FCC ownership rules

The FCC has held tight to anachronistic structural regulations, dealing a massive blow to broadcasters in dire need of regulatory relief. Localism will be one of the casualties.

TV station owners just got bopped on the beak by the FCC regarding local TV station ownership limits. Could another bloody nose be on the way? It’s possible. That’s the view of prominent broadcast attorney David Oxenford, a partner at Wilkinson Barker Knauer in Washington. In a Jan. 2 blog, Oxenford said the Democratic-controlled FCC could take a look at the so-called UHF Discount, which is an FCC rule that allows a single TV station owner to serve more than 39% of TV households nationally. The FCC did not take up the UHF Discount or the 39% statutory cap set by Congress during its most recent quadrennial review of its broadcast ownership rules. “With a fifth commissioner now on the FCC, the UHF Discount could again be considered, particularly if there is a proposed acquisition that places the issue before the FCC by relying on the discount to comply with the ownership rules,” Oxenford said.

Entrenched in the past, the commission has held firm — and even tightened — its deeply out-of-date regulations, dealing a deep blow to broadcasters.

Ted Hearn: “Did the FCC just say that Nexstar and Amazon do not compete in the video programming marketplace? Didn’t Amazon Prime announce today that it will begin showing ads on TV shows and movies starting on Jan. 29? Financial pressure on TV station owners isn’t new, but it isn’t going away, either. But that didn’t seem to bother the FCC. The FCC’s new rulebook is long and complex, technical and tedious – which means a full understanding of the new rules won’t surface until the agency reviews proposed transactions or issues enforcement rulings against a TV station that pushed the limits.”

After weeks of intense lobbying, the Federal Communications Commission has reportedly adopted new media ownership rules, and it appears TV station owners have been dealt a setback. The news came in a post on the X microblogging site by a reporter for Communications Daily, an industry newsletter that follows FCC activity closely. “The FCC has approved the 2018 Quad Review order 3-2. I’m told the order still extends top 4 prohibition to LPTV and multicast streams, only change is language highlighting the waiver process,” Monty Tayloe wrote on Friday.

Ahead of next Wednesday’s fast-approaching deadline, broadcasting and pay TV industry representatives are using the limited time left to pitch the FCC on their preferred substance of potentially new media ownership rules. Broadcasters are urging the FCC to loosen some current rules and allow for more TV station ownership consolidation at the local level. Meanwhile, cable and satellite TV companies think current rules have loopholes that need to be closed to reduce the number of signal blackouts and moderate their payments to stations for carriage.

It’s not just TV stations that want deregulation from the FCC. So do radio stations. Facing stiff competition from Amazon, Facebook, and Google for ad dollars, radio broadcasters Connoisseur Media and Mid-West Family Broadcasting are saying the FCC needs “to relax the current local radio ownership rules particularly for companies like theirs, that already provide significant local service, and would increase such service if allowed to own more stations in their markets.”

TV station owners have their fingers crossed as they await a big regulatory decision out of the FCC. Agency action is expected within days based on a court order requiring an FCC decision by Dec. 27. Before the agency is a proposal to tighten a key TV station ownership regulation. A negative outcome for broadcasters could upend established business practices that support their market value. Even if the FCC exempts existing TV station deals otherwise disallowed under the new rules, many broadcasters fear that even an accommodation like that could hurt their ability to exit the business at a healthy price.

The National Association of Broadcasters continues to press for TV station ownership deregulation, saying a federal rule that bars the common ownership of some of the most successful TV stations in a market needs to go. NAB lawyers made their latest appeal for a market-driven ownership approach in a Nov. 30 meeting with an aide to FCC Chair Jessica Rosenworcel. A federal appeals court has ordered the FCC to finish its TV station ownership review by Dec. 27.

The FCC has 90 days to finish its review of the rules governing how many broadcast stations a company can own, a federal court said in a ruling on Friday (Sept. 29). The agency is required to review the laws every four years to see if they continue to serve the public interest. It kicked off the review in 2019, but a series of legal entanglements delayed the actual start of the process. After further stalling this year, the National Association of Broadcasters filed a petition with the D.C. Circuit Court of Appeals in April to get the process moving.

A deal for Forum Communications Company to acquire Fox affiliates KVRR Fargo, N.D., and KQDS Duluth, Minn., has come undone. The deal failed to materialize as both Forum Communications and Red River Broadcasting awaited what is called a “Big Four waiver request” from the FCC. The waiver would have allowed Forum to acquire a second “Big Four” network affiliate in the Fargo market.

The FCC should conclude its long-overdue, congressionally mandated quadrennial review of whether its media ownership regulations are necessary in the public interest, NAB CEO Curtis LeGeyt told FCC Chairwoman Jessica Rosenworcel earlier this month, according to an FCC filing. A politically tied FCC is unlikely to approve reregulation of broadcasters and so far there has been no movement on a Senate confirmation vote on Gigi Sohn, the Democratic nominee who would break that tie.

It’s been four months since Comcast filed its FCC petition asking the agency to look at whether Nexstar is in violation of the 39% broadcast audience cap, and so far, it’s been crickets.

In a move that is a big blow to some big tech companies, Congress has voted to ban new equipment licenses for Chinese telecoms Huawei, ZTE and any other technology company the government concludes poses a national security threat, closing what one of the bill’s sponsors called a “dangerous loophole.”

In a first for an acquisition of a network affiliation, the FCC says Gray Television has “willfully and repeatedly” violated the commission’s prohibition on owning two of the top-four rated full-power TV stations in a market. The FCC has proposed a half-million-dollar fine. The commission said that the proposed fine stemmed from its acquisition of the CBS affiliation of KTVA — which went dark — when it already owned NBC affiliate KTUU, both in Anchorage, Alaska.

Republicans are basking in the U.S. Supreme Court’s decision upholding a GOP rollback of media ownership restrictions — but now it’s the Democrats’ turn to put their stamp on the policy. The FCC must review its media ownership rules every four years. The latest review, begun in 2018, languished while the legal challenge to the Republican policy was pending. The high court’s decision in FCC v. Prometheus Radio Project frees the now Democratic-led FCC to jumpstart its review process. Both Democratic members have publicly backed more stringent rules that promote minority and women ownership.

The United States Supreme Court yesterday released its decision upholding the FCC’s 2017 changes to its ownership rules in the FCC v. Prometheus Radio Project case. The practical result of this decision is that the newspaper-broadcast crossownership prohibition will end. We certainly do not think that any future FCC would try to reinstate the crossownership ban given the current state of the newspaper industry. Also abolished in 2017 and now formally ended are the radio-television crossownership restrictions.

Few rules in the Code of Federal Regulations have as tortured a history as 47 CFR § 73.3555 — the broadcast multiple ownership rules. The subject of court decisions too numerous to count, a brief review of FCC decisions revising (or deciding not to revise) these rules reveals a twisted mass of logic and rationales where parties fiercely argue even as to the very reason for their existence. Today, the Supreme Court released a unanimous decision reversing the Third Circuit’s ruling involving three ownership rules, noting simply that the FCC’s approach had been reasonable, and the fact that it made its decision based on the record before it rather than the record the Third Circuit wished for, was just the way government must function.

In a big victory for broadcasters, the Supreme Court has reversed the Third Circuit’s decision throwing out the FCC’s broadcast deregulation under former FCC Chairman Ajit Pai. Current acting chairwoman Jessica Rosenworcel had voted against the deregulatory move.

NAB President Gordon Smith says the organization is shifting into offense with the new Democrat-led FCC, pairing with newspaper publishers for an antitrust exemption in dealing with Big Tech along with pressing for a relaxation of antiquated TV ownership rules. Note: This story is available to TVNewsCheck Premium members only. If you would like to upgrade your free TVNewsCheck membership to Premium now, you can visit your Member Home Page, available when you log in at the very top right corner of the site or in the Stay Connected Box that appears in the right column of virtually every page on the site. If you don’t see Member Home, you will need to click Log In or Subscribe.

A recent study published by two FCC economists shows the agency’s local ownership regulations depress the amount of local news programming that could otherwise be produced. The FCC could immediately promote more local news production just by relaxing its outmoded rules.

On the final full day of the presidency of Donald J. Trump, his administration urged the Supreme Court to allow media ownership rules to change despite some who believe the move would hurt female and minority ownership of broadcast outlets. A high court with three Trump appointees could grant such wish, although the forthcoming decision figures to be prelude to more battles ahead.

Turns out Jan. 19 will be an inauguration day of sorts — inaugurating the Supreme Court’s first consideration of an appeal of the FCC’s media ownership rule deregulation. It will be the fourth oral argument of the January session, with one hour of argument scheduled, though that could spill over depending on how the arguments and Justices’ questioning goes.

Gray’s brief argues that the FCC’s modernized rules should finally be allowed to take effect because the agency issued them in full compliance with its obligations under Section 202(h) of the Telecommunications Act of 1996.

Broadcasters would welcome reformation of the outdated newspaper-TV crossownership rule, but the Supreme Court’s decision to hear an appeal of the Third Circuit decision doesn’t solve all the industry’s COVID-induced woes. The FCC still needs to eliminate the Top 4 rule and online video distributors need to be classified as MVPDs.

As we reported last week, the United States Supreme Court has agreed to hear appeals by the FCC and the NAB of a decision by the U.S. Court of Appeals for the Third Circuit that overturned a 2017 decision by the FCC attempting to relax its media ownership rules. So, what does this actually mean for the FCC’s ownership rules and the broadcast industry? Not surprisingly based on the history of this proceeding, the answer is not entirely clear.

The country’s top court has taken up a major case about media ownership rules that will have a far-reaching impact on M&A and broadcast regulation.

The U.S. Supreme Court said on Friday it will take up a long-running legal dispute over whether the FCC can loosen U.S. media ownership rules. A lower court has thwarted the FCC’s efforts to revise the rules since 2003 in a series of decisions.

“The FCC’s anachronistic ownership rules place local broadcasters at a decided disadvantage against other competitors in the complex, fast-evolving, highly competitive video marketplace,” the Big 4 affiliate groups told the Supreme Court.

The Solicitor General of the United States, on behalf of the FCC, has asked the Supreme Court to review a U.S. Third Circuit Court of Appeals decision overturning most of its media ownership deregulation decision, hammering the circuit for what the FCC suggested was serial obstruction of what it had concluded was in the public interest.

Why have the FCC’s decade-long efforts to liberalize the broadcast ownership rules been stymied by two judges and will that continue?

The FCC has reinstated its 2016 ownership rules, recognizing that the changes made in those rules in 2017 were no longer effective because the Third Circuit Court of Appeals had thrown out the 2017 decision. While the FCC may still try to appeal the Third Circuit decision to the Supreme Court, the Third Circuit’s mandate has issued, meaning that its order is effective even if a Supreme Court appeal is filed.

TV station owners are taking advantage of FCC rules to quietly take over small-town airwaves, but cable and satellite companies are crying foul to regulators. Broadcasters aren’t supposed to own more than one top-rated outlet in any market, but they are snapping up multiple stations anyway in small markets like Parkersburg, W.Va., and Greenville, Miss., as the broadcast TV market is challenged by changes in technology and advertising.

The FCC isn’t likely to loosen ownership restrictions anytime soon, said leaders from Nexstar, Gray and Meredith last week, but outside money is likely to continue coming into the industry while the ownership cap holds steady. L-r: Patrick McCreery of Meredith, Perry Sook of Nexstar and Pat LaPlatney of Gray. (Photo: Wendy Moger-Bross)

The federal court in Philadelphia said the FCC, in eliminating the newspaper-broadcast crossownership rule and relaxing the local TV duopoly rule, failed to ascertain the impact of the action on station ownership by women and minorities. FCC Chairman Ajit Pai blasted the ruling and the court, which has repeatedly blocked ownership dereg: “It’s become quite clear that there is no evidence or reasoning — newspapers going out of business, broadcast radio struggling, broadcast TV facing stiffer competition than ever — that will persuade them to change their minds.”

Gray Television’s deal to buy KDLT Sioux Fall, S.D., and create a precedent-setting affiliate duopoly in the market has been hung up at the FCC for 15 months without any explanation. For the sake of buyers and sellers, large and small, the FCC needs to act.

When it comes to those opposing modifications to the FCC’s media ownership rules, the National Association of Broadcasters is not holding back in its most recent comments. The organization wrote that comments submitted in opposition to reform are “fundamentally backward” in this new media marketplace.

FCC Chairman Ajit Pai put in a plug Wednesday for giving the FCC some fast track broadcast deregulatory authority. In a House Communications Subcommittee FCC oversight hearing, Pai said that the disconnect between a moving marketplace and the “stasis” of FCC rules was the fundamental issue the FCC had with its media ownership rules.