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FCC Proposes New Limits on Broadcasters: If You Run It, You Own It

Tom Wheeler unexpectedly proposed to close major ownership loopholes

Local broadcasters would lose some major loopholes under a proposal revealed Thursday by Federal Communication Commission  Chairman Tom Wheeler, who wants to end the practice of stations banding together to drive up revenues from cable providers and bypass station-ownership limits via joint operating agreements.

Wheeler’s reexamination of current rules was expected — but the aggressive move to immediately bar certain activities came as a surprise.

The FCC is due to vote on Wheeler’s proposal on March 31. Under it, local broadcasters of two of the top four local stations would be barred from banding together to negotiate rates for cable retransmission. 

In addition, broadcasters who use joint service agreements to run local TV stations they don’t technically own could have to count the stations as if they do — a move that could put the broadcasters in violation of FCC ownership limits.

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An FCC official said the moves were in response to stations’ attempts to evade existing FCC rules and congressional intentions. He said competing broadcasters’ efforts to band together to negotiate local retransmission content was leading to skyrocketing retransmission payments that was unfairly pushing up cable prices to consumers.

“Congress intended for retransmission to be hammered out in one on one negotiation, but increasingly we’ve seen the largest stations negotiate jointly — though they are competitors,” he said.

Requiring owners to count stations they merely run as their own is a reflection of reality, he said.

“By any reasonable standard, these stations are not independent,” he said. “The FCC must ensure its rules to protect diversity and media voices are followed.”

Wheeler made the announcement as he announced he would propose no major changes in existing FCC rules which limit the number of households any one company can reach nationally, bar major TV networks from buying each other and a media company from buying TV stations in a city where it owns a newspaper.

Wheeler said he would seek comment on changes in those rules.