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FCC Commissioner criticizes agency’s conditional approval of WADL deal

Commissioner Brendan Carr said the Media Bureau acted beyond the scope of its authority by not wholesale approving Mission's purchase application or designating the matter for a hearing.

Commissioner Brendan Carr said the Media Bureau acted beyond the scope of its authority by not wholesale approving Mission's purchase application or designating the matter for a hearing.

The front of the Federal Communications Commission building in Washington, D.C. (FCC public domain image)
The front of the Federal Communications Commission building in Washington, D.C. (FCC public domain image)

At least one official with the Federal Communications Commission is unhappy with the agency’s conditional approval of a sale between Mission Broadcasting and the owners of Detroit-area television station WADL-TV.

On Wednesday, FCC Commissioner Brendan Carr issued a statement criticizing a decision by the agency’s Media Bureau to approve the deal subject to a modification of certain terms, including an affirmation that Mission would financially separate itself from Nexstar Media Company, reserve a certain amount of advertising revenue for itself, and remove a stipulation that afford Nexstar the option to acquire WADL (Channel 38) for itself in the future.

Carr characterized the Media Bureau’s conditional approval as a “denial” of the original purchase agreement between Mission and WADL’s current owner Adell Broadcasting, which involved Nexstar bankrolling the $75 million that Mission would spend to acquire WADL from Adell, then assuming operational control the station through a shared services agreement.

Those agreements drew the ire of the FCC last month when it imposed a $1.2 million financial penalty against Nexstar and a smaller fine against Mission over a similar arrangement between the two broadcasters concerning New York City station WPIX (Channel 11). In that instance, the FCC said Nexstar exerted too much control over WPIX, making it a de facto owner of the station and putting it over a federal ownership cap that limits the reach of any one broadcaster to 39 percent of the American TV audience. (Nexstar is appealing the fine.)

The FCC’s conditional approval on Tuesday — which surprised just about everyone — was intended to keep Mission and Nexstar from repeating the same situation with WADL. But Carr says the conditional approval essentially forces all involved parties to agree to specific terms imposed by the regulator that were not part of the original purchase agreement, which was slightly amended last September.

“The FCC’s decision to redline the terms of a deal like this plainly exceeds the agency’s statutory authority,” Carr wrote in his dissent, drawing upon Section 309 of the Communications Act, which “imposed limits on the FCC’s jurisdiction over translations like this one.”

According to Carr’s interpretation, that provision of the Communications Act “specifies that the FCC shall either grant the application, if the FCC determines that doing so serves the public interest, or alternatively it shall designate the application for hearing.”

The FCC did not relegate the matter to a hearing, though it has held several informal discussions with key stakeholders while the matter was pending over the past year. Adell Broadcasting owner Kevin Adell attended at least five of those meetings, which also saw participation from community interest groups and representatives of the pay television industry.

Carr says those informal meetings aren’t enough — that the FCC has two options: Approve the application as it was submitted, or designate the matter for a hearing.

“It is instead taking the application the FCC received and substituting it for a new one drafted by the agency,” Carr complains. “That’s not the FCC’s job or role.”

Carr said the FCC compounded its legal errors by relying almost entirely on the notice sent to Nexstar and Mission last month concerning the fine over Nexstar’s operational control of WPIX. Carr didn’t vote to approve the fine, but rather “concurred” with the FCC’s decision, writing on Wednesday thta he had “concerns…with the FCC’s approach” on the matter.

“So the agency is doing one of two things: It is either prejudging the outcome of that commission-level proceeding, or it is making new and novel decisions without authorization from the full commission,” Carr wrote. “The Bureau does not have the authority to do either one of those things. Indeed, these are the types of decisions that should be made by the Commission itself.”

Mission has not commented on whether it will modify its purchase terms pursuant to the FCC’s order on Tuesday, and a spokesperson for Nexstar declined to comment when reached by The Desk.

Adell, on the other hand, seems pleased with the outcome of the matter: While he declined to offer a specific comment on the FCC’s notice on Tuesday, he provided The Desk and other news outlets with a statement that said he has “not been this happy since his Bar Mitzvah.”

Carr says the matter points to a bigger issue: That broadcasters need fewer regulations and hurdles from federal agencies, not more.

“We are at a break glass moment for America’s broadcasters,” Carr proferred. “They are facing unprecedented headwinds and competition, including from their largely unregulated Big Tech competitors. The FCC should be focused on decisions that will make it easier for broadcasters to attract the capital necessary for them to invest, compete, and serve their local communities. Once again, the FCC does the opposite today.”

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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