FCC to Eliminate the National TV Ownership Cap and Propose a Case-by-Case Review

At is August 6^th meeting, the FCC is expected to issue an order revising its approach to its TV national ownership rules.  Currently, the rules state that a single media company may only own TV stations that reach a maximum of 39% of the TV households nationwide.  (The 39% number is calculated by adding up the TV households in each DMA market. Because of technical reception issues, UHF stations are presumed to reach only 50% of the households in a market) This is a blanket rule that prevents any TV transactions which exceed the 39% cap.

Rather than a blanket prohibition, the FCC plans to eliminate the rule and address each transaction on a case-by-case basis.  The proposed order states:

"The Commission shifts today from a blanket prohibition to a case-by-case approach that will give the Commission the flexibility to approve deals that are in the public interest while continuing to deny any transaction that fails to serve the public interest. Under a case-by-case approach, the Commission’s interests in localism, viewpoint diversity, and competition (to the extent they are implicated) can be fully analyzed and vindicated in the context of a specific transaction. There may be transactions that would have exceeded the limits of the 39% national cap that do not promote the public interest and that will be denied. On the other hand, there may be transactions that would have exceeded the 39% national cap that do promote the public interest and could gain Commission approval. We find that shifting from a relatively inflexible, ex ante regulation to an individualized, case-by-case assessment will help ensure that the Commission carries out its statutory mandates in an appropriate manner without having to show special circumstances that would justify a waiver of a rule that no longer serves the public interest."

The FCC is not proposing to simply grant waivers to the existing rule. It is eliminating the rule altogether, preferring instead to address national ownership issues as part of its public interest evaluation for each transaction.

Given this finding, we repeal the Commission’s national television multiple ownership rule. We conclude that replacing that regulation with a case-by-case approach to applications for television license transfers and assignments is the best way to promote the Commission’s media ownership goals of localism, viewpoint diversity, and competition. Therefore, any proposed transactions that would have been barred under a strict

FCC Commissioner Anna Gomez will oppose the decision.  She stated in a press release:

“This unlawful effort to hand control of the public airwaves to billionaire buddies of this administration will destroy local newsrooms, silence community reporting, and drive-up costs for the American families who depend on local stations for news and emergency alerts. A free and diverse media landscape depends on real limits on how much of the public airwaves any one company can control, and this FCC is now poised to allow local broadcasters to sell those airwaves off to the highest bidder. Congress set the 39 percent national ownership cap in federal law, and only Congress has the authority to raise or eliminate it. The Commission cannot waive away that limit simply because these corporate behemoths want to get out from under it.”

No doubt this decision will trigger Congressional reaction.  Changing the national TV ownership rules has been a controversial issue for decades.  However, competition from streaming and digital services, which can reach 100% of TV households nationwide, has forever changed the video marketplace. We do not want to follow the path of local newspapers.  The regulatory environment must adapt to economic realities.     

It is worth noting that the proposed decision does not mention relaxation of the local radio ownership rules.  It appears they well be addressed separately.   

You can see the FCC’s proposed decision here.

You can access Chairman Carr’s blog here.

You can see Commissioner Gomez’s press release here.