DOJ Backs FCC on JSAs, SS'sJustice Concludes Shared Sales Agreements Should Count as Ownership, Others Should Draw Scrutiny 2/21/2014 5:52 PM Eastern
The Justice Department's antitrust division has told the FCC that it should treat TV joint sales agreements (JSAs) as attributable ownership interests, and that shared sales agreements should be looked at on a case-by-case basis.
That means a station whose ad sales were being handled by another would be considered co-owned and disallowed if it violated local or national ownership caps.
DOJ supported making radio JSAs attributable back in 1997 when the FCC was considering making them attributable--which it did. But it did not weigh in on TV JSAs or other sharing agreements at the time, saying it did not have enough info.
In comments Friday (Feb. 21) on the FCC's ownership rule review proceeding, where the commission had teed up the question about what impact sharing arrangements had, DOJ said it now had more info and that "the Department’s recent experience in broadcast television investigations confirms that attribution of television stations is also appropriate."
DOJ said that having analyzed a number of JSAs and SSAs and other agreements, it concluded that they can cause harm to competition and can have effects similar to a merger.
"Such arrangements often confer influence or control of one broadcast competitor over another," the department said. "Failure to account for the effects of such arrangements can create opportunities to circumvent FCC ownership limits and the goals those limits are intended to advance. As a consequence, the Department believes it is appropriate for the Commission’s ownership 'attribution' rules to treat any two stations participating in a JSA (or agreement similar in substance to a JSA) as under common ownership."
FCC chairman Tom Wheeler is widely expected to schedule a vote in March on the ownership rule review that makes JSA's of over 15% of ad sales attributable, as they are in radio. That was widely expected to be approved by the FCC’s Democratic majority, but the DOJ comments also buttress Wheeler’s approach to SSAs.
"Furthermore, even where a sharing agreement does not create an attributable interest under the Commission’s bright-line rules," DOJ said, as with SSAs and others, "the Commission should scrutinize agreements on a case-by-case basis and take action where those agreements do not serve the public interest."
Wheeler has already signaled he plans to do just that.
The National Association of Broadcasters, which has been arguing against the new attribution rules, was not pleased.
"NAB respectfully but strongly disagrees with the conclusions of the Justice Department's Antitrust Division," said NAB spokesman Dennis Wharton. "Joint sales agreements allow local TV stations that might otherwise go out of business to increase local news and community service, and to provide robust competition to pay TV giants. In an era when $200 monthly bills from consolidated broadband and cable companies are becoming the norm, it's important to remember that heavily regulated local TV stations remain free of charge to every American. NAB is disappointed with the Justice Department's conclusions, which we believe could kill jobs and damage the economics of local broadcasting."