Media Ownership Recon Order Possible for September or October

An FCC reconsideration order that would relax broadcast ownership rules is still expected in September or October, attorneys and industry officials told us (see 1707190054). The item, an order on reconsideration of the 2014 quadrennial review, is expected to make it easier for the Sinclair/Tribune deal to be approved without divestitures. Industry officials and attorneys said it's widely expected to roll back newspaper/broadcast cross-ownership rules and rules on joint sales agreement (JSA) attribution, and may also relax or change the eight-voices test and top-four network rule. The American Television Alliance met with FCC officials last week to urge the commission not to eliminate the top-four network rule.

Though many broadcast industry officials expect the order in September, it could be pushed back because of the complexity of the issue or to account for the input of recently seated FCC commissioners Jessica Rosenworcel and Brendan Carr, some industry sources said. Though an FCC official noted Carr and Rosenworcel would have more than a month to weigh in from their August swearing-in to the Sept. 28 commissioners’ meeting, it’s possible one or the other may want more time, an industry official said. The FCC didn’t comment.

Newspaper ownership restrictions and JSA rules are considered extremely likely targets of the order, but broadcast officials are not as certain -- but still optimistic -- about changes to the eight-voices test and top-four network rule, they told us. NAB and individual broadcasters have argued both rules are arbitrary and outdated and should be eliminated, but a broadcast industry official said relaxing the rules rather than eliminating them may be more likely. The recon order isn't expected to include any of the items raised in the FCC’s media deregulation proceeding or an examination of the national ownership cap -- those proceedings are separate, a Media Bureau official said.

Newspaper cross-ownership rules were singled out as a rule the FCC has cause to eliminate by the 3rd U.S. Circuit Court of Appeals in its ruling against the FCC’s 2014 quadrennial review, and the U.S. Court of Appeals for the D.C. Circuit previously ruled against the eight-voices test, broadcast attorneys said. Some attorneys said that could make those rules easier for the FCC to relax than the top-four network rule, though others felt the commission has enough of a record to relax or eliminate them all.

Orders passed under the previous administration barring joint negotiation of retransmission consent deals by two top-four network stations show that rules barring common ownership of two top-four network stations in the same market are “in the public interest,” ATVA said in its ex parte filing. “Under the Administrative Procedure Act prohibition against ‘arbitrary’ or ‘capricious’ agency action, the Commission may reverse this explicit finding only if it offers a ‘reasoned explanation’ for doing so,” ATVA said. “Issues raised by joint negotiation and joint ownership of top-four stations are exactly the same.”

Though broadcasters have many expectations for the recon order, industry and FCC officials said the final character of the order likely is still in flux. Once a recon order is approved, it's practically guaranteed to be challenged in court, public interest and broadcast officials said.