CEI joins coalition against FCC interference in affiliation agreements
Dear Chairman Carr:
We, the undersigned organizations, write in continued support of your work to reduce government regulation and interference in America’s thriving communications sector. From media and broadband to the space economy, your deregulatory agenda continues to remove barriers to investment, innovation, and competition.
It is in that spirit that we respectfully urge the Federal Communications Commission (FCC) to avoid intervening, either directly or indirectly, in affiliation agreements freely negotiated between broadcast networks and local television station owners.
Affiliation agreements determine which local stations carry a network’s national news, sports, and entertainment programming, as well as the financial and operational terms governing that relationship. Those agreements, which historically do not require FCC approval, are negotiated by sophisticated parties on both sides, each with its own incentives, market knowledge, and responsibility to viewers, advertisers, employees, and shareholders.
Recent reports indicate that the FCC is investigating several affiliation changes and may consider whether those arrangements are consistent with the FCC’s preferred structure for the broadcast marketplace.
We understand and appreciate your concern for the long-term health of local television. Local broadcasters remain important sources of news, emergency information, and community programming. But as many of our organizations have previously emphasized, broadcasters are perfectly capable of deciding whether and when to enter into or end an affiliation agreement with a network. The FCC should not substitute its own judgment for that of the market participants themselves.
Station owners and networks understand their own costs, audiences, competitive pressures, and business needs best. They are also the parties that bear the consequences when their decisions prove wise or mistaken. A station group may conclude that changing affiliations will improve its economics, expand local programming, or better serve its viewers. A network may determine that another station offers stronger distribution, technical capabilities, or local reach. These are legitimate business considerations that parties must be free to consider and balance without undue government interference.
We are therefore concerned by suggestions that affiliation changes could trigger heightened scrutiny for license renewals or lead to other regulatory consequences. License renewal should not become a newfound tool for influencing lawful private negotiations or pressuring market participants to reach outcomes preferred by the government.
The FCC’s authority over broadcast licenses makes restraint especially important. Even without issuing a formal rule, statements linking private business decisions to license renewal can influence negotiations and distort the market. Companies may reasonably feel compelled to avoid transactions that are lawful and economically sound because they fear inviting regulatory scrutiny.
A precedent allowing the FCC to intervene in affiliation negotiations because it disagrees with the resulting market structure will not remain confined to the present Commission or the present set of companies. A future FCC under a different administration could use that same theory to investigate affiliation changes benefiting broadcasters whose content with which it disagrees, pressure networks to reconsider relationships with disfavored station groups, or threaten license consequences when private negotiations produce politically inconvenient results.
Under your leadership, the FCC has made important progress in getting government out of the way. That is precisely why we respectfully urge you to preserve that record and exercise restraint by resisting efforts to expand the FCC’s reach beyond historical precedent by investigating or penalizing lawful affiliation changes merely because the Commission would have preferred the parties to reach a different result.
Thank you for your consideration and continued leadership.
Sincerely,
Jeffrey Mazzella
President
Center for Individual Freedom
Bartlett D. Cleland
Executive Director
Innovation Economy Institute
Grover Norquist
President
Americans for Tax Reform
Tom Giovanetti
President
Institute for Policy Innovation
Justin Owen
President & CEO
Beacon Center of Tennessee
Rosemary Becchi
Founder & President
Jersey 1st
Ryan Ellis
President
Center for a Free Economy
George Landrith
President
Frontiers of Freedom
Tom Schatz
President
Citizens Against Government Waste
Charles Sauer
Founder and President
The Market Institute
Ashley Baker Executive
Director
The Committee for Justice
Pete Sepp
President
National Taxpayers Union
Deborah Collier
Executive Director
Innovation and Technology Policy Center
Citizens Against Government Waste
Jon Decker
Senior Fellow
Parkview Institute
DJ Hatch Policy Analyst
Center for Technology and Innovation
Competitive Enterprise Institute
Daniel J. Erspamer
Chief Executive Officer
Pelican Institute for Public Policy
Gerard Scimeca
Chairman
Consumer Action for a Strong Economy
Karen Kerrigan
President & CEO
Small Business & Entrepreneurship Council
James Czerniawski
Head of Emerging Technology Policy
Consumer Choice Center
Ross Marchand
Executive Director
Taxpayers Protection Alliance
James Erwin
Executive Director
Digital Liberty