it doesn't like the next FCC's decision, said Wilkinson Barker Broadcast Attorney David Oxenford. Oxenford represents Connoisseur in the matter.

NAB also filed to intervene on the FCC's behalf against Prometheus Radio Project, so the broadcast association will remain in the case. Prometheus is seeking to require the FCC to study ownership diversity and to take further steps to curb shared service agreements, while NAB was seeking to have ownership restrictions loosened. The News Media Alliance also challenged the ownership rules, and the case will continue with Prometheus and NMA as petitioners. The Multicultural Media Internet and Telecom Council and NABOB are also parties in the case (see 1611170055). If NAB's recon petition is still active when the case goes before the 3rd U.S. Circuit Court of Appeals -- where it's expected to end up -- NAB might seek to stall court action by arguing the FCC should decide the recon petition first. That may not play well at the 3rd circuit, said a public interest lawyer, since NAB's previous arguments in the matter were based on the FCC's not taking action it was congressionally required to do. Asking the court to forestall FCC action on the same matter might not be easy to argue, the attorney said.

The FCC shouldn't “retain rules that limit broadcasters’ ability to compete, particularly against increasingly consolidated multichannel video programming distributors (MVPDs) and online video providers,” said NAB in its recon petition. “For stations and their services to survive, let alone thrive, broadcasters must be permitted to achieve economies of scale and scope, particularly in their provision of local news,” the petition said. “Economies of Scale and Scope in TV Broadcasting “ is the title of a report prepared for NAB by economist Jeffrey Eisenach, who's advising the Trump administration on FCC matters as part of its communications “landing team.” The FCC media ownership order “in no way represents the 'fresh look' at the media marketplace” required by Congress, NAB said. NAB wants the FCC to roll back cross ownership and local ownership rules.

Nexstar's recon petition seeks “such modifications as necessary to permit duopoly ownership in all markets,” the petition said. Nexstar also wants the FCC to reverse its decision to treat television joint sales agreements as attributable for the purposes of calculating ownership. Connoisseur is challenging a narrower aspect of the ownership order, the way the FCC determines ownership of radio stations in embedded markets. “An 'embedded market' is a suburban radio market which Nielsen separately identifies as a radio market for which it reports ratings,” Connoisseur said. “Radio stations licensed to communities in embedded markets are also considered part of a larger 'parent' market encompassing an entire metropolitan area.” Connoisseur wants the commission to create a more in depth test for determining whether such stations comply with ownership rules, the filing said.