Media Bureau Says Shared Services Agreements in Hawaii Don’t Violate Duopoly Rule
The FCC Media Bureau largely denied a complaint filed by Media Council Hawai'i against Raycom and MCG Capital alleging their shared services agreements violated the FCC’s ownership rules. The bureau said the shared services and asset transfer agreements between Raycom, which owns KHNL-TV and KGMB-TV Honolulu and MCG, which owns KFVE-TV Honolulu don’t violate any ownership rules. But it left the door open to address whether the agreements are in the public interest when it considers license renewals. And the order acknowledged that the bureau will address the issue of shared services agreements in its quadrennial media ownership rule review (CD Nov 22 p8).
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Media Council Hawai'i is very disappointed with the bureau’s decision, said Angela Campbell, its counsel at the Georgetown Law Institute for Public Representation. “The Bureau’s failure to enforce the ownership limits here will be seen as a green light for others to evade the TV duopoly rule by entering into similar sharing arrangements,” she said. She said the council will probably ask the full commission to review the decision.
Because Raycom hasn’t acquired control of MCG’s broadcast license under FCC precedent, the agreements don’t violate the FCC’s ownership rules, an order released Friday said. “We also conclude that the exchange of network affiliations and other assets did not violate the duopoly rule, notwithstanding that at the time of the execution of the agreements, it gave Raycom control over two of the top four stations” in the market, the order said.
The commission will look at similar issues in the context of its 2010 quadrennial media ownership rule review, the order said. Even though this case doesn’t violate the FCC’s duopoly rules, “we agree with Media Council insofar as it suggests that the net effect of the transactions in this case -- an extensive exchange of critical programming and branding assets with an existing in-market, top-four, network affiliate -- is clearly at odds with the purpose and intent of the duopoly rule,” it said. That commitment to look at the issue in the context of the ownership rulemaking is welcome, but probably too late to address the loss of diversity and competition resulting from such agreements, Campbell said.
Because there’s no rule violation, the bureau declined to assess how the agreements affect competition and diversity among broadcasters in Honolulu, the order said. “However, consideration of the impact such agreements have on competition and diversity may be relevant in determining whether license renewal for one or either station … would be consistent with the public interest,” it said. And the bureau’s decision in the order released Friday doesn’t prejudge the same question in the context of a license renewal, it said.
The order also proposed a $10,000 fine against MCG Capital for failing to keep up-to-date program records in its public inspection file at its KFVE-TV Honolulu station.