FCC’s FERREE QUESTIONS DIGITAL REQUIREMENT IN KPXF SALE
Is The Christian Network Inc. (CNI) a “network organization” under the FCC’s chain broadcasting rules adopted in 1941, FCC Media Bureau Chief Kenneth Ferree is asking in a previously unreported March 10 letter to the parties involved. He raised several questions involving an affiliate’s right to reject network programming, plus several other conditions on network-affiliate relations, in the sale of KPXF (Ch. 61) Porterville, Cal., by Paxson Communications to Univision. The transfer was approved Feb. 7, 2002, and the Media Access Project (MAP) filed a petition for reconsideration.
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The Media Bureau now is taking a 2nd look because the sales agreement requires KPXF to reserve a digital channel for the exclusive use of CNI for 1-6 a.m. 7 days per week. In his letter, Ferree asked Paxson several questions (the same questions weren’t asked of Univision) about that mandatory channel reservation and how it would comply with an affiliate’s right to reject network programming. He said KPXF couldn’t reject any CNI program “on the basis of program performance or ratings, advertiser reactions or the availability of alternative programming which the licensee believes to be more profitable or attractive.” Ferree also questioned the requirement that the digital channel assignment last for 50 years -- followed by automatic 10-year renewals. Also, he said, that agreement “apparently runs with the license” in any future sale.
Ferree questioned whether the agreement violated the FCC’s option time rule, which prohibits a network from reserving an option to use “specified amounts of an affiliate’s broadcast time.” He asked for an explanation of how the digital channel reservation for CNI complied with the option time requirement of the network rules and whether the 50-year life of the agreement was “consistent with Commission precedent” governing the lengths of local marketing agreements.
The questions Ferree posed prompted multiple responses, including some from nonparties such as the Network Affiliated Stations Alliance (NASA). Paxson said the agreement “complies fully with the Commission’s relevant rules and policies.” But, if the Commission ruled otherwise, Paxson requested a waiver. Paxson and CNI had entered into an agreement in Sept. 1999 giving CNI the use of one of KPXF’s digital channels as long as CNI programming was “devoid of gratuitous violence, explicit sex and foul language,” Paxson told the FCC.
CNI was upset it didn’t receive Ferree’s inquiry and that the Commission hadn’t made CNI a party to the proceeding. CNI wrote Ferree March 20 that it already had provided “significantly and uniquely informed responses to MAP’s allegations… MAP, which has no direct knowledge to contribute, was included [as a party] while CNI, the party uniquely suited to address the issues raised, was excluded.” In a follow-up letter, CNI said it “technically may be considered a ‘network organization,'” but so could syndicated programmers because they used the “same method of simultaneous distribution of programming via satellite.”
NASA said its 2001 request that the FCC issue a declaratory ruling in response to its questions about TV network requirements in affiliation agreements raised inquiries similar to Ferree’s. Since the Commission hadn’t acted on that request and the unresolved questions it raised, NASA said, “it is difficult for CNI to gauge the Commission’s current position on many aspects of the network-affiliate relationship.” NASA said the questions asked by Ferree “demonstrate how easy it would be for the FCC to act on NASA’s request. [The] March 10 letter is the functional equivalent of NASA’s requested declaratory ruling process.” - - Tack Nail