(Adds quotes, further details on votes, spectrum items)
By Alina Selyukh
WASHINGTON, March 31 U.S. communications
regulators voted along party lines on Monday to prohibit
broadcast companies from controlling two or more TV stations in
a market by sharing advertising sales staff as the agency began
its new review of media ownership rules.
Two Democratic members of the Federal Communications
Commission sided with Chairman Tom Wheeler on new rules that
would count a broadcaster as having an ownership interest in any
station where that owner sells 15 percent or more of weekly
Current FCC rules typically prohibit one broadcaster from
owning two TV stations in one local market.
Wheeler said broadcasters increasingly use so-called joint
services agreements, or JSAs, as a loophole to "skirt the
existing rules to create market power," giving one station de
facto control over another's programming and finances.
Broadcaster with JSAs now have two years to divest or apply
for waivers, for instance arguing that their agreement has no
influence on programming or actually promotes localism and
competitiveness of local TV. The FCC pledged to review any
waivers within 90 days.
The rules passed against fierce opposition from Republican
FCC members, who voiced many of the arguments aired in recent
weeks by the broadcasting industry, in particular that the
arrangements are vital to financially strapped local TV stations
as they save cash on ad sales and use it to improve programming.
Public interest groups, however, have pushed for the FCC to
do away with sidecar agreements, which they see as helping
corporations consolidate ownership of local media. The Justice
Department in a filing in February supported that view.
The new rules could prompt divestitures from large TV
station owners such as Sinclair Broadcast Group Inc and
Nexstar Broadcasting Group Inc, whose shares took a hit
in recent days as FCC considered the new rules.
On Monday, Republican commissioners Ajit Pai and Mike
O'Rielly, echoing the comments from the National Association of
Broadcasters, chided Wheeler for moving ahead on new rules
before completing the FCC's review of regulations on media
ownership required by Congress every four years.
The FCC on Monday launched the 2014 review, though has not
proposed relaxing current rules, including a ban on one owner
controlling a major newspaper and TV station in one market.
The commission also unanimously voted to prohibit two or
more of top four broadcasters that compete against each other in
the same market from banding together and jointly negotiating
retransmission agreements with cable and satellite companies,
expecting it to help lower fees for consumers.
Additionally, the FCC on Monday unanimously voted to free a
slice of airwaves for outdoor high-speed Wi-Fi Internet,
clearing a band of high frequencies, known as the 5 gigahertz
band, for unlicensed, or shared, use. Previously, the band of
frequencies was largely used by federal government entities.
In the past, new unlicensed spectrum led to innovations such
as cordless telephones and remote garage-door openers.
The FCC also set up another slice of the electromagnetic
spectrum, known as AWS-3, for sale to wireless broadband
providers in an auction scheduled for later this year.
(Reporting by Alina Selyukh; Editing by Doina Chiacu,
Marguerita Choy and Lisa Shumaker)