WASHINGTON (CNS) — At the end of March, the Federal Communications Commission took action to quash the growing monopolization of local TV airwaves by just a handful of broadcasting conglomerates.
It used to be that one company owned the CBS affiliate, another the NBC station, and so on down the line all the way to the independent, unaffiliated stations in a city. One reason was because the FCC at one time had strict limits on the number of stations that one company could own.
To promote the growth of the UHF band for channels 14 and above, the FCC changed its formula from a numeric limit to a ceiling on the percentage of the U.S. household that could be covered by the broadcast area of a company’s TV properties — and then declared that ownership of a UHF station counted only half as much as the original VHF channels.
Those caps kept getting nudged upward through the remaining decades of the 20th century. Spurred on by the Telecommunications Act of 1996, TV stations were subject to a buying and selling spree. And when some broadcast firm was bumping up against the cap by buying a slew of other stations, the FCC usually found a way to accommodate it.
But when ownership limits couldn’t be further expanded stations came up with the concept of a “joint service agreement” to help stations purportedly in trouble. Another broadcaster in the market would enter into a deal to sell advertising time jointly for both the bigger and the smaller station; more often than not, the bigger station took on programming responsibilities as well. It’s still jarring to see commercials promoting one station’s shows on another channel, but that’s because the senior partner in these agreements now has an economic interest in the theoretical competitor’s success.
“Nearly 300 full-power local TV stations changed hands in 2013 at a price of more than $8 billion,” said the Pew Research Center’s 11th annual State of the News Media report, issued in April, “with big owners getting even bigger.”
“In terms of programming, a clear result is more stations in the same market being operated jointly and sharing more content. As of early 2014, joint service agreements exist in almost half of the 210 local TV markets nationwide, up from 55 in 2011,” the report added.
“And fewer stations are producing their own newscasts. The ultimate impact on the consumer is complicated to assess, but the economics benefit to the owner is indisputable.”
So, if you think it’s jarring to see commercials for one station airing on another station, consider the impact on your brain when you see news anchors and reporters long identified with one station doing reports for another station’s newscasts. In some cities, one station’s newscast is rerun at a later hour on a different station. So much for independent news judgment.
The FCC’s action, which passed on a 3-2 vote on the five-member commission, sets a bar of 15 percent in ad sales by one station for another as the amount that constitutes a joint service agreement. It also allows two years for such agreements to be disentangled.
While broadcasters say the agreements are needed to save the kind of money required to mount local programming, there has been precious little evidence of that. FCC chairman Tom Wheeler argued during the March 31 FCC meeting that would-be buyers of stations found themselves outmuscled by joint sales agreements, if not frozen out of the station-purchase market altogether.
The FCC also included a waiver for stations to continue in a joint sales agreement, primarily if there is an ownership stake in one of the stations by women or minorities. And the FCC has 90 days to decide whether to issue a waiver.
“For years, a small handful of powerful conglomerates has used outsourcing agreements to dodge the FCC’s ownership rules and grow their empires at the public’s expense. And for too long the agency has looked the other way as these companies have dominated the airwaves,” said a March 31 statement by Craig Aaron, president and CEO of Free Press, a Washington communications policy think tank.
“It’s time for conglomerates to start playing by the rules. Divesting some of their stations could open the door for truly independent and diverse owners to enter a marketplace conglomerates have controlled for years,” Aaron said.
It will be interesting to say the least how the FCC action will change the TV landscape. Pew’s figures on 2013 station sales would place the average value of those stations at somewhere around $26.7 million — nearly quadruple the 2012 price. At that rate, it’s not going to be some mom-and-pop outfit with a handheld camera making a purchase.
Pattison is media editor for Catholic News Service.