Hearst, Scripps Pitch 50% National Ownership Cap

Some high-profile broadcast groups have been telling the FCC they would be OK with moving the 39% national ownership cap to 50% from 39%, rather than eliminating it altogether. 

In filings at the FCC, Hearst Television, Scripps Media, Raycom Media, Gray Television, Graham Media, Quincy Media, Dispatch Broadcast Group and Morgan Murphy Media told the FCC they can support both a cap at 50% and eliminating the UHF discount for future broadcast groups, so long as current groups that would be over that 50% cap without the discount are grandfathered. 

They say that "will bring the Cap up to date with the current marketplace and strike a reasonable balance among the competing interests in play."

The FCC opened a combined cap and discount proceeding after reinstating the UHF discount, arguing the previous FCC could not eliminate it without also considering the cap at the same time, since the two were linked. The FCC was under no obligation to review the cap, but it is part of current chairman Ajit Pai's broader deregulatory review.

"[Because] the Commission is mandated by the Communications Act to ensure that America’s local system of broadcasting thrives, the Local Broadcasters believe this solution to be the optimal outcome for this proceeding," they wrote in joint comments in that combined proceeding earlier this month.

Related: FCC Sets Comment Dates on Latest Sinclair-Tribune Filing

"In order to facilitate the production of high-quality local journalism, the Local Broadcasters must be free to combine television, radio, print, and digital online assets in whatever fashion makes business sense to serve discrete local markets," the groups told the commission.

One of the interests in play is Sinclair, which supported eliminating the cap and is trying to get its Tribune deal approved by the FCC and Justice. As it currently stands, without the UHF discount, the deal would exceed 70% of the national audience, so would violate that new cap by over 20%. So, Sinclair would need to close that deal before the FCC made its decision if it went with the broadcasters' approach.

Related: NAB Pitches 50% UHF/VHF Discount

Conservative news outlet Newsmax, which opposes the Sinclair-Tribune merger, said it supports a 50% cap, but only with a tweak to the grandfather provision that would effectively block that merger. 

In comments on the broadcasters' comments, Newsmax said that while it thinks Congress meant the cap to remain at 39%--something a court may eventually have to decide--if the FCC should raise the cap, the company says it is OK with 50% under two conditions:

1) The FCC should only grandfather ownership combos in place before it issued the reconsideration order on its elimination of the UHF discount.

2) The FCC prohibits station groups from getting around the 50% cap through services agreements with stations it does not own. Sinclair is proposing striking some of those agreements with stations it is spinning off to get under the current 39% national cap and local ownership restrictions.

The FCC under the previous Democratic Administration advised it would look at such agreements carefully, presuming they could be attempt to evade ownership restrictions, but the current FCC canceled that advisory.

Another wrinkle in the FCC deal, and the FCC's broadcast deregulation, is a federal court challenge to the FCC's decision to reinstate the UHF discount. That decision could come out any time.   

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.