FCC Asked To Cast Wary Eye On Station Joint Operations Deals

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Small and midsized cable operators along with Time Warner Cable, Dish Network, Free Press, NABET/CWA and the Newspaper Guild have asked the FCC to consider what they say are the adverse impact of shared services agreements, local marketing agreements and other joint operations agreements between TV stations in the agency's quadrennial review of media ownership rules.

The groups, which filed a letter to Federal Communications Commission chairman Julius Genachowski as part of both quadrennial and open retransmission-consent rule review, argue that the agreements are an end-run around ownership limits that reduce competition and journalistic independence, cost jobs and boost retrans fees and ad rates, costs that are passed along to viewers.

"Regardless of the label and means of coordination, the outcome is often the same: layoffs of station staff, reduced journalistic independence, and diminished competition for audiences, advertisers and multichannel video programming distributors (MVPDs) that carry these stations through retransmission consent agreements," they argue. "A truly independently owned and operated station does not 'outsource' its rights and obligations to its competitors."

The American Cable Association, Time Warner Cable and Free Press, which all signed the letter, are also part of the American Television Alliance, which has been pushing for retrans reform, including making the argument that shared services agreements are a way to exploit the FCC rules to leverage retrans muscle in a market.

Broadcasters see it quite differently. In meetings with FCC Media Bureau staffers last month, LIN TV executives argued that many multichannel video providers have "substantially larger" share of a local market than TV stations, even broadcasters "that control two or more stations in a single market." It argues that trying to achieve carriage negotiation "symmetry" by limiting broadcasters' local market scale would be bound to fail.

LIN argues that the local market limits broadcasters are subject to prevent many from achieving the economies of scale that would allow them to produce more and better local programming.

Free Press circulated a copy of the filling to reporters, prompting this reaction from the National Association of Broadcasters

"Evidence shows that when a strong local TV station shares resources with another broadcaster, the result is the creation of more local news, weather and sports," said NAB spokesman Dennis Wharton in a statement. "The simple reality is that newsgathering and public affairs programming costs money, and that viewers benefit by more choice from a TV station that is free to the public. If the goal of Free Press is to eliminate competition that local broadcasters provide to pay TV conglomerates like Time Warner Cable and DISH, perhaps it should change its name to Pay Press."

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