The Federal Communications Commission (FCC) has granted Gray Media a waiver to own and operate two same-market television stations in Minnesota, the broadcaster announced on Tuesday.
Under current federal rules, broadcasters are typically not allowed to own two of the top four highest-rated TV stations within the same market, though the agency allows broadcasters to apply for a waiver to do so.
The FCC has not granted a waiver of its “top two” rule in more than five years. But, this week, the agency approved a waiver for Gray Media to acquire KXLT (Channel 47), the Fox affiliate serving the Rochester area.
Gray Media already owns KTTC (Channel 10, NBC) in that market, and has long operated KXLT under a “shared services agreement,” which allows Gray Media to operate nearly all aspects of the station while it is technically owned and licensed to a third party.
The arrangement — also known as “local marketing agreements,” or more informally as “sidecars” — have been widely used by other broadcasters to get around some FCC rules regarding local TV station ownership in the past. In addition to the “top two” rule, shared services agreements also allow local broadcast station owners to evade the FCC’s rule that prohibits them from owning stations that reach more than 40 percent of the American TV audience.
In January, President Donald Trump appointed FCC Commissioner Brendan Carr to oversee the agency as its Chairman. Almost immediately, Carr indicated that the FCC would make sweeping changes to how it regulates licensed broadcast stations.
On the one hand, Carr said he expected broadcast stations to serve their local communities, though Congress and the FCC have never specifically codified what that meant. Generally, broadcasters have understood that requirement of their license to involve the production of local news and community-oriented programming, among other initiatives.
On the other hand, Carr has voiced his support for various initiatives that local broadcasters have raised over the past few years, including a need to refresh certain regulations regarding ownership caps and the winding down of the current digital broadcast standard in favor of “NextGen TV.”
The Media Bureau’s action on Tuesday was the first significant step made by the agency since Carr took the reins as chairman, even if it involved a routine waiver. In this case, Gray Media justified its desire to purchase KXLT by describing it as a “failing station,” a term that indicates the station suffered from both audience and financial issues for an extended period of time.
“Gray appreciates the FCC Media Bureau’s careful consideration of our waiver request and its recognition of the marketplace in which today’s local television stations compete for viewers and advertisers,” Kevin Latek, the Chief Legal and Development Officer at Gray Media, said in a statement. “We look forward to leveraging the combined resources of KTTC-TV and KXLT-TV to improve service for viewers in the Rochester market.”
