The agency’s April 20 meeting will include a plan to reinstate the so-called UHF discount used to calculate when a company hits the FCC’s ceiling on the number of stations it can own.
“I’m proposing that we hit the reset button, returning the rule to the way it was up until last fall” when the FCC abolished the discount, Pai says in a blog post. “And then we’ll launch a comprehensive review of the national ownership cap, including the UHF discount, later this year.”
Generally speaking, FCC rules bar a station group from reaching more than 39% of all TV households. But with the discount, they only had to count half of the households reached by UHF stations, which older viewers will recall as those higher than channel 13 on the dial.
In September, the FCC, under former Chairman Tom Wheeler, voted to end the UHF discount. The 30-year rule was designed to account for the weaker over-the-air reach of UHF stations. But that no longer made sense following the 2009 national conversion to digital over-the-air broadcasts, the agency concluded.
Now “UHF channels are equal, if not superior, to VHF channels,” the FCC said.
Fox asked the U.S. Court of Appeals in D.C. to overturn the FCC’s decision. The company said that the agency had “failed in its obligation to engage in reasoned decision making by refusing even to entertain arguments that the limitation should be relaxed or eliminated, rather than tightened.”
Pai said today that he believes “the FCC is likely to lose that litigation because it went about eliminating the UHF discount in the wrong way.”
Some potential megadeals, including a merger of Sinclair and Tribune Media, would still be too big even if the UHF discount is reinstated.
But others involving groups with lots of UHF properties — including Ion Media, Trinity Broadcasting Network and Univision — would become easier to negotiate.
In February, CBS chief Les Moonves said he “would be interested” in buying stations if the FCC lifts the ownership cap.
Sinclair shares are up 2.6% in afternoon trading with Nexstar up 2.4%, CBS up 1.6% and Tribune and Tegna up 0.7%.
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