Rules Adopted in the Quadrennial Review Order

Rules Adopted in the Quadrennial Review Order
Adopted December 18, 2007: Word | Acrobat

• Newspaper/Broadcast Cross-Ownership Rule - The Quadrennial Review Order declined to reinstate the cross-media limits, adopted in the 2002 Order. The Commission instead modestly relaxed the newspaper/broadcast cross-ownership prohibition.

  • The new rule adopts a presumption that a waiver of the cross-ownership rule is not inconsistent with the public interest (i.e., may be permissible) in the following circumstances: when a daily newspaper seeks to combine with a radio station in a top 20 designated market area (“DMA”), or when a daily newspaper seeks to combine with a television station in a top 20 DMA and (1) the television station is not ranked among the top four stations in the DMA and (2) at least eight independent “major media voices” remain in the DMA. A “major media voice” includes full-power commercial and noncommercial television stations and major newspapers. The Commission concluded that such sources are generally the most important and relevant outlets for news and information in local markets.

  • For markets smaller than the top 20 DMAs, the Commission adopted a presumption that it is inconsistent with the public interest for an entity to own newspaper/broadcast combinations and emphasized that it therefore is unlikely to approve such transactions. The Commission will reverse the negative presumption in two limited circumstances: when the proposed combination involves a failed or failing station or newspaper, or when the combination results in a new source of a significant amount of local news in a market. The Commission will require any applicant attempting to overcome the negative presumption to demonstrate by clear and convincing evidence that the merged entity will increase the diversity of independent news outlets and increase competition among independent news sources in the relevant market.

  • No matter which presumption applies, the Commission’s analysis of the following four factors will inform its review of a proposed combination: (1) the extent to which cross-ownership will serve to increase the amount of local news disseminated through the affected media outlets in the combination; (2) whether each affected media outlet in the combination will exercise its own independent news judgment; (3) the level of concentration in the DMA; and (4) the financial condition of the newspaper or broadcast station, and if the newspaper or broadcast station is in financial distress, the owner’s commitment to invest significantly in newsroom operations.

  The Commission retained the other media ownership rules currently in effect.

• Local Television Ownership Limit – The Commission retained the local television ownership rule. Under that rule, a single entity may own two television stations in the same local market if (1) the so-called “Grade B” contours of the stations do not overlap; or (2) at least one of the stations in the combination is not ranked among the top four stations in terms of audience share and at least eight independently owned and operating commercial or non-commercial full-power broadcast television stations would remain in the market after the combination.

• Local Radio Ownership Limit - The Commission retained the local radio ownership rule. That rule embodies the numerical caps set by Congress in 1996. The caps are based on a sliding scale that increases with the size of the local market. As a general rule, one entity may own (a) up to five commercial radio stations, not more than three of which are in the same service (i.e., AM or FM), in a market with 14 or fewer radio stations; (b) up to six commercial radio stations, not more than four of which are in the same service, in a market with between 15 and 29 radio stations; (c) up to seven commercial radio stations, not more than four of which are in the same service, in a radio market with between 30 and 44 radio stations; and (d) up to eight commercial radio stations, not more than five of which are in the same service, in a radio market with 45 or more radio stations.

• The National Television Ownership Limit - In 2004, Congress enacted legislation that permits a single entity to own any number of television stations on a nationwide basis as long as the station group collectively reaches no more than 39% of the national TV audience. The statute also excluded the national television cap from the ownership rules required to be reviewed in the quadrennial review proceedings. Accordingly, the national television cap was not under review in the 2006 quadrennial review proceeding. The Commission did, however, consider whether it could review the 50% UHF discount, which applies a 50% discount in calculating a UHF station’s audience reach for purposes of applying the national television ownership cap. The Commission concluded, in the Quadrennial Review Order, that the 2004 legislation precludes it from reviewing the 50% UHF discount in quadrennial review proceedings.

• Radio/Television Cross-Ownership Limit – The Quadrennial Review Order retained the radio/television cross-ownership limit. Under that rule, one company may own in a single market: one TV station (two TV stations if permitted by the local TV ownership rule) and one radio station regardless of total market size; or if at least 10 independent media voices (i.e., broadcast facilities owned by different entities) would remain after the merger, up to two TV stations and up to four radio stations; or if at least 20 independently owned media voices would remain post-merger, up to two TV stations and up to six radio stations or one TV station and up to seven radio stations. Parties must also comply with the local radio ownership rule and the local TV ownership rule.

• Dual Network Ban – The Quadrennial Review Order retained the dual network ban. That rule permits common ownership of multiple broadcast networks but prohibits a merger of the “top four” networks, i.e., ABC, CBS, Fox, and NBC.

  Multiple challenges to the Quadrennial Review Order currently are pending in the U.S. Court of Appeals for the Ninth Circuit, which will decide which court will ultimately hear these challenges.