FCC Isn’t Done With Sinclair-Tribune

Regulator won’t make deal decision until at least mid-July at earliest
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Jessica Rosenworcel

In a Twitter post, Democratic FCC member Jessica Rosenworcel suggested a decision on Sinclair-Tribune “should” be waiting on for a court to rule on the agency’s move to end the UHF discount.

Washington — The seemingly endless review of the proposed Sinclair Broadcast Group-Tribune Media merger doesn’t show signs of being wrapped up anytime soon. And that’s fine with the cable and satellite operators opposed to the deal, who are looking to block it, and maybe also get some help from a federal court in the effort.

While the Federal Communications Commission has put the latest iteration of the proposed merger out for public comment — there have been five versions so far — the agency has set a seven-week comment period, slightly longer than most anticipated, which means it won’t be making a decision on the deal until at least mid-July.

That will make it more than a year since the FCC first put the deal out for initial comment.

Cable and satellite operators — and some other interested parties — want the FCC to deny the merger, arguing that it would give Sinclair untoward leverage in retrans negotiations.

The FCC did not restart its informal deal shot clock, currently stuck on day 167, even though it consolidated all five of the Sinclair iterations for comment and is expecting this to be essentially the final version. But it still wants more information on Sinclair’s proposal to be allowed to own two of the top four stations in Indianapolis and St. Louis. The FCC presumes such dual ownership of dominant stations violates its local ownership rules, but in a deregulatory move last fall, it eliminated the absolute prohibition and said it would look at such combinations on a case-by-case basis.

Until the FCC gets that additional information, however, it likely won’t restart the clock, and may not until all the comments are in by July 12.

Factoring In Delay Rumors

There was buzz last week that FCC chairman Ajit Pai could delay the Sinclair decision until after the U.S. Court of Appeals for the D.C. Circuit rules on a challenge to the FCC’s return of the UHF discount. That move paved the way for the deal, but could unpave it if the court throws it out, suddenly making Sinclair’s merger with Tribune Media virtually impossible since it would represent more than 70% national audience reach (which is only reduced to below the 39% national ownership cap thanks to that discount).

Pai has been under pressure from Congressional Democrats to delay the decision, but made no promises other than to say the court case was “a factor.”

Adding to that buzz was a tweet by commissioner Jessica Rosenworcel: “The @FCC just asked for public comment on the Sinclair merger, speeding the way for regulatory approval. But the @FCC is still waiting on a court decision about how many stations one company can own. No way it should rush ahead now before the court acts. The rule of law matters.”

The FCC hardly seems to be rushing at the moment, given that it has allowed seven weeks for comments on the deal before it will be making any decision, and must wait a while after that to vet the comments that might come in at the eleventh hour.

The chairman’s office had no comment on Rosenworcel’s tweet or the decision’s timing; a spokesperson for the commissioner said she was not signaling any inside information about the chairman’s plans, but instead was continuing to say the FCC “should” wait until after the court weighed in.

A Hill source said the thinking by some was that the chairman might be letting the bureau staffers give the deal a fine-tooth-comb review, no matter the timing, given the ongoing inspector general investigation into the FCC’s handling of that merger review. And more than one source has pointed out that Sinclair’s deal tweaks have continued to draw criticism as insufficient to address concerns about retaining too much control of stations being spun off, making it harder — even for a deregulatory-minded commission — to sign off on the deal.

Not Moving Like Clockwork

As to the immovable shot clock, it is unclear exactly what the FCC is currently measuring, anyway. The merger has been in front of the FCC for almost a year, but the clock has remained stopped since Jan. 4 as Sinclair continued to re-file the deal to accommodate antitrust issues with the Justice Department and local ownership rule issues, with the FCC making deregulatory moves that allowed Sinclair to potentially own more stations. But Pai told Sen. Dick Durbin (D-Ill.) earlier this month that the reason the FCC had not restarted the clock in all that time was “because we have not had adequate information upon which to base a decision.”

The most recent request for further data on Indianapolis and St. Louis was yet another one of those inadequate information-prompted requests, so the clock remains stopped.

“The FCC is giving extraordinary scrutiny to the Sinclair merger, as it should,” said Adonis Hoffman, chairman of Business in the Public Interest, which backs the merger. “While the deal is transformative, the rationale for approval should rest on a realization that Sinclair — and every other big broadcaster — is in the fight of their lives against Netflix, Facebook, Apple and other [over-the-top services] that have bigger market caps and no restrictions on ownership. The market has changed in its fundamental form.

“The reality is that if you aggregated the top 10 broadcasters, they would not be as big as Netflix,” Hoffman added. “That is the fundamental issue and the sooner the FCC acknowledges it, the better for all stakeholders, including consumers and investors.”

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