FCC, DOJ Get Pushback Over J-A-S Agreements

Broadcasters are pushing back against the Justice Department’s effort to rein in deals that allow competing local TV stations to pool their resources in order to sell advertising time, according to Variety.

FCC chairman Tom Wheeler is also looking to place limits on agreements in which station groups jointly sell advertising time, in an effort to make the process more efficient for smaller stations and to give the sales entity more clout with advertisers. The broadcast lobby is  defending such arrangements as “vital” to the health of stations and for providing local and diverse programming.

In a filing with the FCC on Tuesday, the National Assn. of Broadcasters chided the Justice Department for attacking so-called joint sales agreements as a way for station groups to avoid media ownership caps, which prohibit ownership of more than one station in small- and medium-sized markets. Broadcasters have argued that the feds’ focus on private transactions among TV stations in mid-size markets s is misplaced at a time when MVPD giants Comcast and Time Warner Cable are attempting to merge.

Tom Wheeler

In a March 6 blog post, Wheeler agreed with the Justice Department and criticized such joint sales agreements as a “loophole” that has allowed station groups to essentially control more than one station and avoid ownership caps. He has proposed a revision in which a station that sells more than 15% of another station’s advertising time is deemed to have “effective control” over that station, similar to rules that govern radio stations. The FCC will take up the proposal at the next commission meeting on March 31.

Such joint sales agreements have become the target of public interest groups, particularly as large station owners like Gannett and Sinclair Broadcast Group have expand their holdings dramatically through acquisitions during the past two years.

The broadcasters also said that the joint sales agreement do not give them an advantage in pricing power, given the growth in satellite, cable and online competition. “And in clinging to its narrow twentieth-century market definition, the Department ignores one of the few facts that it includes in its submission — a majority of Americans get their television content from sources other than free, over-the-air broadcast television,” the NAB said.

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