NAB, Prometheus Challenge FCC JSA Rules
The NAB and Prometheus Radio Project each filed court challenges to new FCC rules on joint sales agreements (JSA) and its handling of the quadrennial review of media ownership rules, according to court documents and an NAB news release Friday (http://bit.ly/1o7ZMRY). The order barring JSAs where one station accounts for more than 15 percent of another’s ad sales (CD April 1 p4) without similarly attributing shared service agreements is “arbitrary and capricious,” public interest group Prometheus told the 3rd U.S. Circuit Court of Appeals. The JSA rule is against the public interest because it puts broadcasters at a competitive disadvantage, NAB told the U.S. Court of Appeals for the D.C. Circuit. “Ownership restrictions against free and local broadcasters are outdated in a world of national pay TV giants,” said an NAB spokesman in a written statement.
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With two petitions for review filed in two different circuits, the initial phase of the court battle is likely to be over venue rather than the substantive issues, several communications attorneys told us. The 3rd Circuit is generally perceived as being less favorable to broadcasters than the D.C. Circuit, said Fletcher Heald broadcast attorney Dan Kirkpatrick. Since all the filings are expected to call for review of the same rules, they will likely be combined into one proceeding, and a lottery will be held to determine in which of the two circuits the case will end up, attorneys said. In either outcome, the side that ends up with the less favorable court will likely file motions to have the case transferred, Kirkpatrick said. That’s similar to the way the last Prometheus II court challenges to the media ownership rules began, he noted.
The JSA order included a two-year grace period to allow broadcasters to unwind their existing sharing deals, and that timeline may have put time pressure on taking the FCC to court, said broadcast attorneys. By acting quickly, the appeals process on challenges to the rules could possibly be completed before the two-year deadline is up, allowing broadcasters to keep their options open, the attorneys said. NAB said it’s looking forward to “swift judicial review” of the case. The FCC Media Bureau declined to comment on either court filing.
The commission is required to review its ownership rules every four years and repeal the outdated ones, NAB said. By ending the 2010 quadrennial review without doing this, the FCC “violated this congressional mandate,” NAB said. The commission also failed to determine that its new JSA rules are in the public interest, NAB said.
By not modifying its ownership rules on minorities and women or collecting data on the impacts of media consolidation on minorities, the FCC has not complied with the Prometheus II decision, said Georgetown Law Institute for Public Representation senior counselor Andrew Schwartzman, representing Prometheus. The 3rd Circuit should either find that the FCC hasn’t complied with Prometheus II, or issue a ruling compelling it to do so, said the group, which advocates for low-power FM stations.
The FCC was arbitrary in setting the 15 percent threshold for attribution for JSAs for TV stations, and not requiring at least disclosure for SSAs, said Prometheus. The Institute for Public Representation had filed comments in the ownership proceeding asking the FCC to set the attribution lower and compel disclosure of such agreements, but the commission kept the 15 percent number used in radio and issued an FNPRM on the disclosure issue. “The commission can’t justify changing its JSA rules without changing its SSA rules,” said Schwartzman. “It’s inconsistent.”