FCC Releases Report and Order Concluding Its 2018 Quadrennial Regulatory Review
After receiving a mandated deadline from the U.S. Court of Appeals for the D.C. Circuit, the FCC presented its long-awaited Christmas gift to the broadcast industry with the December 26 release of the 2018 Quadrennial Review Report and Order (R&O"). By a 3-2 vote, with both Republican commissioners dissenting, the R&O found that the FCC's existing broadcast ownership rules, with some minor adjustments, remain necessary and in the public interest. This FCC action brings to a close yet another chapter in the FCC's Sisyphean saga of quadrennial reviews and resultant litigation.
The FCC opted to retain outright the Dual Network Rule, finding that the existing prohibition against common ownership of two or more affiliates of the Big Four broadcast networks (ABC, CBS, Fox, and NBC) in a market remains necessary. The majority opinion reasoned that loosening the rule to allow a combination between Big Four broadcast networks would lessen competition for advertising revenue and likely subsequently result in the remaining networks paying less attention to viewer demand for innovative, high-quality programming." Further, the Democratic majority of Commission found that the Dual Network Rule increases the bargaining power of local broadcast affiliates and empowers them to influence network programming decisions in ways that better serve the interests of their local communities. Rather than contract the Dual Network Rule, the FCC's R&O expands it by preventing the use of LPTV and digital multicast affiliations to circumvent the existing embargo on acquiring a second top-four ranked television station in a market.
By an equally-divided Commission, the FCC also voted to keep in place the Local Radio Ownership Rule, with minor adjustments aimed at making permanent the long-employed interim contour-overlap methodology used to determine ownership limits in areas outside the boundaries of defined Nielsen Audio Metro markets and in Puerto Rico.
The FCC also adjusted the methodology used under the Local Television Ownership Rule to determine station ranking within a market. Specifically, a television station's audience share ranking in a Nielsen Designated Market Area (DMA") will now be determined based on the combined audience share of all free-to-consumer, non-simulcast multicast programming airing on streams owned, operated, or controlled by that station as measured by Nielsen Media Research or by any comparable audience ratings service." Additionally, the Commission specified a definite time period over which ratings data should be averaged and updated the relevant daypart used to make audience share and ratings determinations.
To the limited extent that the R&Omakes any substantive updates to the rules, the changes won't take effect right away. The Office of Management and Budget must first review any changes that involve information collections" while the rest will become effective 30 days after the R&O first appears in the Federal Register. If you have any questions or would like assistance with complying with these new rules, please contact your FHH attorney. Until then, we wish you a very Happy New Year!