NEWSReport No. DC 96-96 ACTION IN DOCKET CASE November 7, 1996 COMMISSION SEEKS COMMENT ON POSSIBLE CHANGES TO THE LOCAL TELEVISION OWNERS HIP RULE, RADIO-TELEVISION CROSS-OWNERSHIP RULE, AND THE GRANDFATHERING OF TELEVISION LOCAL MARKETING AGREEME NTS (MM DOCKET NOS. 91-221, 87-7) The Commission is seeking comment regarding possible modifications to the local television ownership rule, the radio-television cross ownership rule, as well as institution of a grandfathering policy for television local marketing agreements (LMAs), if such agreements are determined to be attributable. In 1995, the Commission solicited public comment on a number of proposals regarding these issues. The action the Commission takes today seeks to update the record on these issues in light of the Telecommunications Act of 1996 (Telecom Act), which modified a number of the Commission's broadcast ownership rules and requires the FCC to review its local ownership rules. Currently, the local television ownership rule prohibits a person or entity from having interests in two television stations whose Grade B signal contours overlap. The Commission is seeking comment on a tentative conclusion to authorize common ownership of television stations that are in separate designated market areas (DMAs) and that do not have overlapping Grade A contours. In addition, the Commission is seeking comment on possible exceptions and waiver criteria that might allow common ownership of two television stations in the same local market. Comments are requested on whether the Commission should establish specific waiver criteria that would take into account one or more of the following: whether the proposed common ownership arrangement involves two UHF stations or a UHF/VHF combination; whether the station to be purchased is a failed or failing station; whether a broadcast television licensee is applying for a channel allotment that has long remained vacant or unused (e.g., five years); whether a transaction involves stations with very small audience or advertising market shares located in very large markets where a specified minimum number of independently owned voices would remain in the event common ownership was allowed; and whether a transaction involves public interest programming enhancements that would not otherwise be provided. -more- The Commission stated that, pending the outcome of this proceeding, it will generally grant waivers of the local television ownership rule so as to allow common ownership of stations in different DMAs with no overlapping Grade A signal contours, conditioned on the outcome of this proceeding. The Commission stated, however, that it will be disinclined to grant waiver requests not meeting these criteria, absent extraordinary circumstances. The Commission's radio-television cross-ownership rule, or the one-to-a-market rule, generally forbids joint ownership of a radio and a television station in the same market. Under its current policy, waivers of this rule are granted where: (1) the proposed radio-television merger is in the top 25 television markets and 30 independently owned broadcast voices would remain post- merger; (2) the merger involves a failed station; or (3) the applicant satisfies a five-factor test. In the Notice adopted today, the Commission sought comment on the continuing need for the radio-television cross-ownership rule, or whether it should be modified. It tentatively concluded that the Commission should extend its presumptive Top 25 market/30 independently owned voice waiver policy to the Top 50 markets, as contemplated by the Telecom Act. It also sought comment on the following questions: (1) Should the Commission extend the presumptive waiver policy to any television market that satisfied a specified minimum independent voice test? (2) Should the Commission extend the presumptive waiver policy to entities that seek to own more than one FM and/or AM radio station? (3) Should it reduce the number of required independently owned voices that must remain after a transaction? (4) Should the "five factors" test be changed or refined to be more effective in protecting competition and diversity. The Commission currently does not attribute television LMAs for local and national ownership purposes. In a companion proceeding concerning its broadcast attribution rules also adopted today (See Further Notice of Proposed Rule Making, FCC 96- 436), the Commission is soliciting comment on whether television LMAs should be deemed attributable as radio LMAs presently are. In the Notice adopted today in its local television proceeding, the Commission seeks comments on grandfathering existing television LMAs in the event they are deemed attributable in the attribution proceeding, and stated that it was inclined to use the adoption date of today's Notice as the appropriate grandfathering date. Thus, under the Commission's proposal, in the event television LMAs are deemed attributable, those entered into prior to this adoption date would be permitted to continue in force without disruption until the original term in the LMA expires. Television LMAs entered into on or after this date would be entered into at the risk of the contracting parties; if these latter LMAs result in a violation of any Commission ownership rule, they would not be grandfathered and would be accorded only a brief period in which to terminate. Action by the Commission November 5, 1996, by Second Further Notice of Proposed Rule Making (FCC 96-438). Chairman Hundt and Commissioners Quello, Ness and Chong, with Commissioners Quello, Ness and Chong issuing separate statements. -FCC- News Media contact: David Fiske or Patricia A. Chew at (202) 418-0500. Mass Media Bureau contacts: Alan Baughcum at (202) 418-2170 or Charles Logan at (202) 418-2130.