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FCC Launches Review of TV Station Ownership Cap

WASHINGTON — The FCC gave the go-ahead on Thursday to review a rule that limits the number of TV stations that a single entity can own, a proceeding that could ultimately allow media companies to own many more outlets.

The FCC’s 3-2 party line vote launches a period to collect public comment on what to do about the national ownership cap, which is now set at 39% of U.S. TV households. The changes could include raising the cap or eliminating it altogether.

Chairman Ajit Pai said the review does not reach conclusions on what should be done.

The FCC will also take comment on the the FCC’s so-called UHF discount. That is a formula for calculating a company’s TV station holdings against the 39% limit. Pai championed the reinstatement of the discount in April after it was eliminated by the previous FCC regime.

“Because the national cap and the UHF discount are inextricably linked, any review of one component of the rule must include a review of the other,” Pai said in a statement last month.

The public comment period is sure to be a free for all among advocacy groups who are already on the offensive against the $3.9 billion union of Sinclair Broadcast Group and Tribune Media.

They argue that Pai and the FCC’s Republican majority already have made a series of moves to ease media ownership rules to the benefit of Sinclair. Even if the Sinclair-Tribune deal is approved by the FCC before a formal vote on raising the cap, Sinclair could cite the pending review as a reason to hold off on divestitures.

Commissioner Mignon Clyburn said the review raises the prospect that massive media companies will command an even larger share of the local media market. She said when it comes to the cap, “the FCC has absolutely no authority to act.”

The fact that it was Congress that imposed the 39% solution on the station cap in 2004 has led to some debate about whether the FCC has the authority to make any changes. Clyburn said it does not, and that the decision has to be made by congressional action.

Commissioner Michael O’Rielly, a Republican appointee who has previously said only Congress had the authority to modify the cap, nevertheless voted in favor of the review. On Thursday, he suggested that the issue would have to be resolved in the courts.

Pai said the review will be looking into whether the FCC had the authority to raise the cap.

The national ownership cap was last raised in 2004. It was initially lifted in 2003 from 35% to 45%, but following an outcry from independent TV station owners (who worried that the major networks would elbow them out of large markets) as well as media watchdog groups, Congress came up with a compromise of 39%.

The UHF discount allows owners of stations on the UHF band (14-64) to count those stations at only half of the actual coverage area of the markets they serve. The UHF discount had been in place for years, but was rescinded in 2016 because the question of signal strength had become mostly moot in the era of digital broadcasting, and because the vast majority of TV homes receive signals through a cable or satellite provider. The restoration of the UHF discount made Sinclair’s acquisition of Tribune possible because most of Sinclair’s 170-plus TV stations are UHF outlets.

Pai has pushed back against criticism that he has pursued policies to benefit one company.

Commissioner Brendan Carr voted to move forward with the review, while Commissioner Jessica Rosenworcel voted against.

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