U.S. FCC may limit TV stations banding on ad sales, retransmission

WASHINGTON, March 6 Thu Mar 6, 2014 2:00pm EST

WASHINGTON, March 6 (Reuters) - U.S. Federal Communications Commission on March 31 will vote on new rules that would prohibit broadcast companies from controlling more than two TV stations in a market by sharing advertising sales staff, FCC officials said on Thursday.

FCC Chairman Tom Wheeler is now proposing new rules that would count a broadcaster as having an ownership interest in any station where that owner sells 15 percent or more of advertising time.

Another proposed rule would also ban two or more broadcasters that technically compete against each other in the same market to band together and jointly negotiate retransmission agreements with cable and satellite companies.

Current FCC rules typically prohibit one broadcaster from owning two TV stations in one local market. But some companies have relied on workarounds that the FCC says often give one broadcaster de facto control over another station's programming and finances.

For instance, some stations in the same market strike agreements that has one of them selling some or all advertising for the other in a deal known as a joint services agreement.

If adopted, new rules could mean potential divestitures for large TV station owners such as Sinclair Broadcast Group Inc. . The FCC said it would give broadcasters two years to divest or apply for waivers, which the FCC would consider on a case-by-case basis to see if they are in the public interest.

The new rules would change the current media ownership regulations, which the FCC is required to review every four years. As the five-member FCC votes on the rules, it will also vote to launch the 2014 quadrennial media ownership review, merging the unfinished 2010 review into the new one.

The review would seek comment on whether broadcasters should disclose some so-called shared services agreements on sharing assets, such as a news helicopter.

It would also keep the current limit on one owner's controlling a major newspaper and TV station in one market and seek comment on possibly relaxing those restrictions.

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