Injecting President Donald Trump’s business-friendly, anti-regulation urges into the media business, the Republican-controlled Federal Communications Commission approved sweeping rollbacks of rules designed to limit monopoly control of local broadcast properties.
The regulatory changes, which came three hours into a marathon FCC public meeting, bring an end to several longstanding rules. Among them: limits on “cross-ownership” of radio, newspaper and TV assets in a market; counting each station involved in joint sales agreements (sharing deals between multiple stations in a market) toward owners’ ownership tallies; and the so-called “eight-voices rule.” Taken together, along with earlier FCC moves to restore the “UHF discount” and abandon the “main studio rule,” the vote opens the door for single owners to roll up stations across the country and control how Americans get their local TV news.
One company in the midst of doing exactly that is Sinclair Broadcast Group, the nation’s No. 1 owner of TV stations, though the Republican majority on the commission disputed charges of favoritism. Sinclair is midway through review of its proposed $3.9 billion acquisition of Tribune Media, and its close ties with President Trump have raised eyebrows over the past year.
“It’s about time,” said FCC Chairman Ajit Pai. “Few of FCC rules are staler than our media ownership regulations. … After too many years of cold shoulders and hot air, this agency finally drags its broadcast ownership rules into the digital age.” Along with fellow majority commissioners Michael O’Rielly and Brendan Carr, Pai said the aim of “modernizing” the rules was to acknowledge how competitive it is for the owners of local stations, who face an onslaught from digital companies and distributors.
Democratic FCC commissioner Mignon Clyburn countered that the changes were straight-up corporate favoritism. “My colleagues in the majority are more intent on granting industry wishes than giving a gift to those in the general public,” she said. “Mark my words: Today will go down in history as one when the FCC abdicated its responsibility to uphold the core values of localism, competition and diversity in broadcasting.” Agreed fellow Democrat Jessica Rosenworcel, “The FCC sets its most basic values on fire. They are gone.”
Rosenworcel said community-based journalism coming out of many stations would be threatened by the rules changes. Clyburn even used President Trump’s own words to make a similar point. “This is about helping large companies grow even larger,” she said. But it operates “in contrast with comments from the president that we must have ‘as many news outlets as we can.’”
Sinclair is poised to grow into a more influential giant if its acquisition of Tribune Media is approved, entering major markets like L.A., New York and Chicago for the first time and covering a striking 72% of American households. While many see the deal closing in the next couple of months, as the companies’ have projected, opponents ranging from Democratic members of Congress to right-wing media executives have raised concerns about the deal.
Commissioners on both sides of the issue acknowledged that the vote would likely be challenged in court. Activist groups like Free Press have made mention of potential legal challenges.
Sinclair has grown from a single Baltimore radio station in 1971 to what is now the top station owner in the country, through a combination of sharp-elbowed negotiating tactics and political maneuvering. When the company reported earnings Nov. 1, pugnacious executive chairman David Smith spoke bluntly two weeks before the FCC’s actions.
He complimented the commission for making moves that acknowledge “that the competitive marketplace has changed and broadcasters actually do compete against everyone for viewers and advertising dollars.” Current ownership rules, he added in the company’s earnings release, “no longer reflect the realities of today’s media landscape and consumer viewing habits. We applaud the FCC’s action to level the playing field, especially in light of emerging technologies and consolidation in the telecom and cable industries.”