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.
Notable CROSS rulings
Petitions asking the FCC to reject a proposed $1.5 billion deal between Gannett and Belo because it depends on shared service agreements (SSAs) are an effort to “hijack” the transaction to “advance broader policy goals,” said Gannett in an opposition comment. It was filed alongside similar ones from Belo and affiliated companies Sander Operating Co. and Tucker Operating Co. in docket 13-189 Friday. Under the terms of the Belo’s purchase by Gannett, some of the stations involved in the transaction will be transferred to Sander and Tucker but still share services with Gannett under SSAs (CD July 26 p1). The American Cable Association, Time Warner Cable and DirecTV asked the commission to deny the deal to keep retransmission consent fees down, while a host of public interest groups filed a petition arguing that the FCC should stop companies from using SSAs to get around cross-ownership rules. The petitions are a “stale and overblown rehash of policy positions” from the 2010 Quadrennial Review and the retrans proceeding, said Belo’s filing.
A study on the impact of newspaper-broadcast cross ownership on minority and female media owners by the Minority & Media Telecommunications Council may be based on outdated and inaccurate information, said Free Press in filings submitted to the FCC Tuesday in response to a Media Bureau request for comment on the study (http://bit.ly/176c9oM). Using information on the study’s participants submitted to the commission by MMTC under a protective order to secure survey respondents’ identities (CD July 29 p11), Free Press found that MMTC may have “erroneously identified certain stations as female and/or minority owned” and could have had business relationships with some of the respondents. The council’s reply comment on its study included a footnote (http://bit.ly/1cw6bUg) that said Free Press’s new allegations are “false and frankly outrageous” and “have no merit.” MMTC had no further comment Wednesday.
The FCC has judged its rules largely appropriate and did not push for repeals and modifications. It released its 2012 biennial review of telecom regulations in a public notice Tuesday (http://bit.ly/1eq0t2I). The 19-page document outlines the determinations and recommendations of FCC offices and bureaus, as they are required to do by the Communications Act every two years, on any regulation that may be outdated. The commission received comments earlier in the year on whether regulations are out of date and addressed those points throughout the document. The review of regulations crosses many different bureaus of the FCC.
A retransmission consent dispute between Time Warner Cable and CBS resulted in a blackout of CBS programming to TWC subscribers in the New York, Los Angeles and Dallas markets. The companies’ last agreed-upon deadline extension expired at 5 p.m. Friday (CD July 31 p15). TWC subscribers also are blocked from accessing programming online.
The Media Bureau announced the filing of an application and deadlines related to the proposed deal between Media General and Young Broadcasting (http://bit.ly/15fQPA8). The deal doesn’t run afoul of cross-ownership rules because Berkshire Hathaway, “which owns newspapers in several Media General television markets, will no longer hold an attributable interest in Media General after consummation of the merger,” said the bureau in a news release Wednesday. The companies have requested renewal for “three existing waivers of local television multiple ownership rules,” the bureau said. Petitions to deny the transaction are due Aug. 8. The bureau also set comment deadlines on Wednesday for the Gannett/Belo and Tribune/Local TV deals (CD Aug 1 p17).
The FCC Media Bureau announced the filing of applications and comment deadlines for the proposed merger between Gannett and Belo (http://bit.ly/16jV0JY) and the proposed merger between Tribune Media and Local TV. Because market overlaps in the Tribune transaction would violate the commission’s cross-ownership rules in some markets, the parties have proposed transferring TV licenses for stations in Norfolk, Va., Portsmouth, Va., and Scranton, Pa., to Dreamcatcher, in a transaction that would include a shared services agreement with Tribune, said the Media Bureau release. Petitions to deny the transaction are due Aug. 19, opposition comments Sept. 4, and replies to the oppositions Sept. 16, said the bureau. The Gannett/Belo merger application also involves cross-ownership issues in some markets. To resolve them, TV licenses in several markets -- including Phoenix, St. Louis and Tucson -- will be transferred to either Sander Media or Tucker Operating Co., in deals that will include shared services agreements or Joint Sales Agreements, the Media Bureau said. At the request of Free Press and several other organizations that filed petitions to deny in the Gannett/Belo proceeding, the bureau is instituting “permit but disclose” ex parte procedures in the proceeding, the bureau said. Oppositions to the petitions to deny are due Aug. 8, and replies to the oppositions Aug. 20.
Commissioner Julie Brill supports having the FTC use its authority under Section 6(b) of the FTC Act to study the business practices of patent assertion entities and examine how such PAE practices affect competition and consumer interests, she said Wednesday. Section 6(b) of the FTC Act gives the agency the authority to do a full investigation of an industry’s business practices, including issuing subpoenas, and report their findings to Congress and the public. Chairwoman Edith Ramirez said in June that the commission should initiate a 6(b) study of PAEs, but didn’t say she would formally ask the commission to vote to start one (CD June 21 p16). Brill told us after an American Constitution Society event that Commissioner Maureen Ohlhausen has also said she supports conducting a 6(b) study. Ohlhausen and fellow Commissioner Joshua Wright did not respond to a request for comment.
Before opening the 5.850-5.925 GHz band for Wi-Fi, as proposed by the FCC in February, the commission should first assemble an advisory panel to look at how unlicensed use of the spectrum will affect dedicated short range communications (DSRC) technologies, said the American Association of State Highway Transportation Officials (AASHTO) in reply comments filed at the FCC. The Intelligent Transportation Society of America said in its comments that the Department of Transportation and original equipment manufacturers have spent hundreds of millions of dollars to make crash-avoidance technologies a reality.
The FCC will likely approve the proposed $1.5 billion merger between Gannett and Belo despite petitions to deny the transaction filed Wednesday by the American Cable Association, Time Warner Cable, DirecTV and multiple public interest groups, said several industry observers in interviews Thursday. “It’s unlikely that the petitions to deny would result in the commission not approving the transaction,” said former FCC Commissioner Robert McDowell, now a visiting fellow at the Hudson Institute.