Sinclair Broadcast Group’s $3.9 billion acquisition of Tribune Media will give the company unprecedented power to politicize local TV news, raise pay TV and ad rates, slow the growth of wireless broadband, and determine what new broadcast technologies can succeed, opponents of the deal charged in filings at the FCC ahead of last night’s deadline for critics to file their concerns.
Companies including Dish Network and T-Mobile, cable TV trade organizations, public interest activists, and conservative news organization Newsmax were among the groups objecting to the transaction.
Most noted that the acquisition would enable Sinclair to reach 72% of the population with more than 200 full power stations in more than 100 markets including New York, Los Angeles, and Chicago. Federal restrictions limit a company to reaching 39% of all viewers.
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An FCC rule allows stations to only count half of the audience reached via UHF stations. Using that standard, Sinclair would reach 45.5%,
In addition, a deal could violate FCC rules that bar ownership of two of the four most popular stations in a market — typically affiliates of the Big Four networks. Sinclair would have 10 in Seattle; St. Louis; Portland, OR; Salt Lake City; Oklahoma City; Winston-Salem, N.C.; Grand Rapids; Harrisburg, PA.; Richmond, VA; and Des Moines.
Sinclair has said that it will divest stations if needed to comply with laws.
But the FCC may relax its ownership caps. If it does, then Sinclair said last month that it might “file amendments to the applications to address such changes.”
Here’s a sampling of objections to the deal submitted to the FCC:
Sinclair’s pattern and practice have become a matter of record: buy a station, cut the local staff, move resources and decision-making to corporate headquarters, and let localism suffer. Sinclair’s recent earnings call removes any lingering doubt over whether that pattern and practice will somehow abate with this acquisition. In the words of Sinclair’s CEO: “right now there are three to five local players, and to us that doesn’t make sense.” The CEO also reportedly stated that consolidating news operations would lead to “significant savings.”
Public Knowledge, Common Cause, United Church of Christ
By its own admission, Sinclair believes that centralized news operations for national and international news is an effective cost-savings model. Further, it is well-documented that Sinclair engaged in the practice of “central casting” – substituting centrally originated programming for local programming. Central casting gets to the core of what the Commission’s localism principles seek to prevent. Indeed, the FCC’s chain broadcast rules prohibit two or more connected stations from simultaneously running the same program. …[I]f Sinclair is allowed to merge, the company could potentially run “pseudo-networks” – controlling the local programming of hundreds of broadcast stations.
The Federal Communications Commission is seeking to enable this transaction through regulatory sleight of hand, an approach that will end decades of bipartisan consensus on the importance of limiting television broadcast networks’ market reach and, consequently, their influence and power. The Commission’s approval of this merger blatantly subverts congressionally mandated media ownership rules. As a result, the level of media concentration proposed by this transaction will homogenize the content available to US consumers, eliminate unique viewpoints and reduce press diversity, especially in the delivery of local news. These actions cannot be justified under the FCC’s public interest standard and this the transaction should be denied.
American Television Alliance
Retrans fees have risen by double digits year-over-year in each of the past four years, making retrans fees the fastest rising part of pay-TV customers’ bills. Giving Sinclair a pass on local ownership limits in places like Seattle, St. Louis and Oklahoma City would all but guarantee more blackouts and higher prices for consumers in those markets.
The “New” Sinclair will have over 110 stations slated for repacking [of airwave spectrum following the FCC’s recent auction] and over 50 stations vacating the newly created 600 MHz band—making it by far the largest broadcaster engaged in repacking. In addition to broadcast stations, Sinclair also controls Dielectric, the nation’s largest television antenna manufacturer, and Acrodyne Services, a television equipment servicing company; and owns numerous broadcasting tower and transmission sites. This massive portfolio of stations and vertically integrated businesses will provide New Sinclair with multiple means to thwart the repacking process in practically every region of the country.
Sinclair’s practice of forcing stations to promote an extreme conservative perspective and distort local news actively threatens the wellbeing of marginalized communities across the nation, specifically communities of color and immigrants. People of color disproportionately rely on broadcast news and thus will be disproportionately harmed by a reduction in localism, competition and diversity. The appearance of a quid pro quo arrangement between the Trump administration and Sinclair, suggested by the timing of the transaction and statements by Trump advisers, also raises concerns that Sinclair may be trading positive coverage for regulatory favors. While Sinclair is welcome to an editorial viewpoint, it is not entitled to distort news coverage to those ends or extract tailor-made changes to Commission rules.
NCTA – The Internet & Television Association
The consequences to consumers of the proposed merger would likely be all too familiar. First, consumers are most likely to face a combination of higher prices and/or reduced investment in broadband infrastructure by small [cable systems] that will inevitably be forced to absorb and/or pass along increased retransmission consent fees. Secondly, consumers will also be more likely to experience blackouts, which have occurred with alarming frequency. There were 142 instances of blackouts in the first quarter of this year alone,22 as broadcasters increasingly leverage retransmission rules that enable them to operate without the need to respond to market forces.
American Cable Association
The applications in this proceeding must be denied for the simple reason that the proposed transaction would be unlawful. The Commission’s existing, statutory National Cap Rule prohibits commercial television broadcast licensees from exceeding a national audience cap of 39 percent. The Local Television Ownership Rules, moreover, prohibit a broadcaster from owning two stations with overlapping contours other than in the largest markets, and then only if one of the stations is not among the top-four rated stations in the market and there are at least eight independent “voices” within the market. The Applicants readily acknowledge in their public interest statement that the proposed transaction would violate both of these rules.
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