Simington Proposes Cap on Network Fees, Condemns Network 'Fake News'

“The mainstream media is not a neutral institution, but a political weapon used to silence, smear, and control,” Simington and Wax wrote. “It’s time to hit fake news where it hurts most: financially.” The op-ed is a tonal shift for Simington, who recently hired Wax, a high-profile Republican activist and fiery former head of the New York Young Republican Club. Several attorneys told us the op-ed listing a chief of staff in the byline with a commissioner is unusual for a commissioner's aide.

Since hiring Wax, Simington has become much more active on social networks and in making media appearances (see 2504300036). Two months ago, Simington told the NAB State Leadership Conference that the FCC shouldn’t act as a “Ministry of Truth,” and its proceedings on broadcaster public interest obligations shouldn’t concern “trying to make local news speak with a single point of view.”

In Thursday’s column, he and Wax wrote that networks have “abandoned any pretense of objectivity, acting instead as political operatives with studios,” and condemned their reporting as “woke talking points” and anti-Trump propaganda. “Make no mistake: this is a fight for the soul of the American media. National networks have shown they cannot be trusted.”

The FCC should cap the revenue that broadcast affiliates pay networks -- sometimes called “reverse retrans” fees – at 30% of broadcaster retransmission consent revenue, wrote Simington and Wax. An FCC official told us the 30% limit is a starting position and could change if an actual rulemaking occurs. “Instead of investing in local reporters, meteorologists, and producers, local broadcasters’ funds are siphoned to bloated national newsrooms that churn out anti-Trump propaganda and woke talking points,” the op-ed said.

The proposal would lead to broadcast programming that better reflects local communities and “restore breathing room for independent broadcasters,” it said. “This reform is in the same spirit as President Trump’s efforts to break up Big Tech, bring back American manufacturing, and take on the pharmaceutical lobby. It’s a populist solution to a top-down problem.”

The column doesn’t specify which laws would give the FCC authority to cap affiliation agreements, but proponents of the idea pointed to language in Section 303 of the Communications Act and the 1943 U.S. Supreme Court case U.S. v. NBC, which they said gives the agency broad authority to regulate network relationships. An attorney representing a broadcast network told us he's “skeptical” that those citations give the FCC power over private contracts between stations and networks.

Simington and Wax also anticipated pushback: “Critics will claim this is ‘government interference.’ That’s nonsense. The airwaves are public property to which the government grants broadcast licenses to companies that serve the public interest.”

The op-ed didn't suggest applying a network fee cap differently to different networks, but FCC and broadcast officials familiar with the proposal said there have been discussions about crafting the policy in a way that would apply to ABC, CBS and NBC, but not Fox. That could be done by setting the cap at a specific rate, or possibly by creating a carve-out. Fox sends its affiliates far less programming than other networks, so applying the cap based on programming hours could be one such method, broadcast attorneys told us. The FCC has targeted the other top-four networks with investigations and warning letters but hasn’t done so with Fox. After taking office, FCC Chairman Brendan Carr reinstated previously dismissed complaints against ABC, CBS and NBC, but not one challenging Fox.

First Amendment experts said the proposal could be shaky on constitutional grounds. “One of the most basic principles of the First Amendment is that individual speakers like CBS cannot be singled out for punishment or regulation based on their messaging or content,” said the Freedom Forum’s Kevin Goldberg. Simington “may say that he simply wants to regulate the retransmission consent process for all the right reasons and within the FCC’s regulatory authority, but the rest of his piece indicates an unconstitutional ulterior motive.”

Robert Corn-Revere of the Foundation for Individual Rights and Expression said Simington's proposal “manages to convert a content-neutral economic regulation into one that is explicitly content-based and therefore vulnerable to constitutional challenge.” The fact that “it is couched in such explicitly political terms is disturbing."

Carr didn’t comment on the op-ed's proposal but is expected to support it. In a December letter to ABC CEO Bob Iger, Carr promised scrutiny of the network's relationship with local broadcasters (see 2412270039). In a news conference Monday, Carr said networks are exerting too much control over local broadcasters through their network affiliation agreements, and the FCC could intervene using its ownership attribution rules. Attorneys told us that the ownership attribution rules could also provide a legal path for the FCC to claim authority over affiliate network contracts. Trump’s endorsement of the proposal via his social media post is also likely to sway Carr, attorneys told us.

Broadcast attorneys who represent affiliates had differing reactions to the proposal Friday. While stations would like to pay lower affiliate fees, the legal ramifications of the FCC exerting authority over affiliation contracts could be vast, one attorney told us. Another attorney, who represents a large broadcaster, said the proposal could finally level the network/affiliate relationship, and he would welcome it. Attorneys representing networks condemned the proposal.

The op-ed framed the cap as a way to combat media bias. “If we want a media that informs instead of indoctrinates and represents communities instead of manipulating them, we must go upstream to the funding model,” wrote Simington and Wax. “Capping reverse retransmission fees is the cornerstone of that effort.” It also explicitly linked the proposal to the president’s private lawsuit against CBS, which Carr has said is entirely distinct from the FCC’s proceeding on the Skydance/Paramount deal and the CBS news distortion proceeding. Trump’s “bold” lawsuit “has opened a vital lane for real reform. Capping reverse retransmission fees gives that legal challenge policy teeth,” the op-ed said.