Consumers access television through two principal types of media. The first is through local broadcast television stations, which provide free over- the-air programming for reception in consumers’ households by television antennas. Many local stations are affiliated with major broadcast networks, while others are independent stations that are not affiliated with a broadcast network. The second platform for accessing television services is through MVPDs, which are cable, satellite, or telecommunications companies that provide services through a wired platform or via satellite and charge their customers a subscription fee. MVPDs’ programming includes so-called “cable” networks, such as CNN or ESPN, and also the local stations, which they carry or retransmit through agreements with the local stations. These two forms of media have some similarities but also key differences, as described in table 1. Television advertising time may be sold at either the national or local level. National advertising time is sold by broadcast or cable networks— both of which produce and aggregate programming that will be aired nationally—to advertisers looking to reach audiences across the country. The advertisements are inserted with the programming that broadcast and cable networks provide to local stations and MVPDs, respectively. In contrast, local advertising time is sold to companies wanting to reach a local audience. This advertising time may be sold to local businesses— such as a car dealership or restaurant—or it may be sold to a national business—such as a car manufacturer or a large restaurant chain—that is purchasing local advertising time to reach a particular local audience. While local stations or MVPDs often directly sell local advertising time to local businesses, national advertising sales representatives may arrange the sale of local advertising time to national businesses. The amount of advertising time available for a local station to sell during a given hour depends on the type of program airing at that time. Specifically, a local station sells all of the advertising time during the programming it produces, such as local news. In our 2014 report on media ownership, we found that advertising aired during local news in particular represents a substantial portion of a broadcast station’s revenue. A local station also sells a portion of the advertising time during programming it receives from its affiliated broadcast network, generally about 2 ½ to 3 minutes per hour, and may sell a portion of the time during syndicated programming, which is programming such as game shows and reruns produced nationally but aired on a station-by- station basis. Advertising on cable networks is mostly sold by the cable networks themselves; however, MVPDs also sell a small portion of the advertising time on the cable networks that they distribute, about 2 minutes per hour according to MVPDs we spoke to for this report. No advertising time on the local stations that MVPDs retransmit is available to MVPDs to sell, nor do MVPDs sell advertising time on premium cable channels that do not carry advertising, such as HBO. Table 2 presents example scenarios of how local and national advertising is sold and shown through both local stations and MVPDs. This table does not include information about how joint sales agreements among local stations and interconnects among MVPDs affect local advertising sales, which is discussed later in the report. Some broadcast stations and MVPDs have entered into agreements regarding the joint-selling of advertising, which have become more prevalent in recent years, according to media-industry stakeholders we spoke to. JSA: An agreement between local stations in which one station is authorized to sell advertising time on the other station. We refer to the station selling the advertising as the “sales-agent station” and the station that turns over its advertising time to be sold by the other station as the “customer-station.” JSAs are specifically defined by FCC rules. Interconnect: An arrangement among MVPDs in the same market in which one MVPD—typically the largest MVPD in the market—sells a portion of the local advertising time for all MVPDs participating in the interconnect and simultaneously distributes that advertising across all such MVPDs in a coordinated manner. Although interconnects were traditionally an arrangement between cable providers, in recent years, telecommunications and satellite providers have also participated in them. Interconnects are not defined by FCC. Some local stations also have other agreements, called shared service agreements, for sharing other functions such as news production, administrative, and operational services. For example, stations can enter into an agreement to share news-gathering resources, such as helicopters, reporters, and cameramen, or can enter into an agreement wherein one station produces another station’s local news. Our 2014 report on media ownership found that stations may have several agreements in place, such as a shared service agreement and JSA, or a single agreement that includes components typical of different types of agreements. Stations are not required to disclose shared service agreements in their public files. However, in 2014, FCC proposed new rules that would define shared service agreements and require their filing. In addition to television, there are a number of other outlets competing for advertisers looking to purchase advertisements in local markets, including radio, print media (such as newspapers and magazines), out-of-home advertising (such as billboards or advertising on buses), and Internet- based media (such as advertising through mobile devices or on websites). Local media advertising generated approximately $136 billion in revenue in 2014, a slight decrease from the $139 billion (2014 dollars) in 2011, according to data from BIA/Kelsey, a media research and consulting firm. The geographic scope of local media markets are defined by Nielsen, a company that measures television viewership—a critical metric for determining advertising rates. Nielsen has divided the country into 210 local television markets, known as DMAs, ranked in size from the largest (New York, N.Y.) to smallest (Glendive, Mont.). Based on information from the stakeholders we interviewed about these markets, we will refer to the 25 largest markets (those ranked 1 through 25) as “large” markets, those ranked 26 through 100 as “medium” markets, and those ranked 101 through 210 as “small” markets. FCC assigns licenses for local stations to use the airwaves on the condition that licensees serve the public interest. FCC’s regulation of local stations is guided by long-standing policy goals to encourage competition, diversity, and localism. To advance these policy goals, and based on statutory requirements to serve the public interest, FCC has implemented rules that limit the number of stations an entity can own or control locally and nationally. Under FCC’s ownership rules, a single entity can own two local stations in the same DMA if the relevant service contours—the boundary of the area a station serves—do not overlap or, if they do overlap (1) at least one of the stations is not ranked among the top-four stations in terms of audience share and (2) at least eight independently owned and operating full-power commercial or noncommercial television stations would remain in the DMA. Because larger markets tend to have more stations, this limit tends to affect smaller markets more than larger ones, since an owner of a local station interested in acquiring a second station in a small market would be less likely to be able to meet these criteria. As previously discussed, FCC is required by statute to review its media ownership rules every 4 years and determine whether any such rules remain necessary in the public interest. FCC’s most recent review related to its media ownership rules was completed in 2008. FCC has also noted that arrangements other than outright ownership could exert similar influence as ownership. To address such issues, FCC developed attribution rules to determine what interests should be counted when applying these media ownership limits. In 2004, FCC sought comment on whether the use of certain television JSAs warranted attribution—that is whether the customer-station should be counted or attributed to the sales-agent station that sells advertising for that station for the purpose of applying FCC’s media ownership limits. FCC sought additional comment on this issue in its 2010 media ownership review. In 2014, FCC promulgated a final rule declaring that if a JSA provides that one station sells more than 15 percent of the weekly advertising time of another station located in the same market, both stations will be counted toward the ownership limit of the owner of the station selling the advertising (i.e., the sales-agent station). The rule is currently in effect; stations with JSAs existing at the time FCC issued the rule that result in violations of FCC’s media ownership limits have until October 2025 to amend or void their agreements or otherwise come into compliance with FCC’s ownership rules. As previously discussed, the rule is subject to ongoing litigation. FCC also has rules for stations to file certain documents with FCC and to maintain public inspection files that include documentation about the licensing and operation of each station. According to FCC, the purpose of the public inspection files is to make information more readily available that the public already has a right to access so that the public will be encouraged to play a more active part in dialogue with broadcast licensees. These rules include requirements for stations to file JSAs with FCC if the JSA is attributable under FCC’s attribution rules and to file all current JSAs, regardless of attribution status, in the stations’ public inspection files. Local television stations’ public inspection files are available online through FCC’s website. We found 86 JSAs among local-station owners in our review of JSAs available from stations’ online public inspection files. A little more than a third of DMAs had a JSA, with 98 percent of JSAs we identified being among stations in medium or small markets (see table 3). The 86 JSAs we reviewed generally covered similar terms. We identified the following key provisions in our review of these agreements: Advertising time: The JSAs specified the advertising that the sales- agent will sell. In most cases, this included all of the customer- station’s advertising time, including local advertising that airs during programming of the local station as well as advertising on the customer-station’s website.