Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 733 

Information Center, Portals II, 445 12th 

Street SW, Room CY–A257, 

Washington, DC 20554. The full text of 

this document and any subsequently 

filed documents in this matter may also 

be found by searching ECFS at: http:// 

apps.fcc.gov/ecfs/. 

Final Paperwork Reduction Act of 1995 

Analysis 

The Order does not contain any new 

or modified information collection 

requirements subject to the Paperwork 

Reduction Act of 1995, Public Law 104– 

13. In addition, therefore, it does not 

contain any new or modified 

information collection burden for small 

business concerns with fewer than 25 

employees, pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4). 

Congressional Review Act 

The Commission sent a copy of the 

Order to Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act, see 5 U.S.C. 

801(a)(1)(A). 

Synopsis 

1. The IAC, formerly known as the 

Local and State Government Advisory 

Committee (LSGAC), was created in 

1997 to provide guidance to the 

Commission on issues of importance to 

state, local, county, and Tribal 

governments, as well as to the 

Commission. The Committee is 

currently composed of 15 elected and 

appointed officials of those 

governmental entities. 

2. The Committee has provided 

ongoing advice and information to the 

Commission on a broad range of 

telecommunications issues in which 

state, local, county, and Tribal 

governments share ‘‘intergovernmental 

responsibilities or administration’’ with 

the Commission, including cable and 

local franchising, public rights-of-way, 

facilities siting, universal service, 

barriers to competitive entry, and public 

safety communications. 

3. The Commission has often found 

over the years that an IAC membership 

of just 15 does not often capture the 

varied perspectives of our regulatory 

partners across the country. The IAC 

works best and its advice helps the 

Commission the most when it fully 

represents perspectives of rural, urban, 

and suburban jurisdictions from various 

geographic areas throughout the United 

States. 

4. By expanding its membership to 30, 

the Commission better enable the IAC’s 

ability to represent perspectives and 

viewpoints from all relevant 

governmental entities and sectors, and 

to further promote valuable, 

comprehensive, and balanced input that 

more comprehensively reflects the 

views and expertise of our regulatory 

partners. The Commission’s experience 

with other advisory committees of 

similar size shows this to be the case. 

5. The Commission continue to 

believe that IAC representation from 

each category of state, local, county, and 

Tribal government is important. Thus, 

the number of members from each 

category set forth in our current rules 

shall now serve as a minimum 

threshold. The Committee will now 

consist of 30 members, of which at least 

four shall be elected municipal officials, 

at least two shall be elected county 

officials, at least one shall be a local 

government attorney, at least one shall 

be an elected state executive, at least 

three shall be elected state legislators, at 

least one shall be a public utilities or 

public service commissioner, and at 

least three shall be Native American 

Tribal representatives. The 

Commission’s approach will give the 

Commission flexibility to expand the 

number and diversity of viewpoints 

from these sectors while ensuring none 

is under-represented. 

Ordering Clauses 

6. The rule modifications adopted 

constitute rules of agency organization, 

procedure and practice. Therefore, the 

modification of § 0.701 of the 

Commission’s rules is not subject to the 

notice and comment and effective date 

provisions of the Administrative 

Procedure Act. See 5 U.S.C. 

553(b)(3)(A), (d). 

7. Pursuant to sections 4(i), 4(j), and 

303(r) of the Communications Act of 

1934, as amended, 47 U.S.C. 154(i), 

154(j), and 303(r), subpart G, § 0.701 of 

the Commission’s rules, 47 CFR 0.701, 

modified as set forth in the Order, is 

adopted. 

List of Subjects in 47 CFR Part 0 

Organization and functions 

(Government agencies). 

Federal Communications Commission. 

Katura Jackson, 

Federal Register Liaison Officer. 

Final Rule 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR part 0 as 

follows: 

PART 0—COMMISSION 

ORGANIZATION 

■ 1. The authority citation for part 0 is 

revised to read as follows: 

Authority: Secs. 5, 48 Stat. 1068, as 

amended; 47 U.S.C. 155, unless otherwise 

noted. 

■ 2. Amend § 0.701 by revising 

paragraph (b) to read as follows: 

§ 0.701 Intergovernmental Advisory 

Committee. 

* * * * * 

(b) Membership. The IAC will be 

composed of 30 members (or their 

designated employees), with a 

minimum of: Four elected municipal 

officials (city mayors and city council 

members); two elected county officials 

(county commissioners or council 

members); one elected or appointed 

local government attorney; one elected 

state executive (governor or lieutenant 

governor); three elected state legislators; 

one elected or appointed public utilities 

or public service commissioner; and 

three elected or appointed Native 

American tribal representatives. The 

Chairman of the Commission will 

appoint members through an 

application process initiated by a Public 

Notice, and will select a Chairman and 

a Vice Chairman to lead the IAC. The 

Chairman of the Commission will also 

appoint members to fill any vacancies 

and may replace an IAC member, at his 

discretion, using the appointment 

process. Members of the IAC are 

responsible for travel and other 

incidental expenses incurred while on 

IAC business and will not be 

reimbursed by the Commission for such 

expenses. 

* * * * * 

[FR Doc. 2018–00015 Filed 1–5–18; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[MB Docket Nos. 14–50, 09–182, 07–294, 04– 

256, and 17–289; FCC 17–156] 

2014 Quadrennial Regulatory Review 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, an Order on 

Reconsideration repeals and modifies 

several of the Commission’s broadcast 

ownership rules. Specifically, this 

document repeals the Newspaper/ 

Broadcast Cross-Ownership Rule, the 

Radio/Television Cross-Ownership 

Rule, and the attribution rule for 

television joint sales agreements. This 

document also revises the Local 

Television Ownership Rule to eliminate 

the Eight-Voices Test and to modify the 


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734 Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 

Top-Four Prohibition to better reflect 

the competitive conditions in local 

markets. This document provides a 

favorable presumption for waiver of the 

Local Radio Ownership Rule’s market 

definitions as to transactions in certain 

embedded markets. Lastly, this 

document rejects requests to change the 

definition of Shared Service Agreements 

(SSAs) and the requirement that 

commercial television stations disclose 

SSAs by placing the agreements in each 

station’s online public inspection file. In 

addition, the document finds that the 

record supports adoption of an 

incubator program to promote 

ownership diversity. The Order on 

Reconsideration grants in part and 

denies in part the Petitions for 

Reconsideration filed separately by the 

National Association of Broadcasters 

(NAB), Nexstar Broadcasting, Inc. 

(Nexstar), and Connoisseur Media LLC 

(Connoisseur). 

DATES: Effective February 7, 2018 except 

for the amendment to § 73.3613, which 

contains information collection 

requirements that are not effective until 

approved by the Office of Management 

and Budget (OMB). The Commission 

will publish a document in the Federal 

Register announcing the effective date 

of these changes. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Arden, Industry Analysis 

Division, Media Bureau, FCC, (202) 

418–2605. For additional information 

concerning the PRA information 

collection requirements contained in the 

Second Report and Order, contact Cathy 

Williams at (202) 418–2918, or via the 

internet at PRA@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Order on 

Reconsideration, in MB Docket Nos. 14– 

50, 09–182, 07–294, 04–256, and 17– 

289; FCC 17–156, was adopted on 

November 16, 2017, and released on 

November 20, 2017. The complete text 

of this document is available 

electronically via the search function on 

the FCC’s Electronic Document 

Management System (EDOCS) web page 

at https://apps.fcc.gov/edocs_public/. 

The complete document is available for 

inspection and copying during normal 

business hours in the FCC Reference 

Information Center, 445 12th Street SW, 

Room CY–A257, Washington, DC 20554. 

To request materials in accessible 

formats for people with disabilities 

(Braille, large print, electronic files, 

audio format), send an email to fcc504@

fcc.gov or call the FCC’s Consumer and 

Governmental Affairs Bureau at (202) 

418–0530 (voice), (202) 418–0432 

(TTY). 

Synopsis 

I. Introduction 

1. In this Order on Reconsideration 

(Order), the Commission grants in part 

and denies in part, as set forth in this 

Order, various petitions for 

reconsideration of the Second Report 

and Order (81 FR 76220, Nov. 1, 2016, 

FCC 16–107, rel. Aug. 25, 2016). 

Specifically, the Commission (1) 

eliminates the Newspaper/Broadcast 

Cross-Ownership Rule; (2) eliminates 

the Radio/Television Cross-Ownership 

Rule; (3) revises the Local Television 

Ownership Rule to eliminate the EightVoices Test and to modify the Top-Four 

Prohibition to better reflect the 

competitive conditions in local markets; 

(4) declines to modify the market 

definitions relied on in the Local Radio 

Ownership Rule, but provides a 

presumption for certain embedded 

market transactions; (5) eliminates the 

attribution rule for television joint sales 

agreements (JSAs); and (6) retains the 

disclosure requirement for shared 

service agreements (SSAs) involving 

commercial television stations. In 

addition, the Commission finds that the 

present record supports adoption of an 

incubator program to promote 

ownership diversity; however, the 

structure and implementation of such a 

program requires further exploration. 

II. Background 

2. Congress requires the Commission 

to review its broadcast ownership rules 

every four years to determine whether 

they are necessary in the public interest 

as the result of competition and to 

repeal or modify any regulation the 

Commission determines to be no longer 

in the public interest. On August 10, 

2016, the Commission adopted the 

Second Report and Order (released on 

August 25, 2016) to resolve both the 

2010 and 2014 quadrennial review 

proceedings, as well as to address 

various issues related to the attribution 

of television JSAs, diversity initiatives, 

and SSAs. 

3. The Second Report and Order 

largely retained the existing broadcast 

ownership rules, reinstated the 

previously vacated Television JSA 

Attribution Rule, and adopted a 

definition of SSAs and a disclosure 

requirement for SSAs involving 

commercial television stations. The 

Commission also committed to explore 

various diversity-related proposals in 

the record, while declining to adopt 

other proposals, including an incubator 

program. Several parties sought 

reconsideration of various aspects of the 

Second Report and Order. NAB 

petitioned the Commission to 

reconsider its decisions regarding the 

Local Television Ownership Rule, 

television JSA attribution, SSA 

disclosure, the Newspaper/Broadcast 

Cross-Ownership Rule, the Radio/ 

Television Cross-Ownership Rule, and 

the rejection of NAB’s proposal to create 

an incubator program to encourage 

diversity. On January 24, 2017, the 

Office of Communication, Inc. of the 

United Church of Christ (UCC), the 

Media Alliance, the National 

Organization for Women Foundation, 

the Communications Workers of 

America, the Newspaper Guild, the 

National Association of Broadcast 

Employees and Technicians, Common 

Cause, the Benton Foundation, Media 

Council Hawai’i, the Prometheus Radio 

Project, and the Media Mobilizing 

Project (UCC et al.) filed a motion to 

strike and dismiss the NAB Petition on 

the grounds that the petition improperly 

evades the strict 25-page limit on 

reconsideration petitions by using a 

prohibited, undersized font for footnotes 

and inserting a substantial portion of its 

argument into those footnotes in 

violation of 47 CFR 1.49(a). The motion 

also alleges that NAB’s summary was 

well over twice the permissible length, 

and improperly contains additional 

arguments in violation of 47 CFR 

1.49(c). In reply, NAB states that it did 

not intend to evade any Commission 

rules and offers to refile if the 

Commission is concerned about UCC et 

al.’s allegations. In addition, NAB cites 

precedent that the Commission has 

considered previously the merits of an 

application for review well in excess of 

the 25-page limit and notes that parties 

adverse to NAB have pleadings in the 

proceeding that violate 47 CFR 1.49 but 

have been considered on the merits by 

the Commission. The Commission 

denies UCC et al.’s motion. The 

Commission finds that, to the extent 

that NAB’s pleading does not precisely 

conform to 47 CFR 1.49, no party has 

been prejudiced, and the public interest 

is best served by considering NAB’s 

arguments. The Commission reminds 

parties, however, to be mindful of the 

requirements of § 1.49. 

4. Nexstar also challenged the Local 

Television Ownership Rule and the 

attribution of television JSAs, while 

Connoisseur challenged an aspect of the 

Local Radio Ownership Rule related to 

embedded markets. 

III. Media Ownership Rules 

A. Newspaper/Broadcast CrossOwnership Rule 

1. Introduction 

5. Upon reconsideration, the 

Commission repeals the Newspaper/ 


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Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 735 

Broadcast Cross-Ownership (NBCO) 

Rule in its entirety. The Commission’s 

decision to repeal the rule means that 

all newspapers (print or digital) now 

will be allowed to combine with 

television and radio stations within the 

same local market, subject to the 

remaining broadcast ownership rules 

and any other applicable laws, 

including antitrust laws. The 

Commission finds that prohibiting 

newspaper/broadcast combinations is 

no longer necessary to serve the goal of 

promoting viewpoint diversity in light 

of the multiplicity of sources of news 

and information in the current media 

marketplace and the diminished voice 

of daily print newspapers. Whatever the 

limited benefits for viewpoint diversity 

of retaining the rule, in today’s 

competitive media environment, they 

are outweighed by the costs of 

preventing traditional news providers 

from pursuing cross-ownership 

investment opportunities to provide 

news and information in a manner that 

is likely to ensure a more informed 

electorate. As such, the NBCO Rule no 

longer serves the public interest and 

must be repealed pursuant to Section 

202(h). 

2. Background 

6. In the Second Report and Order, 

the Commission affirmed its previous 

findings that an absolute ban was overly 

restrictive, but concluded that some 

newspaper/broadcast cross-ownership 

restrictions continued to be necessary to 

promote viewpoint diversity. It retained 

the general prohibition on common 

ownership of a broadcast station and a 

daily print newspaper in the same local 

market, but adopted minor changes to 

the rule to accomplish what the 

Commission called a modest loosening 

of the absolute ban. The Commission: 

(1) modified the geographic scope of the 

rule to update its analog parameters and 

to reflect more accurately the markets 

that newspapers and broadcasters 

actually serve; (2) adopted an explicit 

exception for failed and failing 

broadcast stations and newspapers; and 

(3) created a case-by-case waiver 

standard whereby the Commission 

would grant relief from the rule if the 

applicants showed that a proposed 

merger would not unduly harm 

viewpoint diversity in the market. The 

Commission declined to eliminate the 

newspaper/radio cross-ownership 

restriction from the NBCO Rule after 

finding that, despite its earlier tentative 

conclusion that radio stations typically 

are not primary outlets for local news, 

radio stations nonetheless provide a 

meaningful amount of local news and 

information such that lifting the 

restriction could harm viewpoint 

diversity. In addition, the Commission 

explained that, although the rule may 

benefit ownership diversity 

incidentally, the agency’s purpose in 

retaining the rule was not to promote 

minority or female ownership. NAB 

petitioned the Commission to 

reconsider its retention of the NBCO 

Rule. 

3. Discussion 

7. The Commission finds that the 

NBCO Rule must be repealed because it 

is not necessary to promote the 

Commission’s policy goals of viewpoint 

diversity, localism, and competition, 

and therefore does not serve the public 

interest. Because the Commission is 

repealing the NBCO Rule on other 

grounds, it is unnecessary to address 

arguments that the rule should be 

repealed on competition grounds. 

Similarly, it is unnecessary to reach 

arguments that ownership does not 

influence viewpoint because the 

Commission is eliminating the rule on 

the ground that, even if ownership 

might influence viewpoint in certain 

circumstances, the NBCO Rule is not 

necessary to foster viewpoint diversity 

(nor to promote localism or 

competition). The parties that support 

reconsideration of the NBCO Rule argue 

that the modifications adopted in the 

Second Report and Order were 

insufficient and that the rule is obsolete 

and should be eliminated. The 

Commission agrees. The Commission 

affirms its longstanding determination 

that the rule does not advance localism 

and competition goals, and finds that it 

is no longer necessary to promote 

viewpoint diversity, the rule’s only 

remaining policy justification. Although 

elimination of the rule could 

theoretically diminish viewpoint 

diversity to a limited extent due to the 

loss of an independent voice as a result 

of any newspaper/broadcast 

combination, the Commission finds that 

this impact will be mitigated by the 

multiplicity of alternative sources of 

local news and information available in 

the marketplace and the overall 

financial decline of newspapers. In 

addition, the Commission finds that this 

concern is outweighed by the 

countervailing benefits to consumers 

that can result from newspaper/ 

broadcast combinations. Finally, based 

on the Commission’s review of the 

record, the Commission finds that 

eliminating the rule will have no 

material effect on minority and female 

broadcast ownership. Accordingly, the 

Commission grants the request that it 

eliminate the NBCO Rule. 

8. The Marketplace Has Changed 

Dramatically. On reconsideration, the 

Commission finds that its decision to 

retain the NBCO Rule failed to 

acknowledge the current realities of the 

media marketplace. In 1975, the 

broadcast industry was still relatively 

young, but it had found its footing, 

owing in part to the role that 

newspaper/broadcast cross-ownership 

had played in its success. Supporters of 

common ownership claimed that joint 

ownership of newspapers and broadcast 

stations made possible the early 

development of FM and TV service even 

though these pioneering stations often 

had to be operated at a loss. In adopting 

the cross-ownership rule, the 

Commission acknowledged the 

pioneering role of newspapers in the 

broadcast medium but found that 

common ownership with newspapers 

was no longer a critical factor for 

broadcaster success. The Commission 

observed that, on the whole, the 

broadcast industry had matured to the 

point that new entrants could be 

expected to have an interest in pursuing 

station ownership. It concluded that the 

special reason for encouraging 

newspaper ownership, even at the cost 

of a lessened diversity, was no longer 

generally operative in the way it once 

was. The Commission understood its 

obligation to give recognition to the 

changes which have taken place and see 

to it that its rules adequately reflect the 

situation as it is, not was. 

9. That same obligation now requires 

the Commission to eliminate the NBCO 

Rule. Not only have the means of 

accessing content changed dramatically, 

but the media marketplace has seen an 

explosion in the number and variety of 

sources of local news and information 

since the Commission adopted the 

NBCO Rule in 1975. Opponents of the 

rule point to this increase and argue that 

the NBCO Rule has become obsolete as 

a result. 

10. From the 6,197 full-power radio 

stations and 851 full-power television 

stations that existed in the late 1960s, 

the Commission’s latest broadcast totals 

place the number of full-power radio 

stations at 15,512 and full-power 

television stations at 1,775. Contrary to 

the Commission’s conclusion in the 

Second Report and Order, the fact that 

the number of full-power broadcast 

stations has more than doubled 

represents a significant increase that 

should be considered when evaluating 

the continued necessity of the NBCO 

Rule. It was improper for the 

Commission to dismiss data submitted 

by Bonneville International Corp. and 

The Scranton Times, L.P., 

demonstrating a substantial increase in 


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736 Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 

the number of broadcast services simply 

because it represented a nationwide 

increase which may have been spread 

unevenly across individual local 

markets without citing any evidence to 

support this notion. In addition, the 

Commission should have taken into 

account the number of low-power 

broadcast stations, which, as of June 

2017, includes 417 Class A television 

stations; 1,968 low-power television 

(LPTV) stations; and 1,966 low-power 

FM (LPFM) stations—none of which 

services existed when the rule was 

adopted. This situation is a stark 

contrast to the state of affairs in 1975, 

when the changed circumstances in the 

broadcasting industry that prompted 

adoption of the NBCO Rule included a 

trend in which the number of channels 

open for new licensing had diminished 

substantially. 

11. Equally, if not more significantly, 

NAB cites evidence of the growing 

prevalence of independent digital-only 

news outlets with no print or broadcast 

affiliation, many with a local or 

hyperlocal focus. Thirteen years ago, the 

Third Circuit agreed with the 

Commission that the record suggested 

that cable and the internet contribute to 

viewpoint diversity; the panel members 

simply disagreed about the degree and 

importance of this trend at that time. 

Since then, however, the picture has 

changed significantly. Even the U.S. 

Supreme Court recently recognized the 

importance of the internet and social 

media as sources of news and 

information for many Americans. As 

this trend continues to gain momentum 

and new voices proliferate, the 

dominance of traditional news outlets 

diminishes. Although the record 

contains some evidence that local 

television stations and newspapers may 

still be consumers’ primary sources of 

local news and information, the 

Commission finds that it improperly 

discounted the role of non-traditional 

news outlets, including internet and 

digital-only, in the local media 

marketplace. 

12. The Commission concluded in the 

Second Report and Order that online 

outlets do not serve as a substitute for 

newspapers and broadcasters providing 

local news and information. As noted 

below, this conclusion does not appear 

to reflect the record evidence as to how 

the internet has transformed the 

American people’s consumption of 

news and information, the direction of 

current trends in this regard, and in 

particular how those trends have 

affected younger adults. At a minimum, 

the record reflects studies that reject the 

premise that people have a primary or 

single source for most of their local 

news and information. Rather, the 

picture revealed by the data is that of a 

richer and more nuanced ecosystem of 

community news and information than 

researchers have previously identified, 

in which Americans turn to a wide 

range of platforms to get local news and 

information. Thus, the contributions of 

such outlets cannot be dismissed out of 

hand as the existence of these nontraditional news outlets nevertheless 

results in greater access to independent 

information sources in local markets. 

Furthermore, the Commission failed to 

acknowledge adequately evidence in the 

record demonstrating the emergence of 

online outlets that offer local content 

and have no affiliation with traditional 

broadcast or print sources. 

13. Numerous studies cited in the 

record establish the emergence and 

growth of alternative sources of local 

news and information, including digitalonly local news outlets as well as other 

online sources of local news and 

information. For example, according to 

a 2014 Pew Research study, out of 438 

digital news sites examined, more than 

half had a local focus, with the typical 

outlet described as focused on coverage 

of local or even neighborhood-level 

news. Even by 2011, a Pew study 

confirmed that while newspapers 

remain popular sources for some such 

information, 69 percent of those 

surveyed said that if their local 

newspaper no longer existed, it would 

not have a major impact on their ability 

to keep up with information and news 

about their community. By 2016, Pew 

reported that just 20 percent of U.S. 

adults often get news from print 

newspapers, with even steeper declines 

in particular demographics—only 5 

percent of those aged 18 through 29, and 

only 10 percent of those aged 30 

through 49. According to the earlier Pew 

study, for the 79 percent of Americans 

who are online, the internet is the first 

or second most important source for 15 

of the 16 local topics examined. Nearly 

half of adults (47 percent) use mobile 

devices to get local news and 

information, and for none of Pew’s 

topics did more than 6 percent of 

respondents say they depended on the 

website of a legacy news organization. 

Among adults under age 40, the web 

ranks first or ties for first for 12 of the 

16 local topics asked about. 

Furthermore, in the Second Report and 

Order, the Commission too readily 

dismissed cable news programming as 

primarily targeted to a wide geographic 

audience, without considering that most 

of the major cable operators carry 

locally-focused cable news networks in 

parts of their footprint. 

14. On reconsideration, the 

Commission finds that the record 

clearly demonstrates that the wealth of 

additional information sources available 

in the media marketplace today, apart 

from traditional newspapers and 

broadcasters, strongly supports 

repealing the NBCO Rule. These 

dramatic and ongoing changes in the 

media industry negate concerns that 

repealing the NBCO Rule will harm 

viewpoint diversity. The Commission 

does not perceive a need for the rule in 

light of the current trends toward greater 

consumer reliance on these alternative 

sources of local news and information. 

The Commission’s failure to account 

properly for the multiplicity of news 

and information sources available in the 

current media marketplace factored 

heavily in its unjustified retention of the 

NBCO Rule. 

15. The Decline of the Newspaper 

Industry Has Diminished its Voice. In 

addition, restrictions on common 

ownership of daily print newspapers 

and broadcast stations are no longer 

justified to protect viewpoint diversity 

as the strength of daily print 

newspapers has declined significantly 

since 1975. In the Second Report and 

Order, the Commission failed to credit 

properly the evidence in the record 

regarding the challenges facing the 

newspaper industry and the resulting 

effects on the ability of print 

newspapers to serve their readers. 

Rather than merely modifying the rule’s 

waiver standard and adjusting its carveouts, the Commission should have 

acknowledged the diminution of 

newspapers’ voices and concluded that 

the time has come to eliminate the rule 

altogether. 

16. In light of the long decline of the 

newspaper industry, the loss of an 

independent daily newspaper voice in a 

community will have a much smaller 

impact on viewpoint diversity than 

would have been the case in 1975. In 

addition, as discussed below, repeal of 

the NBCO Rule will permit newspaper/ 

broadcast combinations that can 

strengthen local voices and thus enable 

the combined outlets to better serve 

their communities. 

17. The NBCO Rule Prevents 

Combinations that Could Benefit 

Localism. The Commission repeatedly 

has recognized that the NBCO Rule does 

not promote localism and actually may 

hinder it by preventing local news 

outlets from achieving efficiencies by 

combining resources needed to gather, 

report, and disseminate local news and 

information. The Commission 

nevertheless retained newspaper/ 

broadcast cross-ownership restrictions 

in order to promote its goal of viewpoint 


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Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 737 

diversity. Because the NBCO Rule is no 

longer necessary to foster viewpoint 

diversity, and the rule can be repealed 

without harming the public interest, the 

potential benefits to localism arising 

from common ownership finally can 

accrue. The Commission expects that 

eliminating the NBCO Rule will allow 

both broadcasters and newspapers to 

seek out new sources of investment and 

operational expertise, increasing the 

quantity and quality of local news and 

information they provide in their local 

markets. 

18. There is ample evidence in the 

record that eliminating the rule will 

help facilitate such investment and 

enable both broadcasters and 

newspapers to better serve the public. 

For example, Cox Media Group, LLC 

(Cox) asserts that collaboration and costsharing between its television station 

and its newspaper in Dayton, Ohio, 

helped them be the first to report on 

what became a national story about the 

failures of the Veterans Administration 

to provide adequate medical services. In 

addition, Cox previously provided 

several examples showing how the 

combination of resources across its 

commonly owned newspaper, 

television, and radio properties in both 

Dayton and Atlanta, Georgia, allowed 

them to report on breaking news stories 

more quickly and accurately and to also 

provide more thorough coverage of 

events, such as political elections, that 

involve numerous interviews and indepth issue reporting. Cox asserts that 

the common ownership of multiple 

outlets has enabled its media properties 

‘‘to vastly improve service at a time 

when the economics of the newspaper 

and broadcast business would seem to 

dictate the opposite.’’ In addition, the 

News Media Alliance (NMA) provided 

numerous examples of the benefits to 

local programming involving crossowned media outlets in various markets. 

For example, a cross-owned newspaper/ 

television combination in Phoenix 

combined resources to report on stories 

such as the shooting of Congresswoman 

Gabrielle Giffords and 18 others in 

Tucson, the Yarnell Hill fire that killed 

19 firefighters and destroyed more than 

100 homes, and a massive dust storm. 

In South Bend, Indiana, a commonly 

owned local newspaper, television 

station, and two radio stations regularly 

worked together on issues of local 

significance, such as uncovering 

harmful substances in drinking water, 

hosting town-hall meetings for political 

candidates and local officials, sending a 

reporter to Iraq, commemorating the 

150th anniversary of the local 

Studebaker factory, providing weather 

information, and covering Notre Dame 

sports. NMA also cited prior 

Commission studies for the proposition 

that, on average, a cross-owned 

television station produces more local 

news and more coverage of local and 

state political candidates than 

comparable non-cross-owned television 

stations. NMA pointed to the finding in 

one Commission study that cross-owned 

television stations, on average, air 50 

percent more local news than non-crossowned stations. The Commission’s 

Media Ownership Study 4 also found 

that the total amount of local news aired 

by all television stations in the market 

may be negatively correlated with 

newspaper/broadcast cross-ownership. 

As noted in the FNPRM (79 FR 29010, 

May 20, 2014, FCC 14–28, rel. Apr. 14, 

2014), however, the study authors 

cautioned that this finding was 

imprecisely measured and not 

statistically different from zero. An 

earlier Commission study cited by NMA 

found that cross-owned television 

stations aired between seven to ten 

percent more local news, which still 

represents a meaningful increase in the 

average amount of local news aired on 

cross-owned television stations. This 

study also found that cross-owned 

television stations, on average, provide 

roughly 25 percent more coverage of 

local and state politics. The Commission 

has acknowledged that prior 

Commission studies have found that 

cross-owned radio stations are more 

likely to air news and public affairs 

programming and are four to five times 

more likely to have a news format than 

a non-cross-owned station. Comments 

in this proceeding bear that out, 

providing anecdotal evidence, such as 

that offered by Morris Communications, 

which explained that its radio stations 

in Topeka, Kansas, and in Amarillo, 

Texas, were able to invest more heavily 

in local news production and in news 

staff because of their cross-ownership 

with the local newspaper. As the 

Commission discussed in the Second 

Report and Order, the record contains 

support for the proposition that 

newspaper/broadcast combinations can 

promote localism by creating 

efficiencies through the sharing of 

expertise, resources, and capital that can 

lead to a higher quantity and quality of 

local news programming. The 

Commission has long accepted that 

proposition, but it concluded in its 

previous decisions that some 

restrictions remained necessary to 

promote viewpoint diversity. The 

Commission concludes now that the 

potential public interest benefits of 

permitting newspaper/broadcast 

combinations outweigh the minimal 

loss of viewpoint diversity that may 

result from eliminating the rule. With 

the elimination of the NBCO Rule these 

localism benefits can finally begin to 

materialize. 

19. In light of the well-documented 

and continuing struggles of the 

newspaper industry, the efficiencies 

produced by newspaper/broadcast 

combinations are more important than 

ever. A report in February 2017 

examining the health of small 

newspapers was cautiously optimistic 

about the future of publications with a 

community or hyperlocal focus but 

acknowledged that their battle for 

survival will not be easy and will 

require new approaches and strategies 

that take advantage of their niche 

position. Removing the regulatory 

obstacle of this outdated rule will help 

financially troubled newspapers carry 

on their important work. While the 

Commission recognizes that costsavings gained from common ownership 

will not necessarily be invested in the 

production of local news, by allowing 

newspapers and broadcasters to 

collaborate and combine resources, the 

Commission’s action in this Order 

creates new opportunities for local 

broadcasters and newspapers to better 

serve the local news and information 

needs of their communities. 

20. The NBCO Rule Must be 

Eliminated. The Commission’s decision 

to repeal the rule reflects the situation 

as it currently is, not as it was more than 

40 years ago. Whereas the Commission 

determined in 1975 that newspaper/ 

broadcast combinations were no longer 

necessary to support the growth of the 

broadcast industry and that the interest 

in viewpoint diversity required separate 

ownership of newspapers and broadcast 

licenses, the Commission now 

determines that this restriction is no 

longer necessary to promote viewpoint 

diversity and can potentially harm 

localism, and that removing the 

restriction best serves the public 

interest. 

21. Indeed, even to the extent that 

eliminating the rule would permit 

transactions that would reduce the 

number of outlets for news and 

information in local markets, the 

markets will continue to have far more 

voices than when the rule was enacted. 

The modern media marketplace 

abounds with new, non-traditional 

voices, the number of local broadcasters 

has increased dramatically, and the 

strength of local newspapers relative to 

other media has diminished as a result 

of the difficulties facing the industry 

and the rise of new voices. And the 

Commission expects the number of 


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voices to continue to grow, as the 

internet, in particular, has lowered the 

barriers to entry and provided a publicly 

accessible platform for individuals and 

organizations to serve the news and 

information needs of their local 

communities. Furthermore, eliminating 

the NBCO Rule will permit efficient 

combinations that will allow 

broadcasters and newspapers to 

combine resources and enable them to 

better serve their local communities. On 

balance, therefore, the Commission 

concludes that retaining the rule does 

not serve the public interest. 

22. The Commission consistently has 

recognized that changing circumstances 

in the marketplace warrant a retreat 

from a total ban; accordingly, the 

Commission has attempted to impose 

various limits on the rule through the 

years. The Commission’s overall 

direction has been toward a growing 

acknowledgment that the rule is not 

always necessary to promote viewpoint 

diversity and should be modified to 

reflect changes in the marketplace. The 

Commission’s action in this Order is 

simply the logical extension of this 

acknowledgment in response to the 

radically altered media marketplace. 

23. As noted in the 2002 Biennial 

Review Order (68 FR 46286, Aug. 5, 

2003, FCC 03–127, rel. July 2, 2003), the 

Commission must consider the impact 

of [its] rules on the strength of media 

outlets, particularly those that are 

primary sources of local news and 

information, as well as on the number 

of independently owned outlets. 

Maximizing the number of independent 

voices does not further diversity if those 

voices lack the resources to create and 

publish news and public information. In 

Prometheus Radio Project v. FCC, 373 

F.3d 372 (3d Cir. 2004) (Prometheus I), 

the court affirmed the Commission’s 

finding in the 2002 Biennial Review 

Order that the NBCO Rule was 

overbroad and should be relaxed. In the 

2006 Quadrennial Review Order (73 FR 

9481, Feb. 21, 2008, FCC 07–216, rel. 

Feb. 2008), the Commission took into 

consideration the imperiled state of the 

newspaper industry, recounting 

statistics and data showing that the 

shrinking newspaper industry had 

suffered circulation declines, staff 

layoffs, shuttered news bureaus, flat 

advertising revenues, rising operating 

costs, and falling stock prices. These 

hardships influenced the Commission’s 

finding that the existing ban on 

newspaper/broadcast combinations 

continued to be overly restrictive. 

24. The newspaper industry had not 

recovered when the Commission began 

its 2010/2014 ownership review and, 

indeed, the hardships continued to 

mount. In its 2010 NOI (75 FR 33227, 

June 11, 2010, FCC 10–92, rel. May 25, 

2010), the Commission described 

newspapers’ declining circulation and 

advertising revenues and asked whether 

relaxing the rule would help 

newspapers to survive. In the FNPRM, 

the Commission expressed concern for 

the future of newspapers but disagreed 

with the suggestion that the NBCO Rule 

should be repealed or relaxed on that 

basis alone. The Commission was 

reluctant to jeopardize viewpoint 

diversity in local markets in response to 

assertions that the rule limited 

opportunities for traditional media 

owners to expand their revenues. Now, 

however, the Commission concludes 

that the continuance of the NBCO Rule 

is not necessary or appropriate to 

preserve or promote viewpoint diversity 

under Section 202(h). The Commission 

anticipates that both newspapers and 

broadcasters will benefit from the rule’s 

repeal, as will, ultimately, the public, as 

discussed above. 

25. The Commission recognized in the 

FNPRM that the NBCO Rule does not 

promote viewpoint diversity when a 

newspaper is in financial distress, and 

the FNPRM proposed an exception to 

the rule for failed and failing merger 

applicants. In the Second Report and 

Order, the Commission adopted that 

exception and explained that allowing 

such mergers is not likely to harm 

viewpoint diversity. In addition, the 

Commission incorporated into the rule 

a case-by-case waiver standard for 

markets of all sizes to account for 

merger situations that do not pose an 

undue risk to viewpoint diversity. 

26. On reconsideration, the 

Commission finds that its modifications 

to the NBCO Rule in the Second Report 

and Order were inadequate. Given the 

current state of the newspaper industry, 

it might very well be too late to save a 

newspaper that would qualify as failed 

or failing under the exception adopted 

in the Second Report and Order. The 

Commission’s goal should be to keep 

local voices strong, not to maintain 

artificial barriers that prevent efficient 

combinations and then wait until 

newspapers reach a failed or failing 

state before providing regulatory relief. 

In addition, the Commission’s case-bycase waiver standard was wholly 

insufficient because the Commission 

failed to provide any meaningful 

guidance on how it would evaluate each 

waiver request. An exception or a 

waiver standard may be appropriate 

when a rule is sound and exceptional 

circumstances exist, but such 

mechanisms do not redeem an unsound 

rule, as the Commission finds this one 

to be. 

27. In addition, the modified rule 

inexplicably left in place a definition of 

daily newspaper that is outdated and 

illogical in that it applies only to 

newspapers printed at least four days a 

week. The distinction between print 

newspapers and digital outlets has 

become blurred as some newspapers 

reduce the number of days a week they 

publish in print and rely more heavily 

on their online distribution. Indeed, 

many publishers today continuously 

update the content of the online 

versions of their newspapers as they 

compete with bloggers and social media 

that rapidly produce and update their 

own content. Applying the NBCO Rule 

to newspapers only if they are printed 

in hardcopy at least four days per week 

ignores the reality that what defines a 

newspaper has changed and that many 

consumers access the paper’s news and 

information over the internet 

throughout the day. A newspaper’s 

influence should no longer be measured 

by how many mornings a week it is 

delivered to the doorstep. Doing so 

would exacerbate the perverse incentive 

for a newspaper seeking to combine 

with a broadcaster to reduce its print 

editions in order to avoid triggering the 

rule. Given the current media 

marketplace and the way consumers 

access content, the rule’s reliance on a 

newspaper’s printing schedule makes 

no sense. 

28. As the modified rule adopted in 

the Second Report and Order is not 

necessary to promote the public interest, 

the Commission cannot retain it 

consistent with Section 202(h). the 

Commission emphasizes that the rule’s 

repeal in no way reflects a lessening of 

the importance of viewpoint diversity as 

a Commission policy goal. Rather, the 

Commission concludes that the rule is 

no longer necessary to promote 

viewpoint diversity. 

29. The Commission finds also that 

the NBCO Rule should be eliminated 

rather than relaxed. The Commission’s 

previous attempts to relax the rule 

demonstrate the difficulty in designing 

an approach that works effectively for 

the range of market circumstances 

across the country. Paradoxically, 

previous attempts at relaxing the rule 

arguably threatened the greatest harm in 

small markets where cross-ownership 

may be needed most to sustain local 

news outlets. The record does not 

provide an adequate basis for 

distinguishing areas where application 

of the rule could serve the public 

interest from those where it would not. 

There was significant opposition to the 

modified rule proposed by the 

Commission in this proceeding, and 

only one commenter proposed a 


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detailed alternative approach, and the 

Commission explained why it declined 

to adopt it. Thus, the record does not 

support a narrowed restriction. 

Moreover, as discussed above, the 

Commission finds that it would be 

outdated and illogical to adopt a rule 

based on the distinction between print 

newspapers and digital outlets. Indeed, 

any modified rule that continues to 

single out newspapers of any kind 

cannot be sustained. 

30. In light of the significantly 

expanded media marketplace and the 

overall state of the newspaper industry, 

and the Commission’s conclusion that 

the rule is not necessary to promote 

viewpoint diversity, competition, or 

localism, and may hinder localism, the 

Commission concludes that immediate 

repeal is required by Section 202(h) and 

will permit combinations that would 

benefit consumers. The Commission’s 

decision will enable all broadcasters 

and newspapers to attract new 

investment in order to preserve and 

expand their local news output. 

31. In addition, though the 

Commission finds that the entire NBCO 

Rule must be eliminated, the 

Commission finds that the record 

provides an additional and independent 

justification for eliminating the 

restriction on newspaper/radio 

combinations. Opponents of this aspect 

of the rule argue that evidence in the 

record does not provide adequate 

support for the Commission’s 

conclusion that radio is a sufficiently 

meaningful source of local news and 

public interest programming such that 

allowing newspaper/radio combinations 

could harm viewpoint diversity. The 

Commission agrees. As discussed in the 

following section, the Commission is 

eliminating the Radio/Television CrossOwnership Rule based on its finding 

that the diminished contributions of 

local broadcast radio stations to 

viewpoint diversity, together with 

increasing contributions from new 

media outlets and the public interest 

benefits of radio/television 

combinations, no longer justify 

continued radio/television crossownership regulation. For the same 

reasons relating to viewpoint diversity 

contributions of radio and the 

proliferation of alternative media voices, 

as well as the countervailing public 

interest benefits of newspaper/radio 

combinations, the Commission 

concludes that the restriction on 

newspaper/radio combinations is not in 

the public interest and must be 

eliminated pursuant to Section 202(h). 

32. Minority and Female Ownership. 

The Commission finds that repealing 

the NBCO Rule will not have a material 

impact on minority and female 

ownership. After seeking public 

comment on this topic a number of 

times, the Commission expressed its 

view that the rule does not promote or 

protect minority and female ownership. 

Not only have past debates on this issue 

not persuaded the Commission that the 

ban on newspaper/broadcast 

combinations is necessary to protect or 

promote minority and female 

ownership, no arguments were made in 

this reconsideration proceeding that 

would lead the Commission to conclude 

otherwise. On the contrary, two 

organizations representing minority 

media owners seek relief from the rule’s 

restrictions. Their comments directly 

refute arguments in the record that 

repealing the rule will harm small 

broadcasters, including minority and 

women broadcasters, because they are at 

a competitive disadvantage compared to 

large media outlets. As the Commission 

contemplated in the FNPRM, merging 

with a newspaper could boost the 

ability of a small broadcaster to compete 

more effectively in the market and to 

improve its local news offerings. The 

Commission’s action in this Order will 

provide the flexibility to do just that. 

33. The Commission agrees with 

comments stating that lifting the ban on 

newspaper/radio combinations is 

unlikely to have a significant effect on 

minority and female ownership in the 

radio market given that the thousands of 

radio stations across the country offer 

plenty of purchasing opportunities for 

minorities and women and at lower cost 

than most other forms of traditional 

media. In addition, the Commission 

does not anticipate that lifting the ban 

on newspaper/television combinations 

will lead to a meaningful decrease in the 

number of minority-owned television 

stations. Some groups previously 

expressed concern that minority-owned 

television stations would be targeted for 

acquisition if the ban were relaxed to 

favor waiver requests for certain 

newspaper/television combinations 

with stations ranked below the top four 

television stations in a market—a 

category that includes many minorityowned stations. Removing the ban 

across-the-board will ensure that no 

artificial incentives are created, and the 

record provides no evidence that 

minority- and female-owned stations 

will be singled out for acquisition, as 

some commenters have speculated. To 

the contrary, record evidence 

demonstrates that previous relaxations 

of other ownership rules have not 

resulted in an overall decline in 

minority and female ownership of 

broadcast stations, and the Commission 

sees no evidence to suggest that 

eliminating the NBCO Rule will 

produce a different result and 

precipitate such a decline. Ultimately, 

given the state of the newspaper 

industry, the Commission expects that 

broadcasters may be better positioned to 

be the buyer, rather than the seller, in 

most transactions that flow from the 

rule’s repeal. Furthermore, submissions 

in the record suggest that some minority 

media owners may be poised to pursue 

cross-ownership acquisition and 

investment opportunities. Therefore, 

eliminating the rule potentially could 

increase minority ownership of 

newspapers and broadcast stations. 

34. In addition, the Commission 

rejects assertions that Prometheus III 

prevents the Commission from repealing 

or modifying any of its broadcast 

ownership rules on reconsideration. 

Contrary to such assertions, the Third 

Circuit’s holding in Prometheus III does 

not require the Commission to adopt a 

socially disadvantaged business (SDB) 

definition before it can revise or repeal 

any rules; rather, the court simply 

required the Commission to complete its 

analysis of whether to adopt such a 

definition. The Commission completed 

that required analysis in the Second 

Report and Order and declined to adopt 

an SDB standard. 

35. Finally, in the Second Report and 

Order, the Commission stated that the 

revised NBCO Rule it adopted would 

help promote ownership diversity. The 

Commission’s comment, however, did 

not indicate a belief that the rule would 

promote minority and female ownership 

specifically, but rather that the rule 

would promote ownership diversity 

generally by requiring the separation of 

newspaper and broadcast station 

ownership. Moreover, the Commission 

made it clear that promoting viewpoint 

diversity, as opposed to preserving or 

promoting minority and female 

ownership, was the purpose of its 

revised rule. The record does not 

suggest that restricting common 

ownership of newspapers and broadcast 

stations promotes minority and female 

ownership of broadcast stations, and 

there is evidence in the record that 

tends to support the contrary. Thus, 

fostering minority and female 

ownership does not provide a basis to 

retain the rule. 

B. Radio/Television Cross-Ownership 

Rule 

1. Introduction 

36. The Commission grants the 

request for reconsideration of the 

Commission’s decision in the Second 

Report and Order to retain the Radio/ 


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740 Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 

Television Cross-Ownership Rule. 

Ownership of television and radio 

stations will continue to be limited by 

the Local Television and Local Radio 

Ownership Rules. 

2. Background 

37. In the Second Report and Order, 

the Commission retained the Radio/ 

Television Cross-Ownership Rule with 

only minor technical modifications, 

finding that the rule remained necessary 

to promote viewpoint diversity. Despite 

its prior tentative conclusion to the 

contrary, the Commission concluded 

that the Radio/Television CrossOwnership Rule remains necessary 

given that radio stations and television 

stations both contribute in meaningful 

ways to promote viewpoint diversity in 

local markets. The Commission further 

claimed that the rule continues to play 

an independent role in serving the 

public interest separate and apart from 

the Local Radio and Local Television 

Ownership Rules, which are designed 

primarily to promote competition. In its 

petition for reconsideration, NAB 

asserts that the decision in the Second 

Report and Order to retain the Radio/ 

Television Cross-Ownership Rule (with 

only minor technical modifications) was 

arbitrary and capricious and contrary to 

Section 202(h) of the 1996 Act. 

3. Discussion 

38. On reconsideration, the 

Commission eliminates the Radio/ 

Television Cross-Ownership Rule, 

concluding that it is no longer necessary 

to promote viewpoint diversity in local 

markets. The Commission concludes 

that the Commission erred in finding in 

the Second Report and Order that 

broadcast radio stations contribute to 

viewpoint diversity to a degree that 

justifies retention of the rule, 

particularly in light of other local media 

outlets that contribute to viewpoint 

diversity. The Commission also 

concludes that, given that the rule 

already permits a significant degree of 

common ownership, it is doing very 

little to promote viewpoint diversity 

and its elimination therefore will have 

a negligible effect. The record in this 

proceeding gives no cause to disturb the 

long-standing conclusion that the rule is 

not necessary to promote localism. 

However, elimination of the rule is 

likely to have a negligible impact in 

most markets, so any impact on 

localism—positive or negative—will be 

similarly negligible. Finally, the 

Commission finds that elimination of 

the rule is not likely to have a negative 

impact on minority and female 

ownership. 

39. Contrary to the Commission’s 

findings in the Second Report and 

Order, as discussed below, the 

Commission finds that broadcast radio 

stations’ contributions to viewpoint 

diversity in local markets no longer 

justify retention of the Radio/Television 

Cross-Ownership Rule. The Commission 

tentatively concluded in the NPRM (77 

FR 2867, Jan. 19, 2012, FCC 11–186, rel. 

Dec. 22, 2011) that the rule was no 

longer necessary to promote viewpoint 

diversity. It then sought further 

comment on that tentative conclusion in 

the FNPRM. The Commission’s 

approach in the NPRM and FNPRM was 

based on an already robust record— 

which was strengthened by comments 

filed in response to the FNPRM— 

demonstrating that local radio stations 

are not primary sources of viewpoint 

diversity in local markets and that 

alternative media outlets are a growing 

and important source of viewpoint 

diversity. The Commission, however, 

reversed itself in the Second Report and 

Order, concluding that the rule should 

be retained. In doing so, the 

Commission largely relied on limited 

evidence, much of it anecdotal or 

immaterial, to conclude that radio 

contributes to viewpoint diversity in 

local markets to a degree sufficient to 

justify retention of the rule. For 

example, the comments cited by the 

Commission primarily discussed format 

selection, music programming, and 

national news content, all of which are 

aspects of radio programming that do 

not inform the Commission’s viewpoint 

diversity analysis. 

40. The Commission also discussed 

broadcast radio’s contributions to 

viewpoint diversity in the NBCO rule 

section of the Second Report and Order. 

That discussion was equally 

unpersuasive. The Commission failed to 

demonstrate that broadcast radio 

stations are significant independent 

sources of local news, relied on 

statistics that failed to distinguish 

between local and national news 

content, referenced examples of 

broadcast content on low-power 

stations, and relied heavily on only a 

handful of anecdotes regarding 

broadcast radio’s contributions to 

viewpoint diversity. The rule does not 

apply to low-power stations, and their 

contribution to diversity is unaffected 

by the decision to retain or repeal the 

radio-television cross-ownership rule. 

All of these flaws undermine the broad 

finding that broadcast radio stations 

contribute to viewpoint diversity to an 

extent that continues to justify crossownership regulation. 

41. NAB argues that the Commission 

failed to justify its departure from its 

position in the NPRM and FNPRM that 

radio stations make only limited 

contributions to local viewpoint 

diversity. The Commission agrees and 

find that the Commission’s conclusion 

in the Second Report and Order that 

radio contributes to local viewpoint 

diversity in meaningful ways, such that 

it justified retention of the rule—a clear 

departure from its earlier, wellsupported position—was not supported 

by the record. The Commission has long 

maintained that broadcast radio stations 

are not a primary source of viewpoint 

diversity in local markets. While the 

record indicates that broadcast radio 

stations may contribute to viewpoint 

diversity in local markets to a certain 

degree, the Commission finds that, in 

the current media marketplace, these 

contributions no longer justify 

restrictions on television/radio crossownership. 

42. For example, the Commission 

itself acknowledged that consumers’ 

reliance on radio for some local news 

and information has declined 

significantly over time—falling from 54 

percent to 34 percent over the last two 

decades—as has the number of all-news 

commercial radio stations—down to 30 

stations from (the already low) 50 

stations in the mid-1980s out of over 

11,000 commercial radio stations. 

Moreover, the overwhelming majority of 

programming on news-talk stations is 

nationally syndicated, rather than 

locally produced. Comments in the 

record, which the Second Report and 

Order did not address or dispute, 

support these findings. A Gallup poll 

found that only six percent of 

Americans turn to radio as their main 

news source, and a Pew study found 

that the percentage of Americans 

reporting that they got any news from 

radio on the previous day dropped from 

more than 50 percent in 1990 to 33 

percent in 2012 (consistent with earlier 

findings cited by the Commission). Only 

five percent cite radio as a main source 

for political and arts and cultural 

information, four percent for crime 

updates, and three percent or less for 

information on various other topics. A 

2013 Pew study confirmed the overall 

trend, finding that news programming 

had been relegated to an even smaller 

corner of the listening landscape. Even 

within this smaller universe, a 

substantial segment consists of National 

Public Radio (NPR)-affiliated 

noncommercial broadcast radio stations, 

which are not subject to the broadcast 

ownership limits. At present, NPR has 

over 900 member stations in the U.S. As 

discussed above, the attempt in the 

Second Report and Order to overcome 


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the record in this proceeding of radio’s 

relatively minor contribution as a source 

of local news and the Commission’s 

historical recognition of radio’s reduced 

role in promoting viewpoint diversity is 

unpersuasive. The record supports far 

better the Commission’s tentative 

conclusions in the NPRM and FNPRM 

regarding radio’s limited contributions 

to viewpoint diversity in local markets. 

43. In addition, the Commission finds 

that, as NAB contends, the 

Commission’s decision to retain the rule 

did not properly acknowledge the 

realities of the digital media 

marketplace, in which consumers now 

have access to a multitude of 

information sources that contribute to 

viewpoint diversity in local markets. In 

the Second Report and Order, the 

Commission found that platforms such 

as the internet or cable do not contribute 

significantly to viewpoint diversity in 

local markets and therefore do not 

meaningfully protect against the 

potential loss of viewpoint diversity that 

would result from increased radio/ 

television cross-ownership. The 

Commission disagrees with arguments 

that the Commission properly found 

that cable and satellite programming do 

not meaningfully contribute to coverage 

of local issues and that information 

available online usually originates from 

traditional media sources. The 

Commission finds instead that the 

Commission erred in discounting the 

role that non-traditional sources play in 

the local media marketplace and that 

the contributions of such outlets result 

in greater access to independent 

information sources in local markets. In 

particular, evidence in the record 

clearly demonstrates the emergence of 

online outlets—including many 

unaffiliated with broadcast or print 

sources—that now offer local news and 

information. And as discussed above, 

the Commission finds that it failed to 

properly credit the local news offerings 

of cable operators. Even if cable and 

online outlets are not yet primary 

sources of local news and information 

programming, their contributions 

cannot be overlooked. While the 

Commission relied on a handful of 

anecdotes to overcome its earlier, 

compelling findings regarding broadcast 

radio’s limited contributions to local 

news and information programming, it 

refused to give appropriate 

consideration to more persuasive 

evidence of the increasing contributions 

of non-traditional media—a trend the 

Commission had previously noted, and 

which has continued. 

44. The decline of radio’s role in 

providing local news and information, 

together with the rise of online sources, 

marks a change from the circumstances 

the Commission faced when it upheld 

the rule in the 2006 Quadrennial Review 

Order. Accordingly, the Commission 

finds that contributions to viewpoint 

diversity from platforms such as the 

internet and cable, while not primary 

sources of viewpoint diversity in local 

markets, help mitigate any potential loss 

of viewpoint diversity that might result 

from limited increases in radio/ 

television cross-ownership. 

45. Importantly, the Commission does 

not mean to suggest that broadcast radio 

stations make no contribution to 

viewpoint diversity in local markets— 

they do. In order to continue to justify 

the radio/television cross-ownership 

limits under Section 202(h), however, 

the Commission is compelled to 

consider these contributions in the 

context of the broader marketplace as it 

exists today, in which broadcast 

television, print, cable, and online 

sources all contribute to viewpoint 

diversity. Broadcast radio’s 

contributions notwithstanding, the wide 

selection of sources now available 

renders the Radio/Television CrossOwnership Rule obsolete in today’s 

vibrant media marketplace. 

46. Moreover, the Commission finds 

that because the rule already permits 

significant cross-ownership in local 

markets, eliminating it will have only a 

minimal impact on common ownership, 

as parties will continue to be 

constrained by the applicable 

ownership limits in the Local Television 

and Local Radio Ownership Rules. For 

example, pursuant to the Radio/ 

Television Cross-Ownership Rule, in the 

largest markets, entities are permitted to 

own, in combination, either two 

television stations and six radio stations 

or one television station and seven radio 

stations. The Local Radio Ownership 

Rule permits an entity to own a 

maximum of eight radio stations in a 

single market. Therefore, in the largest 

markets, absent the Radio/Television 

Cross-Ownership Rule, an entity 

approaching the limits of the existing 

cap will be permitted to acquire only 

one additional radio station and remain 

in compliance with the Local Radio 

Ownership Rule. Likewise, an entity 

with one television station already 

could acquire only one additional 

station in these large markets under the 

Local Television Ownership Rule. Thus, 

the effect of eliminating the radio/ 

television cross-ownership rule will be 

small and, as discussed above, mitigated 

by contributions to viewpoint diversity 

from other media outlets. In addition, 

the local ownership limits for television 

and radio, while intended primarily to 

promote competition, will continue to 

prevent an undue concentration of 

broadcast facilities, thereby preserving 

opportunities for diverse local 

ownership, and are therefore adequate 

to serve the goals the Radio/Television 

Cross-Ownership Rule was intended to 

promote. 

47. In light of its limited benefits, the 

Commission finds that the Radio/ 

Television Cross-Ownership Rule no 

longer strikes an appropriate balance 

between the protection of viewpoint 

diversity and the potential public 

interest benefits that could result from 

the efficiencies gained by common 

ownership of radio and television 

stations in a local market, efficiencies 

that the Commission has previously 

recognized. For example, NAB cites 

numerous Commission studies that 

found that radio/television crossownership produces public interest 

benefits, including increased news and 

public affairs programming. The 

Tribune Company also provides 

examples of how its co-owned radio/ 

television combinations have been able 

to improve outreach to their local 

community and work collaboratively to 

improve coverage of issues of local 

concern. The current rule prevents 

localism benefits from accruing more 

broadly, without providing meaningful 

offsetting benefits to viewpoint 

diversity. As such, the Commission can 

no longer justify retention of the Radio/ 

Television Cross-Ownership Rule under 

Section 202(h). In light of the significant 

common ownership already allowed 

under the rule, it is not appropriate to 

modify and retain the rule, which the 

Commission has found is no longer in 

the public interest under Section 202(h). 

Indeed, the record demonstrates that 

there is no policy justification— 

competition, localism, or viewpoint 

diversity—upon which to base such a 

revised rule. Because the Commission is 

eliminating the Radio/Television CrossOwnership Rule on the grounds 

discussed herein, it is not necessary to 

reach alternative arguments involving 

the impact of ownership on viewpoint 

diversity. 

48. Minority and Female Ownership. 

Lastly, consistent with the 

Commission’s preliminary view in the 

FNPRM, the Commission finds that the 

record fails to demonstrate that 

eliminating the Radio/Television CrossOwnership Rule is likely to harm 

minority and female ownership. While 

broadcast radio remains an important 

entry point into media ownership, 

eliminating this rule will not result in 

significant additional consolidation 

because of the constraints of the Local 

Radio Ownership Rule. Furthermore, 

there is no evidence that any additional 


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common ownership that would be 

permitted as a result of eliminating the 

Radio/Television Cross-Ownership Rule 

would disproportionately or negatively 

impact minority- and female-owned 

stations. Indeed, the analyses within the 

contexts of the Local Television 

Ownership Rule and the Local Radio 

Ownership Rule suggest that previous 

relaxations of those rules have not 

resulted in reduced levels of minority 

and female ownership. The Commission 

finds that the record provides no 

information to suggest that eliminating 

the Radio/Television Cross-Ownership 

Rule will have a different impact on 

minority and female ownership. The 

Commission disagrees with the general 

assertion by UCC et al. that the 

Commission cannot modify any of its 

media ownership rules without further 

study of the impact on minority and 

female ownership. 

49. In the Second Report and Order, 

the Commission found that although the 

rule could help promote opportunities 

for diversity in broadcast television and 

radio ownership, it was not being 

retained for the purpose of preserving or 

creating specific amounts of minority 

and female ownership. The 

Commission’s comment, however, did 

not indicate a belief that the rule would 

promote minority and female ownership 

specifically, but rather that the rule 

would promote ownership diversity 

generally by requiring the separation of 

radio and television broadcasters. The 

Commission cannot justify retaining the 

rule under Section 202(h) based on the 

unsubstantiated hope that the rule will 

promote minority and female 

ownership. 

C. Local Television Ownership Rule 

1. Introduction 

50. Upon reconsideration, the 

Commission finds that the Local 

Television Ownership Rule adopted in 

the Second Report and Order is not 

supported by the record and must be 

modified. 

2. Background 

51. The Second Report and Order 

effectively retained the existing Local 

Television Ownership Rule (with only a 

minor technical modification of the 

contour overlap provision to reflect the 

transition to digital broadcasting), 

finding that the rule remained necessary 

to promote competition. Despite a 

record replete with evidence of the 

significant changes in the video 

marketplace, the Commission’s decision 

left in place ownership restrictions 

originally implemented in 1999. Under 

the rule adopted in the Second Report 

and Order, an entity may own up to two 

television stations in the same market if: 

(1) the digital noise limited service 

contours (NLSCs) of the stations (as 

determined by section 73.622(e) of the 

Commission’s rules) do not overlap; or 

(2) at least one of the stations is not 

ranked among the top-four stations in 

the market and at least eight 

independently owned television 

stations would remain in the market 

following the combination. NAB and 

Nexstar filed petitions for 

reconsideration of the Local Television 

Ownership Rule, specifically 

challenging the Top-Four Prohibition 

and the Eight-Voices Test. 

3. Discussion 

52. On reconsideration, the 

Commission adopts a revised Local 

Television Ownership Rule, finding that 

the rule adopted in the Second Report 

and Order is no longer necessary in the 

public interest as a result of 

competition. The Commission’s revised 

rule reflects its assessment of both the 

current video marketplace and the 

continued importance of broadcast 

television stations in their local markets. 

Specifically, the Commission finds that 

the Eight-Voices Test is not supported 

by the record and must be eliminated. 

In addition, the Commission modifies 

the Top-Four Prohibition by 

incorporating a new case-by-case review 

process to address evidence in the 

record that the prohibition may be 

unwarranted in certain circumstances. 

The Commission finds that these 

modifications to the Local Television 

Ownership Rule are not likely to have 

a negative impact on minority and 

female ownership. 

53. The Commission rejects the 

argument that reconsideration is 

inappropriate because petitioners rely 

on arguments that have been fully 

considered and rejected by the 

Commission within the same 

proceeding. Neither the 

Communications Act nor the 

Commission’s rules preclude granting 

petitions for reconsideration that fail to 

rely on new arguments. Likewise, the 

Commission rejects UCC’s claim that 

reconsideration is not warranted unless 

petitioners present new evidence. UCC’s 

reliance on section 1.429(b) of the 

Commission’s rules is misplaced, as this 

section does not require petitioners to 

support their claims of Commission 

error with new evidence. Commission 

precedent establishes that 

reconsideration is generally appropriate 

where the petitioner shows either a 

material error or omission in the 

original order or raises additional facts 

not known or not existing until after the 

petitioner’s last opportunity to respond. 

Even if a petition is repetitious, the 

Commission can, in its discretion, 

consider it. While the petitioners repeat 

some arguments made earlier in this 

proceeding, they nonetheless provide 

valid grounds for the Commission to 

reconsider its previous action. As 

discussed below, the Commission finds 

that the petitioners have identified 

material errors in the Second Report 

and Order warranting reconsideration of 

certain aspects of the Local Television 

Ownership Rule. 

54. Market. The Commission finds 

that its decision in the Second Report 

and Order to adopt a rule focused on 

promoting competition among broadcast 

television stations in local television 

viewing markets was appropriate given 

the record compiled in this proceeding. 

The Commission concluded in the 

Second Report and Order that nonbroadcast video offerings still do not 

serve as meaningful substitutes for local 

broadcast television and that 

competition within a local market 

motivates a broadcast television station 

to invest in better programming and to 

provide programming tailored to the 

needs and interests of the local 

community in order to gain market 

share. NAB and Nexstar urge the 

Commission to expand the market 

definition to include non-broadcast 

video alternatives, such as online and 

multichannel video programming 

distributors (MVPD) video programming 

sources. While the video marketplace 

has changed substantially since the 

current television ownership limits 

were adopted in 1999 and since the last 

Commission review of these rules 

concluded in 2008, broadcast television 

stations still play a unique and 

important role in their local 

communities. As such, the Commission 

believes that, on the current record, a 

rule focused on preserving competition 

among local broadcast television 

stations is still warranted. Thus, the 

Commission does not include other 

types of video programming providers 

within the market to which the 

restriction applies. The Commission 

emphasizes, however, that this 

conclusion could change in a future 

proceeding with a different record. 

55. The Commission’s finding does 

not mean, however, that changes 

outside the local broadcast television 

market should not factor into the 

Commission’s assessment of the rule 

under Section 202(h) or that the 

Commission is free to retain its existing 

rule without any adjustments that take 

into account marketplace changes. 

Indeed, television broadcasters’ 

important role makes it critical for the 


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Commission to ensure that its rules do 

not unnecessarily restrict their ability to 

serve their local markets in the face of 

ever-growing video programming 

options. Consumers are increasingly 

accessing video programming delivered 

via MVPDs, the internet, and mobile 

devices. Moreover, the online video 

distributor (OVD) industry—which 

includes entities such as Netflix and 

Hulu—continues to grow and evolve. In 

addition to providing on-demand access 

to vast content libraries, many OVDs are 

now offering original programming and/ 

or live television offerings similar to 

traditional MVPD offerings. The Second 

Report and Order acknowledged the 

popularity of these services but failed to 

properly account for this in its analysis. 

Accordingly, the Commission 

reconsidered the Local Television 

Ownership Rule and adopt common 

sense modifications that will help local 

television broadcasters achieve 

economies of scale and improve their 

ability to serve their local markets in the 

face of an evolving video marketplace. 

56. Eight-Voices Test. Upon 

reconsideration, the Commission finds 

that the Eight-Voices Test is 

unsupported by the record or reasoned 

analysis and is no longer necessary in 

the public interest. Accordingly, the 

Commission grants the NAB Petition 

and the Nexstar Petition with respect to 

this issue. 

57. Despite the fact that the 

Commission has spent years seeking 

comment regarding the local ownership 

rule, the record lacks evidence sufficient 

to support the Commission’s decision to 

retain the Eight-Voices Test. In the 

Second Report and Order, the 

Commission asserted that competition 

among stations affiliated with the Big 

Four networks (often the top-four rated 

broadcast stations in a local market) and 

at least four independent competitors 

unaffiliated with a Big Four network 

motivates all of the stations in a market 

to improve their programming, 

including providing additional local 

news and public interest programming. 

Yet the Commission did not provide or 

cite any evidence to support this 

argument, even though the Eight-Voices 

Test has been around since 1999 (more 

than enough time to observe whether 

the Eight-Voices Test has been having 

the expected impact in local markets). 

58. The Commission also failed to 

explain adequately why the number of 

independent television stations must be 

equal to the number of top-performing 

stations in a market. The Commission 

stated that a significant gap in audience 

share persists between the top-four rated 

stations in a market and the remaining 

stations in most markets, but it offered 

no justification for the notion that the 

dominance of four top-performing 

stations must be balanced by an equal 

number of independent, lowerperforming stations. The Commission 

provided no precedent, record evidence, 

or economic theory to support this 

notion. Moreover, a significant gap in 

audience share between the top-four 

stations and the other stations in a 

market could also logically justify 

permitting the common ownership of 

non-top-four stations to form a stronger 

competitor to the top-four stations and 

thus promote competition, even if fewer 

than eight independent voices remain. 

59. Instead, the Commission’s primary 

justification for retaining the EightVoices Test apparently stems from the 

historical use of the number eight as the 

proper number of voices when the rule 

was revised in 1999 to permit duopoly 

ownership in certain circumstances. 

Notably, that decision relied on 

viewpoint diversity grounds to 

determine the appropriate numerical 

limit. The Commission subsequently 

determined that the rule was no longer 

necessary to promote viewpoint 

diversity and instead relied on 

competition to support its adoption of 

the exact same voices limit in the 2006 

Quadrennial Review Order. The 

Commission, however, offered no 

empirical evidence to support this line 

drawing in the 2006 Quadrennial 

Review Order as necessary to preserve 

competition, and as discussed above, 

the Commission finds that the rationale 

set forth in the Second Report and 

Order was flawed. Although the 

Commission’s decision to retain the 

Eight-Voices Test in the 2006 

Quadrennial Review Order was upheld 

in Prometheus Radio Project v. FCC, 652 

F.3d 431 (3d Cir. 2011) (Prometheus II), 

the Commission is obligated under 

Section 202(h) to justify its broadcast 

ownership rules based on the existing 

record and in light of current 

marketplace realities. On 

reconsideration, the Commission finds 

no record support for retaining the 

Eight-Voices Test and concludes that 

retaining it does not serve the public 

interest. Further, as discussed below, 

the Eight-Voices Test prevents the 

realization of public interest benefits. 

Accordingly, it must be eliminated. 

60. The record fails to support the 

adoption of a different voice test, e.g., 

six voices, despite specific requests for 

comment on alternative voice tests in 

this proceeding. One commenter argued 

for lowering the voice count in general, 

and another proposed changing the test 

to four voices—a proposal the 

Commission rejects because such a 

restriction would be redundant given its 

decision, as discussed below, to retain 

the Top-Four Prohibition. Another 

commenter argued that the Eight-Voices 

Test should be eliminated and not 

replaced with an alternative test. No 

other commenters offered support for a 

different voice test. The Commission 

finds no justification for relying on an 

arbitrary voice count to promote 

competition and concludes that the 

public interest is better served by the 

revised rule the Commission adopts in 

this Order, which will allow 

combinations that will help lower-rated 

stations better serve their viewers while 

preserving the restriction that an entity 

may not own two top-four rated stations 

in a market unless it can demonstrate 

that such a combination will serve the 

public interest and in no event will 

allow common ownership of more than 

two stations in a market, subject to the 

contour overlap provision. The 

Commission finds that this is a more 

effective way to promote competition 

and still avoid harms associated with 

significant concentration in local 

markets than an arbitrary remaining 

voices test. 

61. The Commission not only failed to 

provide a reasoned basis for retaining 

the Eight-Voices Test; it also ignored 

evidence in the record demonstrating 

that the Eight-Voices Test lacks any 

economic support, is inconsistent with 

the realities of the television 

marketplace, and prevents combinations 

that would likely produce significant 

public interest benefits. Indeed, no 

commenter has produced evidence of 

any other industry where the 

government employs an eightcompetitor test. In multiple instances, 

the Commission acknowledged the 

potential public interest benefits of 

common ownership, which potentially 

allow a local broadcast station to invest 

more resources in news or other public 

interest programming that meets the 

needs of its local community. The 

Commission finds that the Eight-Voices 

Test denies the public interest benefits 

produced by common ownership 

without any evidence of countervailing 

benefits to competition from preserving 

the requirement. Furthermore, these 

markets—including many small and 

mid-sized markets that have less 

advertising revenue to fund local 

programming—are the places where the 

efficiencies of common ownership can 

often yield the greatest benefits. The 

Commission’s action in repealing the 

Eight-Voices Test will enable local 

television broadcasters to realize these 

benefits and better serve their local 

markets. In particular, the record 

suggests that local news programming is 


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typically one of the largest operational 

costs for broadcasters; accordingly, 

stations may find that common 

ownership enables them to provide 

more high-quality local programming, 

especially in revenue-scarce small and 

mid-sized markets. After the draft order 

in this proceeding was publicly 

released, DISH Network L.L.C. (DISH) 

submitted an economic study based on 

viewer ratings data applicable to 

existing combinations of local television 

stations as compared with ratings data 

from independently owned stations in 

DMAs deemed comparable to the DMAs 

served by commonly owned stations. 

DISH claims that the study shows that 

common ownership of local television 

stations does not produce increased 

ratings for local programming; therefore, 

common ownership does not produce 

higher-quality local programming. DISH 

provides no reason it could not have 

submitted this study earlier in response 

to broadcasters’ claims that relaxation of 

the rule would lead to more locally 

responsive and higher quality 

programming. Thus, it is inexcusably 

late. 47 CFR 1.429(b), (f). Moreover, the 

study suffers from significant 

methodological issues and fails to 

provide a sufficient basis upon which to 

draw any conclusions. For example, the 

study employs a simplistic analysis 

covering a small sample size and the 

results are highly dependent on the 

selection of data points, such as control 

DMAs, viewing period, and time slot. 

Furthermore, the analysis fails to 

address issues of statistical significance 

regarding viewership, and the crosssectional analysis fails to account for 

other variables that may influence 

viewership in different markets or 

otherwise address the cases in the filing 

for which viewership is higher in 

duopoly markets. Ultimately, the study 

does not undermine the Commission’s 

finding that efficiencies gained through 

common ownership can allow 

broadcasters to invest more resources in 

producing more and higher-quality 

locally responsive programming. 

62. Top-Four Prohibition. In contrast 

to the Eight-Voices Test, the 

Commission finds that its decision in 

the Second Report and Order to treat 

combinations of two top-four stations 

differently from other combinations is 

supported in the record. The 

Commission therefore denies the NAB 

Petition and the Nexstar Petition to the 

extent each requested complete 

elimination of the Top-Four Prohibition. 

As discussed below, however, the 

Commission finds that modification of 

the Top-Four Prohibition to include a 

case-by-case analysis is appropriate in 

order to address instances in which the 

application of the Top-Four Prohibition 

may not be warranted based on the 

circumstances in a particular market or 

with respect to a particular transaction. 

This hybrid approach will allow for a 

more refined application of the Local 

Television Ownership Rule that will 

help facilitate the public interest 

benefits associated with common 

ownership in local markets. 

63. The ratings data in the record 

generally supported the Commission’s 

line drawing, and the potential harms 

associated with top-four combinations 

find support in the record. The 

Commission has repeatedly concluded 

that the Top-Four Prohibition is 

necessary to promote competition in the 

local television marketplace. As the 

Commission has consistently found, 

there is generally a significant cushion 

of audience share percentage points that 

separates the top four stations from the 

fifth-ranked stations. In the Second 

Report and Order, the Commission 

found that this pattern has not changed. 

Thus, top-four combinations would 

generally result in a single firm’s 

obtaining a significantly larger market 

share than other stations and reduced 

incentives for commonly owned local 

stations to compete for programming, 

advertising, and audience shares. The 

Commission also finds that the data 

were sufficiently recent and 

uncontradicted by any newer ratings 

data in the record, such that it was 

appropriate for the Commission to rely 

on the data in reaching its decision. The 

Commission considered alternative 

arguments and data in the record and 

ultimately found that the Top-Four 

Prohibition, last endorsed in the 2006 

Quadrennial Review Order, continued 

to be supported. In arguing that the TopFour Prohibition should be eliminated, 

NAB notes that evidence in the record 

demonstrated that the concerns that the 

Top-Four Prohibition is intended to 

address may not be present in many 

markets. NAB also provides additional 

information demonstrating that some 

markets do not have a gap between the 

ratings of the fourth- and fifth-ranked 

stations or that the gap is larger between 

second- and third-ranked stations in 

some markets. The Commission has 

long conceded that the justification for 

the Top-Four Prohibition does not apply 

in all markets. Thus, the rule may 

prohibit combinations that do not 

present public interest harms or that 

offer potential public interest benefits 

that outweigh any potential harms. To 

this extent, the bright-line prohibition is 

over-inclusive. On reconsideration, the 

Commission believes that it is 

appropriate to modify the rule to allow 

for more flexibility. 

64. In particular, the Commission 

takes steps to mitigate the potentially 

detrimental impacts of applying the 

Top-Four Prohibition in certain 

circumstances. In the Second Report 

and Order, the Commission conceded 

the potential public interest benefits 

from allowing additional common 

ownership, yet found that the harms 

associated with top-four combinations 

exceeded these benefits. This logic no 

doubt holds when the rationale for 

adopting the Top-Four Prohibition 

applies, though the benefits could 

exceed the harms in certain 

circumstances based on an evaluation of 

the characteristics of a particular market 

or a particular transaction. 

65. Instead of relying solely on the 

bright-line application of the Top-Four 

Prohibition, the Commission is adopting 

a hybrid approach that will allow 

applicants to request a case-by-case 

examination of a proposed combination 

that would otherwise be prohibited by 

the Top-Four Prohibition. Under a 

hybrid approach, a rule includes both 

bright-line provisions and a case-by-case 

element to allow for consideration of 

market-specific factors. Such an 

approach provides certainty and 

flexibility when determining whether a 

particular transaction should be granted. 

Though no party commented on this 

issue, the Commission finds that the 

record supports its approach. As 

discussed in this Order, special scrutiny 

of combinations of two top-four rated 

stations is still supported by the record, 

though the record also demonstrates a 

need for flexibility in addressing 

circumstances in which application of 

the Top-Four Prohibition may not be 

appropriate due to the particular 

circumstances in a local market. The 

hybrid approach is well suited for such 

circumstances. Such an approach will 

help mitigate the potential drawbacks 

associated with strict application of the 

Top-Four Prohibition, while still 

preserving the ease and efficiency of 

applying the rule. This revised rule will 

continue to promote robust competition 

in local markets while also facilitating 

transactions, in appropriate 

circumstances, that will allow broadcast 

stations to achieve economies of scale 

and better serve their local viewers. 

66. As the Commission has just 

discussed, the record demonstrates the 

need for flexibility in the application of 

the Top-Four Prohibition. Given the 

variations in local markets and specific 

transactions, however, the Commission 

does not believe that applicants would 

be well served by a rigid set of criteria 

for its case-by-case analysis. The record 


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does, however, suggest the types of 

information that applicants could 

provide to help establish that 

application of the Top-Four Prohibition 

is not in the public interest because the 

reduction in competition is minimal 

and is outweighed by public interest 

benefits. Such information regarding the 

impacts on competition in the local 

market could include (but is not limited 

to): (1) Ratings share data of the stations 

proposed to be combined compared 

with other stations in the market; (2) 

revenue share data of the stations 

proposed to be combined compared 

with other stations in the market, 

including advertising (on-air and 

digital) and retransmission consent fees; 

(3) market characteristics, such as 

population and the number and types of 

broadcast television stations serving the 

market (including any strong 

competitors outside the top-four rated 

broadcast television stations); (4) the 

likely effects on programming meeting 

the needs and interests of the 

community; and (5) any other 

circumstances impacting the market, 

particularly any disparities primarily 

impacting small and mid-sized markets. 

Applicants are encouraged to provide 

data over a substantial period (e.g., the 

past three years, similar to the 

requirement in the failing/failed station 

waiver test) to strengthen their request 

and to help avoid circumvention of the 

Top-Four Prohibition based on 

anomalous data over a short period of 

time or manipulation of program 

offerings prior to the proposed 

transaction. In the end, applicants must 

demonstrate that the benefits of the 

proposed transaction would outweigh 

the harms, and the Commission will 

undertake a careful review of such 

showings in light of the record with 

respect to each such application. 

67. The Commission disagrees with 

the contention that affording licensees a 

case-by-case opportunity to seek 

approval of top-four combinations 

cannot be squared with the bright-line 

rule adopted in the Commission’s 2014 

Retransmission Consent Report and 

Order (79 FR 28615, May 19, 2014, FCC 

14–29, rel. Mar. 31, 2014). There, the 

Commission concluded that the 

potential competitive harms arising 

from joint negotiation of retransmission 

consent by non-commonly owned 

stations outweighed the potential 

benefits and determined that a brightline prohibition would be more 

administratively efficient than case-bycase review because it would provide 

the bargaining parties with advance 

notice of the appropriate process for 

such negotiation. Here, however, the 

result of the Commission’s case-by-case 

review of proposed top-four 

combinations will provide bargaining 

parties with advance notice of whether 

joint retransmission consent 

negotiations for the two stations in 

question will be allowed. Moreover, 

common ownership of two top-four 

stations implicates a broader range of 

potential benefits and harms than a 

narrow agreement between two top-four 

stations to jointly negotiate 

retransmission consent so there is no 

inherent inconsistency between 

adopting a bright-line rule in the latter 

case and a case-by-case review in the 

former case. Additionally, the 

Commission rejects the contention that 

adopting a case-by-case review is 

inconsistent with the statute. To the 

extent that the existing Top-Four 

Prohibition is overbroad given the 

current state of competition, as the 

Commission concludes here, then the 

existing prohibition, absent 

modification, is not necessary in the 

public interest as a result of competition 

and should be modified. Moreover, in 

adopting this approach, the Commission 

declines to adopt specific criteria 

related to the issue of retransmission 

consent, as recently advocated by some 

commenters. Instead, as discussed in 

this Order, the Commission believes 

that the case-by-case review process will 

allow parties to advance any relevant 

concerns—including concerns related to 

retransmission consent issues—in the 

context of a specific proposed 

transaction if such issues are relevant to 

the particular market, stations, or 

transaction. 

68. Similarly, the Commission rejects 

the recommendation of Independent 

Television Group (ITG) that the 

Commission adopt a presumption in 

favor of top-four combinations in small 

and mid-sized markets. ITG provides no 

evidence sufficient to support such a 

presumption. ITG simply relies on 

NAB’s assertion in its 2014 comments 

that in some markets, there may have 

been significant disparities in audience 

share among some of the top-four rated 

stations. The case-by-case analysis is not 

weighted in favor of transactions in any 

particular market, and applicants in 

small and mid-sized markets will be 

able to provide market-specific evidence 

supporting their requests. 

69. Gray Television, Inc. proposes 

that, at least in smaller markets, two 

stations be permitted to combine 

ownership if one of the stations has not 

produced a local newscast in the 

previous two years. The Commission 

finds, however, that market 

characteristics and the state of local 

programming, including local news 

offerings, are better considered in its 

case-by-case analysis at this time. The 

Commission anticipates that any 

transactions processed under this caseby-case approach will help inform any 

consideration of specific criteria that 

could be included in any future revision 

of the Local Television Ownership Rule, 

which will be reviewed again in the 

forthcoming 2018 Quadrennial Review 

proceeding. 

70. Minority and Female Ownership. 

The Commission finds that the 

modifications adopted to the Local 

Television Ownership Rule are not 

likely to harm minority and female 

ownership. As noted in the Second 

Report and Order, data in the record 

demonstrate that relaxation of the Local 

Television Ownership Rule in 1999 did 

not have a negative impact on overall 

minority ownership levels. In this 

lengthy proceeding, no party has 

presented contrary evidence or a 

compelling argument demonstrating 

why relaxing this rule will have a 

different impact. Indeed, consistent 

with the Second Report and Order, the 

Commission finds that the record does 

not support a causal connection 

between modifications to the Local 

Television Ownership Rule and 

minority and female ownership levels. 

71. In the Second Report and Order, 

the Commission stated that ensuring the 

presence of independently owned 

broadcast television stations in the local 

market indirectly increases the 

likelihood of a variety of viewpoints and 

preserving ownership opportunities for 

new entrants. The Commission’s 

comment, however, did not indicate a 

belief that the rule would promote 

minority and female ownership 

specifically, but rather that the rule 

would promote ownership diversity 

generally by limiting common 

ownership of broadcast television 

stations. This statement will continue to 

be true with respect to the revised rule 

that the Commission adopts in this 

Order. Under Section 202(h), however, 

the Commission cannot continue to 

subject broadcast television licensees to 

aspects of the Local Television 

Ownership Rule that can no longer be 

justified based on the unsubstantiated 

hope that these restrictions will promote 

minority and female ownership. In 

addition, the Commission disagrees 

with the general assertion by UCC et al. 

that the Commission cannot modify any 

of its media ownership rules without 

further study of the impact on minority 

and female ownership. The Commission 

also disagrees with assertions by the 

Multicultural Media, Telecom and 

internet Council and the National 

Association of Black Owned 


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Broadcasters that the rules can be 

retained based on promoting news 

coverage of specific issues. 

72. Incentive Auction. The 

Commission reiterates that it remains 

premature to analyze the implications of 

the incentive auction on the Local 

Television Ownership Rule. Contrary to 

the position of certain parties, the 

Commission cannot—and did not in the 

Second Report and Order—use the 

auction as an excuse for delaying action 

and refusing to fulfill its obligations 

under Section 202(h). While the 

Commission finds fault in its prior 

decision to retain the existing television 

ownership restrictions without 

modification, the incentive auction was 

not a factor in that decision. Instead, the 

Commission properly found that it 

could not delay a decision on its rules 

because of the auction nor could it 

adopt changes to its rules based on 

speculation as to the final results of the 

auction. The Commission agrees with its 

prior finding. Section 202(h) compels 

the Commission to act on the record 

before it and determine whether to 

retain, repeal, or modify the Local 

Television Ownership Rule based on the 

realities of the current marketplace, 

which the Commission has done. 

Though the auction has finished, it is 

still too soon to evaluate its impacts on 

the television marketplace. While there 

is still time for stations to change their 

post-auction channel sharing elections, 

the initial results of the auction suggest 

that the auction may not have a 

significant impact in the context of the 

Local Television Ownership Rule, as the 

overwhelming majority of commercial, 

full-power winning bidders have elected 

to channel share once they surrender 

their spectrum. The Commission will 

continue to monitor these elections as 

part of its continuing efforts to assess 

the impact of the auction on the 

television marketplace. As noted in the 

Second Report and Order, the 

Commission will evaluate the broadcast 

marketplace post-auction and expects 

that these issues will be considered in 

the forthcoming 2018 Quadrennial 

Review proceeding. 

D. Local Radio Ownership Rule 

1. Introduction 

73. The Commission denies in part 

and grants in part Connoisseur’s 

petition for reconsideration of the 

Commission’s decision in the Second 

Report and Order to retain the current 

methodology for determining 

compliance with the Local Radio 

Ownership Rule in markets containing 

embedded markets (i.e., smaller 

markets, as defined by Nielsen Audio, 

that are included in a larger parent 

market). The Commission grants 

Connoisseur’s petition to the extent it 

seeks a presumption that would apply 

its two-prong test for waiver requests 

involving existing parent markets with 

multiple embedded markets pending 

further consideration of this issue in the 

2018 Quadrennial Review proceeding. 

2. Background 

74. Connoisseur seeks reconsideration 

of the decision in the Second Report 

and Order to retain the existing 

methodology for embedded markets and 

asks the Commission to adopt a new 

two-pronged test for a station owner that 

seeks to own stations licensed to home 

counties (i.e., the county in which the 

station’s community of license is 

geographically located) in different 

embedded markets within a single 

parent market. Consistent with the 

Commission’s current methodology, 

under the first part of Connoisseur’s 

proposed test, a station owner would be 

required to comply with the numerical 

ownership limits using the Nielsen 

Audio Metro methodology in each 

embedded market. Under the second 

part, however, the station owner would 

be required to comply with the 

ownership limits using a contouroverlap methodology in lieu of the 

Commission’s current parent market 

analysis. Connoisseur argues that, as a 

result of the Commission’s existing 

methodology, a broadcaster which owns 

stations in one embedded market may 

be precluded from owning stations in 

another embedded market, despite the 

lack of competitive overlap between 

those markets. 

3. Discussion 

75. The Commission denies in part 

and grants in part Connoisseur’s 

petition for reconsideration. First, the 

Commission finds that its decision to 

not adopt a blanket change to the 

current methodology was supported by 

a reasoned explanation. Second, the 

Commission finds that its decision to 

adopt a contour-overlap methodology 

for the Puerto Rico market is not at odds 

with the approach the Commission took 

regarding embedded markets. Finally, 

the Commission grants Connoisseur’s 

alternative request to adopt a 

presumptive waiver approach for 

existing parent markets with multiple 

embedded markets. 

76. The Commission finds that it 

provided a reasoned explanation for its 

decision in the Second Report and 

Order to not adopt a blanket change to 

the current embedded market 

methodology. Connoisseur argues that 

the Commission acted arbitrarily in 

deciding to retain the current 

methodology. In particular, Connoisseur 

maintains that counting stations from 

multiple embedded markets for 

purposes of calculating compliance with 

the numerical limits in the parent 

market is unreasonable because stations 

in embedded markets do not compete in 

any meaningful way with stations in 

other embedded markets or stations in 

the central city of the parent market. 

The Commission noted in the Second 

Report and Order, it has long relied on 

Nielsen Audio’s market analysis, as 

reported by BIA, which lists all the 

stations that are deemed to compete in 

a given market (often referred to as 

above-the-line stations), as the basis for 

multiple ownership calculations for 

embedded and parent markets. The 

Commission found that the Nielsendefined markets are the primary means 

by which broadcasters and advertisers 

place a value on advertising sold by 

stations listed as participating in the 

market. Nielsen Audio’s market 

definitions are recognized as the 

industry standard and provide for 

consistency and ease of application in 

comparison to other possible methods 

for defining local radio markets. The 

inclusion of an embedded market 

station as an above-the-line station in a 

parent market therefore has long been 

thought to reflect a determination by 

Nielsen Audio that, absent other 

information, the station competes in 

that market. The Commission notes that 

its continued reliance on Nielsen Audio 

market definitions for purposes of 

applying the Local Radio Ownership 

Rule provides an important level of 

certainty to radio licensees in all 

markets, including those in embedded 

markets, and overcomes disadvantages 

associated with the contour-overlap 

approach. Although Nielsen has 

historically defined what stations 

compete in a market based on 

geographical market boundaries, and the 

Commission’s rules have relied on these 

determinations in determining 

compliance with its ownership caps, 

Connoisseur’s Oct. 30, 2017 ex parte 

letter raises issues related to embedded 

markets that should be further explored 

in greater detail in the 2018 

Quadrennial Review proceeding. 

However, the arguments in the ex parte 

letter support adoption of a presumptive 

waiver approach for transactions 

involving existing parent markets with 

multiple embedded markets. 

77. The Commission also finds that its 

decision in the Second Report and 

Order to adopt a contour-overlap 

methodology for the Puerto Rico market 

is not inconsistent with the approach to 


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embedded markets. Connoisseur argues 

that parent markets containing multiple 

embedded markets are analogous to the 

Puerto Rico market where mountainous 

topography, as opposed to a central city, 

separates smaller centers of economic 

activity within the larger parent market. 

Accordingly, Connoisseur asserts that 

the contour-overlap methodology the 

Commission applies to the Puerto Rico 

market likewise should be applied in 

the context of embedded markets in lieu 

of the Commission’s current parent 

market analysis. The Commission finds 

that differences between the Puerto Rico 

market and a parent market that 

includes embedded markets make the 

comparison between the two 

circumstances inappropriate. As one 

example, the core location of a station’s 

listenership has the potential to shift 

geographically over time in a parent/ 

embedded market scenario in a way that 

would be unlikely, or even impossible, 

where, as in Puerto Rico, the physical 

terrain prevents a station from reaching 

other geographic areas. Indeed, the 

Commission has long stated that the 

Puerto Rico market is unique, even as 

compared to other large metro areas. 

The Commission has a long history— 

dating back to 2003—of applying the 

contour-overlap methodology to Puerto 

Rico on a case-by-case basis due to the 

unique characteristics of that market. 

The Commission therefore finds that its 

decision to retain the existing 

methodology for embedded markets is 

not undermined by its decision to adopt 

a contour-overlap methodology in 

Puerto Rico. 

78. For these reasons, the Commission 

continues to find that, rather than 

adopting Connoisseur’s proposal for an 

across-the-board change to the 

Commission’s embedded market 

methodology, entertaining a marketspecific waiver is the appropriate 

approach at this time. In the Second 

Report and Order, the Commission 

acknowledged Connoisseur’s concerns 

with respect to the particular 

characteristics of the current New York 

market and indicated its willingness to 

entertain a waiver specific to that 

market, a willingness the Commission 

reiterates in this Order. Ultimately, the 

issue continues to appear narrow in 

scope—largely specific to a small 

number of parties’ concerns with at 

most two markets. The circumstances 

Connoisseur describes could apply 

currently to, at most, two markets—New 

York City and Washington, DC. The 

Commission notes, however, that 

embedded market designations are 

subject to change, with the potential for 

embedded markets to be created, 

modified, or eliminated in the future. 

For instance, in addition to New York 

and Washington, DC, Connoisseur 

previously had identified San Francisco 

as an example of a parent market with 

two embedded markets. One of those 

embedded markets, however, is no 

longer rated by Nielsen. Accordingly, 

the San Francisco market now includes 

only one embedded market and is 

therefore no longer relevant to the issues 

discussed in Connoisseur’s petition, 

which pertain solely to parent markets 

containing multiple embedded markets. 

As such, the potential impact of a 

proposed transaction involving 

embedded market stations may vary 

based on the specific markets, stations, 

and ownership interests involved. 

79. Accordingly, the Commission 

finds Connoisseur’s argument regarding 

a presumptive waiver approach to be 

persuasive. While a bright-line rule 

codifying Connoisseur’s preferred 

approach to embedded markets would 

no doubt provide greater certainty, as 

discussed in this Order, the Commission 

does not believe that such an approach 

is supported by the record at this time. 

Instead, the Commission intends to fully 

examine its existing methodology 

regarding embedded market transactions 

in the forthcoming 2018 Quadrennial 

Review proceeding. Pending the 

outcome of this review, however, the 

Commission adopts a presumption in 

favor of applying Connoisseur’s twoprong test proposed on reconsideration 

to waiver requests involving existing 

parent markets with multiple embedded 

markets (i.e., New York and 

Washington, DC). The Commission 

finds that there is sufficient evidence on 

the record to support a presumption that 

a waiver of the Local Radio Ownership 

Rule as to stations in these markets 

serves the public interest if the 

transaction at issue satisfies the twoprong test. Pursuant to section 310(d) of 

the Communications Act, the 

Commission must make a public 

interest determination with respect to 

any future applications based on the 

entire record with respect to that 

application. Throughout the proceeding, 

Connoisseur has provided information 

demonstrating that, due to the particular 

circumstances in these markets, 

applying the existing market 

methodology may not be warranted. 

These showings provide the 

Commission with sufficient confidence 

that transactions consistent with this 

presumption likely will not unduly 

impact competition in these markets, 

subject to the Commission’s review 

under section 310(d). The Commission 

finds, however, that it is appropriate to 

limit the presumption to these markets 

(New York and Washington, DC), 

pending review in the 2018 Quadrennial 

Review proceeding, to avoid any 

potential manipulation of embedded 

markets in other Nielsen Audio markets. 

80. Adoption of this presumption will 

give Connoisseur—and other parties— 

sufficient confidence with which to 

assess possible future actions. Further, 

the Commission anticipates that any 

such transactions will help inform its 

subsequent review of the Local Radio 

Ownership Rule—and, in particular, the 

treatment of embedded market 

transactions. 

E. Television JSA Attribution 

1. Introduction 

81. On reconsideration, the 

Commission finds that it erred in its 

decision to adopt the Television JSA 

Attribution Rule and eliminates the 

Television JSA Attribution Rule. The 

petitioners also argue that the 

attribution decision must be reversed on 

the grounds that (1) the decision had the 

effect of tightening the media ownership 

rules, and that the Commission failed to 

properly analyze the impact of the 

attribution decision as required under 

Section 202(h) of the 1996 

Telecommunications Act; and (2) the 

decision was inconsistent with the 

Commission’s repeal of the wireless 

attributable material relationship (AMR) 

rule. Because the Commission is 

reversing its decision to adopt the 

Television JSA Attribution Rule on 

other grounds, it does not need to reach 

these arguments. 

2. Background 

82. The Commission first considered 

whether to attribute television JSAs in 

1999. It declined to do so, finding that 

JSAs did not convey a sufficient degree 

of influence or control over station 

programming or core operations to 

warrant attribution and that JSAs helped 

produce public interest benefits. The 

Commission sought additional comment 

on this conclusion in a 2004 notice of 

proposed rulemaking after attributing 

radio JSAs in the 2002 Biennial Review 

Order. Then in 2014, nearly a decade 

after initially seeking comment on the 

issue, the Commission changed course 

and adopted the Television JSA 

Attribution Rule, despite a lack of 

evidence suggesting that its prior 

determination that television JSAs do 

not convey sufficient influence or 

control to warrant attribution was 

wrong. Specifically, the rule established 

that JSAs that involve the sale of more 

than 15 percent of the weekly 

advertising time of a station (brokered 


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station) by another in-market station 

(brokering station) are attributable under 

the Commission’s ownership rules. As a 

result, the brokering station was deemed 

to have an attributable interest in the 

brokered station, and the brokered 

station would count toward the 

brokering station’s permissible 

ownership totals. 

83. In the Second Report and Order, 

the Commission concluded that the 

Local Television Ownership Rule (with 

a minor modification) still served the 

public interest and it re-adopted the 

Television JSA Attribution Rule based 

on the same rationale articulated in the 

Report and Order (79 FR 28996, May 20, 

2014, FCC 14–28, rel. Apr. 15, 2014). By 

their Petitions, NAB and Nexstar now 

seek reconsideration of the decision to 

re-adopt the Television JSA Attribution 

Rule, arguing that the Commission, in 

adopting the rule, ignored the evidence 

before it and reached a decision 

unsupported by the record. 

3. Discussion 

84. The Commission finds that 

Petitioners provide valid reasons to 

reconsider the Commission’s decision to 

adopt the Television JSA Attribution 

Rule. The Commission’s attribution 

analysis was deficient and failed to 

adequately consider the record, which 

does not support the Commission’s 

conclusion that television JSAs confer 

on the brokering station a sufficient 

degree of influence or control over the 

core operating functions of the brokered 

station to warrant attribution. In 

addition, the record contains ample 

evidence of the public interest benefits 

that these JSAs provide. Even if the 

Commission had correctly determined 

that television JSAs involving more than 

15 percent of the brokered station’s 

weekly advertising time confer 

sufficient influence to warrant 

attribution, the Commission concludes 

that the potential benefits of television 

JSAs outweigh the public interest in 

attributing such JSAs. Accordingly, the 

Commission grants the NAB Petition 

and the Nexstar Petition with respect to 

this issue. As a result of the 

Commission’s decision, 47 CFR 

73.3613(d)(2) and the notes to 47 CFR 

73.3555 will be amended to reflect the 

fact that television JSAs are no longer 

attributable. Additionally, various 

Commission rules will need to be 

revised to reflect the other rule changes 

and decisions adopted in this Order, as 

set forth in the final rules. The 

Commission directs the Media Bureau 

to make all form modifications and to 

take any other steps necessary to 

implement all the rule changes and 

other relevant decisions adopted in this 

Order. Though television JSAs will no 

longer be attributable as a result of the 

amount of advertising time brokered, 

the Commission reminds licensees that 

they must retain ultimate control over 

their programming and core operations 

so as to avoid the potential for an 

unauthorized transfer of control or the 

existence of an undisclosed or 

unauthorized real party in interest. 

85. The Commission failed to 

demonstrate that television JSAs confer 

a sufficient degree of influence or 

control so as to be considered an 

attributable ownership interest under 

the Commission’s ownership rules. 

While the Commission pointed out that 

the attribution analysis traditionally 

seeks to identify interests that provide 

the holder with the incentive and ability 

to influence or control the programming 

or other core operational decisions of 

the licensees—an inquiry that often 

relies on the Commission’s predictive 

judgement—the Commission may not 

ignore the record or the realities of the 

marketplace when making this 

determination. 

86. Here, the Commission’s theory of 

attribution—a reversal of its earlier 

decision that television JSAs should not 

be attributable—was belied by its own 

extensive experience reviewing and 

approving television JSAs. Between 

2008 and the decision to attribute 

television JSAs in 2014, the 

Commission’s Media Bureau reviewed 

and approved 85 television JSAs in the 

context of transaction reviews. Given 

the Commission’s extensive history 

reviewing specific television JSAs, it is 

telling that the record was devoid of any 

evidence that any JSA allowed a 

brokering station to influence even a 

single programming decision of a 

brokered station. 

87. As Nexstar points out, the 

Commission’s only citation in support 

of the theory that television JSAs might 

provide some measure of influence or 

control was inapposite. In Ackerley 

Group, Inc., 17 FCC Rcd 10828 (2002), 

the Commission found that a 

combination of agreements, which 

included a flat-fee television JSA, were 

substantively equivalent to an 

attributable local marketing agreement 

(LMA). Yet the Commission’s 

attribution analysis in the Report and 

Order relied solely on the sale of 

advertising time and not a combination 

of other agreements that may justify 

attribution under the Commission’s 

rules and precedent. As such, this 

isolated incident failed to provide 

support for the Commission’s theory of 

attribution. 

88. The Commission attempted to 

sidestep the lack of evidence to support 

its theory of attribution by relying on 

the decision in the 2002 Biennial 

Review Order to attribute radio JSAs. 

The Commission now agrees with 

Nexstar that this reliance was not 

appropriate. First, the Commission 

failed to explain why differences in fee 

structure (typically fixed fees for radio 

JSAs versus a percentage of advertising 

revenue for television JSAs) did not 

mitigate the Commission’s earlier 

concerns that a fixed fee structure— 

which the Commission found to be 

common in radio JSAs—effectively 

transferred the market risk to the 

brokering station. In a percentage fee 

structure, the broker and brokering 

stations split revenues based on agreed 

upon percentages. By contrast, a flat fee 

structure provides a payment to the 

brokered station regardless of 

performance or revenues. The Third 

Circuit relied on this finding when 

upholding the decision to attribute radio 

JSAs, and the Commission also 

emphasized the fixed fee structure when 

it proposed to attribute television JSAs 

in 2004. The record shows, however, 

that television JSAs generally rely on 

percentage fee arrangements in which 

the brokered station retains a substantial 

portion of the advertising revenue, 

which makes it substantially less likely 

that the brokered station’s programming 

decisions would be significantly 

influenced by the brokering station. 

This critical difference, however, was 

simply glossed over without an 

explanation as to how a percentage fee 

structure transferred market risk to the 

brokering station in the same way as a 

fixed fee structure. Indeed, it appears 

that the typical revenue split gives the 

licensee of the brokered station a 

significant interest in the operation and 

success of the station that is not present 

in a fixed fee arrangement. While the 

Commission declines to attribute 

television JSAs for the reasons set forth 

in this Order, it notes that, under 

Ackerley, the Commission could still 

find that the terms of an individual 

television JSA (either alone or in 

conjunction with other agreements) rise 

to the level of attribution. 

89. The Commission also failed to 

consider sufficiently other distinctions 

between the television market and the 

radio market that undermined its 

reliance on the radio JSA attribution 

precedent. For example, unlike radio 

stations, television stations typically 

have network affiliations, which limits 

the amount of programming that a 

brokering station could potentially 

influence and the amount of available 

advertising time for sale. In the 

Commission’s experience reviewing 


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television JSAs in transaction reviews, 

most of the television JSAs approved by 

the Commission involved the brokering 

of stations with network affiliations. To 

be sure, the Commission disagreed that 

this is a meaningful distinction, but 

once again, it failed to provide any 

record evidence to support its theory. 

The Commission claimed that, even 

with a network affiliation in place, the 

broker could potentially influence the 

selection of non-network programming, 

whether to preempt network 

programming, and/or the choice of 

network affiliation. This claim, 

however, was not supported with any 

evidence of such influence being 

exerted, neither over individual 

programming decisions nor the 

selection of a network affiliation. 

90. The Commission similarly 

brushed aside evidence that television 

stations rely less on local advertising 

revenue than radio stations, which 

would reduce the amount of advertising 

time sold by the broker. Accordingly, 

the broker would control less of the 

television station’s advertising revenue, 

which would limit the ability and 

incentive of the broker to exert 

significant influence or control over the 

brokered station’s core operating 

procedures. The Commission summarily 

concluded that because both radio JSAs 

and television JSAs involve the sale of 

advertising time, both must be treated 

the same for attribution purposes. But 

this one-size-fits-all attribution analysis 

is not supported by the record and 

cannot be sustained. 

91. The lack of evidence supporting 

the Commission’s determination that 

television JSAs confer a significant 

degree of influence or control over the 

core operating functions of the brokered 

station provides sufficient reason for the 

Commission to eliminate the Television 

JSA Attribution Rule. But even if the 

Commission had appropriately 

determined that television JSAs meet 

the attribution criteria, it still should 

have evaluated whether the public 

interest would be served by making the 

agreements attributable. While the 

Commission did acknowledge the 

potential for benefits flowing from the 

use of television JSAs in the Report and 

Order, the Commission expressly 

refused to consider these public interest 

benefits in the context of its attribution 

decision, claiming that the public 

interest benefits should be considered in 

the context of its analysis of the local 

ownership rules. While declining to 

evaluate the significant record evidence 

of the public interest benefits produced 

by television JSAs, the Commission 

claimed that it would preserve 

beneficial television JSAs through a 

waiver process. That process, however, 

proved to be illusory, as the 

Commission did not grant a single 

waiver request while the Television JSA 

Attribution Rule was initially in effect, 

which ultimately led to Congressional 

action to protect existing television 

JSAs. As discussed in this Order, the 

Commission finds that the record does 

not support attribution of television 

JSAs in the first instance, so there is no 

need to consider whether to adopt a 

waiver process 

92. The Commission was correct that 

the potential public interest benefits of 

television JSAs are not relevant to 

whether these agreements satisfy the 

Commission’s general attribution 

criteria (i.e., whether they confer the 

potential for significant influence), but 

that does not excuse the Commission 

from assessing the record to determine 

whether, if the attribution criteria are 

satisfied, attribution would serve the 

public interest. Notably, when the 

Commission attributed radio JSAs in the 

2002 Biennial Review Order, it did 

undertake such an assessment and 

found that the balance of interests, in 

those particular circumstances, 

supported the decision to attribute radio 

JSAs. That finding was based on the 

record in that proceeding, which did not 

contain significant or detailed evidence 

of the claimed public interest benefits of 

radio JSAs, and does not control the 

Commission’s analysis of the potential 

benefits of television JSAs. 

93. Additionally, in the Second 

Report and Order, which reinstated the 

Television JSA Attribution Rule, the 

Commission included only a brief, 

general discussion of the rationale for 

attributing television JSAs, largely 

ignoring the benefits of television JSAs. 

The Commission failed to discuss the 

voluminous record regarding the 

benefits produced by JSAs, instead 

citing anecdotal evidence that 

attribution of television JSAs—prior to 

being vacated by the Third Circuit—had 

produced opportunities for minority 

and female ownership. Its sole citation 

for this proposition, however, was a 

blog post authored by then-Chairman 

Tom Wheeler and Commissioner 

Mignon Clyburn. This claimed benefit is 

not supported by the record and, in fact, 

there is record evidence that refutes this 

assertion. This cursory treatment does 

not constitute an assessment of the 

record regarding the potential public 

interest benefits of television JSAs. As 

such, the Commission is not persuaded 

by the arguments that it properly 

weighed the public interest benefits 

before implementing this new rule. The 

American Cable Association (ACA) 

argues that eliminating the Television 

JSA Attribution Rule will allow 

broadcasters to covertly coordinate their 

retransmission consent negotiations in 

contravention of the joint negotiation 

prohibition. This argument is not 

persuasive. Broadcasters are prohibited 

from jointly negotiating retransmission 

consent for stations in the same local 

market that are not under common de 

jure control permitted by the 

Commission. Licensees are expected to 

comply with the Communications Act 

and Commission rules and policies, and 

the Commission has authority to take 

enforcement action where it finds a 

licensee has violated any relevant 

statutes, rules, or policies. The 

Commission will not assume that 

licensees will violate its rules, but 

entities can file a complaint if they 

believe that any broadcaster is violating 

the joint negotiation prohibition, and 

the Commission will take appropriate 

action. 

94. On reconsideration, the 

Commission concludes that the record 

demonstrates that television JSAs can 

promote the public interest, and that 

this provides an independent reason for 

eliminating the Television JSA 

Attribution Rule. Indeed, the record 

demonstrates that television JSAs have 

created efficiencies that benefit local 

broadcasters—particularly in small- and 

medium-sized markets—and have 

enabled these stations to better serve 

their communities. The video 

marketplace is changing rapidly, and 

television JSAs can help reduce costs 

and attract vital revenue at a time of 

increasing competition for viewership. 

Broadcasters can turn these efficiencies 

into increased services for local 

communities. For example, a JSA 

between two stations in Kansas helped 

create cost savings that, in turn, allowed 

the stations to fund weather emergencyrelated crawls in Spanish, a service vital 

to the tornado-prone area. Other stations 

have been able to increase their local 

news programming and further invest in 

investigative reporting due to their JSAs. 

Additionally, certain JSAs have helped 

spur minority ownership. As noted in 

the record, a station owned by Tougaloo 

College, a historically African-American 

college, has credited its JSA for 

providing the resources necessary to 

upgrade to HD, to produce content 

relevant to its community, and to cover 

local sporting events. This is just a 

sampling of the many examples in the 

record in which JSAs have benefited 

local stations and communities. 

95. Furthermore, the Commission 

failed to cite any evidence of actual 

harm associated with television JSAs. 

The Commission’s analysis here under 

the public interest standard does not 


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supersede any antitrust analysis 

performed by the Department of Justice 

Antitrust Division (DOJ) on a case-bycase basis regarding JSAs or other 

agreements among broadcasters that are 

similar in function. Indeed, the 

Commission’s public interest analysis 

differs from DOJ’s antitrust review, 

reflecting a broader evaluation of the 

potential harms and benefits of 

ownership combinations in light of the 

requirements of the Communications 

Act and Commission rules and the 

objectives of the Act and rules. 

Consequently, nothing in this Order, or 

any amendment made by this Order, 

should be construed to modify, impair, 

or supersede the operation or 

applicability of any state or federal 

antitrust laws. 

96. The Commission stated that JSAs 

could, possibly, allow the stations to 

raise their advertising rates above what 

could be achieved if the ad time were 

sold independently. The Commission, 

however, failed to engage in any actual 

analysis of the impact of television JSAs 

on advertisers, and the record in this 

proceeding contained no evidence of 

stations charging higher rates for 

advertising sold pursuant to a JSA and 

no support from advertisers for the 

Television JSA Attribution Rule. On the 

contrary, there was evidence in the 

record that advertisers have benefitted 

from JSAs, which make their ad buys 

more efficient. Similarly, as discussed 

above, the Commission did not identify 

a single instance of harm to viewers or 

competition in local markets resulting 

from a broker’s exercise of influence 

over the programming or other core 

operations of a brokered station— 

indeed, as discussed above, the 

Commission did not cite a single 

instance of such influence even being 

exerted. 

97. The Commission finds that, on 

balance, the public interest is best 

served by not attributing television 

JSAs, regardless of whether they 

technically satisfy the attribution 

criteria. As discussed above, the 

Commission’s attribution analysis was 

not supported by the record, and this 

failure provides an independent reason 

for eliminating the Television JSA 

Attribution Rule. It is well within the 

Commission’s authority to decline to 

attribute an agreement or relationship 

that might otherwise satisfy the 

attribution criteria in order to help 

foster public interest benefits. For 

example, in the EDP Attribution 

Modification Order (73 FR 28361, May 

16, 2008, FCC 07–217, rel. Mar. 5, 2008), 

the Commission modified the Equity/ 

Debt Plus Attribution Rule (EDP Rule) 

by carving out an exemption in certain 

circumstances to encourage investment 

in eligible entities. There, the record 

demonstrated that small businesses, 

including those owned by minorities 

and women, were having difficulty 

obtaining financing. The Commission 

acknowledged the potential role that the 

EDP Rule had in hindering investment 

in eligible entities and found that it was 

justified in relaxing the EDP Rule to 

help address this issue. This decision 

demonstrates the need to balance the 

purpose of the attribution rules—that is, 

to identify potentially influential 

interest holders—with the 

Commission’s public interest goals. 

98. Similarly, even if some television 

JSAs were to provide the brokering 

station some ability to influence the 

operations of the brokered station, the 

Commission finds that attribution is not 

warranted here in light of the significant 

public interest benefits produced by 

these agreements. Television JSAs can 

help promote diverse ownership and 

improve program offerings, including 

local news and public interest 

programming, in local markets. While 

the Commission agrees that it is 

important that its attribution rules 

reflect accurately the competitive 

conditions of local markets, particularly 

in the context of the Commission’s local 

broadcast ownership rules, the analysis 

cannot end there. The Commission must 

ensure that its attribution decisions do 

not harm the very markets that the 

attribution rules are designed to protect 

by preventing the accrual of significant 

public interest benefits. As discussed in 

this Order, the tangible benefits of 

television JSAs far outweigh the benefits 

that may accrue from a rote application 

of the attribution criteria in these 

circumstances. 

99. The Commission also finds that its 

decision to eliminate the Television JSA 

Attribution Rule is appropriate, even in 

light of its decision to relax the Local 

Television Ownership Rule. As 

discussed above, the Commission finds 

that it failed to establish that television 

JSAs confer significant influence 

warranting treating JSAs as attributable 

ownership interests, so the existence of 

television JSAs in the marketplace does 

not have an impact on the Commission’s 

public interest analysis in the Local 

Television Ownership Rule context. 

Indeed, television JSAs have been 

utilized by many broadcasters with 

increasing prevalence for well over a 

decade. The record in this proceeding 

lacks any evidence of public interest 

harm, and there is evidence that these 

agreements have produced and can 

produce meaningful public interest 

benefits. As such, the Commission does 

not believe that the Local Television 

Ownership Rule should be made more 

restrictive due to the presence of 

television JSAs. 

100. And while there may be fewer 

television JSAs executed moving 

forward because of the Commission’s 

relaxation of the Local Television 

Ownership Rule, that does not diminish 

the public interest benefits associated 

with these agreements in the television 

context. The television ownership limits 

are still much more restrictive than the 

radio ownership limits, so there may be 

a continuing need for JSAs to help 

create economies of scale and improve 

program offerings, particularly for small 

or independent station owners. By 

preserving the ability to enter into a 

JSA, some station owners may be able 

to maintain independent operations 

instead of exiting the marketplace, and 

these agreements will continue to be 

available to help new entrants and small 

businesses acquire and operate new 

stations. Thus, the Commission is not 

persuaded that repeal of the eight-voices 

requirement and the Television JSA 

Attribution Rule will deter new entry 

based on consolidation of advertising 

sales. 

F. Shared Service Agreements 

1. Introduction 

101. The Commission upholds its 

decision in the Second Report and 

Order to adopt a comprehensive 

definition of SSAs and a requirement 

that commercial television stations 

disclose SSAs by placing them in their 

online public inspection files. 

2. Background 

102. SSAs allow stations in a local 

market to combine certain operations, 

personnel, and/or facilities, with one 

station effectively performing functions 

for multiple, independently owned 

stations. The FNPRM proposed a 

comprehensive definition of SSAs and 

sought comment on the scope of the 

definition, including any potential 

refinements to the definition to help 

ensure that it was not overbroad. While 

certain commenters expressed concerns 

with the scope of the definition, none 

provided an alternative definition or 

suggested any specific changes to the 

definition proposed in the FNPRM. The 

FNPRM also sought comment on 

potential disclosure options for these 

agreements. In the Second Report and 

Order, the Commission adopted a 

definition of SSAs substantially similar 

to the definition proposed in the 

FNPRM and a requirement that 

commercial television stations disclose 

SSAs by placing them in their online 

public inspection files. In its Petition for 


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Reconsideration, NAB asks the 

Commission either to eliminate the SSA 

disclosure requirement or rationally 

define the SSAs subject to it, asserting 

that the SSA disclosure requirement is 

overbroad and unnecessary. 

3. Discussion 

103. The Commission declines to 

reconsider the SSA definition and 

disclosure requirements adopted in the 

Second Report and Order. The 

Commission finds that both the 

definition and the disclosure 

requirement were supported by the 

record and that NAB has failed to 

provide sufficient reasons to reconsider 

the Commission’s decision at this time; 

therefore, the Commission denies the 

NAB Petition in this regard. 

104. Contrary to NAB’s claim, the 

Second Report and Order rationally 

defines SSAs. In the Second Report and 

Order, the Commission adopted a clear 

definition of SSAs and addressed 

commenters’ concerns regarding the 

types of agreements covered by the 

definition. As the Commission 

discussed, the definition of SSAs is 

appropriately limited in scope, applying 

only to those agreements that involve 

station-related services. Moreover, the 

Commission sufficiently illustrated this 

scope by providing guidance in the 

definition of SSAs with non-exhaustive 

examples. The Second Report and Order 

also addressed specific concerns in the 

record, clarifying that certain 

agreements, such as ad hoc or on-the-fly 

arrangements during breaking news 

coverage, fall outside the SSA 

definition. Ultimately, the definition is 

appropriately tailored to include only 

those agreements that involve station 

operations relevant to the public. NAB 

expresses concern that the SSA 

definition would apply to agreements 

encompassing everything from janitorial 

to catering to maintenance to security 

services. An agreement to share 

facilities and station personnel meeting 

the definition of an SSA may include 

provisions allocating costs or 

responsibilities related to the operation 

and upkeep of the shared facilities. 

Consistent with the Second Report and 

Order, however, agreements that relate 

only to such incidental services, even 

those involving shared facilities, are not 

encompassed by the SSA definition and 

are not, therefore, subject to disclosure. 

Accordingly, the Commission finds 

NAB’s concerns to be misplaced and 

sufficiently addressed in the Second 

Report and Order. In light of the 

Commission’s analysis and the lack of 

any alternative definitions or specific 

refinements proposed in the record, 

including on reconsideration, the 

Commission finds no reason to 

reconsider the definition of SSAs 

adopted in the Second Report and 

Order. 

105. The Commission also finds that 

the Second Report and Order provided 

a sufficient justification for requiring the 

disclosure of SSAs. The Commission is 

not required to first determine the 

regulatory status of SSAs before 

requiring disclosure. The Second Report 

and Order addressed the various 

objections in the record and effectively 

demonstrated that the Commission has 

the authority to require disclosure of 

SSAs in order help the Commission 

obtain information relevant to its 

statutory responsibilities. Any efforts to 

ascertain the potential impact of these 

agreements on the Commission’s policy 

goals should not be read to imply only 

a negative impact. SSAs may help 

facilitate improved service in local 

communities, and disclosure of these 

agreements may provide greater insight 

into such potential benefits. The Second 

Report and Order set forth a sufficient 

justification for requiring disclosure in 

these circumstances, and NAB’s brief 

argument to the contrary in its request 

for reconsideration gives the 

Commission no cause to disturb the 

underlying decision at this time. 

106. While the Commission is 

upholding the decision in the Second 

Report and Order to require disclosure, 

the Commission emphasizes that its 

action is not a pretext for future 

regulation of SSAs. As the Third Circuit 

recognized, the Commission acted 

appropriately in declining to attribute 

these agreements in this proceeding, as 

some commenters had requested. 

Among other things, the Commission 

has admitted that it lacks an 

understanding of the potential impact of 

SSAs on a station’s core operating 

functions, and evidence in the record 

suggests that these agreements help 

produce significant public interest 

benefits. Accordingly, any consideration 

of the regulatory status of these 

agreements by a future Commission 

must reflect significant study and 

understanding of the impact of these 

agreements on station operations and a 

complete account of the public interest 

benefits these agreements help facilitate. 

Furthermore, while the record compiled 

in this proceeding does not demonstrate 

that the disclosure requirement will 

unduly burden commercial television 

broadcasters, the Commission retains 

the authority to revisit this disclosure 

requirement should evidence of such 

burdens arise after the disclosure 

requirement is implemented or 

experience demonstrate that the benefits 

of this requirement are outweighed by 

its costs. 

G. Diversity/Incubator Program 

1. Introduction 

107. The Commission grants in part 

and denies in part NAB’s request for 

reconsideration regarding the 

Commission’s decision in the Second 

Report and Order not to adopt an 

incubator program on the current 

record. The Commission agrees that it 

should adopt such a program and 

decides in this Order that it will do so. 

However, the Commission also finds 

that the underlying record fails to 

provide sufficient guidance on how best 

to structure such a program. 

Accordingly, the Commission adopts in 

this Order a Notice of Proposed 

Rulemaking seeking comment on how 

the Commission should structure the 

incubator program. 

2. Background 

108. As explained in greater detail in 

the accompanying Notice of Proposed 

Rulemaking, an incubator program 

would provide an ownership rule 

waiver or similar benefits to a company 

that establishes a program to help 

facilitate station ownership for a certain 

class of new owners. The concept of an 

incubator program has been discussed 

since at least the early 1990s. Yet, 

despite general support for the concept, 

the Commission has never undertaken 

the creation of a comprehensive 

incubator program. The Commission has 

adopted a limited program that provides 

a duopoly preference to parties that 

agree to incubate or finance an eligible 

entity. In adopting this general policy 

preference, however, the Commission 

did not provide details regarding the 

structure and operation of the 

incubation activities. As such, the 

Commission does not believe that this 

limited policy preference serves as an 

effective basis upon which to design a 

comprehensive incubator program. 

109. Most recently, the Commission 

sought comment in the NPRM and 

FNPRM on whether to adopt an 

incubator program and, if so, how to 

structure such a program. In the 

FNPRM, in particular, the Commission 

highlighted administrative concerns and 

structural issues that needed to be 

addressed before such a program could 

be adopted. While there was general 

support for an incubator program, and 

some suggestions on how to structure 

certain aspects of such a program, the 

Commission found in the Second Report 

and Order that the record failed to 

address the specific concerns detailed in 

the FNPRM; accordingly, the 


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Commission declined to adopt an 

incubator program. NAB sought 

reconsideration of the Commission’s 

rejection of NAB’s recommendation for 

an incubator program. According to 

NAB, the Commission could create an 

incubator program based on the 

overcoming disadvantages preference 

(ODP) standard, which the Commission 

rejected in the Second Report and 

Order, or the new entrant criteria in the 

broadcast services’ auction rules. The 

petition otherwise fails to address the 

many other issues of concern 

highlighted by the Commission in this 

proceeding. 

3. Discussion 

110. On reconsideration, the 

Commission agrees with NAB that it 

should adopt an incubator program and 

decides here that it will do so. There is 

support for an incubator program from 

many industry participants and 

advocacy groups. And the Commission 

agrees with supporters that adopting an 

incubator program would promote new 

entry and ownership diversity in the 

broadcast industry by helping address 

barriers to station ownership, such as 

lack of access to capital and the need for 

technical/operational experience. In this 

proceeding, however, the Commission 

has identified various, specific concerns 

regarding how to structure and monitor 

such a program. The Commission finds 

that the comments and 

recommendations in the record fail to 

adequately address all of these issues. 

While certain suggestions may have 

merit in regards to specific aspects of 

the program, the Commission is not yet 

at the point where it can finalize the 

overall structure and method for 

implementation of the program. 

Therefore, the Commission requires 

additional comment on how to structure 

the incubator program. 

111. The Commission is initiating a 

new proceeding in the accompanying 

Notice of Proposed Rulemaking that will 

seek additional comment on how best to 

implement the Commission’s incubator 

program. Initiating a dedicated 

proceeding will allow the Commission 

to focus its efforts on getting this 

program up and running, and the 

Commission anticipates that its 

consideration of this issue will be 

assisted by the newly established 

Advisory Committee on Diversity and 

Digital Empowerment. 

IV. Procedural Matters 

A. Supplemental Final Regulatory 

Flexibility Analysis 

112. In compliance with the 

Regulatory Flexibility Act (RFA), this 

Supplemental Final Regulatory 

Flexibility Analysis (Supplemental 

FRFA) supplements the Final 

Regulatory Flexibility Analysis (FRFA) 

included in the Second Report and 

Order, to the extent that changes 

adopted on reconsideration require 

changes to the information included and 

conclusions reached in the FRFA. As 

required by the Regulatory Flexibility 

Act of 1980, as amended (RFA), an 

Initial Regulatory Flexibility Analysis 

(IRFA) was incorporated in the NPRM 

that initiated this proceeding. The 

Commission sought written public 

comment on the proposals in the NPRM, 

including comment on the IRFA. The 

Commission also incorporated a 

Supplemental Initial Regulatory 

Flexibility Analysis (Supplemental 

IRFA) in the FNPRM in this proceeding. 

The Commission sought written public 

comment on the proposals in the 

FNPRM, including comment on the 

Supplemental IRFA. The Commission 

received no comments in response to 

the IRFA or the Supplemental IRFA. 

This present Supplemental FRFA 

conforms to the RFA. 

113. Response to Public Comments 

and Comments by the Chief Counsel for 

Advocacy of the Small Business 

Administration. Pursuant to the Small 

Business Jobs Act of 2010, which 

amended the RFA, the Commission is 

required to respond to any comments 

filed by the Chief Counsel for Advocacy 

of the Small Business Administration 

(SBA) and to provide a detailed 

statement of any change made to the 

proposed rules as a result of those 

comments. The Chief Counsel did not 

file any comments in response to the 

proposed rules in this proceeding. 

114. Description and Estimate of the 

Number of Small Entities to Which 

Rules Will Apply. The RFA directs the 

Commission to provide a description of 

and, where feasible, an estimate of the 

number of small entities that will be 

affected by the rules adopted. The RFA 

generally defines the term small entity 

as having the same meaning as the terms 

small business, small organization, and 

small governmental jurisdiction. In 

addition, the term small business has 

the same meaning as the term small 

business concern under the Small 

Business Act. A small business concern 

is one which: (1) Is independently 

owned and operated; (2) is not 

dominant in its field of operation; and 

(3) satisfies any additional criteria 

established by the SBA. The final rules 

adopted in this Order affect small 

television and radio broadcast stations 

and small entities that operate daily 

newspapers. A description of these 

small entities, as well as an estimate of 

the number of such small entities, is 

provided below. 

115. Television Broadcasting. This 

Economic Census category comprises 

establishments primarily engaged in 

broadcasting images together with 

sound. These establishments operate 

television broadcasting studios and 

facilities for the programming and 

transmission of programs to the public. 

These establishments also produce or 

transmit visual programming to 

affiliated broadcast television stations, 

which in turn broadcast the programs to 

the public on a predetermined schedule. 

Programming may originate in their own 

studio, from an affiliated network, or 

from external sources. The SBA has 

created the following small business 

size standard for such businesses: Those 

having $38.5 million or less in annual 

receipts. The 2012 Economic Census 

data reports that 751 such firms in this 

category operated in that year. Of that 

number, 656 had annual receipts of 

$25,000,000 or less, 25 had annual 

receipts between $25,000,000 and 

$49,999,999 and 70 had annual receipts 

of $50,000,000 or more. Based on this 

data, the Commission therefore 

estimates that the majority of 

commercial television broadcasters are 

small entities under the applicable SBA 

size standard. 

116. The Commission has estimated 

the number of licensed commercial 

television stations to be 1,382. Of this 

total, 1,262 stations (or about 91 

percent) had revenues of $38.5 million 

or less, according to Commission staff 

review of the BIA Kelsey Inc. Media 

Access Pro Television Database (BIA) on 

May 9, 2017, and therefore these 

licensees qualify as small entities under 

the SBA definition. In addition, the 

Commission has estimated the number 

of licensed noncommercial educational 

television stations to be 393. 

Notwithstanding, the Commission does 

not compile and otherwise does not 

have access to information on the 

revenue of NCE stations that would 

permit it to determine how many such 

stations would qualify as small entities. 

117. The Commission notes, however, 

that, in assessing whether a business 

concern qualifies as small under the 

above definition, business (control) 

affiliations must be included. The 

Commission’s estimate, therefore, likely 

overstates the number of small entities 

that might be affected by its action, 

because the revenue figure on which it 

is based does not include or aggregate 

revenues from affiliated companies. In 

addition, another element of the 

definition of small business is that the 

entity not be dominant in its field of 

operation. The Commission is unable at 


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this time to define or quantify the 

criteria that would establish whether a 

specific television broadcast station is 

dominant in its field of operation. 

Accordingly, the estimate of small 

businesses to which rules may apply do 

not exclude any television broadcast 

station from the definition of a small 

business on this basis and are therefore 

possibly over-inclusive. There are also 

2,385 LPTV stations, including Class A 

stations, and 3,776 TV translator 

stations. Given the nature of these 

services, the Commission will presume 

that all of these entities qualify as small 

entities under the above SBA small 

business size standard. Also, as noted 

above, an additional element of the 

definition of small business is that the 

entity must be independently owned 

and operated. The Commission notes 

that it is difficult at times to assess these 

criteria in the context of media entities 

and its estimates of small businesses to 

which they apply may be over-inclusive 

to this extent. 

118. Radio Stations. This Economic 

Census category comprises 

establishments primarily engaged in 

broadcasting aural programs by radio to 

the public. Programming may originate 

in their own studio, from an affiliated 

network, or from external sources. The 

SBA has established a small business 

size standard for this category as firms 

having $38.5 million or less in annual 

receipts. Economic Census data for 2012 

shows that 2,849 radio station firms 

operated during that year. Of that 

number, 2,806 operated with annual 

receipts of less than $25 million per 

year, 17 with annual receipts between 

$25 million and $49,999,999 million 

and 26 with annual receipts of $50 

million or more. Therefore, based on the 

SBA’s size standard the majority of such 

entities are small entities. 

119. According to Commission staff 

review of the BIA/Kelsey, LLC’s Media 

Access Pro Radio Database on May 9, 

2017, about 11,392 (or about 99.9 

percent) of 11,401 of commercial radio 

stations had revenues of $38.5 million 

or less and thus qualify as small entities 

under the SBA definition. The 

Commission has estimated the number 

of licensed commercial radio stations to 

be 11,401. The Commission notes it has 

also estimated the number of licensed 

noncommercial radio stations to be 

4,111. Nevertheless, the Commission 

does not compile and otherwise does 

not have access to information on the 

revenue of NCE stations that would 

permit it to determine how many such 

stations would qualify as small entities. 

120. The Commission also notes, that 

in assessing whether a business concern 

qualifies as small under the above 

definition, business (control) affiliations 

must be included. The Commission’s 

estimate, therefore, likely overstates the 

number of small entities that might be 

affected by its action, because the 

revenue figure on which it is based does 

not include or aggregate revenues from 

affiliated companies. In addition, an 

element of the definition of small 

business is that the entity not be 

dominant in its field of operation. The 

Commission further notes, that it is 

difficult at times to assess these criteria 

in the context of media entities, and the 

estimate of small businesses to which 

these rules may apply does not exclude 

any radio station from the definition of 

a small business on these basis, thus the 

Commission’s estimate of small 

businesses may therefore be overinclusive. Also, as noted above, an 

additional element of the definition of 

small business is that the entity must be 

independently owned and operated. 

The Commission notes that it is difficult 

at times to assess these criteria in the 

context of media entities and the 

estimates of small businesses to which 

they apply may be over-inclusive to this 

extent. 

121. Daily Newspapers. The SBA has 

developed a small business size 

standard for the census category of 

Newspaper Publishers; that size 

standard is 1,000 or fewer employees. 

Business concerns included in this 

category are those that carry out 

operations necessary for producing and 

distributing newspapers, including 

gathering news; writing news columns, 

feature stories, and editorials; and 

selling and preparing advertisements. 

Census Bureau data for 2012 show that 

there were 4,168 firms in this category 

that operated for the entire year. Of this 

total, 4,107 firms had employment of 

499 or fewer employees, and an 

additional 22 firms had employment of 

500 to 999 employees. Therefore, the 

Commission estimates that the majority 

of Newspaper Publishers are small 

entities that might be affected by its 

action. 

122. Description of Reporting, Record 

Keeping, and other Compliance 

Requirements for Small Entities. The 

Order on Reconsideration eliminates the 

Newspaper/Broadcast Cross-Ownership 

Rule and the Radio/Television CrossOwnership Rule, modifies the Local 

Television Ownership Rule and, and 

eliminates the Television JSA 

Attribution Rule. The Order on 

Reconsideration does not adopt any new 

reporting, recordkeeping, or compliance 

requirements for small entities. The 

Order on Reconsideration thus will not 

impose additional obligations or 

expenditure of resources on small 

businesses. In addition, to conform to 

the elimination of the Television JSA 

Attribution Rule, parties to JSAs that 

were attributable under the previous 

rule will no longer be required to file 

the agreements with the Commission 

pursuant to section 73.3613 of the 

Commission’s rules. 

123. Steps Taken to Minimize 

Significant Economic Impact on Small 

Entities, and Significant Alternatives 

Considered. The RFA requires an 

agency to describe any significant 

alternatives that it has considered in 

reaching its approach, which may 

include the following four alternatives 

(among others): (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for such small entities; 

(3) the use of performance, rather than 

design, standards; and (4) an exemption 

from coverage of the rule, or any part 

thereof, for such small entities. 

124. In conducting the quadrennial 

review, the Commission has three chief 

alternatives available for each of the 

Commission’s media ownership rules— 

eliminate the rule, modify it, or, if the 

Commission determines that the rule is 

necessary in the public interest, retain 

it. The Commission finds that the 

modification and elimination of the 

rules in the Order on Reconsideration, 

which are intended to achieve the 

policy goals of competition, localism, 

and viewpoint diversity, will continue 

to benefit small entities by fostering a 

media marketplace in which they are 

better able to compete and by promoting 

additional broadcast ownership 

opportunities, as described below, 

among a diverse group of owners, 

including small entities. The 

Commission discusses below several 

ways in which the rules may benefit 

small entities as well as steps taken, and 

significant alternatives considered, to 

minimize any potential burdens on 

small entities. 

125. Newspaper/Broadcast CrossOwnership (NBCO) Rule. In the Order 

on Reconsideration, the Commission 

considered whether to retain, modify, or 

eliminate the NBCO Rule. The 

Commission determined that the NBCO 

Rule is no longer in the public interest 

and should be repealed. As an 

alternative to the action taken, the 

Commission considered whether to 

adopt a modified NBCO Rule, but 

rejected that approach as unsupported 

by the record. As a result, newspapers 

will be able to combine with television 

and radio stations within the same local 


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market, subject only to the Local 

Television and Local Radio Ownership 

Rules. Repeal of the NBCO Rule in its 

entirety eliminates the economic burden 

of compliance with the rule on small 

entities. Furthermore, repeal of the rule 

will allow broadcasters and local 

newspapers to seek out new sources of 

investment and operational expertise, 

potentially increasing the quantity and 

quality of local news and information 

they provide to consumers. Small 

broadcasters may find that merging with 

a newspaper could boost their ability to 

serve their local markets. The Order on 

Reconsideration finds that the NBCO 

Rule created considerable harm in small 

markets where the benefits of crossownership could have helped to sustain 

the local news outlets, many of which 

are likely to be small entities. 

Elimination of the rule will help 

promote additional investment 

opportunities for small entities in many 

local markets. The Order on 

Reconsideration also concludes that 

repeal of the NBCO Rule is unlikely to 

have a material effect on minority and 

female ownership of newspapers and 

broadcast stations. 

126. Radio/Television CrossOwnership Rule. In the Order on 

Reconsideration, the Commission 

considers whether to retain, modify, or 

eliminate the Radio/Television CrossOwnership Rule. The Commission finds 

that the Radio/Television CrossOwnership Rule no longer serves the 

public interest and should be repealed. 

The Commission considers whether to 

adopt a modified rule, but rejects that 

approach as unsupported by the record. 

Eliminating the rule allows television 

stations and radio stations in the same 

market to be commonly owned provided 

that such ownership arrangements 

otherwise comply with the Local 

Television and Local Radio Ownership 

Rules. As with the NBCO Rule, repeal 

of the Radio/Television CrossOwnership Rule in its entirety 

eliminates the economic impact of the 

rule on small entities. Small entities in 

particular may benefit from the 

aforementioned efficiencies and benefits 

of common ownership enabled by the 

rule’s repeal. The Commission also 

finds that repeal of the Radio/Television 

Cross-Ownership rule is unlikely to 

have an effect on minority and female 

ownership of broadcast television and 

radio stations. 

127. Local Television Ownership Rule. 

In the Order on Reconsideration, the 

Commission finds that the existing 

Local Television Ownership Rule is no 

longer necessary in the public interest 

but should be modified further to enable 

television stations to compete more 

effectively. Accordingly, the 

Commission repeals the Eight-Voices 

Test that had required at least eight 

independently owned television 

stations to remain in a market after 

combining ownership of two stations in 

the market. The Commission considers 

whether to adopt a different voice test, 

but rejects that approach as 

unsupported by the record. In addition, 

the Commission considers whether to 

retain, modify, or eliminate the TopFour Prohibition, a prohibition against 

common ownership of two top-four 

ranked stations in all markets. The 

Commission finds that the record 

generally supported the Commission’s 

decision in the Second Report and 

Order to treat combinations involving 

two top-four rated stations differently 

than other combinations, but on 

reconsideration the Commission 

modifies the rule to include a case-bycase approach to account for 

circumstances in which strict 

application of the prohibition is not in 

the public interest. Under the new 

modified television ownership rule an 

entity may own two television stations 

in the same DMA if (1) the digital noise 

limited service contours (NLSCs) of the 

stations (as determined by section 

73.622(e)) do not overlap; or (2) at least 

one of the stations is not ranked among 

the top four stations in the market. The 

Commission will consider combinations 

otherwise barred by the Top-Four 

Prohibition on a case-by-case basis. 

128. The modifications to the Local 

Television Ownership Rule are not 

expected to create additional burdens 

for small entities. Conversely, the 

economic impact of the rule 

modification may benefit small entities 

by enabling them to achieve operational 

efficiencies through common 

ownership. The Order on 

Reconsideration also concludes that the 

modifications to the Local Television 

Ownership Rule are unlikely to have an 

effect on minority and female 

ownership of broadcast television 

stations. 

129. Television JSA Attribution Rule. 

On reconsideration, the Commission 

considers whether to retain or eliminate 

the Television JSA Attribution Rule. 

The Commission finds that the rule was 

unsupported by the record and does not 

serve the public interest and therefore 

should be repealed. The repeal of the 

Television JSA Attribution Rule 

eliminates the economic burden of the 

rule on small entities. In the rapidly 

changing video marketplace, television 

JSAs help reduce costs and attract vital 

revenue at a time of increasing 

competition for advertising and 

viewership. Efficiencies provided by 

JSAs also enable broadcasters to 

improve or increase services for local 

communities, thus fostering significant 

public interest benefits. Local television 

broadcasters—particularly in small- and 

medium-sized markets—stand to benefit 

from these efficiencies that television 

JSAs create. The repeal of the attribution 

rule will remove a regulatory 

disincentive for stations to enter into 

JSAs and enable these stations to better 

serve their communities. In addition, 

because of the elimination of the 

Television JSA Attribution Rule, parties 

to JSAs that were attributable under the 

previous rule will no longer be required 

to file the agreements with the 

Commission, thus eliminating that 

economic burden. 

B. Paperwork Reduction Act Analysis 

130. This Order on Reconsideration 

contains information collection 

requirements subject to the Paperwork 

Reduction Act of 1995 (PRA), Public 

Law 104–13. The requirements will be 

submitted to the Office of Management 

and Budget (OMB) for review under 

section 3507(d) of the PRA. OMB, the 

general public, and other Federal 

agencies will be invited to comment on 

the information collection requirements 

contained in this proceeding. The 

Commission will publish a separate 

document in the Federal Register at a 

later date seeking these comments. In 

addition, the Commission notes that, 

pursuant to the Small Business 

Paperwork Relief Act of 2002, Public 

Law 107–198, see 44 U.S.C. 3506(c)(4), 

the Commission previously sought 

specific comment on how it might 

further reduce the information 

collection burden for small business 

concerns with fewer than 25 employees. 

C. Congressional Review Act 

131. The Commission will send a 

copy of this Order on Reconsideration to 

Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act, see 5 U.S.C. 

801(a)(1)(A). 

V. Ordering Clauses 

132. Accordingly, it is ordered that, 

pursuant to the authority contained in 

sections 1, 2(a), 4(i), 257, 303, 307, 309, 

310, and 403 of the Communications 

Act of 1934, as amended, 47 U.S.C. 151, 

152(a), 154(i), 257, 303, 307, 309, 310, 

and 403, and Section 202(h) of the 

Telecommunications Act of 1996, this 

Order on Reconsideration is adopted. 

133. It is further ordered that, 

pursuant to section 405 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 405, and section 

1.429 of the Commission’s rules, 47 CFR 


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Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 755 

1.429, that the petitions for 

reconsideration filed by (1) Connoisseur 

Media, LLC is granted, in part, and 

otherwise denied as set forth herein; (2) 

the National Association of Broadcasters 

is granted, in part, and otherwise denied 

as set forth herein; and (3) Nexstar 

Broadcasting, Inc. is granted, in part, 

and otherwise denied as set forth herein. 

134. It is further ordered that UCC et 

al.’s Motion to Strike and Dismiss is 

denied as set forth herein. 

135. It is further ordered that the 

Order on Reconsideration and the rule 

modifications attached hereto shall be 

effective February 7, 2018, except for 

those rules and requirements involving 

Paperwork Reduction Act burdens, 

which shall become effective on the 

effective date announced in the Federal 

Register notice announcing OMB 

approval. 

136. It is further ordered, that the 

proceedings MB Docket No. 04–256, MB 

Docket No. 09–182, and MB Docket No. 

14–50 are terminated. 

List of Subjects in 47 CFR Part 73 

Radio, Reporting and recordkeeping 

requirements, Television. 

Federal Communications Commission. 

Katura Jackson, 

Federal Register Liaison Officer, Office of the 

Secretary. 

Final Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR part 73 as 

follows: 

PART 73—RADIO BROADCAST 

SERVICES 

■ 1. The authority citation for part 73 

continues to read as follows: 

Authority: 47 U.S.C. 154, 303, 309, 310, 

334, 336 and 339. 

■ 2. Amend § 73.3555 as follows: 

■ a. Revise paragraph (b); 

■ b. Remove and reserve paragraphs (c) 

and (d); 

■ c. Revise the introductory text, 

paragraphs a. through d., and 

paragraphs g. through k. of Note 2 to 

§ 73.3555; 

■ d. Revise Notes 4 through 7 to 

§ 73.3555; 

■ e. Revise Note 9 to § 73.3555; and 

■ f. Remove Note 12 to § 73.3555. 

The revisions read as follows: 

§ 73.3555 Multiple ownership. 

* * * * * 

(b) Local television multiple 

ownership rule. (1) An entity may 

directly or indirectly own, operate, or 

control two television stations licensed 

in the same Designated Market Area 

(DMA) (as determined by Nielsen Media 

Research or any successor entity) if: 

(i) The digital noise limited service 

contours of the stations (computed in 

accordance with § 73.622(e)) do not 

overlap; or 

(ii) At the time the application to 

acquire or construct the station(s) is 

filed, at least one of the stations is not 

ranked among the top four stations in 

the DMA, based on the most recent allday (9 a.m.–midnight) audience share, 

as measured by Nielsen Media Research 

or by any comparable professional, 

accepted audience ratings service. 

(2) Paragraph (b)(1)(ii) (Top-Four 

Prohibition) of this section shall not 

apply in cases where, at the request of 

the applicant, the Commission makes a 

finding that permitting an entity to 

directly or indirectly own, operate, or 

control two television stations licensed 

in the same DMA would serve the 

public interest, convenience, and 

necessity. The Commission will 

consider showings that the Top-Four 

Prohibition should not apply due to 

specific circumstances in a local market 

or with respect to a specific transaction 

on a case-by-case basis. 

(c)–(d) [Reserved] 

* * * * * 

Note 2 to § 73.3555: 

In applying the provisions of this 

section, ownership and other interests 

in broadcast licensees will be attributed 

to their holders and deemed cognizable 

pursuant to the following criteria: 

a. Except as otherwise provided 

herein, partnership and direct 

ownership interests and any voting 

stock interest amounting to 5% or more 

of the outstanding voting stock of a 

corporate broadcast licensee will be 

cognizable; 

b. Investment companies, as defined 

in 15 U.S.C. 80a–3, insurance 

companies and banks holding stock 

through their trust departments in trust 

accounts will be considered to have a 

cognizable interest only if they hold 

20% or more of the outstanding voting 

stock of a corporate broadcast licensee, 

or if any of the officers or directors of 

the broadcast licensee are 

representatives of the investment 

company, insurance company or bank 

concerned. Holdings by a bank or 

insurance company will be aggregated if 

the bank or insurance company has any 

right to determine how the stock will be 

voted. Holdings by investment 

companies will be aggregated if under 

common management. 

c. Attribution of ownership interests 

in a broadcast licensee that are held 

indirectly by any party through one or 

more intervening corporations will be 

determined by successive multiplication 

of the ownership percentages for each 

link in the vertical ownership chain and 

application of the relevant attribution 

benchmark to the resulting product, 

except that wherever the ownership 

percentage for any link in the chain 

exceeds 50%, it shall not be included 

for purposes of this multiplication. For 

purposes of paragraph i. of this note, 

attribution of ownership interests in a 

broadcast licensee that are held 

indirectly by any party through one or 

more intervening organizations will be 

determined by successive multiplication 

of the ownership percentages for each 

link in the vertical ownership chain and 

application of the relevant attribution 

benchmark to the resulting product, and 

the ownership percentage for any link in 

the chain that exceeds 50% shall be 

included for purposes of this 

multiplication. [For example, except for 

purposes of paragraph i. of this note, if 

A owns 10% of company X, which 

owns 60% of company Y, which owns 

25% of ‘‘Licensee,’’ then X’s interest in 

‘‘Licensee’’ would be 25% (the same as 

Y’s interest because X’s interest in Y 

exceeds 50%), and A’s interest in 

‘‘Licensee’’ would be 2.5% (0.1 × 0.25). 

Under the 5% attribution benchmark, 

X’s interest in ‘‘Licensee’’ would be 

cognizable, while A’s interest would not 

be cognizable. For purposes of 

paragraph i. of this note, X’s interest in 

‘‘Licensee’’ would be 15% (0.6 × 0.25) 

and A’s interest in ‘‘Licensee’’ would be 

1.5% (0.1 × 0.6 × 0.25). Neither interest 

would be attributed under paragraph i. 

of this note.] 

d. Voting stock interests held in trust 

shall be attributed to any person who 

holds or shares the power to vote such 

stock, to any person who has the sole 

power to sell such stock, and to any 

person who has the right to revoke the 

trust at will or to replace the trustee at 

will. If the trustee has a familial, 

personal or extra-trust business 

relationship to the grantor or the 

beneficiary, the grantor or beneficiary, 

as appropriate, will be attributed with 

the stock interests held in trust. An 

otherwise qualified trust will be 

ineffective to insulate the grantor or 

beneficiary from attribution with the 

trust’s assets unless all voting stock 

interests held by the grantor or 

beneficiary in the relevant broadcast 

licensee are subject to said trust. 

* * * * * 

g. Officers and directors of a broadcast 

licensee are considered to have a 

cognizable interest in the entity with 

which they are so associated. If any 

such entity engages in businesses in 


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756 Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 

addition to its primary business of 

broadcasting, it may request the 

Commission to waive attribution for any 

officer or director whose duties and 

responsibilities are wholly unrelated to 

its primary business. The officers and 

directors of a parent company of a 

broadcast licensee, with an attributable 

interest in any such subsidiary entity, 

shall be deemed to have a cognizable 

interest in the subsidiary unless the 

duties and responsibilities of the officer 

or director involved are wholly 

unrelated to the broadcast licensee, and 

a statement properly documenting this 

fact is submitted to the Commission. 

[This statement may be included on the 

appropriate Ownership Report.] The 

officers and directors of a sister 

corporation of a broadcast licensee shall 

not be attributed with ownership of that 

licensee by virtue of such status. 

h. Discrete ownership interests will be 

aggregated in determining whether or 

not an interest is cognizable under this 

section. An individual or entity will be 

deemed to have a cognizable investment 

if: 

1. The sum of the interests held by or 

through ‘‘passive investors’’ is equal to 

or exceeds 20 percent; or 

2. The sum of the interests other than 

those held by or through ‘‘passive 

investors’’ is equal to or exceeds 5 

percent; or 

3. The sum of the interests computed 

under paragraph h. 1. of this note plus 

the sum of the interests computed under 

paragraph h. 2. of this note is equal to 

or exceeds 20 percent. 

i.1. Notwithstanding paragraphs e. 

and f. of this Note, the holder of an 

equity or debt interest or interests in a 

broadcast licensee subject to the 

broadcast multiple ownership rules 

(‘‘interest holder’’) shall have that 

interest attributed if: 

A. The equity (including all 

stockholdings, whether voting or 

nonvoting, common or preferred) and 

debt interest or interests, in the 

aggregate, exceed 33 percent of the total 

asset value, defined as the aggregate of 

all equity plus all debt, of that broadcast 

licensee; and 

B.(i) The interest holder also holds an 

interest in a broadcast licensee in the 

same market that is subject to the 

broadcast multiple ownership rules and 

is attributable under paragraphs of this 

note other than this paragraph i.; or 

(ii) The interest holder supplies over 

fifteen percent of the total weekly 

broadcast programming hours of the 

station in which the interest is held. For 

purposes of applying this paragraph, the 

term, ‘‘market,’’ will be defined as it is 

defined under the specific multiple 

ownership rule that is being applied, 

except that for television stations, the 

term ‘‘market’’ will be defined by 

reference to the definition contained in 

the local television multiple ownership 

rule contained in paragraph (b) of this 

section. 

2. Notwithstanding paragraph i.1. of 

this Note, the interest holder may 

exceed the 33 percent threshold therein 

without triggering attribution where 

holding such interest would enable an 

eligible entity to acquire a broadcast 

station, provided that: 

i. The combined equity and debt of 

the interest holder in the eligible entity 

is less than 50 percent, or 

ii. The total debt of the interest holder 

in the eligible entity does not exceed 80 

percent of the asset value of the station 

being acquired by the eligible entity and 

the interest holder does not hold any 

equity interest, option, or promise to 

acquire an equity interest in the eligible 

entity or any related entity. For 

purposes of this paragraph i.2, an 

‘‘eligible entity’’ shall include any entity 

that qualifies as a small business under 

the Small Business Administration’s 

size standards for its industry grouping, 

as set forth in 13 CFR 121.201, at the 

time the transaction is approved by the 

FCC, and holds: 

A. 30 percent or more of the stock or 

partnership interests and more than 50 

percent of the voting power of the 

corporation or partnership that will own 

the media outlet; or 

B. 15 percent or more of the stock or 

partnership interests and more than 50 

percent of the voting power of the 

corporation or partnership that will own 

the media outlet, provided that no other 

person or entity owns or controls more 

than 25 percent of the outstanding stock 

or partnership interests; or 

C. More than 50 percent of the voting 

power of the corporation that will own 

the media outlet if such corporation is 

a publicly traded company. 

j. ‘‘Time brokerage’’ (also known as 

‘‘local marketing’’) is the sale by a 

licensee of discrete blocks of time to a 

‘‘broker’’ that supplies the programming 

to fill that time and sells the commercial 

spot announcements in it. 

1. Where two radio stations are both 

located in the same market, as defined 

for purposes of the local radio 

ownership rule contained in paragraph 

(a) of this section, and a party (including 

all parties under common control) with 

a cognizable interest in one such station 

brokers more than 15 percent of the 

broadcast time per week of the other 

such station, that party shall be treated 

as if it has an interest in the brokered 

station subject to the limitations set 

forth in paragraph (a) of this section. 

This limitation shall apply regardless of 

the source of the brokered programming 

supplied by the party to the brokered 

station. 

2. Where two television stations are 

both located in the same market, as 

defined in the local television 

ownership rule contained in paragraph 

(b) of this section, and a party 

(including all parties under common 

control) with a cognizable interest in 

one such station brokers more than 15 

percent of the broadcast time per week 

of the other such station, that party shall 

be treated as if it has an interest in the 

brokered station subject to the 

limitations set forth in paragraphs (b) 

and (e) of this section. This limitation 

shall apply regardless of the source of 

the brokered programming supplied by 

the party to the brokered station. 

3. Every time brokerage agreement of 

the type described in this Note shall be 

undertaken only pursuant to a signed 

written agreement that shall contain a 

certification by the licensee or permittee 

of the brokered station verifying that it 

maintains ultimate control over the 

station’s facilities including, 

specifically, control over station 

finances, personnel and programming, 

and by the brokering station that the 

agreement complies with the provisions 

of paragraph (b) of this section if the 

brokering station is a television station 

or with paragraph (a) of this section if 

the brokering station is a radio station. 

k. ‘‘Joint Sales Agreement’’ is an 

agreement with a licensee of a 

‘‘brokered station’’ that authorizes a 

‘‘broker’’ to sell advertising time for the 

‘‘brokered station.’’ 

1. Where two radio stations are both 

located in the same market, as defined 

for purposes of the local radio 

ownership rule contained in paragraph 

(a) of this section, and a party (including 

all parties under common control) with 

a cognizable interest in one such station 

sells more than 15 percent of the 

advertising time per week of the other 

such station, that party shall be treated 

as if it has an interest in the brokered 

station subject to the limitations set 

forth in paragraph (a) of this section. 

2. Every joint sales agreement of the 

type described in this Note shall be 

undertaken only pursuant to a signed 

written agreement that shall contain a 

certification by the licensee or permittee 

of the brokered station verifying that it 

maintains ultimate control over the 

station’s facilities, including, 

specifically, control over station 

finances, personnel and programming, 

and by the brokering station that the 

agreement complies with the limitations 

set forth in paragraph (a) of this section 

if the brokering station is a radio station. 

* * * * * 


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Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 757 

Note 4 to § 73.3555: 

Paragraphs (a) and (b) of this section 

will not be applied so as to require 

divestiture, by any licensee, of existing 

facilities, and will not apply to 

applications for assignment of license or 

transfer of control filed in accordance 

with § 73.3540(f) or § 73.3541(b), or to 

applications for assignment of license or 

transfer of control to heirs or legatees by 

will or intestacy, or to FM or AM 

broadcast minor modification 

applications for intra-market 

community of license changes, if no 

new or increased concentration of 

ownership would be created among 

commonly owned, operated or 

controlled broadcast stations. 

Paragraphs (a) and (b) of this section 

will apply to all applications for new 

stations, to all other applications for 

assignment or transfer, to all 

applications for major changes to 

existing stations, and to all other 

applications for minor changes to 

existing stations that seek a change in an 

FM or AM radio station’s community of 

license or create new or increased 

concentration of ownership among 

commonly owned, operated or 

controlled broadcast stations. 

Commonly owned, operated or 

controlled broadcast stations that do not 

comply with paragraphs (a) and (b) of 

this section may not be assigned or 

transferred to a single person, group or 

entity, except as provided in this Note, 

the Report and Order in Docket No. 02– 

277, released July 2, 2003 (FCC 02–127), 

or the Second Report and Order in MB 

Docket No. 14–50, FCC 16–107 (released 

August 25, 2016). 

Note 5 to § 73.3555: 

Paragraphs (b) and (e) of this section 

will not be applied to cases involving 

television stations that are ‘‘satellite’’ 

operations. Such cases will be 

considered in accordance with the 

analysis set forth in the Report and 

Order in MM Docket No. 87–8, FCC 91– 

182 (released July 8, 1991), in order to 

determine whether common ownership, 

operation, or control of the stations in 

question would be in the public interest. 

An authorized and operating ‘‘satellite’’ 

television station, the digital noise 

limited service contour of which 

overlaps that of a commonly owned, 

operated, or controlled ‘‘non-satellite’’ 

parent television broadcast station may 

subsequently become a ‘‘non-satellite’’ 

station under the circumstances 

described in the aforementioned Report 

and Order in MM Docket No. 87–8. 

However, such commonly owned, 

operated, or controlled ‘‘non-satellite’’ 

television stations may not be 

transferred or assigned to a single 

person, group, or entity except as 

provided in Note 4 of this section. 

Note 6 to § 73.3555: 

Requests submitted pursuant to 

paragraph (b)(2) of this section will be 

considered in accordance with the 

analysis set forth in the Order on 

Reconsideration in MB Docket Nos. 14– 

50, et al. (FCC 17–156). 

Note 7 to § 73.3555: 

The Commission will entertain 

applications to waive the restrictions in 

paragraph (b) of this section (the local 

television ownership rule) on a case-bycase basis. In each case, we will require 

a showing that the in-market buyer is 

the only entity ready, willing, and able 

to operate the station, that sale to an 

out-of-market applicant would result in 

an artificially depressed price, and that 

the waiver applicant does not already 

directly or indirectly own, operate, or 

control interest in two television 

stations within the relevant DMA. One 

way to satisfy these criteria would be to 

provide an affidavit from an 

independent broker affirming that active 

and serious efforts have been made to 

sell the permit, and that no reasonable 

offer from an entity outside the market 

has been received. 

We will entertain waiver requests as 

follows: 

1. If one of the broadcast stations 

involved is a ‘‘failed’’ station that has 

not been in operation due to financial 

distress for at least four consecutive 

months immediately prior to the 

application, or is a debtor in an 

involuntary bankruptcy or insolvency 

proceeding at the time of the 

application. 

2. If one of the television stations 

involved is a ‘‘failing’’ station that has 

an all-day audience share of no more 

than four per cent; the station has had 

negative cash flow for three consecutive 

years immediately prior to the 

application; and consolidation of the 

two stations would result in tangible 

and verifiable public interest benefits 

that outweigh any harm to competition 

and diversity. 

3. If the combination will result in the 

construction of an unbuilt station. The 

permittee of the unbuilt station must 

demonstrate that it has made reasonable 

efforts to construct but has been unable 

to do so. 

* * * * * 

Note 9 to § 73.3555 

Paragraph (a)(1) of this section will 

not apply to an application for an AM 

station license in the 1605–1705 kHz 

band where grant of such application 

will result in the overlap of the 5 mV/ 

m groundwave contours of the proposed 

station and that of another AM station 

in the 535–1605 kHz band that is 

commonly owned, operated or 

controlled. 

* * * * * 

■ 3. Amend § 73.3613 by revising 

paragraph (d)(2) to read as follows: 

§ 73.3613 Filing of contracts. 

* * * * * 

(d) * * * 

(2) Joint sales agreements: Joint sales 

agreements involving radio stations 

where the licensee (including all parties 

under common control) is the brokering 

entity, the brokering and brokered 

stations are both in the same market as 

defined in the local radio multiple 

ownership rule contained in 

§ 73.3555(a), and more than 15 percent 

of the advertising time of the brokered 

station on a weekly basis is brokered by 

that licensee. Confidential or 

proprietary information may be redacted 

where appropriate but such information 

shall be made available for inspection 

upon request by the FCC. 

* * * * * 

[FR Doc. 2017–28329 Filed 1–5–18; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 660 

[Docket No. 170627602–7999–02] 

RIN 0648–BG98 

Magnuson-Stevens Act Provisions; 

Fisheries Off West Coast States; 

Pacific Coast Groundfish Fishery; 

Pacific Whiting; Pacific Coast 

Groundfish Fishery Management Plan; 

Amendment 21–3; Trawl 

Rationalization Program 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Final rule. 

SUMMARY: NMFS issues this final rule to 

change the management of the Pacific 

whiting at-sea sectors’ (i.e., the 

Mothership [MS] and Catcher/Processor 

[C/P] sectors) allocations for 

darkblotched rockfish and Pacific ocean 

perch (POP) by managing the allocations 

as set-asides rather than as total catch 

limits, under the authority of the Pacific 

Coast Groundfish Fishery Management 

Plan (FMP), and the Magnuson-Stevens 

Fishery Conservation and Management 

Act (Magnuson-Stevens Act). This rule 

revises regulations in accordance with 


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