The National Association of Broadcasters (NAB) has criticized the Federal Communications Commission’s (FCC) recent decision to transfer scrutiny of a proposed multi-billion dollar merger between Standard General and TEGNA to an administrative law judge.
On Tuesday, the NAB’s President and CEO Curtis LeGeyt called the move alarming, and said it was part of the FCC’s “needlessly prolonged process” to examine the $5.4 billion deal between the two companies that was proposed last February.
“NAB is alarmed by the FCC Media Bureau’s decision to designate for hearing the Standard General-TEGNA merger after a needlessly prolonged process and on the basis of issues outside the Commission’s purview,” LeGeyt wrote. “While NAB takes no position on the merits of the transaction, nothing about the hearing designation required substantially exceeding the FCC’s self-imposed 180-day shot clock. The long delay, and now hearing designation, will likely lead to job losses and other damaging cost-cutting measures by the local stations involved to account for the extreme expense of managing the FCC’s unwieldly process.”
The FCC appears concerned with several elements of the proposed merger, which would see TEGNA stations share common ownership with those operated by Standard General and Apollo Global Management. Those stations include ones owned by Cox Media Group; the agency appears worried that a merger between the two could result in unfair competition in some markets, including Atlanta and Seattle, where Cox and TEGNA already own stations.
TEGNA and Standard General have imposed a May 22 deadline for the deal. There are concerns that transferring scrutiny to an administrative law judge could hold the deal up beyond that deadline, which could effectively kill the proposal.
On Tuesday, Reuters reported that Standard General intends to continue on with the proposal, despite the FCC’s recent action.
The FCC typically decides matters like these on its own. A so-called “shot clock” gives the agency 90 days to deliberate before approving or rejecting a proposal, but the procedure is mostly voluntary, something that the NAB takes issue with.
“The Media Bureau’s actions renew serious concerns with the Commission’s role in reviewing transactions,” LeGeyt wrote on Tuesday. “It is clear the Commission’s shot clock is an illusion, and NAB urges Congress to consider codifying it in law rather than relying on the FCC’s current voluntary commitment. Further, it is inappropriate for the bureau staff, without the input of the commissioners, to designate a major transaction for hearing. This process deprives the commissioners, who are nominated by the President and confirmed by the Senate, the opportunity to participate in decisions of this magnitude, and leaves the parties to the transaction with no practical legal recourse.”
The NAB is also urging lawmakers in Congress to codify a definition of “public interest” into law, rather than leaving that definition open to interpretation by the FCC and others.
“Rather than simply ensure that a given transaction complies with the FCC’s rules – and thus would presumably be in the public interest – the current standard has been interpreted to permit the Commission to extract ad hoc concessions whether or not they fall within the FCC’s expertise or mandate,” LeGeyt said.