FCC Fines Alaskan Broadcaster for Breaking Market Dominance Rule

According to a notice of apparent liability issued Wednesday by the Federal Communications Commission (FCC), Gray Television Inc. violated a regulation prohibiting an owner from possessing two of the top four television stations within a Designated Market Area (DMA). As a result of Gray’s wilful and continuous violation, the FCC is holding the broadcaster liable for the statutory maximum for a single violation, $518,283.

The notice explains that “[i]n order to promote competition and a diversity of viewpoints in local markets, the Commission adopted its Local Television Ownership Rule to establish that an entity may not own two full-power television stations in the same DMA if both commonly owned stations are ranked among the top four rated stations in the market.”

According to the FCC, Gray and one of its subsidiaries purchased the non-license assets of KTVA(TV) in July 2020. Gray reportedly took no steps to notify the agency of the ownership change.

By acquiring then owning and operating KTVA(TV), the FCC contended, Gray violated the top-four ban in the Anchorage, Alaska market for more than seven months. Reportedly, the purchased CBS affiliate was the second-rated station in the Anchorage DMA while Gray’s existing KTUU-TV, Anchorage, Alaska, an NBC affiliate, took the top slot. The FCC’s notice notes that it determined the DMA ranking “under the audience share prong of the Local Television Ownership Rule.”

In determining how to penalize Gray for the violations, the notice notes that the FCC considers upwards and downwards adjustment factors. “[W]e note that there would be a number of bases upon which to upwardly adjust a forfeiture in this case,” the Commission explains.

Gray’s violation reportedly resulted in substantial economic gains due to the acquisition’s timing. With the purchase of the DMA’s second most popular network, Gray was allegedly able to capitalize on “record-setting political advertising expenditures in the months leading up to the 2020 election.”