The NAB has resorted to legal action against the Commission over the ban on JSAs. We mentioned last week that broadcasters were also going to file. Now Nexstar is doing just that. Reuters quoted Nexstar as saying it also has filed with the US Court of Appeals for the District of Columbia Circuit to overturn the FCC ruling.
The case is National Association of Broadcasters v. Federal Communications Commission and United States of America, U.S. Court of Appeals for the District of Columbia Circuit, No. 14-1092.
Under the new rules, approved in a 3-2 FCC vote 3/31 along political party lines, a broadcaster is counted as having an ownership interest in any station where that owner sells 15% or more of weekly advertising time. Current FCC rules typically prohibit one broadcaster from owning two TV stations in one local market.
Republican FCC commissioners and broadcasters have argued that such agreements are vital to financially strapped local television stations, which can save cash on advertising sales and instead use it to improve programming.
FCC Chairman Tom Wheeler, backed by DOJ, has called such ad sharing agreements a loophole for some TV stations to skirt existing rules and amass market power.
The NAB, in its petition, argues that the FCC’s move violated its congressional mandate by setting the rules before completing the 2010 review of media ownership rules, which is required every four years. The FCC in March voted to launch the 2014 review, effectively folding the 2010 review into it.
NAB argues the FCC violated its congressional mandate by failing to complete its 2010 quadrennial review, and did not justify the joint sales agreement change.
On 5/30, the NAB said it will ask the D.C. Circuit Court of Appeals to overturn a March FCC vote that requires broadcasters to unwind many of their advertising sales resource sharing arrangements.
On 5/29, Sinclair said it planned to take three of its stations off air to comply with the FCC’s rules on joint sales after it could not find a buyer for those stations.
Said NAB in a release last week: “NAB announced today it intends to file a petition at the U.S. Court of Appeals for the D.C. Circuit challenging the Federal Communications Commission’s 3-2 decision on March 31 prohibiting joint sales agreements between two television stations, while failing to complete a required review of its broadcast ownership restrictions.
Congress requires the FCC every four years to review its ownership rules to “determine whether any of [them] are necessary in the public interest as the result of competition,” and “repeal or modify any regulation” no longer in the public interest. In its petition, NAB will explain that the FCC violated this congressional mandate by failing to complete its 2010 review.
NAB’s petition will also challenge the FCC’s decision to treat agreements between two television stations for the sale of advertising time as an ownership interest prohibited in most markets under its local television ownership rule – a rule that the FCC failed to determine is “in the public interest as the result of competition.”
“NAB believes that a fact-based examination of today’s marketplace would show that FCC ownership restrictions against free and local broadcasters are outdated in a world of national pay TV giants,” said NAB Executive Vice President of Communications Dennis Wharton. “These rules – some of which have not been altered since 1975 – place broadcasters at a competitive disadvantage as we strive to continue delivering news, entertainment and lifeline programming to local communities across America. “We salute Commissioners Pai and O’Rielly for their strong dissent in this split FCC decision and look forward to swift judicial review.” NAB understands that at least two other broadcast companies – Nexstar Broadcasting Group and Howard Stirk Holdings – will also challenge the FCC’s JSA ban.”
