Monday, November 23, 2009

FCC keeps Hawaii TV dispute on restricted basis

The case of the three-television station shared services agreement in Honolulu has been challenged before the FCC on regulatory grounds in a restricted proceeding.

The FCC has decided to keep it that way, preventing it from becoming a matter for public debate, at least where the FCC itself is concerned.

The Shared Services Agreement in Honolulu brings together Raycom’s NBC KHNL-TV and MyNetworkTV KFVE-TV with MCG Capital’s CBS KGMB-TV. The two companies have since swapped the calls and programming of the MNT and CBS stations, leaving the programming of the two majors directly under Raycom, while MCG takes primary care of the MNT programming.

Among recent developments was the FCC treatment of a letter from Rep. Neil Abercrombie (D-HI). Abercrombie had written, “The merger cannot help but lead to the loss of editorial diversity and may violate FCC ownership rules. Three stations will be combining their news and editorial functions, which will lead to fewer perspectives in the news and fewer outlets for the public.”

The FCC told Abercrombie that any ex parte contributions to a restricted proceeding must be served on all appropriate parties and that the fact that this step was taken must be clearly indicated on the submission or its cover letter.

Attorney John Griffith Johnson Jr. of Paul, Hastings, Janofsky & Walker LLP has been resisting efforts by Media Council Hawaii, the original complainant to the FCC, to turn the matter into an ex parte permit-but-disclose proceeding so that public comment could be brought to bear on the matter.

Johnson said MCH failed to demonstrate a good reason for changing the status of the proceeding, arguing, "Nothing is to be gained by allowing this proceeding to be debased by converting it into a form of 'American Idol'-style of popularity contest, with the contesting parties each vying to fill the record with comments from the public and from elected representatives in favor of their respective positions on the merits and outcome.”

He said that since MCH is seeking license revocations, or a “death sentence,” for both television companies, the outcome should not in any way be influenced “by underinformed commentary and opinions from uninvolved third parties that have no relevance to the specific legal issues presented for decision.”

RBR-TVBR observation: The rules, as far as we know, allow a station licensee to farm out certain back room operations, to farm out advertising sales operations, and to farm out responsibility for up to 15% of the programming schedule. That amounts to just over three-and-a-half hours daily for a 24/7 station – plenty of time to produce a nice chunk of local news programming. Raycom has steadfastly maintained that the SSA in Honolulu is within the parameters of the rules.

The decision to keep the matter restricted means that the focus probably will be on the specific merits of this specific case.

If the FCC wants to change the rules, that is an entirely different type of proceeding, definitely the type in which stakeholders and the public will be invited to participate.

Here’s how we handicap the Honolulu situation: We think Raycom will win on the merits, but the whole publicity-generating issue may very well lead to intense scrutiny of television SSAs and a possible rule-making attempt as part of next year’s quadrennial review.

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