Regulating Relationships between Competing Broadcasters
51 Pages Posted: 5 Feb 2010 Last revised: 7 Nov 2010
Date Written: February 5, 2010
In response to mounting economic challenges in the media industry, some broadcasters have begun entering into agreements whereby one station agrees to sell advertising, produce programming, or take over certain other functions, of another station in the same market. Though such arrangements, often called local marketing or time brokerage agreements, are not particularly new in the broadcasting field, they have been used with increasing frequency in recent years. The Federal Communications Commission has implemented rules and policies that ensure such agreements are used in a manner consistent with the public interest. Because these agreements involve cooperation among competitors, they also raise antitrust questions, yet antitrust enforcers have been relatively quiet about the practice.
Despite the laissez-faire approach to regulating cooperative agreements, these agreements, and the relationship between competitors that they create, look suspiciously similar to agreements that were once common in the newspaper industry, and which were condemned under the antitrust laws.
This article examines the form and function of cooperative agreements among broadcasters and explores the reasons why such agreements are attractive business propositions for those who enter them; it then describes the regulatory context in which these agreements exist, from both a communications and antitrust law perspective. The article closes with a look back at the antitrust enforcement action brought against joint operating agreements and the subsequent passage of the Newspaper Preservation Act, and sets forth some suggestions for future regulatory treatment of cooperative agreements.
In brief, this article concludes that while cooperative agreements likely offer many procompetitive benefits, both the FCC and antitrust enforcers should take a more active, cooperative role in reviewing and monitoring agreements between competing broadcasters and consider the potentially adverse effects of such arrangements across each potentially affected market, including the market for audience share, the market for advertisers, the market for carriage, and the marketplace of ideas.
Keywords: antitrust, broadcasting, communications, media, local marketing agreement, joint sales agreement, time brokerage agreement, horizontal overlap
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