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FCC ruling closing Joint Sales Agreement loophole includes public interest waiver

(March 31, 2014) The Federal Communications Commission today adopted a provision that closes a loophole in its TV ownership rules that it says "ensures competition, localism, and diversity" in a single broadcast market. The practice of allowing Joint Sales Agreement, where the owner of one TV station was allowed to selling advertising for another station, led to stations being able to effectively operate as owners of multiple stations in a market.

Critics charged that the JSAs have been used by some broadcasters to essentially accumulate ownership of multiple TV stations and avoid selling them to comply with FCC rules. A similar loophole for JSAs was eliminated for radio stations, and now the ruling was extended to television properties.

The National Association of Black Owned Broadcasters applauded the FCC for allowing broadcasters to apply for a waiver if the operator could demonstrate the JSA already in existence served the public interest. The provision is similar to a remedy that the organization had earlier suggested.

The Commission ruled that parties to existing TV JSAs will have two years to come into compliance with the applicable local ownership limits. Waiver requests will be considered on a case-by-case basis, and must show that strict compliance with the rule would be inconsistent with the public interest.

"The new rule has two aspects that might benefit minority entrepreneurs," said Jim Winston, NABOB executive director.  "First, JSA operators might be able to demonstrate that the public interest will benefit from a waiver, because a minority owner will be able to develop a station into a successful business operation bringing diversity of ownership to a market."

"Second, if the JSA operator chooses not to make a public interest showing to obtain a waiver, the station...might be placed on the market and a minority owner might be in position to purchase the station."

FCC Chairman Tom Wheeler, and Commissioners Mignon Clyburn and Jessica Rosenworcel approved the ruling, with Commissioners Ajit Pai and Michael O'Rielly dissenting.

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