NAB AGAIN URGES COURT TO REJECT REMAINING NEW OWNERSHIP RULES
NAB on Mon. again asked the 3rd U.S. Appeals Court, Philadelphia, to vacate the FCC’s new rule allowing companies to own more than one TV station in a market and another redefining radio markets. NAB said the FCC’s rule blocking companies from owning more than one of the top 4 stations in a market is “arbitrary and capricious” and would stifle consolidation where it’s needed most -- in small- to medium- sized markets where even stations ranked 3rd or 4th sometimes lose money.
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The FCC’s contention that common ownership of top-4 stations could hurt the public interest is “overbroad” and ignores the financial constraints some top-4 stations face in small and medium markets, NAB said. It said that while 85% of top-4 stations produce local news, only 60% of 4th-ranked stations produce their own local news: “The commission ignores its own findings that, without consolidation, financially beleaguered top-4 stations are unlikely ever to be able to provide or improve local news programming.”
NAB said the FCC hasn’t disputed NAB’s finding that under the top-4 rule, no mergers would be allowed in 81 of the 150 small- and mid-sized markets with more than one local TV station, and only one merger would be possible in 35 others. NAB said the FCC ignored “undisputed evidence” that top-4 stations vary greatly in profitability, competition and local news. “Top-4 status is not a rational proxy for the presence or absence of benefits from common ownership,” NAB said.
Meanwhile, NAB said the FCC’s decision to abandon a longstanding coverage contour approach to defining radio markets with Arbitron’s geographic definition effectively tightens ownership restrictions, something NAB said the FCC doesn’t have legal authority to do under the 1996 Telecom Act. NAB argued the overarching intent of the Act was to spur greater competition in radio markets by lifting the national ownership cap and relaxing other ownership restrictions. Sec. 202(h) of the Act requires the FCC to conduct biennial reviews to continually “repeal or modify” its ownership rules. The FCC used that section as justification for changing the market definition rule, but NAB argued Congress’s intent was for the FCC to relax ownership rules, not tighten them.
NAB also attacked another key FCC defense of the new radio market definition, which held that the contour map approach was plagued by “anomalies.” NAB said: “The commission must show that the new methodology is better.” NAB had also opposed a 3rd rule raising the TV ownership cap to 45%, but Congress has already moved to set the cap at 39%, so NAB didn’t address that rule in Mon.’s reply brief. -- J.L. Laws