TV Stations and Networks Disagree in FCC Inquiry on Network-Affiliate Relationship

While FCC Chairman Brendan Carr initially (see 2511190065) framed the Media Bureau inquiry into network-affiliate relationships as focused on strengthening station preemption rights, broadcast group comments focused more on other aspects of the relationship. In a joint filing, the station affiliate groups said the FCC should look into strengthening station preemption rights but “wish to make clear that solving issues regarding Network overreach in the preemption space” won’t “impact local broadcasters’ ability to survive” without rebalancing the broader network/affiliate dynamic. The only other filing in the docket from a station group -- Gray Media -- doesn’t mention preemption.

Stations said the FCC should take action against networks regarding their streaming services and negotiations with other streaming services. Gray called on the FCC to block a network negotiating tactic called “a white feed,” where networks air national network content in place of local content from affiliate stations that don’t opt in to network-negotiated contracts with virtual MVPDs. “The Networks’ ability to replace, or otherwise displace, locally produced news, weather, and informational programming with national programming that includes no local content is a disservice to viewers in those markets.” The affiliate groups said the FCC should look into networks putting what was previously exclusive broadcast content onto streaming services. The FCC “should take into account the myriad negative effects of the erosion of any programming exclusivity as it considers taking actions aimed at returning control to Affiliates and empowering them -- and not national Network programmers -- to serve their local communities,” the groups said.

The affiliate groups said the FCC should look at expanding the rules governing network-affiliate contracts but stopped short of seconding the Media Bureau’s proposal to expand retransmission consent negotiation rules to network affiliate contracts. The FCC “already has rules that govern appropriate content of affiliation agreements, and it might be time to expand those rules and to require fairness, balance, and equity in negotiation of affiliation agreements.” Disney, Fox, Paramount and NBCU all said the FCC doesn’t have authority to apply the good faith retransmission consent negotiation rules to affiliation agreements. “Congress expressly adopted a good faith bargaining regime in the context of retransmission consent negotiations between broadcasters and MVPDs.” said Disney. “Congress has not adopted similar requirements in the network-affiliate context.”

Gray also said the FCC should cap network affiliate fees at 50% of a station’s retransmission consent revenue. Then-Commissioner Nathan Simington, in an opinion column earlier this year, proposed a similar 30% cap (see 2505020066).

The Center for American Rights’ filing mentioned preemption and said the FCC should take action against any network-affiliate contract provision that limits a station’s right to reject programming in the public interest. “Networks may not beat affiliates down by withholding desirable programming when affiliates decline other programming in the public interest.” Contract caps on how many times a station can preempt hinder “a station’s ability to exercise its discretion,” CAR said. “Confidential commission review of network-affiliate contracts, including as an element of future license renewals, is likely a necessary step, at least for the time being, to ensure that the law in this area is being obeyed,” CAR said.

Disney, NBCU, Fox and Paramount Global all said the market is working, station preemption rights are sufficient as they are, and the FCC has very limited authority over network-affiliate contracts. “Over the last 30 years, ABC affiliated stations have exercised their right to preempt programming and will continue to do so without FCC intervention,” said Disney, pointing to the recent preemption of Jimmy Kimmel Live! and the 60 stations that preempted the first episode of NYPD Blue in 1993. “These and other examples make clear that the regime is working in compliance with the FCC’s rules and that no further regulatory intervention is warranted,” Disney said.

Incentivizing widespread preemption could destroy broadcasting, Paramount Global said. “Without consistent clearance of advertising at a national level, losses in network advertising revenues ultimately impact the network’s ability to fund programming, impairing the network programming model itself,” Paramount said. “There is no evidence in the record that network-affiliated stations have violated the Commission’s rules by surrendering control of their programming, personnel, or finances to their networks,” said Fox. Disrupting the network-affiliate relationship “would jeopardize broadcast networks’ ability to secure marquee programming for the benefit of American consumers,” NBCU said. “This disruption will steer premium sports and entertainment content away from broadcasting and towards platforms owned by Big Tech companies.”

CAR also called on the FCC to extend its inquiry into network-affiliate relationships to PBS stations and suggested selling off their spectrum. CAR said the FCC should open an inquiry into the future of public broadcasting without PBS and CPB. “If PBS and NPR cannot prove a viable long-term business model as national networks -- and if their individual affiliates cannot show long-term business models in each market,” the FCC “needs to consider whether those channels (i.e., that spectrum) will become available in the near future for other potential licensees or uses.”

CAR said the FCC should require PBS and NPR stations to present financial information to the FCC to show they have a long-term business model. The agency should also examine whether public media stations “are fulfilling their public-interest obligations as licensees when the public’s elected representatives have just chosen to cut off public funding because of their failure to serve the public well.” That question “is especially pressing after PBS’s big brand reboot, the Ken Burns documentary timed to America’s 250th birthday, was ‘a woke mockery of America’s founding,’” CAR wrote.

Several commenters said the FCC should be careful not to exceed its authority in any action based on the proceeding. “The network-affiliation rules, therefore, serve a specific narrow purpose and should not be seen as a blunt tool to dictate how network and broadcaster affiliation agreements should operate,” said the International Center for Law & Economics. The FCC’s claim of authority over network-affiliate relationships is “based on flawed precedents” likely to be overturned in court and the FCC “should back away from, not double down on, it,” commented the Information Technology and Innovation Foundation. “Any action contemplated by the Commission must remain rooted in regulatory humility,” said the Conservative Political Action Coalition Foundation's Center for Regulatory Freedom. “Not every shift in bargaining leverage or business practice justifies new rules, and the mere presence of market pressure does not imply market failure.”