JSA Waivers Have to Show Either Lack of Influence or Public Interest Benefit, Says Order, FCC Official
Those seeking to keep their joint sales agreements under the FCC’s new ownership attribution rules for JSAs will have to either show that their JSA doesn’t give one company undue control or influence over another, or accept attribution and ask for a waiver of the local ownership rule, according to an FCC official and the text of the commission’s media ownership item (http://fcc.us/1eKtYmt). Though approved at the March 31 meeting, the text of the item -- making attributable for ownership cap purposes JSAs that cover more than 15 percent of a station’s sales -- wasn’t released until Tuesday. Much attention in the intervening two weeks has focused on the specifics of the waiver policy included in the order (CD April 1 p4), with public interest groups concerned it might provide a way to get around the new rules, and FCC Chairman Tom Wheeler saying it would allow JSAs that serve the public interest to remain in place.
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The bureau will take into account “the totality of the circumstances” to assess whether “strict compliance with the rule is inconsistent with the public interest” for a given waiver request, the order says. To get a waiver, an applicant should show that the broker station doesn’t have influence over the brokered one, and demonstrate “that the brokered station has the incentive and ability” to keep its decisions, programming and operation from being influenced by the broker station, the order said. Waiver requests for JSAs that involve one station controlling smaller percentages of ad sales, and have shorter durations “so as to minimize or eliminate any influence on operations or programming,” are “more likely to be successful than an open-ended request,” the order said.
The waiver process for attribution of JSAs is designed to work in concert with the waiver process for local ownership rules, an FCC official told us. Since waivers of the attribution rule for JSAs are more likely to be granted when applicants can show a lack of undue influence -- such as a low percentage of brokered ad sales -- JSAs that meet those standards are expected to apply for attribution waivers, the official said. But in circumstances where a JSA involves a large degree of influence -- such as one station controlling a high percentage of a station’s ad sales -- the stations can instead apply for a waiver of the local ownership rule by trying to show that enforcing the rule would adversely affect “competition, diversity, or localism,” the order said. The two kinds of waivers are designed to be used as alternatives, depending on the facts, to allow stations that serve the public interest in a broad range of circumstances to be considered for waivers, the FCC official said. According to the order, any waiver application “necessitated by attribution of JSAs” will be prioritized and completed within 90 days of the record closing, “provided there are no circumstances requiring additional time for review."
This still doesn’t give broadcasters much clarity on what will and won’t get a waiver, Fletcher Heald broadcast attorney Dan Kirkpatrick told us. “Barely one paragraph of the JSA [report and order] discusses the standards that will apply to JSA attribution waivers, and even that minimal discussion is disturbingly vague,” Kirkpatrick said on the firm’s CommLawblog (http://bit.ly/1nqXNbn). As such waivers are granted, the standards are likely to become clearer, he said, but for now “we don’t have guidance as to what is going to be acceptable.” Kirkpatrick’s comment echoed Commissioner Ajit Pai’s statement on the waiver standards, which he called “soft as mush” and “inchoate.” The order makes it “impossible to tell which considerations, if any, will be outcome-determinative,” Pai said.
Broadcasters likely expected the waiver standard to be more lenient, said Free Press Policy Counsel Lauren Wilson. “We're really happy to see that” Wheeler and the bureau “are sticking to their guns,” Wilson said. By hinging waivers on the degree of influence one station has over another, the order focuses on the important aspects of sharing arrangements, she said.
The new JSA attribution rules won’t apply to national advertising sales firms, the order said. “National rep firms that are commonly owned with broadcast stations are operated separately from the commonly owned broadcast station,” said the order. Parties to existing attributable TV JSAs, or to ones entered into after the order’s release but before the filing requirement becomes effective, are to file a copy of the agreements with the FCC within 30 days after the filing requirement becomes effective, the order said.