CORRECTED-U.S. FCC needs better data on TV stations' shared deals -watchdog

Tue Jul 29, 2014 9:58am EDT

(In story from July 28 corrects second paragraph to properly identify the watchdog as the Government Accountability Office)

By Alina Selyukh

WASHINGTON, July 28 (Reuters) - The Federal Communications Commission may have problems ensuring that its regulations on shared arrangements by TV stations meet the agency's goals on competition and diversity because "it lacks basic data," the U.S. government watchdog said on Monday.

The Government Accountability Office, the investigative arm of Congress, at the request of Senate Commerce Committee Chairman Jay Rockefeller, spent a year investigating the impact of agreements between TV stations to jointly sell advertising or produce and acquire programming, or to share news or other equipment and resources.

Through interviews with stakeholders, a review of filings and documents, and a case study in six markets, the GAO found it "difficult to objectively determine" how such agreements affect the FCC's policy goals of competition, localism and diversity in the broadcasting industry.

"FCC has not completed a study of and lacks basic data on broadcaster agreements. This lack of analysis and information could undermine FCC's efforts to ensure its media ownership regulations achieve their intended goals," the GAO said in a report released on Monday.

"Without conducting a fact-based analysis of how agreements are being used, FCC cannot ensure its current and future policies on broadcaster agreements serve the public interest."

Consumer advocates and the U.S. Justice Department had urged the FCC to carefully scrutinize agreements through which broadcast companies may be effectively controlling two or more TV stations in a market.

The FCC in March voted along party lines, with a Democratic majority, to crack down on joint advertising sales agreements. The FCC now counts a broadcaster as having an ownership interest in any station in which that party sells 15 percent or more of weekly advertising time.

Current FCC rules typically prohibit one broadcaster from owning two TV stations in a local market.

The two Republican commission members opposed the move, and their concerns were echoed by the broadcasting industry - in particular that the arrangements are vital to financially strapped local stations as they save cash on ad sales and use it to improve programming or even stay on air.

The National Association of Broadcasters, a trade group, is suing the FCC over the restrictions.

The FCC has also launched a new review of its media ownership rules, which has to be conducted every four years, and is seeking comment on whether it should require TV stations to disclose shared services agreements.

The GAO found that TV stations were "increasingly sharing services," but found limited data on how prevalent those agreements were. Neither the FCC nor industry representatives could point to a central data source to track such agreements, the GAO said.

The report also found that broadcasters were more likely to strike so-called joint sales agreements or local marketing agreements in smaller markets. No data was available for local news service agreements or shared services agreements broadly.

The FCC declined a request for comment on Monday.

For the entire report, see: here (Reporting by Alina Selyukh; editing by Ros Krasny and Leslie Adler)