Broadcasters have launched a counterstrike against the Federal Communications Commission's proposal to restrict TV joint sales agreements by asking the agency to look into similar sales arrangements used by the largest pay TV providers.
The commission is scheduled to vote at the end of the month on FCC chairman Tom Wheeler's proposal that would effectively eliminate JSAs because they would push station groups over the ownership limits in nearly 100 small markets.
In comments filed today with the FCC, the National Association of Broadcasters calls the "interconnect" advertising activities by cable, satellite and telephone companies "collusive."
Through NCC Media, multiple TV providers rely on one sales team to sell local and national advertising time across all the pay TV providers in a single market. Last summer, NCC added Dish to its lineup of pay TV inventory.
So, the NAB reasoned, if the FCC is going to crack down on local market joint sales agreements between two small TV stations, shouldn't the agency also take a look at the local sales arrangements between pay TV providers?
"Heavily regulated local broadcasters in smaller markets are being scrutinized by the FCC for a practice that involves one local TV station selling ads for another local TV station. Yet the heavily consolidated pay TV industry, unshackled by any ownership rules, is free to engage in this most collusive of advertising sales practice on a massive scale in multiple markets," said Gordon Smith, president and CEO of the NAB.
NAB's strategy won't help the industry's already prickly relationship with the cable industry. "NAB's latest attack is an unfortunate and desperate attempt to divert attention from examination of discrete broadcast ownership issues. This collateral attack on pay TV providers should be seen for what it is: a transparent stunt to muddy the waters and confuse the issue," said Michael Powell, president and CEO of the National Cable & Telecommunications Associations.
Wheeler's JSA proposal has split the commission along party lines and given broadcasters the impression that the FCC chairman is out to bring down the value of TV stations in order to force more broadcasters to voluntarily relinquish spectrum for auction to wireless companies.
Since Wheeler decided to go after JSAs, the stock prices of TV groups such as Nexstar Broadcasting Group and Sinclair Broadcast Group, which operate JSAs in smaller markets, have taken a dive.