Carr Promises Scrutiny of ABC Negotiations, Levin Eyes Action Against Fox

"The approach ABC is apparently taking in these negotiations concerns me,” Carr told Disney CEO Bob Iger in a letter Saturday. CNN's Brian Stelter obtained the letter and posted it Monday on X. The FCC “clearly has an interest in and the authority to facilitate the proper functioning of the retransmission consent process and to ensure that local broadcast TV stations retain the economic and operational independence necessary to meet their public interest obligations,” Carr wrote. “If the network/affiliate relationship is jeopardizing either of those objectives, then the FCC will be compelled to act.”

Networks taking a percentage of station retransmission consent fees to underwrite their direct-to-consumer streaming services while keeping their most lucrative programming exclusively for those streaming services is “antithetical to the will of Congress,” Carr added. “I will be monitoring the outcome of your ongoing discussions with local broadcast TV stations to ensure that those negotiations enable local broadcast TV stations to meet their federal obligations and serve the needs of their local communities.” Broadcast attorneys and interest groups have suggested that Carr's promises of FCC scrutiny of the networks are politically motivated and an extension of President-elect Donald Trump's repeated threats against them (see 2412020050).

Broadcast station groups have long complained of uneven negotiations with networks on reverse retrans fees and streaming content, and unsuccessfully pressed the FCC under current Chairwoman Jessica Rosenworcel to reopen a docket on reclassifying linear streaming services as virtual MVPDs. Historically, Carr seemed in agreement with Rosenworcel that such a reclassification is outside the FCC’s authority. The agency “needs to be very, very careful to hew to the letter of the law that Congress has written,” Carr said in October 2023 in response to a press question about a letter from Democratic lawmakers urging the refreshing of docket 14-261 to gather information on the dynamic between broadcasters and streaming (see 2310190062). That a policy is outdated “does not itself give rise to FCC authority,” Carr added at the time.

The letter to Iger doesn’t mention reclassifying virtual MVPDs. Instead, it focuses on the "growing imbalance" between networks and stations related to streaming and asserts the FCC’s authority over retransmission consent negotiations. Carr didn't comment on whether his stance on the FCC's authority over virtual MVPDs has shifted. Americans “no longer trust” the national broadcast networks but hold positive views of their local stations, Carr wrote. “When we talk about trust in media,” it's “important to draw a distinction between national programming outlets -- like ABC -- and the many local broadcast TV stations that are working to serve their local communities.” ABC and NAB didn’t comment. NBC, CBS and Fox didn't respond to queries about whether they received similar letters.

Levin and WTXF

Analyst Levin, a former FCC chief of staff, suggested that Rosenworcel could complicate agency action against broadcast licensees over their news content by designating the license of Fox’s WTXF-TV Philadelphia for hearing (see 2411190045). During interviews Monday, broadcast attorneys told us they are unsure that would be effective.

Should Rosenworcel issue a hearing designation order (HDO), “we feel confident that [Carr] would find a way to reverse the decision and drop the petition against Fox,” wrote Levin, now with New Street Research, in an email to subscribers Friday. “But in doing so he is likely to undercut, both politically and legally, his own case against the news divisions of the other three networks.” Pillsbury broadcast attorney Scott Flick emailed that Carr “would have little difficulty arguing that the distinction between the FOX proceedings and those of the other networks is where the questionable speech occurred.”

Levin said in the email that he believed it was unlikely Rosenworcel would make such a move, but Media and Democracy Project, the group behind the petition against WTXF, amplified his note Monday. MAD has argued that the station’s parent company and leadership don’t meet the agency’s character requirements for FCC licensees. They point to a 2023 Delaware Superior Court finding that Fox broadcast untrue statements about Dominion Voting Systems and the 2020 election.

Fox has argued that the MAD petition runs counter to FCC precedent and that the broadcaster hasn’t violated the agency's character standards. The petition has been stalled at the agency for more than a year, as has renewal of WTXF’s license. “Rosenworcel is obviously troubled by Carr’s efforts to use a transaction process to affect news coverage,” wrote Levin, pointing to the chairwoman's statements condemning the idea of FCC action against broadcast licenses (see 2410080056). “Nonetheless, we suspect that Rosenworcel is content to do nothing to affect Carr’s efforts.”

Carr, Fox, NAB and the FCC didn’t comment.

Designating WTXF for hearing would unlikely present much of an obstacle for future FCC action on news distortion and other complaints against the networks, Flick and other attorneys told us. For example, under FCC rules, Carr could simply rescind an HDO, Flick said. The complaints against the networks are focused on conduct that occurred during broadcast programming, while much of the Fox content named in the court finding that MAD cited occurred on the company’s cable network, Flick added. A hearing designation "might provide Carr an opportunity to more sharply draw a distinction between First Amendment protections for cable programmers versus [those] of broadcasters.” One broadcast attorney said that dismissing the MAD petition could be part of setting a precedent that punishing broadcasters for their content is outside FCC authority.

MAD has also been vocal about differences between its complaint against Fox and recent complaints about the networks, which have largely been filed by the conservative Center for American Rights. MAD's petition "is easily distinguishable from routine complaints by politicians about the political slant of a particular channel or network's political slant or classic journalistic prerogatives, like what questions to ask in a debate and how to edit an interview,” MAD said in a November FCC filing.

In an interview, Levin told us that even if Carr could legally do away with an HDO against Fox while pursuing action against the broadcast networks, the disparity of treatment could cause problems. While WTXF would likely continue operating with a license hearing dragging on, an HDO related to the CBS complaint would effectively kill the $8 billion deal for Skydance to buy Paramount Global. “For Carr to say ‘I’m going to look at one’ but decline to look at the other creates a political problem,” Levin said.