FCC Opens Review of 39% Cap, UHF Discount

A politically, and philosophically, divided FCC voted Thursday (Dec. 14) to launch a review of the FCC's national 39% broadcast audience reach cap.

TV station group owners cannot own stations that reach more than 39% of the nation, with waivers in some circumstances.

The FCC is looking at whether it can modify the cap, which was created by Congress, and if so, whether it should be lowered or, more likely under this FCC, raised or eliminated altogether given the increasing programing and technological options for accessing content.

It also asks whether to retain the UHF discount, which allows station groups to count only half their UHF station audience toward that cap, and if not, should the cap be adjusted.

"We need to take a holistic look at the national cap rule, including the UHF discount," chairman Ajit Pai said of the item. "The marketplace has changed considerably due to the explosion of video programming options and various technological advances that have occurred since the cap was last considered in 2004.  So we need to examine whether our rules should change accordingly.  That’s an important discussion that will be informed by the facts in the record—not anything else."

The item drew no tentative conclusions. Chairman Pai said the item was all about developing a record and could not say when any action would be taken.

The vote was 3-2, with the Democrats strongly opposing. But at least one Republican also had issues with the FCC's authority to take action.

Commissioner Michael O'Rielly said he still didn't think the FCC had the authority to modify the congressionally mandated cap--he is a former congressional staffer who worked on the legislation. O'Rielly said Congress would need to weigh in ultimately, but he supported the FCC review since that congressional review did not look like it was forthcoming.

The FCC under current Chairman Ajit Pai voted to reinstate the cap earlier this year, with the signal that its elimination was tied to the cap review. That dates from the analog days when UHF stations were less desirable signals than VHF, which is the reverse in digital TV.

Commissioner Jessica Rosenworcel, who had voted to eliminate the UHF discount under a previous chairman, slammed the proposal.

"Today the FCC seeks to dismantle its values," she said. "At a time when real facts get casually derided as fake news, algorithms are ascendant, and what is viral is often not verifiable, this is neither prudent nor wise.  It is also unlawful.  At the direction of Congress in the Consolidated Appropriations Act of 2004, the FCC is statutorily prohibited from allowing a single company from acquiring stations that reach more than 39 percent of the national television audience. The FCC lacks authority to change this law.

 Doing so is the exclusive province of Congress. But somehow, someway, we have this rulemaking anyway. 

"Localism, diversity and competition are bedrock principles of our national media policy, and indeed our democracy," said Commissioner Clyburn, another strong nay. "Giving a single broadcaster the means to buy up enough local stations to exceed the 39% cap is inconsistent with the statute and must be rejected.

Critics of the FCC's restoration of the discount and possible increase of the ownership cap argue those were moves by the FCC majority to help Sinclair buy the Tribune stations.

“Today, the FCC took yet another step to pave an easier path for the proposed Sinclair-Tribune mega-merger at the expense of viewers and an independent, diverse, and local media," said the Coalition to Save Local Media, one of those critics. "The FCC initiated a proceeding to, among other things, relax or eliminate the 39 percent national broadcast audience reach cap, which prevents a single voice from controlling our nation’s airwaves.  This cap is statutory, intended to be enforced by the FCC, not amended by it."

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.