×

FCC Eases Media Ownership Restrictions in Vote to Restore UHF Discount

The FCC on Thursday voted to restore an arcane rule that has allowed station groups to fall within media ownership limits.

The commission, in a 2-1 vote, reinstated the so-called UHF discount. First adopted in 1985, it has allowed media companies to count only half the coverage area reach of their UHF stations.

That’s important for major companies like Sinclair Broadcast Group, Fox Television Stations, Nexstar, and ION Media Networks in making sure that they fall within the media ownership cap — in which no one company can own stations that collectively reach more than 39% of the country.

Commissioner Mignon Clyburn, the sole Democrat on the FCC, dissented. She warned that the FCC’s move would diminish diversity, competition, and localism, and predicted a wave of mergers and acquisitions.

The UHF discount, she said, was from another era when there was a disparity between the UHF and VHF signal. That was eliminated with the transition to digital television. Broadcasters balked when the Obama-era FCC, under then-chairman Tom Wheeler, voted to eliminate the UHF discount, and station groups have been urging FCC chairman Ajit Pai to reinstate it.

She called the discount an “outdated state of play, with rules made for the analog era.” She cited statements from Sinclair that they are looking to buy more stations, and from CBS chief Leslie Moonves, anticipating a rise in the media ownership cap.

“The commission just wrapped up and put a bow on a huge gift for those large broadcasters, with ambitious dreams of more consolidation,” she said at the meeting. “Now I am not a betting woman, but mark my word: this order will have an immediate impact, on the purchase and sale of television stations.”

She showed a chart from Bloomberg showing how major station groups benefit from the discount. The largest, ION Media, reaches 33.7% of the country with the discount, but 65.2% without. Univision reaches 23.6% with the discount, but 44.8% without.  When the discount was repealed last summer, station groups were allowed to retain their existing holdings, but they would be forced to divest assets in the event of a merger or corporate takeover.

Pai, however, argued that the elimination of the discount needed to go hand-in-hand with an examination of the media ownership cap. He said that the FCC would start just such a proceeding later this year. Reinstating the UHF discount, he said, would give the FCC a “blank slate.”

“This represents a rational first step in media ownership reform policy allowing free and local broadcasters to remain competitive with multi-national pay TV giants and broadband providers, ” said Gordon Smith, the CEO of the National Association of Broadcasters.

Update: Brandon Burgess, the chairman and CEO of ION Media Networks, sent a letter to Pai praising the restoration of the UHF discount.

“This action allows small entrepreneurial and consumer-oriented companies like ION Media to continue to succeed in a consolidating media world,” he wrote.

“Why anyone would want to micro-regulate tiny pro-consumer companies like ION Media (while simultaneously approving the media consolidation deals you reminded everyone of today) shall remain a mystery to both of us.  But onward.”

 

More Biz

  • The dark Manhatten skyline, seen from

    StubHub Refunds $500,000 to Customers Shut Out by New York Blackout

    Saturday’s blackout in New York had an outsized effect on the city’s nightlife, with Madison Square Garden and the entire Broadway district seeing multiple shows cancelled due to the the power outage. As a result, StubHub has refunded more than $500,000 worth of tickets for cancelled events. According to a statement from the company, the StubHub [...]

  • Weapons Cache

    D.A. Files 64 Charges in Bel-Air Weapons Stockpile Case

    The L.A. County District Attorney’s office has filed 64 counts against Girard Saenz, the man who allegedly kept a stockpile of more than 1,000 weapons at a Bel-Air home linked to the Getty family. Saenz is accused of illegal possession of assault weapons, transferring handguns without a dealer license, possession of short-barreled shotguns, and possession [...]

  • 9-1-1: Angela Bassett in the series

    Fox Sees Primetime, Sports Ad Gains As TV Upfront Wraps

    Fox Corporation is the latest to benefit from stronger-than-expected trends in TV ad spending, as the company notched strong gains in advertising commitments for its next cycle of programming – its first since selling off a large chunk of its media assets to Walt Disney. Ad demand was stronger than many executives anticipated, according to [...]

  • BMI Promotes David Levin to Senior

    BMI Promotes David Levin to Senior VP of Digital Licensing

    BMI today announced that David Levin has been promoted to Senior Vice President of Licensing, effective immediately. In his newly expanded role, Levin is responsible for all of BMI’s domestic licensing and revenue generation, encompassing radio, television, digital media, cable, satellite and general licensing.  Levin, who will oversee teams in New York and Nashville, reports [...]

  • Warner Music Group Logo

    Warner Music Acquires Musical Theater Indie First Night Records

    Warner Music Group has acquired First Night Record, an independent record label for West End and Broadway musical theatre cast recordings. The company will be overseen by WMG’s Arts Music Division, led by President Kevin Gore. First Night co-founder John Craig will join the Arts Music team under a multi-year consulting agreement to identify and record musical theatre productions in [...]

  • Woodstock 50 to Hold Open House

    Woodstock 50 to Hold Open House for Local Residents Before Permit Review Tuesday

    If nothing else, the producers of Woodstock 50 are persistent. After two permit applications to hold the troubled festival at the Vernon Downs racetrack in Upstate New York were rejected by the town of Vernon codes office, the producers and venue owner Jeffrey Gural today invited the local community “to embrace the Festival’s spirit of [...]

  • ILM Star Wars The Force Awakens

    ILM to Open Latest Effects Facility in Sydney, Australia

    Sydney, Australia, is to be home to Industrial Light & Magic’s fifth production hub. The Disney-owned special effects company currently has facilities in San Francisco, Vancouver, London and Singapore. The decision to open the Sydney outpost was announced Monday local time by executive creative director and head of ILM Rob Bredow, ILM executive Luke Hetherington, [...]

More From Our Brands

Access exclusive content