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FCC initiates review of national ownership cap

Federal Communications Commission Chairman Ajit Pai said that the agency would seek public input on whether to modify, retain or eliminate the 39% national TV multiple ownership rule, also known as the national cap, including the UHF discount.

"A comprehensive review of the rule is warranted in light of considerable marketplace changes, such as technological developments and increased video programming options for consumers, since the cap was last modified in 2004," said Pai, a Republican, in a Nov. 21 statement.

FCC Commissioner Mignon Clyburn, a Democrat, raised immediate concerns, calling the proposed policy changes "legally suspect."

"I hope my colleagues will see the light, and put these drafts where they belong: in the trash heap," she said Nov. 21.

Clyburn is not the only commissioner to question whether the FCC has the necessary legal authority to raise or adjust the cap. Some, including Republican FCC Commissioner Michael O'Rielly, say that authority rests solely with Congress. In recent decades, Congress has twice raised the cap — once through the 1996 Telecommunications Act, when the cap was raised to 35% from 25%, and then again through the 2004 Consolidated Appropriations Act, which lifted the cap to its current 39% limit. Importantly, as part of the 2004 legislation, Congress said the FCC should not consider "any rules relating to the 39 percent national audience reach limitation" as part of the agency's quadrennial media ownership review.

O'Rielly has argued Congress' intent was to take the cap out of the commission's purview. "The pertinent language … was heavily negotiated and painstakingly crafted in order to settle a recurring and particularly contentious media ownership issue," O'Rielly said in 2016, adding that he had personal knowledge of the intent behind the 2004 law because "I was there at the time and helped reach the agreement."

O'Rielly said the national ownership cap was intentionally exempted from the quadrennial review process "to protect a tenuous compromise from the whims of the commission."

Pai's move to review the cap comes as the FCC is considering Sinclair Broadcast Group Inc.'s proposed combination with Tribune Media Co. The FCC recently voted to ease its media ownership rules in a contentious 3-2 party-line decision, which could make it easier for the merger to close. Without any divestitures, a combined Sinclair and Tribune would exceed the 39% national audience reach cap by approximately 6.5%.