[Congressional Record Volume 142, Number 86 (Wednesday, June 12, 1996)]
[Extensions of Remarks]
[Page E1066]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 LEGISLATION TO IMPROVE THE LMA PROCESS

                                 ______


                             HON. SAM FARR

                             of california

                    in the house of representatives

                        Wednesday, June 12, 1996

  Mr. FARR of California. Mr. Speaker, today I am introducing 
legislation to address a serious flaw in the rules governing local 
marketing agreements for television stations.
  Current FCC rules allow television stations to enter into what are 
called ``local marketing agreements'', or LMA's. An LMA allows a 
television station or other entity to manage programming, sales, and 
operations at another station.
  For troubled stations, the LMA can provide needed assistance to 
maintain both their operations and independence. However, as they have 
become more frequent, so have they become broader and more 
comprehensive in their scope.
  Strangely, although FCC rules are clear with respect to TV station 
ownership--owing two stations in the same market is illiegal--they are 
extremely vague with respect to television LMA's.
  For example, current FCC regulations do not take into account the 
size of a local marketing agreement, the amount of operations managed 
through an LMA, or the size of the media market affected. Nor do they 
require prior notice or public comment from the communities that might 
be impacted.
  My own community has been affected by this ambiguity in FCC rules. 
Recently, two local stations in Monterey, CA reached a local marketing 
agreement which affected a sizeable portion of the programming and 
operations of one of the stations. No prior notice was given or 
required; no public input was requested; and there were no studies or 
consideration of the possible impact, positive or negative, of the LMA 
on the region.
  Unfortunately, Mr. Speaker, this is a growing problem. Although radio 
LMA's account for the majority of such agreements, the expanding number 
of consolidations and mergers in the television industry have put 
greater economic pressures on small stations. LMA's have become an 
increasingly attractive alternative to bankruptcy--but also, for some, 
a useful loophole in the duopoly laws.
  My bill will resolve this problem by extending the more exact and 
time-tested LMA rules for radio to television as well. As for radio, 
television LMA's affecting 15 percent or less of broadcast time on a 
station would not require prior notice or approval by the FCC. However, 
more comprehensive LMA's would require prior notice and public comment 
before the FCC could approve them. Such approval would have to be made 
on the basis of public interest, convenience, and necessity.
  My bill will resolve the current ambiguity in FCC rules--ambiguity 
which leaves the LMA process open to broad interpretation, and makes no 
allowance for the needs, interests, or concerns of local communities. 
Making LMA rules clear and fair will benefit the station owners who 
benefit from these agreements, as well as television viewers and local 
communities affected by them.
  I urge my colleagues to support this legislation.

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