Prospective JSA Rules Could Complicate FCC Reaction to Calls to Reconsider Gannett/Belo
The specter of changes to the FCC’s rules for joint sales agreements among TV station owners could complicate its response to public interest objections to Gannett’s $2.73 billion purchase of Belo, said broadcast attorneys in interviews Friday. Gannett and two companies with which it is involved in such arrangements responded Friday to an application for review filed last month by Free Press and Georgetown University’s Institute for Public Representation. The public interest application for review “invites the Commission to remove any certainty that the Commission’s ownership rules (and presumably other rules, as well) will be enforced in a fair and uniform way,” said Tucker Operating Co. It and Sander Media are the two companies involved in sharing agreements with Gannett under the Belo deal.
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A representative of FCC Chairman Tom Wheeler’s office told a gathering of public interest groups and multichannel video programming distributors that a proposed change to the rules governing JSAs is in the works, and such a proposal was nearly circulated after the commission’s January meeting (CD Jan 30 p1). Though there are indications that the commission wants to make changes to JSA rules, it would be politically complicated to apply that philosophy to the already approved Gannett/Belo, said Fletcher Heald broadcast attorney Frank Jazzo, not involved in that deal. “Generally, the law does not favor retroactive rulemaking."
Applying a “hypothetical new standard” to the Gannett/Belo by reversing it after an application for review would “violate due process,” said Sander Media. Gannett and its affiliated companies’ objections to the public interest applications are similar to the arguments raised in the pre-approval process. Though the public interest groups said deals involving sharing agreements are “novel” and must be ruled on by the full commission, the broadcasters disagree. The Media Bureau “properly relied on its own precedent,” said the opposition filing.
Several lines in the Gannett-affiliated filings argue against tangling the adjudication of the Gannett/Belo deal with a rulemaking on JSAs or shared services agreements (SSAs). Accepting the public interest arguments “would transform the current orderly, rules-based application process into an unpredictable process in which the standards for the ‘public interest’ are set by the policy preferences of the sitting Commissioners -- and destined to shift as the Commission’s membership changes,” said Tucker. Gannett/Belo is “not the appropriate forum” to “seek changes to the Commission’s ownership and attribution rules,” said Gannett.
If the commission does take up the application for review and reverses Gannett/Belo, the presence of an upcoming rulemaking on JSAs could give the companies extra ammunition in a subsequent court battle, said a lawyer who represents large broadcasters. Gannett/Belo could argue that the commission was applying a new rule to a transaction that occurred before that rule was created, said the lawyer. However, the commission could argue that that is under its authority to determine that that transaction isn’t in the public interest, another broadcast attorney said.
A possible upcoming commission rulemaking might instead help the public interest case, said public interest attorney Andy Schwartzman, who represented Free Press in filing the public interest group’s opposition to Gannett/Belo. Since the public interest argument has been that JSAs and SSAs have only ever been ruled on through delegated authority at the bureau level, a commission rulemaking that’s the opposite of bureau precedent “adds weight to the case,” said Schwartzman. Alternatively, Gannett/Belo and any commission rulemakings on JSAs may not affect each other, said Free Press Policy Counsel Lauren Wilson. Since there is no such rule, and the public interest arguments are based on the bureau’s use of delegated authority, a proposed rule wouldn’t be relevant to whether the FCC acts on the application for review, she said.