Justice Supports FCC Crackdown On JSAs
The Department of Justice has endorsed an effort to crack down on joint sales agreements and other sharing arrangements between TV stations — offering key Obama administration support for a reform effort being promoted by FCC Chairman Tom Wheeler.
“The Department believes it is appropriate for the commission’s ownership ‘attribution’ rules to treat any two stations participating in a JSA (or agreement similar in substance to a JSA) as under common ownership,” said DOJ’s antitrust division, in a Feb. 20 filing that was posted on the FCC’s website today.
In its filing, DOJ also urged the FCC to carefully examine sharing agreements that don’t include JSAs and to “take action where those agreements do not serve the public interest.”
“Such arrangements often confer influence or control of one broadcast competitor over another,” DOJ said. “Failure to account for the effects of such arrangements can create opportunities to circumvent FCC ownership limits and the goals those limits are intended to advance.”
DOJ also said that TV station use of “sidecar” companies to control other stations that are “nominally owned by a separate entity” had become increasingly prevalent. “In practice, our investigations have revealed that these ‘sidecars’ often exercise little or no competitive independence from the other station,” DOJ said.
DOJ also urged the FCC to require broadcasters to file all sharing agreements at the agency so the FCC can analyze them.
“Such analyses should consider whether collaborations will harm competition by increasing the potential for firms to coordinate over price or other strategic dimensions and/or by reducing incentives of firms to compete with one another,” DOJ said.
Wheeler could not immediately be reached for comment, and an FCC spokesman declined comment.
But Wheeler is expected to unveil an order as soon as next month that would bar broadcasters from forming new JSAs — deals under which one stations sells ad time for another station in the same market. Under the plan, the FCC also would give broadcasters up to two years to unwind existing JSAs.
Wheeler is also expected to seek public comment on what to do about other forms of shared services agreements between stations.
In response, Dennis Wharton, a spokesman for the National Association of Broadcasters, said: "NAB respectfully but strongly disagrees with the conclusions of the Justice Department's antitrust division. Joint sales agreements allow local TV stations that might otherwise go out of business to increase local news and community service, and to provide robust competition to pay TV giants.
“In an era when $200 monthly bills from consolidated broadband and cable companies are becoming the norm, it's important to remember that heavily regulated local TV stations remain free of charge to every American. NAB is disappointed with the Justice Department's conclusions, which we believe could kill jobs and damage the economics of local broadcasting."