US TV stations sue regulator

The National Association of Broadcasters (NAB) has resorted to legal action against the US regulators over the ban on TV stations sharing advertising staff in what are called joint sales agreements (JSA's), the trade group said on Friday.

Reuters quoted Nexstar Broadcasting Group Inc, saying NAB has also challenged the 31 March decision of the Federal Communications Commission (FCC) to bar broadcast companies from controlling two or more TV stations in a market through joint ad sales.

In both lawsuits, the US Court of Appeals for the District of Columbia Circuit had been asked to overturn the FCC ruling.

Under the new rules, approved in a 3-2 FCC vote along political party lines, broadcasters were considered to have an ownership interest in any station where they sold 15 per cent or more of weekly advertising time. FCC rules typically bar broadcasters from owning two TV stations in one local market.

Republican FCC commissioners and broadcasters had argued that agreements of the type were vital to financially strapped local television stations, which could save cash on advertising sales and instead use it on programming.

Meanwhile, NAB's executive vice president, Dennis Wharton said in a statement, "NAB believes that a fact-based examination of today's marketplace would show that FCC ownership restrictions against free and local broadcasters are outdated in a world of national pay TV giants."

He added, "These rules – some of which have not been altered since 1975 – place broadcasters at a competitive disadvantage as we strive to continue delivering news, entertainment and lifeline programming to local communities across America."

NAB argues the FCC violated its congressional mandate by failing to complete its 2010 quadrennial review, and did not justify the joint sales agreement change.

Broadcasting & Cable reported Wharton as saying after the JSA vote that it was disappointing the FCC would take this action without first completing its 2010 statutorily mandated media-ownership review.

He added, as the record before the Commission clearly showed, the public interest would not be served by this arbitrary and capricious decision, which under the law was not permitted.