trending Market Intelligence /marketintelligence/en/news-insights/trending/usvv2JcnAn9kgQES4D0Nmg2 content esgSubNav
In This List

FCC majority supports national TV ownership cap review

Blog

Live TV still dominates most TV viewing in Asia

Blog

Netflix amortized content spend estimated at $13.6 billion in 2021

Blog

Credit Risk Trends for Telecom & Tech: A Mid-Year 2021 Outlook

Blog

Summer box office rebounds in 2021


FCC majority supports national TV ownership cap review

During a meeting overshadowed by a net neutrality action, the Federal Communications Commission also voted Dec. 14 on items that stand to open the door to further broadcast consolidation and lead to more streamlined wireless deployment procedures.

The FCC voted 3-2 to move forward on a notice of proposed rulemaking seeking comment on whether to modify or eliminate the 39% national audience reach cap, which prohibits a single broadcast station group from owning TV stations that together reach more than 39% of U.S. TV households. In addition, the proposal asks about retaining or modifying the UHF discount, which allows stations broadcasting in the UHF spectrum — or on channels 14 to 51 — to attribute only 50% of their TV households in their designated market areas toward the overall cap.

The move to review the cap, which has attracted criticism from Democrats in Congress and on the commission, comes as the FCC is considering Sinclair Broadcast Group Inc.'s proposed combination with Tribune Media Co. Including the UHF discount and without any divestitures, a combined Sinclair and Tribune would exceed the 39% national audience reach cap by about 6.5%. Without the UHF discount, a combined Sinclair/Tribune would have a reach covering 72% of U.S. homes across 108 markets.

A major question around the ownership cap is whether the FCC has the authority to modify it, as it was Congress that last 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.

Republican FCC Commissioner Michael O'Rielly has long maintained Congress intended to take the cap out of the commission's purview, a position he reiterated during the Dec. 14 meeting. "I do not believe the commission has the authority to modify the national audience reach cap, which extends to eliminating UHF discount. While the discount may no longer be technologically justified, it's up to Congress to make that determination, not the commission," O'Rielly said.

That said, O'Rielly said he believes this is a matter that will end up in court before it will be taken up by Congress.

"Since it doesn't appear congressional action is forthcoming, I look forward to reviewing the record that will result from this proceeding. If the commission believes after such review it has the authority to modify the cap, I will happily support that item," he said. O'Rielly joined fellow Republican Commissioner Brendan Carr and Chairman Ajit Pai in voting to move the notice of proposed rulemaking forward.

FCC Commissioner Jessica Rosenworcel, a Democrat, also expressed her belief that the FCC lacks the necessary authority to raise the cap. "The FCC is statutorily prohibited from allowing a single company from acquiring stations that reach more than 39% of the national television audience," she said, adding modifying the cap is " the exclusive province of Congress."

On the wireless front, the FCC unanimously voted to seek input on creating a new exclusion from routine historic preservation reviews. Specifically, the exclusion would apply to review requirements for collocating communications equipment on "Twilight Towers." So-called Twilight Towers were constructed between March 16, 2001, and March 7, 2005, and they either were built without undergoing the required historic preservation review or lack documentation showing the review was conducted. As a result, these towers have not been eligible for collocations, meaning that new operators cannot add equipment or lease space on the towers. The proposed exclusion, according to O'Rielly, is a first step toward reducing the need for additional new tower construction and facilitating the expansion of wireless networks.

Also during the Dec. 14 meeting, the FCC unanimously voted to adopt an order that will add a dedicated "Blue Alert" to the commission's Emergency Alert System. Blue Alerts would deliver information to the public when a law enforcement officer is killed, seriously injured or missing. The FCC also voted to move forward on a notice of proposed rulemaking and order that aims to strengthen the Rural Health Care Program and improve access to telehealth in rural America. Most immediately, the order waives the program's annual cap on a one-time basis for funding year 2017. In addition, it seeks comment on what the appropriate funding cap should be in the future and explores ways to more efficiently distribute program funds to combat waste, fraud and abuse.