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Ruling on Monday to decide fate for shared service agreements

FCCTVPIcOn Monday, the Federal Communications Commission will vote and decide the fate of television stations across the country that are contracted in shared service agreements.

The proposed rule would make it so that broadcasters in a given market wouldn’t be able to jointly negotiate retransmission fees with cable providers. Additionally, stations that handle more than 15 percent of ad sales for another station would be treated as the owner. Those stations would then be given two years to end the shared service agreements or else be found in violation, although waivers could be evaluated on a case-by-case basis.

Generally, a larger station often picks up operations for a smaller, struggling station. The practice has often helped stations stay afloat that otherwise would have gone under. But watchdog groups like the Free Press, Public Knowledge and the Institute for Public Representation have argued that such agreements restrict competition and diversity.

Ric Gorman, owner of KHSL-TV in Chico, Calif., told The Wall Street Journal if the station was required to unwind its shared service agreement with neighboring KNVN-TV, it would place both stations “under severe financial stress.” Meanwhile, Bloomberg reported that Sinclair Broadcast Group gets roughly 20 percent of its revenue from sharing arrangements.  Ajit Pai, a Republican FCC commissioner, told Bloomberg that if the FCC were to rule in favor of the new requirements, it would be a “job-killer that would result in less news programming, less diversity and more stations going dark.”

As previously reported by inVocus, Bob Papper, industry vet and  distinguished professor emeritus of journalism at Hofstra University, is in agreement with the critics of the proposal who say that all rules applied should be done strictly case-by-case, with each station being evaluated on its benefits to the community and its long-term viability. “You’ve got consumer groups on the one hand saying this is terrible because we’re eliminating newsrooms and eliminating editorial voice, and you have industry on the other side saying this is saving newsrooms,” Papper previously told inVocus.

According to WSJ.com, the proposal “falls along party lines,” with two Republicans not supporting the proposal and the swing votes lying among the Democrats. But the issue isn’t black and white. Congressional Rep. Richard Neal, a Massachusetts Democrat, reportedly wrote a letter to the FCC requesting that stations with existing joint sales agreements be grandfathered in.

“I worry about blanket rules, I guess, because the world just tends not to be that simple,” Papper told inVocus.

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