In Another Partisan Vote, FCC Moves Closer To Eliminating Local TV Ownership Cap

Associated Press

In another boost to major station owners like Sinclair and Fox, yet another partisan vote by the Republican-controlled FCC moved the commission a step closer to raising or eliminating the 39% ownership cap.

The National Television Multiple Ownership Rule, which passed 3-2 today, won’t get nearly the same amount of attention as the FCC’s rollback of net neutrality rules earlier in the same meeting. But it has the potential to dramatically reshape the media landscape, not just locally but for a range of top-shelf national players.

As 21st Century Fox and Sinclair Broadcast Group both look to expand their industry-leading local TV holdings, both are counting on the cap going away. Sinclair’s pending acquisition of Tribune Media would put it in 72% of homes. Fox is counting on stations as a centerpiece of its strategy, especially after the majority of its assets transfer to Disney. In an investor conference call this morning, Rupert Murdoch said “New Fox” will be “in a mood to expand and do new things and we’ll have the ability.”

The rule adopted today starts a process of review that many local broadcasters and observers see as likely to result in a change to the longstanding cap, which currently limits a single owner from controlling stations with reach to more than 39% of U.S. households.

FCC chairman Ajit Pai contends that opponents of the rule overstate its effects. “There are no conclusions in this order,” he said. “It just asks questions.” Specifically, he said the goal of it is to evaluate it in tandem with the so-called “UHF discount,” a rule that enables stations with higher positions on the dial (a concept that dates to the era of physical dials on wood-paneled TV sets) to count for less toward one owner’s overall tally.

Michael O’Rielly, a Republican commissioner, also downplayed the likely impact of the order, which he predicted would have negligible “real-world implications.” With many top groups (he cited CBS and Hearst) well below the current 39% cap, “the practical effect will likely be limited.”

As in other debates throughout 2017, Democratic commissioners Mignon Clyburn were the dissenting voices.

Clyburn, in a bid to persuade the majority, invoked such conservative mainstays as former Sen. Trent Lott, late New York Times columnist William Safire and even the NRA. She warned that the attempt to loosen the cap would hasten consolidation and eliminate local voices. Quoting Linda Ellerbee, she said, “As these companies swallow each other up, there is a frightening possibility that television will speak with just one voice.”

She added that whatever the larger debates swirling around the local TV ownership cap deserves wider attention.

“It is a big deal with substantial implications for localism, diversity and competition,” Clyburn said.

The 39% cap was last adjusted in 2004. Pai, echoing sentiments from local broadcasters, noted that technological advances and shifting consumer media habits mean “the marketplace has changed considerably” in the years since. Hence, he argued, the need for a new look at the cap.

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