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FCC Republicans Slam Quadrennial Order

Call it ostrich-like response; NAB agrees; D.C. weighs in

Reaction was swift in Washington, to the FCC’s release of the text of its quadrennial review order, which kept in place restrictions on broadcast TV and radio station ownership.

That started with FCC commissioner statements, where the Republican dissenters lit into the decision.

In a 17-page opus, Commissioner Ajit Pai said that while “the video marketplace has transformed dramatically,” the FCC has done nothing but rubber stamp the radio and TV ownership rules. “The more the media marketplace changes, the more the FCC’s media regulations stay the same,” calling the quadrennial an “ostrich of an order” that was not what Congress intended and is “a thumb in the eye” of the Third Circuit Court, which demanded the FCC take action on program diversity.

The FCC order bills its preservation of ownership rules as pro-diversity, but Pai strongly disagrees.

“This proceeding is proof of this agency’s plenary and purposeful abdication of its statutory duty,” he wrote. “It shows that this commission does not believe it is accountable to Congress or the courts. And it is evidence that unless Congress or a court steps in and takes action, this is the way that it will continue to be: The commission’s media ownership regulations will never be relaxed. Efforts to promote diversity will remain stalled. The law, the marketplace, and common sense will continue to be ignored.”

Fellow Republican Commissioner Michael O’Rielly was on the same page. “Rarely have I seen a proceeding take so long and a document say so much in order to accomplish nothing of value,” he said.

“Prodded at long last by court order into completing the statutorily-mandated Quadrennial Review, the commission has managed to produce a thoroughly objectionable document divorced from the realities of today’s media marketplace,” said O’Rielly.

“Incredibly, the only significant changes this commission is willing to make are those that serve to render current media ownership rules, last effectively amended in 1999, even more restrictive,” he said. “While grudgingly allowing for Congress’ damage-minimizing directive to grandfather existing Joint Service Agreements, the order reinstalls the commission’s 2014 JSA attribution rule, ignoring the evidence that JSAs have served the public interest well in many circumstances, and narrowing the options for broadcasters attempting to stretch scarce resources. And the order doubles down on this punitive stance by requiring disclosure of Shared Service Agreements as a waystation en route to a promised proceeding regarding SSA attribution.”

The Multicultural Media, Telecom and Internet Council was also less than impressed with the outcome and said it had not decided yet whether to sue the FCC. MMTC had wanted the FCC to extend the cable procurement rule to other sectors, but the FCC order did not do so, though it asked about whether it should be extended to broadcast.

Congress in the 1992 Cable Act requires cable operators to encourage participation by minorities and women in all parts of their organizations. MMTC wants that requirement to extend across the board.

The National Association of Broadcasters had submitted a FOIA request to the FCC for the information it used to conclude the rules needed to stay.

NAB said in a letter to the FCC Thursday that the FCC “failed to conduct the rigorous media ownership review mandated by Congress,” and called the FCC’s evidence “underwhelming” and “devoid of useful data.”

And echoing, or foreshadowing the Pai ostrich analogy, called the evidence “a hollow foundation for research or analysis.” Instead, it said. “[T]he records prove what broadcasters have long suspected — the FCC has taken a purposeful ‘head in the sand’ approach to its required quadrennial examination of the media marketplace.”

As part of the quadrennial review, the FCC extended the ban on co-ownership of two top-four rated TV stations to cases of network affiliation swaps to prevent using those to evade the restrictions.

That was just fine with the American Cable Association, which saw such swaps as a path to unfair leverage in retransmission consent negotiations.

“This is a positive step that the FCC is taking to ensure compliance with its local television ownership rules and improve the functioning of the retransmission consent marketplace,” said ACA President Matt Polka. “The FCC already prohibits the ownership of one top-four rated television station from acquiring a second top-four rated station in the same market. Its action today will rein in the practice of a single owner of a top-four and non-top-four rated station achieving this same goal by simply swapping their network affiliations outside the purview of the FCC.”

“This abusive practice permits the stations’ owner to negotiate retransmission consent for two top-four rated stations at the same time, thus driving up prices and harming consumers. Such joint negotiations among two non-commonly owned stations in a single market have been prohibited for precisely the same reason. ACA is pleased to see that the FCC is taking action to address the retransmission consent marketplace through its rulemaking powers and encourages it to continue to look for ways to improve the functioning of its rules.”