LOCAL MEDIA 

ADVERTISING

FCC Should Take 

Action to Ensure 

Television Stations 

Publicly File 

Advertising 

Agreements

Report to Congressional Committees

March 2016

GAO-16-349

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-349, a report to 

congressional committees

March 2016

LOCAL MEDIA ADVERTISING

FCC Should Take Action to Ensure Television 

Stations Publicly File Advertising Agreements

Why GAO Did This Study

Television stations, which provide free, 

over-the-air programming, and 

MVPDs, which provide subscription 

television services, compete with other 

local media for advertising revenue. 

FCC rules limit the number of local 

stations an entity can own in one 

market to promote competition and 

other public interests. Some station 

owners created joint sales agreements

to potentially cut costs. In 2014, finding 

that such agreements confer influence 

akin to ownership, FCC adopted rules 

that require that where such 

agreements encompass more than 15 

percent of the weekly advertising time 

of another station, they will count 

toward FCC’s ownership limits. MVPDs

also have arrangements

(“interconnects”) for jointly selling 

advertising in a local market.

GAO was asked to examine the role of 

advertising agreements in local media 

markets. This report examines (1) the 

prevalence and characteristics of such 

agreements, and (2) stakeholders’ 

perspectives on these agreements. 

GAO examined publicly available joint 

sales agreements and interviewed 

FCC officials and media, public 

interest, academic, and financial 

stakeholders about their views. 

Stakeholders were selected to 

represent a range of companies and 

from those who submitted comments 

on FCC’s rules, among other reasons.

What GAO Recommends

FCC should review joint sales 

agreements filed in stations’ public files 

to identify missing agreements and 

take action to ensure the files are 

complete. FCC said it would take 

action to ensure compliance with its 

public file requirement.

What GAO Found

Agreements among station owners allowing stations to jointly sell advertising—

known as “joint sales agreements”—are mostly in smaller markets and include 

provisions such as the amount of advertising time sold and how stations share 

revenue. Some of these agreements also included provisions typical of other 

types of sharing agreements. The Federal Communications Commission (FCC) 

requires each station involved in a joint sales agreement to file the agreement in 

the station’s public inspection file. According to FCC, these files are meant to 

provide the public increased transparency about the operation of local stations 

and encourage public participation in ensuring that stations serve the public 

interest. GAO reviewed all joint sales agreements found in stations’ public files 

and identified 86 such agreements among stations. GAO also found 

inconsistencies in the filing of these agreements. Specifically, 25 of these 

agreements were filed by one station but not by others involved in the 

agreements. FCC addresses compliance with this filing requirement through its 

periodic reviews of station licensing and in response to complaints. However, 

FCC officials said neither of these approaches has identified agreements that 

should be filed but have not been, and FCC has not reviewed the completeness 

of stations’ joint sales agreement filings. If stations with joint sales agreements

are not filing these agreements as required, a member of the public reviewing 

such a station’s public file would not see in the file that the station’s advertising 

sales involve joint sales with another station. Most multichannel video 

programming distributor (MVPD) stakeholders GAO interviewed said that 

interconnects exist in most markets. These arrangements allow an advertiser to 

purchase advertising from a single point to be simultaneously distributed to all 

MVPDs in a local market participating in the interconnect.

Stakeholders GAO interviewed—including station owners, MVPDs, media 

industry associations, and financial analysts—said that joint sales agreements

and interconnects can provide economic benefits for television stations and 

MVPDs, respectively. Joint sales agreements allow stations to cut advertising 

costs, since one station generally performs this role for both stations. For 

example, some station owners said they used the savings from joint sales 

agreements and other service-sharing agreements to invest in and improve local 

programming. Some selected station owners and financial analysts said that 

stations in smaller markets are more likely to use joint sales agreements because 

stations in smaller markets receive less advertising revenue while having similar 

costs as stations in larger markets. Other stakeholders, including public-interest 

groups and academics, raised concerns about how these agreements may 

negatively affect local markets. For example, some public-interest groups said 

that using these agreements reduces competition in the local market and allows 

broadcasters to circumvent FCC’s ownership rules. MVPDs stated that 

interconnects allow MVPDs to better compete with broadcasters for local 

advertising revenue by increasing the potential reach of an advertisement to 

subscribers of MVPDs participating in the interconnect. Some small MVPDs 

raised concerns that large MVPDs that manage interconnects may impose unfair 

terms as a condition of their participation in the interconnect. However, large

MVPDs said they do not engage in such practices. 

View GAO-16-349. For more information, 

contact Mark L. Goldstein at (202) 512-2834 

or goldsteinm@gao.gov.
Page i GAO-16-349 Local Media Advertising

Letter 1

Background 7

JSAs Are Mostly in Smaller Markets, but Some JSAs Were 

Missing from Stations’ Public Files; Some Stakeholders 

Reported That Interconnects Are Mostly in Medium- to LargeSize Markets 14

Some Selected Stakeholders Said That Advertising Agreements 

Provide Economic Benefits, but Others Raised Concerns over 

the Market Effects of these Agreements 24

Conclusions 29

Recommendation 30

Agency Comments 30

Appendix I Objectives, Scope, and Methodology 32

Appendix II Local Media Advertising Revenue 38

Appendix III Comments from the Federal Communications Commission 41

Appendix IV GAO Contact and Staff Acknowledgments 43

Tables

Table 1: Characteristics of Local Broadcast Television Stations 

and Multichannel Video Programming Distributors 

(MVPD) Services 8

Table 2: Examples of Local Advertising Time Sales on Broadcast 

and Multichannel Video Programming Distributor (MVPD) 

Television 10

Table 3: Number and Percentage of Joint Sales Agreements 

(JSA) by Designated Market Area’s (DMA) Size, as of 

August 31, 2015 15

Table 4: Stakeholders Interviewed from the Following 

Organizations 35

Contents
Page ii GAO-16-349 Local Media Advertising

Figures

Figure 1: Multichannel Video Programming Distributor (MVPD) 

Advertising Sales within a Designated Market Area 

(DMA) without and with an Interconnect 22

Figure 2: Estimated Share of Local Advertising Revenue by Local 

Media Type, 2014 39

Figure 3: Local Media Advertising Revenue Market Shares, 2011 

and 2014 40

Abbreviations

DMA designated market area

FCC Federal Communications Commission

FNPRM Further Notice of Proposed Rulemaking

JSA joint sales agreement

local station local broadcast television station

MVPD multichannel video programming distributor

RTDNA Radio Television Digital News Association

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-16-349 Local Media Advertising

441 G St. N.W.

Washington, DC 20548

March 10, 2016

The Honorable Fred Upton

Chairman

The Honorable Frank Pallone, Jr.

Ranking Member

Committee on Energy and Commerce

House of Representatives

The Honorable Greg Walden

Chairman

The Honorable Anna G. Eshoo

Ranking Member

Subcommittee on Communications and Technology

Committee on Energy and Commerce

House of Representatives

Local broadcast television stations (local stations) use public airways to 

broadcast their signals and by law must operate in the public interest. The 

Federal Communications Commission (FCC), which is responsible for 

regulating local stations, has long-standing policy goals to promote the 

public interest by encouraging competition, localism, and diversity.1

Guided by these policy goals, FCC established media ownership rules 

that, among other things, limit the number of local television stations an 

entity can own or control in local markets and nationally. FCC is also 

responsible for monitoring and reporting to Congress on the status of 

 1

FCC has defined these three policy goals as follows. Competition: FCC seeks to create a 

marketplace in which broadcast programming meets the needs of consumers and has 

stated that competition drives stations to invest in better local programming. When 

reviewing competition in local television markets, FCC considers competition for viewers 

and advertisers. Diversity: FCC seeks to maintain and enhance diversity based on the 

idea that diverse ownership among media outlets increases the number of viewpoints in 

broadcast content compared to what would otherwise be the case in a more concentrated 

ownership structure. Localism: FCC seeks to ensure that each station meets the needs 

and issues of the community that it is licensed to serve with the programming that it offers. 

See In the Matter of 2014 Quadrennial Review—Review of the Commission’s Broadcast 

Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the 

Telecommunications Act of 1996, Further Notice of Proposed Rulemaking and Report and 

Order, 29 FCC Rcd 4371, 4377, ¶ 14, 4381, ¶ 22 (2014) (2014 Quadrennial Review 

FNPRM and Report and Order).

Letter
Page 2 GAO-16-349 Local Media Advertising

competition among companies that provide subscription television 

services through cable (e.g., Comcast), satellite (e.g., DIRECTV), or 

telecommunications networks (e.g., AT&T), which are referred to as 

“multichannel video programming distributors” (MVPD). Currently, there 

are no similar ownership limits on MVPDs, although FCC has attempted 

to prescribe limits that were overturned by the courts.2

Local stations and MVPDs both sell advertising in local markets that also 

include newspapers, direct mail, and, more recently, Internet-based 

media. Some local-station owners have entered into agreements to share 

resources with other stations, which may allow stations to realize 

economic efficiencies. One type of these agreements is the joint sales 

agreement (JSA), under which one local station sells the advertising time 

for another local station, usually within the same local market. 

Additionally, in some local markets, MVPDs have also entered into 

arrangements known as “interconnects” to pool a portion of their 

advertising time to be sold by a single MVPD, often the largest one in the 

market. Some policymakers have raised questions about how sharing 

agreements such as JSAs may affect competition and programming 

among competing local stations.

By statute, FCC is required to review its media ownership rules every 4 

years and determine whether any of its rules remain necessary in the 

public interest.3 FCC completed its last such review in 2007, releasing its 

decision in 2008. In 2010, FCC initiated but did not complete a review of 

its media ownership rules. In 2014, FCC initiated another review of its 

 2

FCC is required by law to prescribe rules and regulations that, among other things, 

establish “reasonable limits on the number of cable subscribers a person is authorized to 

reach through cable systems owned by such person, or in which such person has an 

attributable interest.” 47 U.S.C. § 533(f)(1)(A). FCC first prescribed rules in 1993, but in 

2009, the United States Court of Appeals for the D.C. Circuit found that FCC’s rule that 

prevented an individual cable operator from serving more than 30 percent of MVPD 

subscribers nationwide was arbitrary and capricious and vacated the rule. Specifically, the 

court found that FCC had failed to demonstrate that allowing a cable operator to serve 

more than 30 percent of all cable subscribers would threaten to reduce either competition 

or diversity in programming. Comcast Corp. v. FCC, 579 F.3d. 1, 10 (D.C. Cir. 2009).

3

Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(h), 110 Stat. 56, 111-112 

(Feb. 8, 1996), as amended by the Consolidated Appropriations Act, 2004, Pub. L. No. 

108-199, § 629, 118 Stat. 3, 100 (Jan. 23, 2004). FCC began its 2010 review in 2009; in 

April 2014, in announcing the 2014 review, FCC incorporated into the new review the 

record from the 2010 review. We did not review FCC’s efforts to review its media 

ownership rules within the scope of this report.
Page 3 GAO-16-349 Local Media Advertising

media ownership rules into which FCC incorporated the record from the 

review begun in 2010. This review is still ongoing. However, in 2014, in 

an accompanying ruling, FCC found that a station that entered into a JSA 

to sell more than 15 percent of the weekly advertising time of another 

station in the same market could exert significant influence over that other 

station—influence akin to ownership. FCC therefore adopted the rule that 

in such situations, FCC would count the station whose advertising was 

being sold toward the ownership limits of the station selling the 

advertising.4 In its order issued with the new rule, FCC stated that JSAs 

should not be used to circumvent its local-station ownership rules, which 

are designed to protect competition.5 The new JSA rules are currently in 

effect. However, stations with existing JSAs that would result in a violation 

of the local station ownership rules have until October 1, 2025, to come 

into compliance.6 Representatives of the broadcast television industry 

brought suit against FCC over the new rules in 2014, claiming, among 

other things, that FCC acted improperly by promulgating rules that require 

that certain JSAs be counted towards a local station’s ownership limits 

without determining whether FCC’s ownership rules remain in the public 

 4

47 C.F.R. § 73.3555 note 2(k).

5

2014 Quadrennial Review FNPRM and Report and Order, 29 FCC Rcd at 4538, ¶ 359.

6

Stations with JSAs existing at the time FCC issued its rules that result in violations of the 

local station ownership rules originally had until June 2016 to come into compliance, but 

the STELA Reauthorization Act of 2014 extended the date of compliance to December 

2016, Pub. L. No. 113-200, § 104, 128 Stat. 2059, 2063 (Dec. 4, 2014). The Consolidated 

Appropriations Act, 2016, enacted on December 18, 2015, further extended the 

compliance deadline to October 1, 2025. Pub. L. No. 114-113, div. E, title VI, § 628, 129 

Stat. 2242. Additionally, legislation that would exempt existing JSAs from FCC’s new rules 

was approved by the Senate Committee on Commerce, Science and Transportation on 

June 25, 2015. S. 1182, 115th Cong. (2015).
Page 4 GAO-16-349 Local Media Advertising

interest and without considering the public-interest benefits of JSAs.7 The 

lawsuit is ongoing.

You asked us to review issues related to local media advertising markets. 

This report examines (1) what available information indicates about the 

prevalence and characteristics of advertising sales agreements among 

local stations or MVPDs and (2) selected stakeholders’ perspectives on 

the impacts of advertising sales agreements among local stations or 

MVPDs.

To determine the prevalence and characteristics of JSAs among local 

stations, we obtained and analyzed all local television JSAs found in the 

stations’ public inspection files on FCC’s website.8 To provide assurance 

that our review of JSAs was as comprehensive as possible, we also 

purchased data on JSAs from BIA/Kelsey, a media research and 

consulting firm, which we compared with the JSAs we identified in the 

stations’ files; we did not identify any additional JSAs that were not 

available in the stations’ public inspection files. We assessed the 

reliability of using BIA/Kelsey’s JSA data for this purpose by obtaining 

information from BIA/Kelsey about how the data were collected and 

maintained and determined that the data were sufficiently reliable for this 

purpose. We examined the filings of JSAs in stations’ public inspection 

files to determine if any JSAs were filed in one station’s folder but missing 

from the folder of another station involved in the JSA. We evaluated 

FCC’s efforts to ensure completeness of stations’ JSA filings based on 

FCC’s rules and stated expectations for stations’ public files and federal 

 7

See Howard Stirk Holdings v. FCC, No. 14-1090, D.C. Cir. (filed June 18, 

2014)(transferred to the U.S. Court of Appeals for the Third Circuit, Nov. 24, 2015). The 

litigation is a consolidation of petitions filed by two broadcasters, a national association 

representing broadcasters, and Prometheus Radio Project challenging FCC’s order that 

provides that FCC will count local stations in the same market brokered under a JSA that 

encompasses more than 15 percent of the weekly advertising time for the brokered station 

toward the brokering station’s permissible ownership total. The litigants allege, among 

other things, that FCC violated the Telecommunications Act of 1996 by issuing the JSA 

rule prior to determining if the broadcast ownership rules are still in the public interest, that 

no record evidence supports FCC determination that TV JSAs for over 15 percent of 

weekly advertising time confer control or influence over brokered local stations, and that 

FCC’s decision to attribute JSAs but not shared service agreements was arbitrary and 

capricious.

8

Television stations are required to file a number of documents in their public station files, 

including copies of active JSAs. 47 C.F.R. § 73.3526(e)(16). These files are available 

online from FCC’s website at https://stations.fcc.gov/ (accessed Nov. 5, 2015).
Page 5 GAO-16-349 Local Media Advertising

internal control standards related to information and communications.9 To 

determine the prevalence and characteristics of interconnects among 

MVPDs, we interviewed FCC officials and the following selected 

stakeholders:

• eight local station owners that we selected to represent companies of 

various sizes and those that do and do not have JSAs;10

• five MVPDs selected to represent cable, satellite, and 

telecommunications providers and two companies selling advertising 

on their behalf;

• five media industry associations selected because they represent 

broadcasters, large and small MVPDs, and advertising sellers;

• two public interest groups and two academic stakeholders selected 

because they filed comments in FCC’s JSA rulemaking or were 

recommended by other stakeholders;11 and

• five financial analysts selected based on our prior work and our 

research on their backgrounds.12

 9

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).

10We excluded local station owners that are party to the lawsuit over FCC’s JSA 

rulemaking.

11Initially, we also sought information about JSAs among broadcast radio stations. FCC 

adopted rules in 2003 that made radio stations’ JSAs attributable under FCC’s ownership 

rules. Broadcast radio stakeholders we interviewed told us that JSAs are not common 

among radio stations, since they are subject to FCC’s radio JSA rule and because FCC’s 

radio ownership limits are less strict than those for television. We contacted owners of 

broadcast radio stations, but most of these companies either did not respond to our 

requests for interviews or told us they had little or no information about radio JSAs. We 

were able to conduct interviews with the Radio Advertising Bureau and Salem Media 

Group, a radio-station owner. In reviewing a 2013 FCC report on radio station filings, we 

identified only four JSAs between radio stations. Due to the limited available information 

about radio JSAs, we have excluded them from our analysis and have focused on 

television JSAs and MVPD interconnects. 

12Our prior work includes a 2014 media ownership report in which we found that FCC 

evaluated broadcaster agreements—including JSAs—that occur in the context of a 

merger or acquisition, but that FCC had not collected data or completed a review to 

understand the use and effects of broadcaster agreements. In that report, we 

recommended that FCC determine whether it needed to collect additional data to 

understand the prevalence and context of broadcast agreements and whether broadcaster 

agreements affect its media policy goals of competition, localism, and diversity. FCC 

agreed with the recommendation and noted that it had taken initial steps to address the 

recommendation, including proposing disclosure of sharing agreements. GAO, Media 

Ownership: FCC Should Review the Effects of Broadcaster Agreements on Its Media 

Policy Goals, GAO-14-558 (Washington, D.C.: June 27, 2014).
Page 6 GAO-16-349 Local Media Advertising

FCC does not regulate nor collect data on interconnects. Further, MVPD 

stakeholders told us that the written agreements that identify the terms of 

interconnects are confidential. Consequently, our information about 

interconnects is largely testimonial.13 Our interview results are not 

generalizable because we did not select these stakeholders using a 

representative sample, and some stakeholders we contacted, particularly 

public-interest stakeholders, declined to be interviewed.

To determine selected stakeholders’ perspectives on advertising sales 

agreements among local stations and MVPDs, we reviewed filings in two 

FCC proceedings: 1) FCC’s rulemaking on television JSAs and 2) FCC’s 

review of a 2014 proposed merger between Comcast and Time Warner 

Cable.14 We analyzed filings that stated specific benefits or concerns 

related to JSAs or interconnects. We also interviewed FCC officials and 

the eight local station owners, five MVPDs, five broadcast and MVPD 

industry and advertising associations, five financial analysts, two publicinterest groups, and two academics previously mentioned about their 

perspectives on JSAs and interconnects. Due to the ongoing litigation 

related to the 2014 FCC order pertaining to television JSAs and 

ownership limits under the broadcast ownership rules, we did not 

evaluate FCC’s efforts related to the JSA rulemaking, nor did we evaluate 

FCC’s efforts to review its media ownership rules for this report.15

For contextual information, we purchased and analyzed local media 

advertising-revenue and market-share data from BIA/Kelsey.16 We 

 13Furthermore, many of the stakeholders we interviewed—including the public-interest 

groups, academics, and some financial analysts—were not knowledgeable about 

interconnects. Our information about interconnects is based mostly on interviews with 

selected MVPDs and their industry associations and financial analysts. FCC officials told 

us they had not studied interconnects and could provide only limited information about 

them.

14We examined filings in the merger proceeding because some commenters discussed 

interconnects in their filed comments. In April 2015, FCC terminated its proceeding 

considering this merger after the applicants notified FCC they had terminated the planned 

transaction. 

15We did not address these matters due to our policy to avoid addressing the merits of 

matters pending in litigation.

16These data covered 12 categories of local media: broadcast radio, broadcast television, 

newspapers, MVPDs, direct mail, magazines, print yellow pages, online yellow pages, 

online, out-of-home, mobile, and e-mail. 
Page 7 GAO-16-349 Local Media Advertising

obtained these data for each of the 210 Nielsen-defined local television 

markets—known as designated market areas (DMA)—for years 2011 and 

2014. We chose these years because 2014 would be the most recent 

year of complete data and 2011 would provide a comparison year during 

the economic recovery. We assessed the reliability of BIA/Kelsey’s data 

for the purpose of providing contextual information about local media 

market shares by discussing these data with industry stakeholders and 

obtaining information from BIA/Kelsey about how they collect and 

maintain the data. We determined that the data were sufficiently reliable 

for this purpose. See appendix I for more information about our scope 

and methodology.

We conducted this performance audit from April 2015 to March 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

Consumers access television through two principal types of media.17 The 

first is through local broadcast television stations, which provide free overthe-air programming for reception in consumers’ households by television 

antennas. Many local stations are affiliated with major broadcast 

networks, while others are independent stations that are not affiliated with 

a broadcast network. The second platform for accessing television 

services is through MVPDs, which are cable, satellite, or 

telecommunications companies that provide services through a wired 

platform or via satellite and charge their customers a subscription fee. 

MVPDs’ programming includes so-called “cable” networks, such as CNN 

or ESPN, and also the local stations, which they carry or retransmit 

 17Increasingly, consumers also have other options, such as Internet-based television 

services that allow streaming of programs online and through Internet-connected 

televisions. These services are not within the scope of our review.

Background

Television
Page 8 GAO-16-349 Local Media Advertising

through agreements with the local stations.18 These two forms of media 

have some similarities but also key differences, as described in table 1.

Table 1: Characteristics of Local Broadcast Television Stations and Multichannel Video Programming Distributors (MVPD) 

Services

Characteristics Local broadcast television stations MVPDs

Distribution Local stations provide free over-the-air programming, 

which can be captured through an antenna.

MVPDs distribute programming to paid subscribers through 

cable, satellite, or telecommunications services.

Programming Many local stations are affiliated with broadcast 

networks that provide some of the stations’

programming; the most watched stations tend to be 

affiliated with one of the four major networks (e.g., 

ABC, CBS, FOX, or NBC).

Local stations also produce their own content (such 

as local news) and purchase syndicated programs 

(such as game shows).

MVPDs offer various selections of cable networks (e.g.,

ESPN) and premium cable networks (e.g., HBO).

MVPDs also provide local stations in their channel lineups.

Service area Local stations are licensed by FCC to broadcast to a 

defined geographic area. For stations with a large 

coverage area, this is typically an entire town or 

metropolitan area and the surrounding area beyond.

Cable providers are required to obtain a franchise 

authorization for each jurisdiction they serve. Franchise 

areas vary in size, but they typically cover a town or 

relatively small jurisdiction.a

Traditionally, cable providers served geographic areas that 

did not overlap; however, this has evolved as satellite and 

telecommunications providers have entered the market with 

service areas that overlap cable providers and each other.

Household use 11.4-million U.S. households had broadcast-only 

television in 2013, as reported by FCC based on 

Nielsen estimates. Local broadcast stations are also 

available to MVPD subscribers.

104.4-million U.S. households used an MVPD service in 

2013, as reported by FCC based on Nielsen estimates.

Ownership Some local stations are owned by larger companies 

that own many stations across many markets (subject 

to FCC ownership limits), while others are under 

single-ownership.

MVPDs include national companies that have millions of 

subscribers across markets, like Time Warner Cable or 

Verizon, as well as smaller companies with fewer than 1,000 

subscribers.

Source: GAO analysis of information from FCC and media industry sources. | GAO-16-349

 18MVPDs provide local stations in their channel lineups in accordance with federal 

statutes and regulations. The must carry rule enables each commercial and 

noncommercial television broadcast station to require cable operators in its local market to 

carry its signal. 47 U.S.C. § 534(a); 47 C.F.R. § 76.56. Under the carry-one carry-all

provision, any satellite operator that chooses to serve a particular local area (by carrying 

an in-market local station) must also carry upon request the signal of all television 

broadcast stations located within the same local market. 47 U.S.C. § 338; 47 C.F.R. § 

76.66. Alternatively, commercial stations may give up the guarantee of carriage provided 

by those two rules and instead negotiate agreements with MVPDs, including potential 

compensation, through a process known as retransmission consent. 47 U.S.C. § 325(b); 

47 C.F.R. § 76.64.
Page 9 GAO-16-349 Local Media Advertising

a

The governmental entities that grant franchises vary by state. Telecommunications MVPDs have 

taken different approaches to franchising. Specifically, like traditional cable companies, Verizon chose 

to secure franchises from the relevant jurisdictions where it introduced FiOS service. In contrast, 

AT&T asserted that its U-verse service is not subject to local franchise regulation as a traditional 

cable television service, but is generally authorized by statewide franchises. According to FCC, the 

two major satellite MVPDs offer services to most of the land area of the United States, excluding 

some portions of Alaska.

Television advertising time may be sold at either the national or local 

level.19 National advertising time is sold by broadcast or cable networks—

both of which produce and aggregate programming that will be aired 

nationally—to advertisers looking to reach audiences across the country. 

The advertisements are inserted with the programming that broadcast 

and cable networks provide to local stations and MVPDs, respectively. In 

contrast, local advertising time is sold to companies wanting to reach a 

local audience. This advertising time may be sold to local businesses—

such as a car dealership or restaurant—or it may be sold to a national 

business—such as a car manufacturer or a large restaurant chain—that is 

purchasing local advertising time to reach a particular local audience. 

While local stations or MVPDs often directly sell local advertising time to 

local businesses, national advertising sales representatives may arrange 

the sale of local advertising time to national businesses.

The amount of advertising time available for a local station to sell during a 

given hour depends on the type of program airing at that time. 

Specifically, a local station sells all of the advertising time during the 

programming it produces, such as local news. In our 2014 report on 

media ownership, we found that advertising aired during local news in 

particular represents a substantial portion of a broadcast station’s 

revenue.20 A local station also sells a portion of the advertising time 

 19MVPDs make a further distinction between regional advertising sold by an interconnect 

at the designated market area (DMA) level, and local advertising sold by an MVPD within 

the portion of the market served by that MVPD. For our purposes, we are considering both 

of these forms as advertising to be local, since they are sold at the local-market level as 

opposed to the national level.

20GAO-14-558. According to the 2013 Radio Television Digital News Association 

(RTDNA)/Hofstra University survey of 1,377 television stations, news represented an 

average of about 49 percent of station revenue, with that percentage increasing as market 

size decreased. RTDNA is a professional organization serving the electronic news 

profession. RTDNA members include local and network news executives, news directors, 

producers, reporters, digital news professionals, educators, and students. The 

RTDNA/Hofstra University Survey is an annual survey of operating television stations.

Television Advertising
Page 10 GAO-16-349 Local Media Advertising

during programming it receives from its affiliated broadcast network, 

generally about 2 1⁄2 to 3 minutes per hour, and may sell a portion of the 

time during syndicated programming, which is programming such as 

game shows and reruns produced nationally but aired on a station-bystation basis. Advertising on cable networks is mostly sold by the cable 

networks themselves; however, MVPDs also sell a small portion of the 

advertising time on the cable networks that they distribute, about 2 

minutes per hour according to MVPDs we spoke to for this report. No 

advertising time on the local stations that MVPDs retransmit is available 

to MVPDs to sell, nor do MVPDs sell advertising time on premium cable 

channels that do not carry advertising, such as HBO. Table 2 presents 

example scenarios of how local and national advertising is sold and 

shown through both local stations and MVPDs. This table does not 

include information about how joint sales agreements among local 

stations and interconnects among MVPDs affect local advertising sales, 

which is discussed later in the report.

Table 2: Examples of Local Advertising Time Sales on Broadcast and Multichannel Video Programming Distributor (MVPD) 

Television

Broadcast television MVPD television

National 

advertiser 

advertising 

nationally

A national fast-food restaurant chain purchases 

advertising time from a broadcast network during a 

network show, such as a prime-time drama. The 

advertisement is shown during that program on all 

local stations affiliated with the network.

A national fast-food restaurant chain purchases advertising 

time from a cable network during a program. The 

advertisement is shown during that program on all MVPDs 

that carry that cable network in their channel lineups.

National 

advertiser 

advertising locally

A winter coat manufacturer wishes to market its 

product in cities with colder climates. It works with an 

advertising sales representative to purchase 

advertising time from local stations in the Chicago, 

Buffalo, and Boston markets during either the 

stations’ local programming or the programming the 

stations obtain from their affiliated broadcast 

networks. The advertisement is shown only on local 

stations in those three markets.

A winter coat manufacturer wishes to market its product in 

cities with colder climates. It works with an advertising 

sales representative to purchase advertising time from 

MVPDs serving Chicago, Buffalo, and Boston during 

programs on cable networks carried by the MVPDs in 

these markets. The advertisement is shown only during 

programs on cable networks in those markets.

Local advertiser 

advertising locally

A car dealership in Seattle wants to advertise a sale. 

It purchases advertising time from a local station 

during either the station’s local programming or the 

programming the station obtains from its affiliated 

broadcast network. The advertisement is shown only 

on that local Seattle station.

A car dealership in Seattle wants to advertise a sale. It 

purchases advertising time from an MVPD that serves 

Seattle to run advertisements during programs on various 

cable networks. The advertisement is shown only during 

programs on cable networks carried by that local Seattle 

MVPD.

Source: GAO analysis of FCC and media industry information. | GAO-16-349

Some broadcast stations and MVPDs have entered into agreements 

regarding the joint-selling of advertising, which have become more 
Page 11 GAO-16-349 Local Media Advertising

prevalent in recent years, according to media-industry stakeholders we 

spoke to.

• JSA: An agreement between local stations in which one station is 

authorized to sell advertising time on the other station.21 We refer to 

the station selling the advertising as the “sales-agent station” and the 

station that turns over its advertising time to be sold by the other 

station as the “customer-station.” JSAs are specifically defined by 

FCC rules.22

• Interconnect: An arrangement among MVPDs in the same market in 

which one MVPD—typically the largest MVPD in the market—sells a 

portion of the local advertising time for all MVPDs participating in the 

interconnect and simultaneously distributes that advertising across all 

such MVPDs in a coordinated manner. Although interconnects were 

traditionally an arrangement between cable providers, in recent years, 

telecommunications and satellite providers have also participated in 

them.23 Interconnects are not defined by FCC.

Some local stations also have other agreements, called shared service 

agreements, for sharing other functions such as news production, 

administrative, and operational services. For example, stations can enter 

into an agreement to share news-gathering resources, such as 

helicopters, reporters, and cameramen, or can enter into an agreement 

wherein one station produces another station’s local news. Our 2014 

report on media ownership found that stations may have several 

agreements in place, such as a shared service agreement and JSA, or a 

single agreement that includes components typical of different types of 

agreements. Stations are not required to disclose shared service 

agreements in their public files. However, in 2014, FCC proposed new 

 21Although most JSAs we reviewed have one sales-agent or one customer-station, some 

JSAs have multiple stations identified as either the sales-agents or customer-stations.

2247 C.F.R. § 73.3555 Note 2 (k). The JSAs and FCC used various other terms for the 

stations involved in JSAs. For example, the sales-agent is sometimes referred to as the 

“broker,” and the customer-station is sometimes referred to as the “brokered” station or 

the “licensee.”

23As explained later in this report, satellite MVPDs have an indirect relationship with 

interconnects.
Page 12 GAO-16-349 Local Media Advertising

rules that would define shared service agreements and require their 

filing.24

In addition to television, there are a number of other outlets competing for 

advertisers looking to purchase advertisements in local markets, including 

radio, print media (such as newspapers and magazines), out-of-home 

advertising (such as billboards or advertising on buses), and Internetbased media (such as advertising through mobile devices or on 

websites). Local media advertising generated approximately $136 billion 

in revenue in 2014, a slight decrease from the $139 billion (2014 dollars) 

in 2011, according to data from BIA/Kelsey, a media research and 

consulting firm.25

The geographic scope of local media markets are defined by Nielsen, a 

company that measures television viewership—a critical metric for 

determining advertising rates. Nielsen has divided the country into 210 

local television markets, known as DMAs, ranked in size from the largest 

(New York, N.Y.) to smallest (Glendive, Mont.).26 Based on information 

from the stakeholders we interviewed about these markets, we will refer 

to the 25 largest markets (those ranked 1 through 25) as “large” markets, 

those ranked 26 through 100 as “medium” markets, and those ranked 101 

through 210 as “small” markets.27

 242014 Quadrennial Review FNPRM and Report and Order, 29 FCC Rcd at 4523, ¶¶ 330, 

331. As of December 17, 2015, the proceeding remains open. Another type of agreement, 

local marketing agreements, allow one or more parties other than the station’s owner to 

purchase blocks of time and then provide programming and sell advertising in that block of 

time. We did not include local marketing agreements within the scope of this review. Our 

prior report on media ownership examined other types of sharing agreements among 

television stations, including shared service agreements and local marketing agreements. 

See, GAO-14-558.

25We adjusted the 2011 revenue estimate to 2014 dollars to account for inflation. The 

nominal revenue estimate for 2011 was $132 billion.

26Nielsen allocates each U.S. county to a DMA based on factors such as viewing patterns 

and MVPD distribution. In some cases, counties are split between markets, and there are 

also some counties in Alaska not assigned to a DMA. See In the Matter of In-State 

Broadcast Programming: Report to Congress Pursuant to Section 304 of the Satellite 

Television Extension and Localism Act of 2010, 26 FCC Rcd 11919, 11921-11922, ¶ 5 & 

fn.10 (2011).

27Households are not evenly distributed among these local market groups. According to 

Nielsen’s 2014 DMA rankings, about half of U.S. households are within the top 25 DMAs.

Other Local Media in Local 

Markets
Page 13 GAO-16-349 Local Media Advertising

FCC assigns licenses for local stations to use the airwaves on the 

condition that licensees serve the public interest.28 FCC’s regulation of 

local stations is guided by long-standing policy goals to encourage 

competition, diversity, and localism. To advance these policy goals, and 

based on statutory requirements to serve the public interest, FCC has 

implemented rules that limit the number of stations an entity can own or 

control locally and nationally. Under FCC’s ownership rules, a single 

entity can own two local stations in the same DMA if the relevant service 

contours—the boundary of the area a station serves—do not overlap or, if 

they do overlap (1) at least one of the stations is not ranked among the 

top-four stations in terms of audience share and (2) at least eight 

independently owned and operating full-power commercial or 

noncommercial television stations would remain in the DMA.29 Because 

larger markets tend to have more stations, this limit tends to affect smaller 

markets more than larger ones, since an owner of a local station 

interested in acquiring a second station in a small market would be less 

likely to be able to meet these criteria. As previously discussed, FCC is 

required by statute to review its media ownership rules every 4 years and 

determine whether any such rules remain necessary in the public 

interest.30 FCC’s most recent review related to its media ownership rules 

was completed in 2008.

FCC has also noted that arrangements other than outright ownership 

could exert similar influence as ownership. To address such issues, FCC 

developed attribution rules to determine what interests should be counted 

when applying these media ownership limits.31 In 2004, FCC sought 

comment on whether the use of certain television JSAs warranted 

attribution—that is whether the customer-station should be counted or 

attributed to the sales-agent station that sells advertising for that station 

for the purpose of applying FCC’s media ownership limits. FCC sought 

additional comment on this issue in its 2010 media ownership review. In 

2014, FCC promulgated a final rule declaring that if a JSA provides that 

one station sells more than 15 percent of the weekly advertising time of 

another station located in the same market, both stations will be counted 

 2847 U.S.C. § 301(d).

2947 C.F.R. § 73.3555(d).

30Pub. L. No. 104-104, § 202(h), as amended by Pub. L. No. 108-199, § 629.

3147 C.F.R. § 73.3555, notes.

FCC Oversight
Page 14 GAO-16-349 Local Media Advertising

toward the ownership limit of the owner of the station selling the 

advertising (i.e., the sales-agent station).32 The rule is currently in effect; 

stations with JSAs existing at the time FCC issued the rule that result in 

violations of FCC’s media ownership limits have until October 2025 to 

amend or void their agreements or otherwise come into compliance with 

FCC’s ownership rules. As previously discussed, the rule is subject to 

ongoing litigation. FCC also has rules for stations to file certain 

documents with FCC and to maintain public inspection files that include 

documentation about the licensing and operation of each station. 

According to FCC, the purpose of the public inspection files is to make 

information more readily available that the public already has a right to 

access so that the public will be encouraged to play a more active part in 

dialogue with broadcast licensees. These rules include requirements for 

stations to file JSAs with FCC if the JSA is attributable under FCC’s 

attribution rules and to file all current JSAs, regardless of attribution 

status, in the stations’ public inspection files.33 Local television stations’

public inspection files are available online through FCC’s website.

 32FCC made a similar attribution rule pertaining to JSAs among radio stations in 2003. In 

our review, we found few instances of JSAs between radio stations, and stakeholders told 

us they are rarely if ever used given differences in the ownership rules for radio.

3347 C.F.R. §§ 73.3256(e)(16), 73.3613(d)(2). 

JSAs Are Mostly in 

Smaller Markets, but 

Some JSAs Were 

Missing from Stations’

Public Files; Some 

Stakeholders 

Reported That 

Interconnects Are 

Mostly in Medium- to 

Large-Size Markets
Page 15 GAO-16-349 Local Media Advertising

We found 86 JSAs among local-station owners in our review of JSAs 

available from stations’ online public inspection files.34 A little more than a 

third of DMAs had a JSA, with 98 percent of JSAs we identified being 

among stations in medium or small markets (see table 3).

Table 3: Number and Percentage of Joint Sales Agreements (JSA) by Designated Market Area’s (DMA) Size, as of August 31, 

2015

DMA ranking group

Number of DMAs by 

ranking group

Number of JSAs among 

stations in each DMA ranking 

group

Percentage of JSAs found 

in each DMA ranking group

Large DMAs (ranked 1-25) 25 3 3%

Medium DMAs (ranked 26-100) 75 39 45%

Small DMAs (ranked 101-210) 110 46 53%

Total 210 86a 100%a

Source: GAO analysis of stations’ JSAs in public inspection files. | GAO-16-349

a

The number and percentage of JSAs do not sum up because there were two JSAs that included 

stations from multiple sizes of markets. The total number of JSAs does not match the total number of 

DMAs with JSAs because some DMAs have multiple JSAs and some JSAs included stations in 

multiple markets.

The 86 JSAs we reviewed generally covered similar terms. We identified 

the following key provisions in our review of these agreements:

• Advertising time: The JSAs specified the advertising that the salesagent will sell. In most cases, this included all of the customerstation’s advertising time, including local advertising that airs during 

programming of the local station as well as advertising on the 

customer-station’s website. Four of the JSAs were created since FCC 

promulgated its 2014 JSA rule, and these JSAs specified that the 

sales-agent would sell no more than 15 percent of the customerstation’s advertising time. This 15 percent is the threshold FCC set in 

 34There are more than 86 JSAs in the public inspection files because an agreement 

between two stations would typically be filed in both stations’ files, in accordance with 

FCC rules. FCC officials said they have not compiled a list of JSAs and do not have any 

data on JSAs. 

JSAs Are Mostly in 

Smaller Markets and 

Cover Similar Terms
Page 16 GAO-16-349 Local Media Advertising

the JSA rule that, if exceeded, would trigger attribution under FCC’s 

ownership rules.35

• Station identification: All of the JSAs identified the owners of both the 

sales-agent and customer-stations covered in the agreements and the 

call signs of the customer stations.36 About two-thirds (60) of the JSAs 

also identified the call signs of the sales-agent stations, while a little 

less than one-third (26) of the JSAs did not identify the call sign of the 

sales-agent station.37 According to FCC officials, FCC’s rules do not 

prescribe the way in which parties to JSAs are identified in the 

agreement, and it is not required that JSAs specifically identify the call 

signs of the stations involved in the agreements under FCC’s rules.

• Time frame: The JSAs generally covered 5 to 10 years with 

extensions based on the consent of both parties. Stations also 

sometimes filed documents indicating their JSAs had been extended.

• Revenue sharing: About half (40) of the JSAs indicated that the salesagent retains 30 percent of the advertising revenue, while some (9) 

indicated a different percentage, a flat fee, or a commission. The 

remaining 37 JSAs had no information about revenue sharing 

because that information was either redacted or not provided.38

• Control and responsibilities: All of the JSAs specified that the 

customer-station retains complete control of the station, including 

control over the operations, finances, personnel, programming, and 

responsibilities to meet FCC requirements.39

 35FCC’s 2014 JSA rule includes a process under which stations may apply for a waiver to 

maintain a JSA with advertising sales exceeding 15 percent if the stations can 

demonstrate that application of the rule would not serve the public interest. According to 

FCC officials, they have received two requests for waivers under the JSA rule; one which

the FCC granted for a temporary period of 9 months, and the other which the applicants 

withdrew.

36A call sign is a series of letters that identifies a local station, such as WUSA, a CBSaffiliated station in Washington, D.C.

37As previously discussed, we refer to the station selling the advertising in a JSA as the 

“sales-agent” and the other station as the “customer-station.” Similarly, we refer to the 

owner of the sales-agent station as the “sales-agent owner” and the owner of the 

customer station as the “customer-station owner.”

38FCC’s rules specify that stations may redact business-sensitive information from JSAs 

they file in public inspection files, but must make this information available to FCC if 

requested. 47 C.F.R. §§ 73.3526(e)(16), 73.3613(d)(2).

39FCC rules specify that JSAs must contain a certification by the licensee or permittee of 

the customer-station verifying that it maintains ultimate control over the station’s facilities, 

including, specifically, control over station finances, personnel and programming, 47 

C.F.R. § 73.3555 Note 2 (k)(3).
Page 17 GAO-16-349 Local Media Advertising

• Shared service agreement: Some of the JSAs included provisions 

typical of a shared service agreement and were characterized as both 

a JSA and a shared service agreement.40 FCC officials and 

stakeholders told us that JSAs and shared service agreements 

typically go together, and local station owners said it would be 

uncommon for a station to have a JSA without an accompanying 

shared service agreement. However, one station owner told us that its 

station has a JSA and no shared service agreements.

• Programming: About one-third (26) of the JSAs reviewed included a 

provision for the sales-agent to provide programming for the customer 

station, generally up to 15 percent of the customer-station’s broadcast 

hours per week.41

While reviewing JSAs filed in stations’ online public inspection files, we 

found that some JSAs were not filed in both a sales-agent station file and 

a customer-station file, as required by FCC rules. Specifically, of the 86 

JSAs we identified, 23 of them were filed in a customer-station file but not 

a sales-agent station file and 2 of them were filed in a sales-agent file but 

not a customer-station file.42 In most of these cases (20 of the 25 JSAs), 

the stations involved in the JSAs were specifically identified by their callsigns in the JSAs; in the other 5 JSAs, only the sales-agent station’s 

owner was identified and we had to determine the sales-agent station by 

contacting the other station named in the JSA or by examining 

information about station ownership in the same market. Although there 

 40We included in our analysis documents titled “shared service agreements” if they 

included a provision for the sale of advertising. A few agreements with joint-advertising 

sale provisions were also filed under other names such as “agreement for the sale of 

commercial time,” which we included in our analysis. 

41Stations have used another form of sharing agreement, the local marketing agreement, 

to provide for the provision of programming, along with advertising, by one station for 

another. As previously stated, we excluded local marketing agreements from our review. 

In 1999, FCC made television local market agreements attributable under FCC’s 

ownership rules if an entity programs more than 15 percent of another in-market station’s 

weekly programming hours. In the Matter of Review of the Commission’s Regulations 

Governing Attribution of Broadcast and Cable/MDS Interests, 14 FCC Rcd 12559, 12585, 

¶ 55 (1999). Some JSAs we reviewed included provisions allowing the sales-agent to 

provide programming below this 15 percent threshold. If one station uses an agreement to 

provide more than 15 percent of the weekly programming hours for another same-market 

station, FCC requires the stations involved to file the agreement with FCC. 47 C.F.R. § 

73.3613.

42Furthermore, if a JSA was not filed in either a sales-agent or customer-station file, we 

would have no way to know about it.

Some JSAs Were Not 

Filed in Stations’ Public 

Files in Accordance with 

FCC Rules
Page 18 GAO-16-349 Local Media Advertising

may be legitimate reasons for a JSA to be missing—for example, if the 

JSA had been terminated and removed from one file but not yet from the 

other—the extent of missing JSAs raises a concern that there may be 

JSAs that should be filed that have not been.

As previously discussed, FCC’s rules require that all current JSAs be filed 

in stations’ public inspection files, which are available online through 

FCC’s website.43 The purpose of this requirement is to improve 

transparency of station operations for the public by making documents 

more readily available that the public already has a right to access. 

Further, according to FCC, the agency required stations to make this 

information available so that the public would be encouraged to play a 

more active part in dialogue with and oversight of broadcast licensees. 

Consequently, if interested parties look at the public file of a station 

involved in a JSA, they should expect to find that document in the file so 

that they may learn about how a station handles its advertising sales. If a 

station involved in a JSA does not have its JSA in its public inspection file, 

the transparency over this aspect of the station’s operations is lost. The 

standards for internal control in the federal government state that agency 

management should ensure there are adequate means of communicating 

with, and obtaining information from, external stakeholders that may have 

a significant impact on the agency achieving its goals.44 As previously 

stated, FCC’s media ownership rules are meant to serve the public 

interest, and FCC’s recent determination that JSAs are a factor in 

assessing whether stations are in compliance with the ownership rules 

indicates that JSAs could have a bearing on whether stations are serving 

the public interest. Furthermore, in October 28, 2014, following the 

enactment of its JSA rule earlier in 2014, FCC released a public notice 

reminding stations of their obligation to file all current JSAs in their public 

inspection files, regardless of whether the station is the sales-agent or the 

customer-station in the agreement.45 The notice stated that a station’s 

 4347 C.F.R. § 73.3526 (e)(16). This rule applies to full-power and Class A commercial 

television stations; it does not apply to low-power stations. Id. § 73.3526 (a)(2); see also 

47 C.F.R § 74.780, which lists rules that apply to low-power television stations and does 

not include section 73.3526.

44GAO/AIMD-00-21.3.1. 

45Media Bureau Announces Requirement to File Certain Television Joint Sales 

Agreements, Public Notice, 29 FCC Rcd 13402 (MB 2014).
Page 19 GAO-16-349 Local Media Advertising

failure to comply with this rule may result in FCC taking an enforcement 

action.

FCC officials said they do not monitor the contents of stations’ public files 

on an ongoing basis and have not reviewed stations’ JSA filings to ensure 

they are complete and up to date. They added that they have never 

identified or compiled copies of JSAs from these publicly available 

sources, either for attributable JSAs or all JSAs, for this purpose. FCC 

officials said they typically review compliance with public inspection file 

requirements in connection with a station’s license renewal application or 

in response to complaints from the public.46 According to FCC officials, 

FCC’s most recent round of license renewal reviews did not turn up any 

missing JSAs, and there were no stations self-reporting or petitions from 

others alleging missing JSAs. However, if FCC has not compiled a list of 

existing JSAs, it is unclear how it would know whether a JSA is missing 

when reviewing a file. Additionally, FCC officials said that if they receive a 

complaint that a public inspection file is incomplete, FCC may investigate 

and take action, such as contacting the station licensee and instructing it 

to update the file or issuing an admonishment or fine, as appropriate; 

however, FCC officials said they have not received any such complaints. 

According to FCC officials, this compliance approach reflects the 

agency’s policy objectives of encouraging greater public participation in 

broadcast licensing. However, FCC’s approach puts the burden of 

discovering the incompleteness of an inspection file on the public, and in 

the case of a file that is missing a JSA, it is not clear how a member of the 

public would be likely to know that a JSA is missing without undertaking a 

review of all stations’ JSA files, as we did, in order to uncover whether 

any other station has put a JSA agreement with that station in its file. 

Furthermore, FCC officials said that they take seriously the obligation to 

ensure that licensees comply with FCC rules and to vigorously enforce 

violations of the public inspection file that are identified as a result of selfdisclosure, public complaints, discovery by FCC staff, or in connection

with a station’s license renewal applications. FCC officials said that the 

public inspection file is meant to assist the public specifically, rather than 

 46A license term is generally 8 years. During the license renewal process, licensees must 

certify compliance with the public inspection file rule for the preceding license period, and 

willful false certifications are punishable by any or all of the following: fine, imprisonment, 

revocation of the station license, or forfeiture. See 18 U.S.C. § 1001, 47 U.SC. §§ 

312(a)(1), 503.
Page 20 GAO-16-349 Local Media Advertising

FCC. However, without examining public inspection files to determine if 

they are complete, FCC may not be fully aware of violations.

If the public is to have the sort of dialogue with and oversight of stations 

that FCC suggests, then the public should have access to these 

documents through the public inspection files. FCC’s rules specify which 

documents should be included in the files, and FCC has the authority to 

take enforcement action against stations that do not follow its rules. 

Although FCC assured broadcasters that the online public file 

requirement would not lead to increased FCC scrutiny of the public 

inspection files,47 FCC has already reminded broadcasters of their 

responsibility to file JSAs in public inspection files and that FCC may take 

enforcement action if stations do not comply.48 If a member of the public 

is examining the file of a station that is involved in a JSA but the station 

has not put the JSA in the file, then it would not be apparent that the 

station’s operations involve another station as provided by a JSA. 

Specifically, this reduces the transparency around the station’s 

advertising sales, which is a principal source of station revenue. Publicinterest stakeholders told us that lack of transparency regarding JSAs and 

other sharing agreements, particularly over what they do and who is 

involved, is a primary concern. If JSAs are missing from stations’ public 

inspection files, interested parties may not be able to access this critical 

piece of information about how stations operate in local markets.

An interconnect involves two or more MVPDs combining a portion of their 

advertising time in a local market, creating a single-point for advertising 

sales across multiple MVPDs within a DMA (see fig. 1). Through 

technological means, these advertisements are then distributed 

simultaneously across the MVPDs participating in the interconnect. For 

example, MVPDs told us that an advertiser wishing to purchase 

advertising time in a local market on a particular cable-network show 

could, through a single transaction with an interconnect, arrange for its 

advertisement to air simultaneously during that show on all MVPDs in that 

 47In the Matter of Standardized and Enhanced Disclosure Requirements for Television 

Broadcast Licensee Public Interest Obligations Extension of the Filing Requirement For 

Children’s Television Programming Report (FCC Form 398), Second Report and Order, 

27 FCC Rcd 4535, 4564 ¶ 58 n. 187 (2012).

4829 FCC Rcd 13402 (MB 2014). 

Interconnects Allow 

MVPDs in a Local Market 

to Sell Advertising from a 

Single Point and Exist in 

Most Markets, According 

to Stakeholders
Page 21 GAO-16-349 Local Media Advertising

market that are part of the interconnect. Without an interconnect, an 

advertiser wishing to reach the same audience would have to negotiate 

separate advertising time purchases for the same times and during the 

same shows with each MVPD in the local market. Although interconnects 

were originally created among cable companies, they have expanded in

recent years to include telecommunications MVPDs. Additionally, MVPD 

stakeholders we spoke to explained that while satellite-based MVPDs do 

not directly participate in interconnects, satellite MVPDs have developed 

a way to insert local advertising into the programming they provide 

customers and have begun rolling this capability out in a limited number 

of markets. Through an arrangement with a cable-industry-owned 

advertising representation sales firm, advertisers can take advantage of 

this capability to reach satellite subscribers in some larger markets when 

purchasing local advertising through interconnects.
Page 22 GAO-16-349 Local Media Advertising

Figure 1: Multichannel Video Programming Distributor (MVPD) Advertising Sales within a Designated Market Area (DMA) 

without and with an Interconnect

Stakeholders including two MVPDs, two MVPD advertising representation 

firms, three industry associations, one broadcast station owner, and one 

financial analyst provided information on the prevalence of interconnects. 

Seven of these stakeholders stated that interconnects exist in most 

markets, while two of these stakeholders indicated that interconnects are 

found mostly in medium- to large-size markets. According to an 

association of MVPD advertising sellers, the number of interconnects has 

increased in recent years as MVPDs realized their benefits and 

efficiencies, which we discuss later in this report. According to several 
Page 23 GAO-16-349 Local Media Advertising

MVPD stakeholders, there is no industry-wide definition of an 

interconnect. Consequently, there are differences in how the term is 

defined, making it difficult to obtain consistent information on the number 

of interconnects nationwide.49

MVPDs, cable associations, and financial analysts we interviewed 

identified the following key characteristics of interconnects:

• Advertising time: According to MVPD stakeholders we interviewed, 

interconnects cover only advertising and do not cover other services.

• Interconnect managers: According to MVPDs, typically the largest 

MVPD provider in the market manages the interconnect. For example, 

one large MVPD told us that it created and manages about one-third 

of the nation’s interconnects and is a participant in interconnects 

managed by other MVPDs. This MVPD also said that creation and 

management of an interconnect requires significant investments in 

personnel and technology. MVPD stakeholders also told us that some 

interconnects are managed by national advertising representation 

firms.

• Revenue sharing: MVPDs said that revenue from the sale of 

advertising through an interconnect is generally prorated among the 

MVPDs in the interconnect based on the amount of inventory provided 

for sale and their number of subscribers in the DMA.

 49We attempted to obtain data from multiple sources on the number of interconnects in the 

United States, but we were unable to obtain a consistent, reliable count of such 

agreements.
Page 24 GAO-16-349 Local Media Advertising

Some stakeholders that filed comments in FCC proceedings and who we 

interviewed stated that local stations and MVPDs benefit economically 

from JSAs and interconnects, respectively. However, some stakeholders 

expressed concerns with how these agreements may impact local 

markets. Stakeholders we selected to interview included local station 

owners, MVPDs, industry associations, public-interest groups, 

academics, and financial analysts.50

According to most of the local station owners that commented in FCC’s 

JSA rulemaking and all that we interviewed, a primary benefit of JSAs, as 

well as other sharing agreements, is that they allow local stations to cut 

costs.51 As previously discussed, a JSA is generally accompanied by a 

shared service agreement, and they are sometimes the same agreement. 

Further, in discussing their views, a few station owners told us that while 

JSAs provide some cost savings, shared service agreements provide 

most of the savings and that it generally did not make sense to talk about 

JSAs without also discussing shared service agreements. Consequently, 

our discussion of stakeholders’ views is based on comments about the 

 50Some stakeholders’ knowledge regarding JSAs, and particularly interconnects, was 

limited. For example, comments in the FCC’s JSA rulemaking proceeding were mostly 

from the media industry, and comments in the Comcast/Time Warner Cable merger 

proceeding related to interconnects were entirely from MVPDs. Further, some 

stakeholders, particularly public-interest and media advocacy groups, declined to meet 

with us, with most indicating they were not knowledgeable enough about JSAs or 

interconnects to discuss them. Of the stakeholders we interviewed, not all had views on 

both types of agreements, and none of the financial analysts raised concerns with JSAs or 

interconnects. Considering the limitations with stakeholder knowledge in this area and the 

fact that our interview results are not generalizable, that a greater or lesser number of 

stakeholders mentioned a given concern is not necessarily indicative that it is of greater or 

lesser concern among all stakeholders.

51We use “station owners” to refer to both owners of local stations and representatives 

from related broadcast industry associations that we interviewed (although those 

associations include members beyond just owners, they represent the same industry 

segment for the purpose of this discussion).

Some Selected 

Stakeholders Said 

That Advertising 

Agreements Provide 

Economic Benefits, 

but Others Raised 

Concerns over the 

Market Effects of 

these Agreements

Station Owners Said That 

JSAs Allow Stations to Cut 

Costs, but Other 

Stakeholders Raised 

Concerns about Effects on 

Competition, Diversity, and 

Localism
Page 25 GAO-16-349 Local Media Advertising

use of both JSAs and shared service agreements, which we refer to 

together as “sharing agreements.”

All of the station owners we interviewed said that the savings from these 

sharing agreements help financially struggling stations survive when they 

might otherwise go out of business, with some owners saying this is 

particularly the case with stations in smaller markets. Some station 

owners and financial analysts told us that as local stations are facing 

increased competition for advertising revenues from other media, such as 

Internet-based media and MVPDs, stations rely on sharing agreements to 

cut costs. Our analysis of BIA/Kelsey local advertising revenue data 

showed that the market share of Internet-based media increased from 11 

percent in 2011 to 17 percent in 2014—a percentage comparable to the 

market share for broadcast television, which was 15 percent in 2014 (up 

slightly from 13 percent in 2011). This share is higher than the market 

share of MVPDs, which was about 5 percent in both years.52 (For more 

results of our analysis of this market data, see app. II.) Most media 

industry stakeholders and financial analysts whom we interviewed 

consistently identified the growth in Internet-based media as a major 

change in local advertising markets in recent years, coming at a time 

when market shares for other types of media, such as radio and 

newspapers, have been relatively flat or in decline.

Furthermore, two station owners and two financial analysts told us that 

stations in smaller markets are more likely to use JSAs than stations in 

larger markets because local stations earn less advertising revenue in 

small markets than in large markets, while they said their costs are 

roughly the same regardless of market size.53 Our analysis of BIA/Kelsey 

estimates of local advertising revenue supports this revenue claim. 

Specifically, stations in the 25 largest DMAs had average revenue of 

$28.0 million per station in 2014—more than nine times the $3.0 million 

average revenue per station in the smallest DMAs (those ranked 101 to 

210). According to some station owners and financial analysts, stations 

view JSAs and shared service agreements as a means of remaining 

financially viable in small markets. In contrast, a local station owner that 

 52We collapsed four of BIA/Kelsey’s media categories—mobile, online, Internet yellow 

pages, and email—into the “Internet-based media” category. 

53Our 2014 media ownership report also noted that costs of operating a television station 

are similar regardless of market size, see GAO-14-558.
Page 26 GAO-16-349 Local Media Advertising

has stations in larger markets said that there is no need for JSAs in 

markets like Los Angeles or New York.

In addition to cutting costs and helping local stations remain financially 

viable, station owners also told us that the associated cost savings from 

sharing agreements enable stations to make investments that help them 

compete with other local media and provide benefits to the stations and 

their communities, thereby supporting FCC’s goals of enhancing 

competition, diversity, and localism. Benefits station owners cited include:

• Investments in diverse programming: Some station owners filing in 

FCC’s JSA rulemaking (6 of 18) and whom we interviewed (4 of 10) 

said that sharing agreements allow them to enhance the diversity of 

local programming. For example, representatives from Univision, a 

Spanish-language network and a station owner, told us the company 

has used JSAs and shared-service agreements with another station 

owner, Entravision, to establish and expand Univision’s second 

Spanish-language network, UniMás. Under this arrangement, 

Entravision provides services for Univision’s stations that carry 

UniMás programming: According to Univision representatives, the 

resulting cost savings have allowed it to launch UniMás in six 

markets, growing the network faster than it could have without sharing 

agreements.

• Increased local news coverage: According to some station owners 

that filed comments in FCC’s JSA rulemaking and that we 

interviewed, producing local news is expensive and stations find it 

financially challenging to produce local news, particularly in smaller 

markets. Most station owners that filed FCC comments (10 of 18) and 

most that we interviewed (7 of 10) said JSAs and shared service 

agreements allow local stations to air local news when they would 

otherwise be unable to or to expand or improve their existing news 

coverage. For example, one owner of a small-market station told us 

its JSA and shared service agreement with a larger station owner in 

the same market have allowed both stations to share resources, 

thereby reducing costs and improving their news services.

• Improved services: Some station owners that filed FCC comments (8 

of 18) and that we interviewed (4 of 10) said JSAs enable stations to 

improve service quality. For example, one station owner told us that 

savings associated with its JSA allowed the station to upgrade its 

broadcast to high definition, which helped the station better compete 

for advertising dollars, since many advertisers will not buy advertising 

unless it is in high definition.
Page 27 GAO-16-349 Local Media Advertising

FCC itself has acknowledged that JSAs may have benefits. Specifically, 

in the order FCC released with its 2014 JSA rules, FCC stated that 

cooperation among local stations may have public-interest benefits under 

some circumstances, particularly in small to mid-sized markets. FCC also 

stated that JSAs may, for example, facilitate cost savings and efficiencies 

that could enable the stations to provide more locally oriented 

programming.54

Conversely, some stakeholders raised concerns about how JSAs and 

shared service agreements may affect local markets. For example, one of 

the four public-interest groups that filed comments in FCC’s JSA 

rulemaking, as well as the two public-interest groups and one of the two 

academic stakeholders we interviewed, said that JSAs do not support the 

long-standing policy goals to encourage competition, diversity, and 

localism. Stakeholders raised concerns about JSAs in the following areas:

• Undue influence: One MVPD association, one labor union, and two 

public interest groups that filed comments in FCC’s JSA rulemaking 

and one MVPD, both public-interest groups, and both academic 

stakeholders we interviewed said that JSAs and other sharing 

agreements create the potential for undue influence over station 

operations. Specifically, according to some of these stakeholders, 

such influence could occur because the agreements create a financial 

interest. With JSAs, this is because the sales-agent station sells the 

customer station’s advertising, which is a principal source of the 

customer station’s revenue. Furthermore, one MVPD, two publicinterest groups, and two labor unions that filed FCC comments, as 

well as both of the public-interest groups and one of the two academic 

stakeholders we interviewed, said JSAs and other sharing 

agreements allow station owners to circumvent FCC’s media 

ownership rules. As previously discussed, FCC’s ownership rules limit 

the number of local stations an entity can control in a local market.

• Reduced competition for advertising: According to most public-interest 

groups (three of four) that filed FCC comments and two of the ten 

 54The order also states that “these potential benefits” did not affect FCC’s “assessment of 

whether television JSAs confer significant influence such that they should be attributed”

for purposes of applying the broadcast ownership rules. According to FCC, any such 

potential benefits “should be assessed in determining where to set the applicable 

ownership limit, i.e., how many television stations a single entity should be permitted to 

own, operate, or control in a local television market.” 2014 Quadrennial Review FNPRM 

and Report and Order 29 FCC Rcd at 4537-4538, ¶ 358 (2014).
Page 28 GAO-16-349 Local Media Advertising

MVPDs, both of the public-interest groups, and one of the two 

academic stakeholders we interviewed, local stations’ use of JSAs 

effectively reduces competition for advertising dollars in local markets 

because, for example, stations within a JSA may combine their sales 

forces and no longer compete with each other for advertising revenue. 

Some of these stakeholders raised the concern that this reduced 

competition may create negative impacts in the market, such as 

allowing stations with JSAs to capture more of the local advertising 

market, putting other stations without JSAs at a disadvantage.

• Reduced diversity: Both public-interest groups and one of the 

academic stakeholders we interviewed said that sharing agreements 

reduce diversity in local markets, including diversity in terms of 

programming or station ownership. For example, an academic 

stakeholder told us that the use of such agreements results in the 

same entity effectively controlling the content of one or more stations.

• Reduced localism: According to one of the four public-interest groups 

and the one academic stakeholder that filed FCC comments, as well 

as both of the academic stakeholders we interviewed, the use of 

sharing agreements can lead to the reduced provision of local news. 

For example, an academic stakeholder said in its FCC filing that JSAs 

and shared service agreements have negatively impacted the 

Syracuse market, because two stations consolidated operations under 

these agreements and in the process cut one of the station’s news 

operations.

According to 9 of the 10 MVPD stakeholders we interviewed,55 a primary 

benefit of an interconnect is to aggregate the available advertising time 

among various MVPDs in a local market. This enables MVPDs to 

collectively reach a greater number of households in that market than any 

single MVPD could reach with its advertising time. Six of these MVPDs 

said this increased reach enables MVPDs participating in interconnects to 

better compete with other local media, particularly local broadcast 

television stations, since it enables them to have a market reach that is 

closer to that of a local station. Further, four MVPDs also told us that this 

increased reach makes MVPDs’ advertising time more valuable to 

advertisers. According to some MVPD stakeholders, without 

interconnects, the reach of each MVPD’s advertising time would include 

only that MVPD’s subscribers, which could be a small percentage of 

 55MVPD stakeholders include MVPDs, MVPD industry associations, and advertising 

representation firms that sell advertising on behalf of MVPDs. 

MVPDs Said 

Interconnects Allow Their 

Advertising Time to Reach 

More of the Local Market, 

but Other Stakeholders 

Raised Concerns about 

Effects on Competition
Page 29 GAO-16-349 Local Media Advertising

households in the local market. As a result, according to three MVPDs, 

sometimes advertisers would not purchase MVPD advertising time. Nine 

of the ten MVPD stakeholders said that aggregating advertising inventory 

through interconnects also enhances the efficiency of advertising sales by 

enabling advertisers to buy advertising time across a number of MVPDs 

in a given local market through a single purchase.

MVPD stakeholders we interviewed also noted that interconnects can 

reduce costs. Two MVPDs we interviewed and two larger MVPDs that 

filed comments in FCC’s Comcast/Time Warner Cable merger proceeding 

said interconnects allow some MVPDs to cut costs because one MVPD 

manages the advertising sales and technological implementation of the 

interconnect for all of the participating MVPDs, whereas without an 

interconnect, each MVPD would maintain a sales staff.

In contrast, smaller MVPD stakeholders that commented in the 

Comcast/Time Warner merger proceeding and some stakeholders we 

interviewed raised concerns about interconnects. Specifically, 6 of the10 

station owners we interviewed told us MVPDs have an unfair competitive 

advantage over local stations because, for example, FCC regulates 

station owners’ JSAs but not MVPDs’ interconnects. Four of these station 

owners noted that MVPDs are therefore allowed to take advantage of 

efficiencies and savings through their own type of advertising sales 

agreement, while local stations face regulatory constraints in doing so. 

Additionally, five small MVPD stakeholders and an advertising 

representation firm that works with small MVPDs that commented in the 

Comcast/Time Warner merger proceeding said that larger MVPDs that 

manage interconnects treat smaller MVPDs unfairly—or have the 

potential to—by applying conditions to the smaller MVPDs’ participation in 

interconnects, such as excluding some smaller MVPDs from 

interconnects if the smaller MVPDs use an advertising representation firm 

that competes with the large MVPD’s national advertising arm. Four small 

MVPDs and an MVPD advertising representation firm that submitted 

comments in the Comcast/Time Warner merger proceeding said that 

excluding MVPDs from interconnects decreases revenue for the excluded 

MVPDs. Two larger MVPDs that provided comments in the merger 

proceeding, however, indicated that they do not engage in such practices.

While opinion differ on how JSAs among local stations and interconnects 

among MVPDs affect the media landscape, FCC has defined JSAs and 

required that they be placed in local stations’ public inspection files. 

Moreover, in 2014, FCC issued a rule that requires that where a JSA 

Conclusions
Page 30 GAO-16-349 Local Media Advertising

encompasses more than 15 percent of another station’s weekly 

advertising time, the JSA will count toward the local-station ownership 

limit. FCC requires that each broadcast television station with a JSA file 

the JSA in its public inspection file, including in the station’s online file on 

FCC’s website—regardless of whether the station is the sales-agent 

station or the customer station. This requirement is intended to improve 

the transparency of local stations’ operations so that the public can have 

a more active role in assessing stations’ operations in their local markets. 

However, we found that a considerable number of JSAs filed by customer 

stations were not also filed by a sales-agent station—and that FCC has 

not taken sufficient steps to determine the extent to which broadcast 

television stations are complying with this rule. If stations that use JSAs 

as part of their advertising operations have neglected to file or update 

their JSAs in their public inspection files, interested parties may be 

unaware that the stations have such arrangements and therefore lack 

insight into this aspect of local television operations. Consequently, the 

transparency of local television markets is diminished, preventing the 

public from effectively assessing and engaging stations with regard to 

local stations’ public interest obligations.

We recommend that the Chairman of FCC review JSAs filed in stations’

public inspection files to identify stations involved in those JSAs and take 

action to ensure that each station involved has filed its JSA as required.

We provided a draft of this report to FCC for review and comment. We 

received written comments from FCC, which are reproduced in appendix 

III. In response to our recommendation, FCC stated that it shares our 

concern that potential noncompliance with FCC’s JSA filing requirement 

could affect the transparency of local television markets. Further, FCC 

stated it will take action to help ensure that broadcasters are aware of and 

in compliance with their public file obligations regarding JSAs and that 

any noncompliance is disclosed to FCC, as appropriate.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the appropriate 

congressional committees, the FCC Chairman, and other interested 

parties. In addition, the report is available at no charge on the GAO 

website at http://www.gao.gov.

Recommendation

Agency Comments
Page 31 GAO-16-349 Local Media Advertising

If you or your staff have any questions about this report, please contact 

me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix IV.

Mark L. Goldstein

Director, Physical Infrastructure Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 32 GAO-16-349 Local Media Advertising

The objectives for this report were to examine (1) what available 

information indicates about the prevalence and characteristics of 

advertising sales agreements among local broadcast television stations 

(local stations) or multichannel video programming distributors (MVPD), 

and (2) selected stakeholders’ perspectives on the impacts of advertising 

sales agreements among local stations or MVPDs.

To determine the prevalence and characteristics of advertising sales 

agreements—specifically joint sales agreements (JSA)—among local 

broadcast television stations (local stations), we obtained and analyzed 

all JSAs found in the stations’ public inspection files on the Federal 

Communications Commission’s (FCC) website.1 We identified documents 

as JSAs if they were labeled as such or if they were a shared service 

agreement that included provisions for the joint-sale of advertising.2 We 

excluded duplicate copies of the same JSA in our analysis, a JSA that we 

determined had expired according to the date in the JSA, and documents 

filed in a JSA folder that were not JSAs, such as local marketing 

agreements and shared service agreements that did not have an 

advertising component.3 According to FCC officials, although stations are 

required to place copies of their JSAs in their public inspection files, FCC 

officials have not independently verified whether each station has done 

so, and the officials said that they were not aware of any JSAs that were 

mislabeled or misfiled. To provide assurance our review of JSAs was as 

comprehensive as possible, we also purchased JSA data from 

BIA/Kelsey, a media research and consulting firm. BIA/Kelsey developed 

its JSA data by reviewing information in the trade press, analyzing FCC 

filings, and through direct contact with television stations to ask for 

information such as the presence of JSAs. We compared BIA/Kelsey’s 

 1

Television station licensees are required to file a number of documents in their public 

station files, including copies of active JSAs. These files are available online from FCC’s 

website at https://stations.fcc.gov/ (accessed Nov. 5, 2015).

2

Some JSAs were titled “Agreement for the Sale of Commercial Time,” but like documents 

labeled “JSA,” dealt with the joint-sale of advertising, so we included these documents in 

our analysis.

3

Local marketing agreements allow one or more parties other than the station’s owner to 

purchase blocks of time and then provide programming and sell advertising in that block of 

time. In 1999, an FCC order made local marketing agreements attributable under FCC’s 

media ownership rules if an entity programs more than 15 percent of another in-market 

station’s weekly programming hours. In the Matter of Review of the Commission’s 

Regulations Governing Attribution of Broadcast and Cable/MDS Interests, 14 FCC Rcd 

12559, 12585, ¶ 55 (1999). 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-16-349 Local Media Advertising

data against the JSAs we were able to identify in stations’ public 

inspection files and did not identify any additional JSAs in this data that 

were not available in the file. We assessed the reliability of using 

BIA/Kelsey’s JSA data for the purpose outlined here by obtaining 

information from BIA/Kelsey about how the data were collected and 

maintained and determined that the data were sufficiently reliable for this 

purpose. We analyzed the JSAs we obtained from FCC to determine their 

characteristics such as which stations and owners were party to the 

agreements, their date and duration, and advertising sales provisions. We 

also analyzed the filings of JSAs in stations’ public inspection folders to 

identify if any JSAs were filed in one station’s folder but missing from the 

folder of another station involved in the JSA. Where JSAs did not mention 

a specific sales-agent station, we identified the probable station by 

reviewing publicly available information about television station owners or 

contacting another station involved in the JSA and examined the public 

inspection files of those stations. We evaluated FCC’s efforts to ensure 

completeness of stations’ JSA filings based on FCC’s rules and stated 

expectations for stations’ public files and federal internal control 

standards related to information and communications.4

To determine the prevalence and characteristics of advertising sales 

agreements—specifically interconnects—among MVPDs, we interviewed 

selected stakeholders (as listed later in this section) about their 

knowledge of the prevalence and characteristics of interconnects. We 

attempted to obtain data on the number of interconnects in the United 

States from various media industry sources; however, we were unable to 

establish the reliability of these data due to differences in the 

methodologies between the various sources that made the numbers 

inconsistent.

To assess selected stakeholders’ perspectives on advertising sales 

agreements among local stations and MVPDs, we reviewed filings in two 

FCC proceedings: 1) the proceeding for FCC’s rulemaking on television 

joint sales agreements and 2) FCC’s review of a 2014 proposed merger 

 4

GAO/AIMD-00-21.3.1.
Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-16-349 Local Media Advertising

between Comcast and Time Warner Cable.5 We analyzed filings that 

stated specific benefits or concerns related to JSAs or interconnects. We 

also interviewed FCC officials and the following stakeholders about their 

perspectives on JSAs and interconnects:

• eight local station owners that we selected to represent companies of 

various sizes and those that do and do not have JSAs;6

• five MVPDs selected to represent cable, satellite, and 

telecommunications providers and two companies selling advertising 

on their behalf;

• five media industry associations selected because they represent 

broadcasters, large and small MVPDs, and advertising sellers;

• two public interest groups and two academic stakeholders selected 

because they filed comments in the FCC JSA rulemaking or were 

recommended by other stakeholders;7 and

• five financial analysts selected based on our prior work and our 

research on their backgrounds.

Table 4 is the list of stakeholders we interviewed.8

 5

We reviewed comments filed in the FCC JSA rulemaking docket since the beginning of 

2014. We examined filings in the merger proceeding because some commenters 

discussed interconnects in their filed comments. In April 2015, FCC terminated its 

proceeding to consider this merger after the applicants notified FCC they had terminated 

the planned transaction. 

6

We excluded local station owners that are party to the lawsuit regarding FCC’s JSA 

rulemaking.

7

Initially, we also sought information about JSAs among broadcast radio stations. FCC 

adopted rules in 2003 that made radio stations’ JSAs attributable under FCC’s ownership 

rules. Broadcast radio stakeholders we interviewed told us that JSAs are not common 

among radio stations, since they are subject to FCC’s radio JSA rule and because FCC’s 

radio ownership limits are less strict than those for television. We contacted owners of 

broadcast radio stations, but most of these companies either did not respond to our 

requests for interviews or told us they had little or no information about radio JSAs. We 

were able to conduct interviews with the Radio Advertising Bureau and Salem Media 

Group, a radio-station owner. In reviewing a 2013 FCC report on radio station filings, we 

identified only four JSAs between radio stations. Due to the limited available information 

about radio JSAs, we have excluded them from our analysis and have focused on 

television JSAs and MVPD interconnects. 
Appendix I: Objectives, Scope, and 

Methodology

Page 35 GAO-16-349 Local Media Advertising

Table 4: Stakeholders Interviewed from the Following Organizations

Local broadcast television 

station owners

• Bristlecone Broadcasting

• Comcast NBCUniversala

• GOCOM Media

• Gray Television

• Schurz Communications

• Sinclair Broadcast Group

• Tougaloo College

• Univision

Multichannel video 

programming distributors 

(MVPD) and related 

advertising sellers

• AT&Tb

• Comcast NBCUniversala

• DIRECTVb

• DISH Network

• NCC Mediac

• Time Warner Cable

• Viamediac

Media industry associations • American Cable Association

• National Association of Broadcasters

• National Cable & Telecommunications Association

• Television Bureau of Advertising

• Video Advertising Bureau

Public interest groupsd • Common Cause

• National Hispanic Media Coalition

Academics • Georgetown University Institute for Public 

Representation

• University of Delaware Center for Community 

Research and Service

Financial analysts • Jefferies

• Brean Capital

• Wells Fargo

• MacQuarie Securities

• Evercore

Source: GAO. | GAO-16-349

a

Comcast NBCUniversal appears twice because the company is both an MVPD and an owner of 

broadcast television stations, and we discussed both of these aspects with representatives of the 

company.

 8

Additionally, we contacted a number of other stakeholders that either did not respond to 

our requests or declined to be interviewed, generally because they indicated they were not 

knowledgeable about the subject. This included broadcast television station owners (ION 

Media and Tribune Company), one MVPD (Verizon), and public interest and media 

advocacy groups (Free Press; Public Knowledge; Multicultural Media, Telecom and 

Internet Council; and National Association of Black Owned Broadcasters).
Appendix I: Objectives, Scope, and 

Methodology

Page 36 GAO-16-349 Local Media Advertising

b

AT&T acquired DIRECTV in 2015; however, we are listing them separately, as we met with them 

separately.

c

NCC Media and Viamedia are advertising representation firms that sell advertising on behalf of 

MVPDs.

d

We have categorized these organizations as public interest groups, although their specific missions 

differ. National Hispanic Media Coalition describes itself as a media advocacy and civil rights 

organization for the advancement of Latinos; Common Cause describes itself as a nonpartisan, 

grassroots organization that serves the public interest.

For contextual information about the advertising revenue and market 

shares of local media, we purchased data from BIA/Kelsey on the 

estimated local advertising revenue of 12 types of local media: broadcast 

television stations, broadcast radio stations, MVPDs, newspapers, 

magazines, direct mail, out-of-home (a category of advertising that 

includes billboards and other signs in public places), yellow pages, online 

(i.e., websites), mobile, email, and Internet yellow pages.9 Since 2009, 

BIA/Kelsey has released nationwide forecasts for local media advertising 

with estimates of local advertising for these 12 media categories. 

BIA/Kelsey allocated its national estimates to each of the 210 Nielsendefined local television markets, known as “designated market areas”

(DMA), based on county-by-county demographic and economic data and 

BIA/Kelsey’s internal estimates on various media.10 BIA/Kelsey checked 

its estimates with publicly available information on many of the public 

companies that are part of its media categories. BIA/Kelsey stated that 

the resulting data should be considered as approximate estimates to 

provide a general view of local advertising markets and changes in those 

markets. We obtained these data for each of the 210 DMAs for years 

2011 and 2014. We chose these years because 2014 would be the most 

recent year of complete data and 2011 would provide a comparison year 

during the economic recovery. 

Prior to purchasing the data from BIA/Kelsey, we researched potential 

sources of such data by interviewing stakeholders and reviewing our prior 

work on media ownership. We solicited proposals from companies that 

we identified as potentially having the data we needed and evaluated 

 9

We used different terms than BIA/Kelsey to describe some of these categories in this 

report and also collapsed some categories for analysis purposes.

10BIA/Kelsey used the demographic and economic data to make adjustments to its 

estimates to account for market-specific differences. For example, if the per-capita retail 

expenditures in a given market were above average, BIA/Kelsey increased its estimate for 

retail advertising in that market. BIA/Kelsey also made adjustments to reflect spending in 

some local markets during years with election-related spending based on the 

competitiveness of local races.
Appendix I: Objectives, Scope, and 

Methodology

Page 37 GAO-16-349 Local Media Advertising

these proposals to determine which would meet our requirements. We 

assessed the reliability of BIA/Kelsey’s data for the purpose of providing 

contextual information about local media market shares by discussing 

these data with industry stakeholders and obtaining information from 

BIA/Kelsey about how they collect and maintain the data. We determined 

that the data were sufficiently reliable for this purpose.

As previously discussed, several broadcast television entities have filed 

an ongoing lawsuit against FCC over the 2014 JSA rule. This lawsuit 

alleges that FCC evaded its legal obligations by not completing its review 

of its media ownership rules and that FCC violated its statutory 

obligations by promulgating the JSA rule on the basis of these ownership 

rules. Due to this lawsuit, we limited the scope of our review. Specifically, 

we did not evaluate FCC’s efforts related to the JSA rulemaking, nor did 

we evaluate FCC’s efforts to review its media ownership rules.

We conducted this performance audit from April 2015 to March 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Local Media Advertising Revenue

Page 38 GAO-16-349 Local Media Advertising

Revenue from the sale of advertising is earned by a variety of types of 

local media. Local media advertising generated approximately $136 

billion in revenue in 2014, a slight decrease from the $139 billion (2014 

dollars) in 2011, according to data from BIA/Kelsey, a media research 

and consulting firm.1 The market for local advertising revenue includes a 

number of different types of media, such as local television and out-ofhome venues (which encompasses billboards and ads on buses, among 

other things). The percentage of local advertising revenue that goes to 

each type of media is referred to as its market share. Recent changes in 

the local media landscape have led to some shifts in market share. We 

obtained data on local advertising revenue from BIA/Kelsey for 2011 and 

2014 for 12 types of local media: broadcast television stations, broadcast 

radio stations, MVPDs, newspapers, magazines, direct mail, out-of-home, 

yellow pages, online (i.e., websites), mobile, email, and Internet yellow 

pages. We analyzed these data to identify differences in the local 

advertising market shares among these various types of local media and 

how these market shares may have changed in recent years.

According to our analysis of these data, the largest sellers of local 

advertising in 2014 were direct mail, broadcast television, and 

newspapers, which each have a market share of about 15 percent or 

more, based on estimates of their local advertising revenue across all 

U.S. local media markets. In contrast, MVPDs’ market share was about 5 

percent in 2014, according to the BIA/Kelsey data. When the market 

shares of various Internet-based media (mobile, online, email, and 

Internet yellow pages) are combined, their market share (17 percent) 

rivals that of the largest local advertising sellers (see fig. 2).

 1

We adjusted the 2011 revenue estimate to 2014 dollars to account for inflation. The 

nominal revenue estimate for 2011 was $132 billion. BIA/Kelsey representatives also 

noted that the 2014 estimate includes political advertising, which they said is important to 

many local television stations.

Appendix II: Local Media Advertising 

Revenue
Appendix II: Local Media Advertising Revenue

Page 39 GAO-16-349 Local Media Advertising

Figure 2: Estimated Share of Local Advertising Revenue by Local Media Type, 2014

a

This figure collapses BIA/Kelsey’s magazines and print yellow pages categories into “other print.”

b

Multichannel video programming distributors are cable, satellite, and telecommunications 

subscription television services.

C

Out-of-home is a category of advertising that includes billboards and other displays in public places.

d

This figure collapses BIA/Kelsey’s mobile, online, e-mail, and Internet yellow pages categories into 

“Internet-based.”

Our analysis also revealed some trends in the market shares of these 

media when comparing estimates for 2011 and 2014. The most 

significant change in market share in these recent years is among 

Internet-based media, with a market-share increase from 11 percent in 

2011 to 17 percent in 2014 (see fig. 3). Most stakeholders we interviewed 

similarly identified Internet-based or “digital” media as having significant 

market growth during this time. Broadcast television’s market share grew 

slightly between 2011 and 2014, and MVPDs’ market share was relatively 

flat between 2011 and 2014, according to the data. Print media 

(newspapers, magazines, direct mail, yellow pages) and radio all saw 

market-share declines from 2011 to 2014, according to the data, and two 

of the financial analysts told us that television market share has flattened 

in recent years and may soon decline. According to many stakeholders, 

advertisers shifting their business to Internet-based media accounts for 

changes in market shares, particularly the declines among print media.
Appendix II: Local Media Advertising Revenue

Page 40 GAO-16-349 Local Media Advertising

Figure 3: Local Media Advertising Revenue Market Shares, 2011 and 2014

a

This figure collapses BIA/Kelsey’s mobile, online, email, and Internet yellow pages categories into 

“Internet-based.”

b

Out-of-home is a category of advertising that includes billboards and other displays in public places.

c

Multichannel video programming distributors are cable, satellite, and telecommunications 

subscription television services.

d

This figure collapses BIA/Kelsey’s magazines and print yellow pages categories into “other print.”
Appendix III: Comments from the Federal 

Communications Commission

Page 41 GAO-16-349 Local Media Advertising

Appendix III: Comments from the Federal 

Communications Commission
Appendix III: Comments from the Federal 

Communications Commission

Page 42 GAO-16-349 Local Media Advertising
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 43 GAO-16-349 Local Media Advertising

Mark L. Goldstein, (202) 512-2834 or goldsteinm@gao.gov.

In addition to the contact named above, Alwynne Wilbur (Assistant 

Director), Amy Abramowitz, Melissa Bodeau, Michael Clements, Leia 

Dickerson, Andrew Huddleston, Crystal Huggins, Hannah Laufe, Meredith 

Lilley, Grant Mallie, Malika Rice, Kelly Rubin, and Larry Thomas made 

key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(543363)
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. 

Listen to our Podcasts and read The Watchblog.

Visit GAO on the web at www.gao.gov.

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Please Print on Recycled Paper.