2022 QR Replies Focus on Sharing Arrangements and Competition

The FCC should seek comment on ways to ensure “licensees do not exploit loopholes in the current rules to end-run around the protections that they provide,” said the Leadership Conference on Civil and Human Rights and many other public interest groups in a joint filing. Sharing agreements and similar arrangements “foster scale and innovation allowing television broadcasters to provide local news and other programming to often underserved communities,” said Nexstar. DirecTV’s recent lawsuit (see 2303150041) against Nexstar is an example of the way such arrangements are abused, said the American Television Alliance. References to “baseless litigation” against Nexstar in other proceedings are “not only irrelevant and beyond the scope of this proceeding” but also show a “lack of substance” in those commenters’ arguments, Nexstar said.

MVPD critics of sharing arrangements and LPTV and multicast network affiliates don’t acknowledge some markets don't have enough full-power stations to host all the major networks, Gray said. In some markets, “the revenue pie” is “too small to split and still provide high quality, locally responsive programming,” Gray said. Without Gray’s ownership of multiple stations in markets such as Harrisonburg, Virginia, or Mankato, Minnesota, those markets would likely have no local news, Gray said.

No commenter in the QR proceeding “can or does seriously dispute the marketplace forces that challenge the ability of local television broadcasters to effectively and efficiently serve local community needs and interests,” said Nexstar. The increased competition broadcasters face is why the agency should act to complete the years-old open proceeding on virtual MVPDs, said the top four network affiliate groups in a joint filing. Local affiliates of the big four networks can’t offset their dropping retransmission consent dollars with money from streaming services because they can’t negotiate directly with the streamers, the filing said. The FCC should state “definitively that virtual MVPDs are classified as MVPDs for purposes of the retransmission consent rules,” the affiliate groups said. The agency should retain the dual network rule barring mergers among the big four, they said: “The dual network rule remains essential to preserving a healthy, balanced network-affiliate relationship and a robust local broadcasting system.”

Multiple commenters said starting the 2022 QR with the 2018 review unfinished violates the intent of Congress. Broadcasters should have encouraged the FCC to complete the 2018 review after the 3rd U.S. Circuit Court of Appeals Prometheus IV decision, said a joint filing from academics Christopher Terry of the University of Minnesota, Caitlin Ring Carlson of Seattle University and Israel Balderas of Elon University. Failure to compromise led to a situation “where any decision by the agency in either the 2018 or 2022 Quadrennial reviews will be immediately suspect,” likely headed for “more judicial review and further delays,” they said. The FCC “should fulfill its statutory responsibility to conclude the 2018 Quadrennial Review before purporting to commence the 2022 edition,” said the joint filing from the CBS, ABC, Fox and NBC affiliate associations.

The U.S. Supreme Court’s eventual ruling on the Prometheus case in favor of FCC discretion gives the agency the power to affirmatively conclude that the agency’s public interest standard includes ownership diversity, said the joint filing from the Leadership Council and groups such as Common Cause. The FCC should “reaffirm its goal to promote minority and female ownership of broadcast media by stating unequivocally that broadcast diversity is a critical part of its public interest analysis,” said the groups. The agency should gauge future acquisitions by the benefits they will generate in their local media market “rather than relying on broad numerical rules that apply local or national ownership limits,” said the joint academic filing.

Radio groups continued to disagree over local ownership subcaps. “Each party commenting on radio ownership in the 2022 proceeding is seeking the same regulatory outcome that such party advocated for in the 2018 docket,” said iHeartMedia. The broadcaster asked the agency to retain FM subcaps but do away with them on the AM side. Keeping the FM caps in place is an existential threat to local radio, said a joint filing from several mid-size broadcasters including Connoisseur Media, Townsquare Media and Neuhoff Media. Localism and diversity goals “can’t be achieved if broadcast radio cannot effectively compete in today’s media marketplace,” said the joint filing. Music rights groups musicFIRST Coalition and Future of Music Coalition disagreed: “These ownership restrictions remain necessary to promote diversity, competition, and localism in communities throughout the country.”

Public interest groups also said the agency should begin studies of broadcasting and ownership. The FCC should study whether duopolies really do improve the quality of news broadcasts, said the Media Action Center. “In this unprecedented era with a nation divided by sets of entirely different information presented as fact, the Peoples’ interest is paramount.” The agency should track the diversity of broadcast boards and incentivize diverse ownership, said the grassroots volunteer group Media and Democracy Project. “Discussions of diversity in media ownership are bogged down in legal and regulatory wrangling that obscures more fundamental matters,” said the filing. “Perhaps by not being lawyers who are steeped in regulatory law we can see more clearly.”