updated, Friday, 6:30 a.m. ET

Wheeler Moves To End Sharing Agreements

If a majority of the commission supports his proposal, joint sales agreements and joint TV station retransmission consent negotiations will be banned, effective immediately.
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FCC Chairman Tom Wheeler will ask his fellow commissioner to vote March 31 on a proposal that will ban joint sales agreements and joint TV station retransmission consent negotiations, a senior FCC official told reporters Thursday.

The JSA and retransmission consent bans will become effective immediately, assuming a majority of the agency’s commissioners vote in support of the regulations, an FCC source says.

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A senior FCC official also says the JSA crackdown will apply to pending station transactions at the FCC, and provide up to two years for existing JSAs to unwind.

The official also says Wheeler is proposing to adopt an expedited waiver review process under which broadcasters will be able to seek waivers for JSAs.

If a broadcaster can show that a particular JSA serves the public interest, it may be able to get a waiver to continue a joint sales sharing deal, the FCC said.

The JSA rule proposed will require the broker station in a JSA to attribute the ownership of the brokered station if the dominant station sells 15% or more of the ad time of a competing station in the same market.

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As long expected, the FCC will also seek comment on what to do about other forms of station sharing agreements that don’t include JSAs, including what disclosure requirements the FCC should require for those.

The retransmission consent crackdown will prohibit two or more separately owned Top 4 broadcast stations in the same market from jointly negotiating retransmission consent, the FCC said.

The FCC order, assuming it’s approved March 31, will adopt “a rebuttable presumption that the costs of joint negotiation by non-Top 4 station combinations in the same market outweigh the benefits, and that joint negotiation among these combinations constitutes a failure to negotiate in good faith,” the FCC said in a background paper.

The FCC also plans to ask for additional comment on whether to “eliminate the commission’s network non-duplication and syndicated exclusivity rules governing carriage of out-of-market network and syndicated programming,” the FCC said in a background paper.

In a blog on the FCC’s website this afternoon, Wheeler alleged that JSAs are being used as a way to get around agency ownership regulations limiting how many stations can be owned in a market.

“At a time of unprecedented change in the video business, the FCC should deal with facts, not reality-obscuring legal fictions,” Wheeler said. “Making JSAs attributable is simply recognizing reality.”

Wheeler also said that joint retrans negotiations could lead to higher prices for consumers. “This action [his crackdown] will return retransmission consent to one-to-one negotiations as intended by Congress, rather than many against one — with potential consequences for the consumer as one who ultimately pays the price,” Wheeler said.

Rep. Greg Walden (R-Ore.) released a discussion draft of a satellite bill Thursday afternoon that includes a provision that would impede the ability of the FCC to attribute JSAs immediately. But the bill to reauthorize the Satellite Television Extension and Localism Act, or STELA, has yet to be officially introduced in the House and would have to be approved by both the House and Senate before becoming law.

Among those commenting on Wheeler's move were:

  • Gordon Smith, NAB President-CEO: "NAB is disappointed but not surprised by this proposal from Chairman Wheeler. Broadcast companies across America have demonstrated that sharing arrangements lead to more local news and provide robust competition to giant pay TV providers. The real loser will be local TV viewers, because this proposal will kill jobs, chill investment in broadcasting and reduce meaningful minority programming and ownership opportunities. Coincidentally, two industries would benefit from today's proposal: Big Cable companies who want less competition for advertising in local markets, and wireless companies who support punitive FCC actions that drive more TV stations into spectrum auctions."
  • Rep. Henry Waxman: “I welcome the commission’s  decision to consider  changes to its broadcast ownership rules. In particular, I strongly support the chairman’s proposal to bring broadcast television’s attribution rules for joint services agreements in line with broadcast radio.  I am also pleased with the chairman’s plan to examine shared services agreements. While there are many instances where broadcasters sharing resources is appropriate, such sharing arrangements should not be used to circumvent the FCC’s ownership rules and undermine localism, competition and diversity over the public airwaves.“
  • Matthew M. Polka, American Cable Association president: “FCC Chairman Wheeler deserves high praise for addressing the broken retransmission consent market and moving to correct one of its most serious flaws — the collusion practiced by dozens of TV stations owners, who are supposed to be competing with one another.  Adoption of Chairman Wheeler’s proposed order would represent a victory not only for fair competition, but also for millions of consumers who are being victimized by TV station conglomerates, which have the perverse idea that collusion is somehow consistent with their legal charter to bargain in good faith.”

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Comments (51) -

PhillyPhlash Nickname posted over 3 years ago
FINALLY: an FCC chief who actually believes in the FREE MARKET and not corporate communism. Kudos, Tom; now DON'T BACK DOWN!
PhillyPhlash Nickname posted over 3 years ago
The situation in Philly is pathetic, with 2 of the 3 net affiliate news depts broadcasting on what should be competing stations-and the CBS affil's promotions dept has the chutzpah to brag about it to viewers! Shame on them.
Chuck Nickname posted over 3 years ago
If Commissioner Wheeler believed in the free market he wouldn't be pushing the spectrum auction that will reduce the number of channels available for TV stations. We had interference before the switch to all digital with stations operating two channels. But at least they were spread over more channels. After the transition interference has continued and we have lost access to a couple of stations as a result. The plan to have some stations also poses a threat to the high quality of the signal today. Just take a look at the quality when too many programs are broadcast at once--looks even worse than cable. A further loss of channels will make it even harder for stations to exist.
Howard Burgers posted over 3 years ago
That ruling will certainly ruin David Smith at Sinclair' day.
TVMN Nickname posted over 3 years ago
He needs to be brought down a few pegs.
FreeRightsUSA Nickname posted over 3 years ago
About time.
SalesGal Nickname posted over 3 years ago
I am curious about something, Is he only doing this to make it more difficult for the smaller stations in a JSA to operate free standing, hence making the spectrum auction more appealing ?
PhillyPhlash Nickname posted over 3 years ago
Oooh hadn't thought of that! Plausible conspiracy theory, indeed. But joint op agreements still should not be permitted because a lack of media diversity violates the public interest, convenience and necessity, to borrow a phrase...
tvspy Nickname posted over 3 years ago
I had thought the same thing a month ago...if more small stations are in trouble they will look to the spectrum auction to sell their frequency. This will benefit the wireless companies who will have more spectrum to buy...and what is Wheeler's background in! Less jobs in tv...more spectrum space for Wheeler's friends in the wireless industry.
Upwind Nickname posted over 3 years ago
JSAs & SSAs certainly have not increased jobs in the television industry.
Burt Ward posted over 3 years ago
We have the tv sales credit group who meets once a month to talk about deadbeat advertisers. Participation at the meeting used to be about 20 people. Now its down to 10 to 12 because of all the JSA's in the city. Tribune and Sinclair both own two former independent stations and they moved the acquired stations to the existing plants, brought the towers down and sold off the station property. It hurt local options for viewers and in many instances hurt competition. The only tangible benefit that will occur in 2015/16 is that instead of having co-phased transmitters they will be able to use pcip to use only one transmitter when the rebanding happens.
tjxx Nickname posted over 3 years ago
Another Liberal screwing things up..Never worked in a business in his life.Professional Interloper.Jusl like his boss!!!
HopeUMakeit Nickname posted over 3 years ago
this will create jobs. end of story.
tvspy Nickname posted over 3 years ago
No it will simply cause the station to go dark and more will lose jobs. Think newspaper...how many have closed up shop over the past 10-years?
Insider Nickname posted over 3 years ago
Nope. Federal Reserve released big report last week that showed more smaller businesses causes job destruction (as opposed to less larger businesses creates more jobs). macroblog.typepad.com/macroblog/2014/02/the-pattern-of-job-creation-and-destruction-by-firm-age-and-size.html
tvspy Nickname posted over 3 years ago
Why do stations allow themselves to get into a SSA/JSA? They are unable to be profitable as a free standing broadcast station. This ruling will result in less individual broadcast station and less local news. Broadcasters will acquire the major broadcast affiliates for their digital tier, and simply simulcast their existing local news in order to save money. Owners enter JSA's/SSA's when the are not profitable. Free Market? The free market is what he just took away if this goes thru. This has been going on for 20-years...Sinclair got greedy and did not improve the product the managed. You will not like what actually come out of this.
nefnet Nickname posted over 3 years ago
Bingo. Station I work for would have gone dark if it weren't for a JSA. And I make sure we do as much public service stuff as we can afford because I care. What this will do is cut that out (our JSA partner isn't nearly as interested in serving the public as I am) and our spectrum will go to the auction, which is what I believe this is intended to accomplish in the first place. So less voices, less community service, fewer free entertainment and information options for viewers... But more spectrum for ATT and VZW to sell back to us at exorbitant rates. So the guys who win are the guys who pay the big bucks, yet again, and guys like me who care about the communities we serve will be out of a job. Thanks for nothing, Wheeler.
SalesGal Nickname posted over 3 years ago
Ironic, the Dems in Washington want to give everything for free (food stamps, healthcare, cell phones, etc) except TV and entertainment. All of this leading up to a big tax on broadband and internet bills for the consumer coming up I am sure.
csn88 Nickname posted over 3 years ago
I disagree TV SPY... The overwhelming majority of these arrangements are simply ways to evade the ownership caps. It's more of a "margin building" step as JSA's and SSA's hub accounting, engineering, reporting, photography and traffic staffs. Suddenly the relatively slim TV margins build exponentially. It's never been about "rescuing" poor performing stations. I do agree with your take on the mega groups greediness being their ultimate downfall with these. They took it too far and got too big and will now pay the price. I do wonder if the re-trans part was a bone to throw the cable operators knowing that they cannot disband re-transmission consent altogether. If they go ahead and approve all the forthcoming waivers then it's all for nothing.
nefnet Nickname posted over 3 years ago
Don't you find it kind of funny, though, how the cable guys and telcos are permitted to grow with fewer constraints and oversight than the broadcast TV market? What odds would you lay on their internet pipes ever getting classified "common carrier"? I call it slim to none, and so we will continue to see toothless regs thrown out in courts and once this mission is done and local broadcasting is hamstrung by getting starved out of their retrans dollars and unable to get syndex protection or sheltering from distant signals, that's less money for local news. Papers gone, broadcast news a shadow of its former self... Where will Americans get their news and information? From the cable nets (as vertically integrated of a business as one could imagine, the wet dream of a megalomaniac) and from the Internet, which will be subject to the whims of the huge MSOs (In ten years I may not even have to pluralize that acronym, just say Comcast instead) and the wieless guys and investigative reporting, localism, and the checks against government corruption that a health, free press brings will be a thing of the past. Hope you enjoy that America; I don't think I will at all.
Doubtful Nickname posted over 3 years ago
Cable and telco (and satellite) guys get a pass because they have to build out their distribution system. Broadcasters get the spectrum for "free" in return for being public stewards. If we wanted to pay the billions to build out a wire-based distribution system, or lease spectrum from the government, we'd probably have fewer restrictions.
Insider Nickname posted over 3 years ago
Incorrect Doubtful. You have no understanding of what it has costs longterm to build the "free" distribution system for TV - especially the many long years where many of the non Network Affiliates hardly made money - if they actually did make money.
Anthony Belle posted over 3 years ago
If that passes, good-by news on WYTV in Youngstown
newsbot Nickname posted over 3 years ago
The main effects of this proposal would be to vastly increase Big Cable's leverage with broadcasters in retransmission consent negotiations and to force broadcasters to sell off spectrum to benefit Big Wireless. Wheeler shows his lobbyist origins in spades.
nefnet Nickname posted over 3 years ago
Also don't forget all the spectrum this will drum up for their auction. That's the REAL order of business, here-- I'd bet a year's salary (which coincidentally will likely be the last one I get as a broadcaster, thanks to this).
Roger Thornhill Nickname posted over 3 years ago
Gordon Smith has it right. This is little more then legal harassment from the FCC to force broadcasters into the incentive auctions. But guess what? Broadcast television will survive this setback and it will survive because greater, more creative minds then Wheeler are at the helm of our industry. Now we need to gear up and prepare for the even greater fight to come…the incentive auction.
DCInsider Nickname posted over 3 years ago
A heck of a payback by the Chairman to his cable and broadband buddies. Now, let's watch him approve the Comcast-TWC merger. Isn't the real monopoly player in these markets the cable operator who faces little direct competition? The Chairman has always hated broadcasters and he did not waste much time trying to stick a knife in their collective backs. A regulator if there ever was one. Julius was bad but this guy is scary.
Roger Thornhill Nickname posted over 3 years ago
Wheeler is a cable industry lackey and another Obama lap dog, like his predecessor. As I've said before, I don't think Tom ever cut his ties to either the cable or broadband companies he, at one time, represented. Obama has installed a fox to guard the hen house.
TVMN Nickname posted over 3 years ago
Simply put, if you can't afford to run a station, don't buy one. Or four. Or nine. SSAs are the lazy way out.
nefnet Nickname posted over 3 years ago
If these guys have their way, no one will be able to afford to run a station. There won't be enough money in it.
Insider Nickname posted over 3 years ago
TVMN - If you truly were in Broadcasting and knew what programming brought in what revenue wise, you would undersand why your comments are incorrect. Your way of thinking just sends failures to the auction - as well as their partners who cannot make it alone. Enjoy it when AT&T& Verizon charge you per GB of data per month
PlasmaMan Nickname posted over 3 years ago
There are markets out there with five or six television stations with total market revenue of $5-$6 million. Without a shared services agreement how is it possible for those stations to pay the bills pay their employees and keep the station on the air? Maybe the rule should not be the same for Yuma and Los Angeles.
Insider Nickname posted over 3 years ago
ding.ding......we have a winner! Those small stations will be going to auction.
Doubtful Nickname posted over 3 years ago
Disagree. In small markets there is no interest on the part of wireless, to buy bandwidth. Wireless needs the bandwidth in the top 25 markets. The small market operators lose twice...no SSAs and no buyers for their spectrum.
KMONEY Nickname posted over 3 years ago
So what will this mean for the Nexstar / CCA deal? Or has that already happened and we just haven't heard about its completion?
SalesGrrl Nickname posted over 3 years ago
Banning SSAs and JSAs in the top 25 markets seems wise, especially between the Big Four affiliates, but after that it's just harmful. If it were affordable, we wouldn't have zero minorities owning a full power TV station. Looks like we'll all just have to head on over to the comments section of the FCC site and weigh in. Besides, JSAs and SSAs are only a problem when they've combined their news functions, who cares who is selling the ads for the air time?! Pretty soon, it will just be PBS and the monopoly of cable.
GMRetiredTV Nickname posted over 3 years ago
If and I say IF Wheeler gets the other commissioners to go along, the unwind process will be a mess!! Every broadcaster will submit a waiver ...unwind will last years...and the lawyers will have lots of billable hours. None of this makes broadcasting better for anyone .... including the consumer.
Roger Thornhill Nickname posted over 3 years ago
We know the two Republican commissioners will vote against it, Pai definitely. But Clyburn might be the swing vote. Normally she would vote as the other Dems. But she is also a strong proponent for broadcast station ownership among minorities and women. It has already been shown that the stations most adversely affected by the loss of JSAs would be small market broadcasters--many of whom are minority and women owned. Clyburn must realize that she can't have it both ways. She can't vote along party lines on a rule that could negatively impact minority and women station owners, possibly forcing them to sell and making broadcast station acquisition unattractive, while at the same time advocating for increased ownership among these two groups. It's nonsensical, hypocritical.
Sammy Nickname posted over 3 years ago
Backwards movement. The days of 4 newsrooms in most places outside the Top 25 are gone. SSA/JSAs allow many small markets to retain another full power station or two. This said getting around the retrans negotiation aspect of this won't be hard- put the network affiliate on a D2 OR just build the illusory "Chinese Wall" between the two people negotiating for the operator. None the less this is backwards movement and is a scary proposition that shows what some want to do to Broadcast,
Chuck Nickname posted over 3 years ago
As a consumer this whole thing makes me think that what we are now enjoying. Great HD picture and an increased number of program options with ION, ThisTV, MeTV, PBS Create, AntennaTV, Cozi, etc. I fear this will be lost and we will be stuck with payTV bills that we don't need.
Sammy Nickname posted over 3 years ago
Backwards movement. The days of 4 newsrooms in most places outside the Top 25 are gone. SSA/JSAs allow many small markets to retain another full power station or two. This said getting around the retrans negotiation aspect of this won't be hard- put the network affiliate on a D2 OR just build the illusory "Chinese Wall" between the two people negotiating for the operator. None the less this is backwards movement and is a scary proposition that shows what some want to do to Broadcast.
tvspy Nickname posted over 3 years ago
Wait a minute...did cable reps above really try and paint the whoa is me card? Cable is the huge and growing monster, television groups are trying to get leverage where they can in order to have a fair negotiation of retrans. ESPN gets $5.25+ per subscriber per month. 100,000,000+ subs. They make 6-billion dollars a year before an ad is sold. Local broadcasters have 5-10x the average ESPN rating sign-on to sign-off...and most broadcasters are asking for $1.25-2.00 per sub. Frustrating.
TVGUY2 Nickname posted over 3 years ago
I keep hearing about "public good" - FCC says "we're doing this for the Public Good", all these academics and politicians against Broadcasters say this is for the Public good. I, for one haven't heard the Public complain about anything??? In fact most are happy that with the "D's" Broadcasters provide and more content without having to pay Cable and Satellite fees. I for one smell a wolf , (Wheeler) in sheep's clothing.
Couldashoulda Nickname posted over 3 years ago
A few questions and a thought… In its simplest form, isn’t local broadcasting just another form of content distribution, the foundation of which (over the air) was based on the consumer’s free access to content? In a day when the media and content distribution world is completely different than the time when the first broadcast license was granted, does the consumer really need more than one or two, free, over the air signals? Doesn’t current research indicate that declining local news demographic ratings stem, in part, from similarity of content between local news organizations, proliferation of news and information sources and the overabundance of local news programming? Isn’t the argument that fewer local television news choices would create a vacuum of disparate voices antediluvian when the number of voices producing local content, distributed across all screens and through print, has actually grown significantly in the past ten years? The arguments that JSA’s and SSA’s were necessary to protect the number of free, over the air voices in a market and the number of jobs in a market just doesn’t seem to make sense anymore. And, history demonstrates that as traditional business models age and industries decline - new industries, companies and jobs are created.
nefnet Nickname posted over 3 years ago
You do have a point, and I would be hard-pressed to defend the state of TV news and diversity overall, but without a (reasonably) healthy broadcast TV market then where are Americans left to get what news and investigative reporting they do consume? Cable news is "news" in name only, and does anyone think a blogger is going to go to city council meetings or make some phone calls to verify a story or do anything besides repost something they found online somewhere else? The real enemy of our freedom is the consolidation of the cable and Telco guys. Funny how everyone worries about groups like Nexstar and Sinclair having too strong of a voice when Comcast is about to control nearly 40% of Americans' access to the internet (and without any meaningful regulation over that control) and ATT and Verizon (Hell's Bells, I like to call them) soak up well over half of Americans' access to mobile networks, also without any meaningful regulation. If the whole point of the spectrum auction is to "enable and ensure access to wireless broadband, now and for the future", implying that the Internet is more important and critical to our daily lives than OTA TV (and it may be, not arguing that), isn't it ironic that the Feds are taking up ownership issues with broadcasters, who are apparently the "buggy whip manufacturers" of the Internet Age? What is the reason, outside of drumming up business for the spectrum auction? Because I don't think anyone can reasonably think that making a bunch of stations go dark or return their licenses is going to diversify voices in ANY market-- all it will do is make sure there are fewer of them, and the ones that remain will be less able to compete with the giant MSOs and Telcos (who aren't really about "localism" or "diversity" or "minority ownership" very much, are they now?) and therefore stuck in an untenable business, trying to run a race with their legs tied together. Sounds like a plan!
Couldashoulda Nickname posted over 3 years ago
I agree that consolidation of Telcos and cable is something that needs to be watched carefully and acted upon with cause. As for where American’s will get the news and investigative reporting they desire to consume? Good question. Local broadcasters and newspapers, once the bastions of local news and investigative journalism have for the most part, let ownership of those hallmarks slip away. Given the right demand, who is to say the digital world can’t support new lines of business created to deliver local news, weather and investigative journalism?
LeftField2010 Nickname posted over 3 years ago
There's a parallel here of sorts; have you noticed as more travelers pay the $85 for TSA Pre-check, the regular security lines (even the priority lines) are getting longer. Why? Because they're pulling TSA personnel off those lines and closing checkpoints. Why? They want the rest of us to fork over the 85 bucks. , and then what happens? Pre-Check lines will be as long as the non-Pre Check lines are now. Point being JSA &SSA dismantling is all about spectrum. They figured out how to force the broadcasters hand. Final thought; ATTENTION POLITICAINS...remember who gets you reelected...and it ain't CABLE. Local television gets you elected and reelected. Proceed with caution.
nefnet Nickname posted over 3 years ago
I like the parallel you draw here but you make an incorrect assumption at the end, there. Local television doesn't really get politicians elected and re-elected; MONEY does that. And the broadcasters cannot compete with the deep pockets of AT&T , Verizon, Comcast, Google, Apple, Microsoft... All those guys want this spectrum and have been paying handsomely to make sure they get it. The politicans are happy to give it to them because without the (tattered but still standing) investigative reporting provided by local news folks, they will be free to do their business in the dark, not in the light of public scrutiny. Everyone who matters wins! Note that doesn't include us.
FlashFlood Nickname posted over 3 years ago
The best thing that Wheeler can do (but won't) is to CANCEL the Spectrum Auction!!!
FlashFlood Nickname posted over 3 years ago
The best thing that Wheeler can do (but won't) is to CANCEL the Spectrum Auction!
eagleeye1 Nickname posted over 3 years ago
Wheeler was a lobbiest for the National Cable Television Assoc. Enough said. Common sense saw this coming. He has never been a fan of broadcasting. His appointment surely was going to make broadcasting difficult. Complete conflict of interest.
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Ratings

Overnights, adults 18-49 for September 22, 2016
  • 1.
    4.0/14
  • 2.
    1.7/6
  • 3.
    1.3/5
  • 4.
    0.9/3
  • 5.
    0.6/2
  • 6.
    0.3/1
Source: Nielsen

Reviews

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