Newsmax: Raising 39% Cap Would Lower Boom on Local News

Cable net Newsmax took aim at broadcasters in its comments on the FCC's review of the 39% audience reach cap for TV station groups, saying raising the cap was dangerous for democracy.

"[W]hile broadcasters seek to shed the regulations that ensure their obligations to serve the local community," it told the commission, "they continue to demand the regulatory benefits they have received in exchange, such as free spectrum, a statutory copyright license, must-carry and retransmission consent rights, and market exclusivity protections."

Newsmax opposes the Sinclair-Tribune deal and has made similar arguments against the merger as concentrating too much power with broadcasters.

FCC Sets Comment Deadlines in 39% Cap Review

"By nationalizing their footprints, broadcast ownership groups are able to use the tools meant to ensure free and local content to force out competition from independent programmers and raise pay-TV prices," Newsmax said.

Sinclair would be able to retain more of the Tribune stations if the FCC decided to loosen the cap. It also argued the FCC needs to eliminate the UHF discount, which the FCC is considering in tandem with the cap.

The FCC has asked whether marketplace changes call for a fresh look at the cap--FCC chairman Ajit Pai has long suggested broadcasters need help competing with MPVDs and over-the-top providers on a more level playing field.

Newsmax says that the question is beside the point, the point being that the cap is statutory, so the FCC can't change it. But even given changes in the competitive, that should not impact how the FCC views ownership rules, which are meant to insure localism "If station groups find localism too constraining on their business plans," it told the commission, "they can simply relinquish their spectrum rights and offer their content on any number of new and unregulated platforms or they can become national cable channels and seek carriage without the benefit of retransmission consent rights."

Newsmax, whose stock in trade is in its name, says that raising the cap would lead to homogenized and centralized news programming, another criticism it has also leveled at Sinclair-Tribune.

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.