GAO: FCC Should Take Action to Ensure Television Stations Publicly File Advertising Agreements

Television stations, which provide free, over-the-air programming, and multichannel video programming distributors (MVPDs), which provide subscription television services, compete with other local media for advertising revenue. Federal Communications Commission rules limit the number of local stations an entity can own in one market to promote competition and other public interests. Some station owners created joint sales agreements to potentially cut costs. In 2014, finding that such agreements confer influence akin to ownership, FCC adopted rules that require that where such agreements encompass more than 15 percent of the weekly advertising time of another station, they will count toward FCC's ownership limits. MVPDs also have arrangements (“interconnects”) for jointly selling advertising in a local market. GAO was asked to examine the role of advertising agreements in local media markets.

This report examines (1) the prevalence and characteristics of such agreements, and (2) stakeholders' perspectives on these agreements. GAO examined publicly available joint sales agreements and interviewed FCC officials and media, public interest, academic, and financial stakeholders about their views. Stakeholders were selected to represent a range of companies and from those who submitted comments on FCC's rules, among other reasons.

GAO Recommends the FCC should review joint sales agreements filed in stations' public files to identify missing agreements and take action to ensure the files are complete. FCC said it would take action to ensure compliance with its public file requirement.