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FCC UHF Proposal Ponders VHF Discount

The FCC's Notice of Proposed Rulemaking
(NPRM) on eliminating the UHF discount tees up various possibilities for
adjusting the current national audience reach limits on TV station ownership,
including allowing more VHF station purchases or even adjusting the current
national ownership cap.

The NPRM proposes
eliminating the UHF discount, which only counts 50% of the households in a
market toward the 39% national cap on a station group's national household
reach for UHF stations. For example, in 2012, the New York market had
7,387,810 TV homes, according to Nielsen. All those count toward the cap for a
V in the market, but only half for a U.

The discount dates
from the days of analog TV, when a UHF station signal was inferior to a VHF
signal. But since the 2009 digital transition, the reverse is true, with VHF
being the inferior signal.

According sources
familiar with the document, the NPRM also explicitly asks whether given that
turnabout, the FCC should consider applying the discount to VHFs.

In addition, the
NPRM says that the FCC also has the authority to change the 39% cap, though it
does not propose doing so, raising the point as part of its explanation of its
authority to eliminate the discount. That means the FCC could get rid of the
UHF discount or add a new VHF discount, raise--or lower--the cap, or combine
all those in some way if it adjusts the rules.

Once the NPRM has
been voted and public comment sought, the FCC will undoubtedly get a lot of
opinions on what it should and shouldn't do, only then will it be voting on
whether or not to make those proposals rules. For example, the FCC approved an
NPRM on retransmission consent changes back in 2011, but has taken no action
since to turn that proposal into action.