FCC Deregulates Broadcast Ownership

A Republican FCC majority, assailed by Hill Democrats who tried to block the vote and FCC Dems who strongly dissented, has eliminated some decades-old broadcast regulations and tweaked others in what broadcasters have argued is a necessary to allow them to remain relevant in a sea of less-regulated competitors.

The order, which was circulated last month eliminates the newspaper-broadcast and the radio-TV cross-ownership rules; allows dual station ownership in markets with fewer than eight independent voices after the duopoly, creating an opportunity for ownership of two of the top four stations in a market on a case-by-case basis (the FCC is not calling it a waiver); eliminates attribution of joint sales agreements as ownership; and creates an incubator program.

It still requires stations to notify the FCC of joint services agreements and does not change the dual-network ownership prohibition. There will also be no change in the local radio station rule. So, the maximum of eight radio stations and two TV stations in a market will remain, but the markets that will be allowed in will change.

"It’s a simple proposition: the media ownership regulations of 2017 should match the media marketplace of 2017," said FCC Chairman Ajit Pai of the historic vote. "That’s the proposition the FCC vindicates today—nothing more, nothing less. And it’s about time.  For few of the FCC’s rules are staler than our broadcast ownership regulations.  Notwithstanding the congressional command that we review and update these rules every four years, they have remained stuck in the past.  After too many years of cold shoulders and hot air, this agency finally drags its broadcast ownership rules into the digital age."

House and Senate Democrats had fought the vote, with some Senators asking Pai to recuse himself until the FCC Inspector General had looked into allegations the ownership vote, and other FCC actions, were thumbs on the scale for the Sinclair-Tribune deal.

The chairman dismissed that request as last-ditch politics.

Sinclair backed the deregulatory moves, but so did most other broadcasters, though they could immediately help Sinclair since it means it has a deal before the FCC and the rule changes mean it might have to spin off fewer stations in the Tribune deal.

FCC Commissioner Mignon Clyburn raked the majority over the coals in her dissent. "[W]elcome back to 'Industry Consolidation Month' at the Federal Communications Commission where it seems my colleagues in the majority are more intent on granting the industry’s holiday wish list early rather than looking out for the public interest," she said. "Mark my words, today will go down in history as the day when the FCC abdicated its responsibility to uphold the core values of localism, competition and diversity in broadcasting."

Clyburn said she did not know where to start in her dissent, but that the order was not about helping smaller broadcasters and newspapers, but about helping large media companies get larger. She said the if the FCC was actually trying to help smaller, financially challenged stations, it would be a targeted proposal to do just that.

Related: FCC Opens More Spectrum Frontier

She said the FCC was, instead, engaging in broadcast empire-building.

Rosenworcel was equally strong in her excoriation, saying the FCC had set its values of diversity, localism and competition "on fire," suggesting consolidation would make it harder to distinguish fake news from real. "We are not going to be able to remedy the way the highest level in government is now comfortable stirring up angry sentiment, denouncing news as false facts, and bestowing favors on outlets with narratives that flatter those in power rather than offer the hard-hitting assessments we need as citizens," she said. "Instead we clear the way for more mergers of greater magnitude—like the one presently before us—which will benefit heartily from the destruction of these policies today. 

“Today the FCC dismantles [our] values," she said. "Instead of engaging in thoughtful reform—which we should do—this agency sets its most basic values on fire.  They are gone.  As a result of this decision, wherever you live the FCC is giving the green light for a single company to own the newspaper and multiple television and radio stations in your community.  I am hard pressed to see any commitment to diversity, localism, or competition in that result.” 

Commissioner Michael O'Rielly supported all the changes, and suggested more deregulation was needed and should be forthcoming. He said he was sure the item would wind up back in court.

Commissioner Brendan Carr said the FCC's past reviews had taken an ostrich-like approach to the realities of the modern media marketplace, a failure Thursday's item was helping to correct. He said the FCC was finally acknowledging the reality that some of the FCC's rules are outdated and counterproductive.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.