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Attorneys are digesting an FCC ruling

L

Link

This article is on the front page of www.insideradio.com today

"Attorneys are digesting an FCC ruling.
A fight between two West Virginia broadcasters could have an impact on operators everywhere. It centers on how much a seller can dictate to a company buying its stations. Attorneys say it could mean more flexibility for buyers, but it could also work to kill some deals. Read the details in today's Inside Radio."

Can anyone point me to the ruling this article is referring to? Look interesting.
 
It's in East Virginia, not West Virginia. Here's the link:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-1091A1.pdf


Essentially what happened is Company A bought a Lynchburg, Va. station running talk from Company B. Both are group owners, Company A paid Company B an extra $25,000 for an agreement that they would not put a talk format on one of their other stations. The deal closes, but shortly thereafter, Company B switches one of its other stations in the market to talk. A sues B to enforce the non-compete covenant in Federal district court, seeking an injunction against B's use of talk programming in the market on any of its stations. District court agreed, granted injunction.

Then a related company to Company A sought to sell their stations in Winchester, VA. Company B filed objections to the transfer with the FCC. FCC granted transfer app., but fined Company A $8K for using the non-compete and obtaining an injunction in Federal court against Company B. But then the Commission turned around and admonished Company B for allowing itself to be bought off for $25K in the original agreement.

Since this ruling implicitly reverses the findings of the Federal district court, you can see why the Washington attorneys are having a hard time figuring this one out. FCC claims that section 310(d) of the Communications act prevents the non-compete clause from being enforced, they claim that the district court never considered this aspect & based their ruling on the validity of the contract under VA law. But Company A noted that Company B brought up section 310(D) and the district court rejected that argument. Hence they claim the district court ruling should prevail over the FCC's views here. Probably would, but for $8K, no-one is going to take these bullies on by appealing the matter.
 
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