The FCC is eliminating a 30-year-old rule that allowed TV station groups to count just half of the coverage area for their UHF stations to comply with media ownership caps.
The FCC’s move, in a 3-2 vote, was opposed by major station groups, but the agency said that the so-called “UHF discount” was outdated. A single entity is prohibited from owning TV stations that reach more than 39% of all TV households in the country.
“The discount has outlived its purpose and intent and, in the current world, acts only to undermine the national audience reach cap,” the FCC said in its order.
The FCC will grandfather station groups who would have exceeded the cap without the benefit of the discount. The grandfather date is Sept. 26, 2013, when the FCC originally unveiled its proposal. It also applies to any pending station acquisitions before the commission and those that had received approval on or before that date.
“We find that this approach is fair to affected licensees and consistent with commission precedent,” the FCC’s order said.
Commissioners Ajit Pai and Michael O’Rielly, both Republicans, opposed the move.
Pai said that the commission should not eliminate the discount without also considering an adjustment of the 39% cap to reflect the current marketplace.
Pai said that Univision covered 22.8% of TV households with the discount, but without it will have a reach of 44.8%, exceeding the cap. Even though it will be grandfathered in, “Univision will not have the ability to purchase television stations in any new market.”
He also said that station groups should be allowed to transfer to new owners without having to divest stations.
“Station groups such as ION and Univision have been good for competition in the video market by facilitating the creation of new broadcast networks to challenge established networks,” he said.
In the FCC order, the agency said that the rationale for the discount was to take into account the weaker signals of UHF stations. But in the transition to digital, UHF stations are “equal, if not superior” to VHF channels. The FCC, however, refused a proposal to instead adopt a VHF discount.
Dennis Wharton, spokesman for the National Assn. of Broadcasters, said in a statement, “While other industries are allowed to innovate without stifling regulation, when it comes to broadcasters, the FCC acts as if we still live in an era of ‘I Love Lucy.’ It’s time for the FCC to look at broadcast ownership rules in a manner that reflects the current marketplace.”