Pai Proposes Major Broadcast Dereg

FCC Chairman Ajit Pai said he has circulated a media ownership item for a vote at the November meeting that would achieve major broadcast deregulation.

It would eliminate the newspaper-broadcast crossownership rules; the radio-TV crossownership rule, eliminate the eight-voices test for duopolies;
allow for case-by case review of top-four prohibition on owning two stations among the top four, but does not get rid of the prohibition; eliminate the attribution rules for joint sales agreements, concluding they serve the public interest, and "finally, finally," the chairman said, establish an incubator program for new, diverse entrants.

The chairman outlined the item at a House Communications Subcommittee hearing Wednesday (Oct. 25). The committee was prepared for the bombshell. "It’s curious that this hearing is scheduled for today in particular—just one day before Chairman Pai is expected to make public at least one proposal that enriches a single company above others, and  that would clear out any last obstacles to Sinclair Broadcasting’s purchase of Tribune Media Company," said ranking member Frank Pallone (D-N.J.). 

Related: Pai: It's Official Policy to Release Meeting Items in Advance

Pai has long signaled such deregulation was coming, likely by before the end of the year and broadcasters have long pushed for such deregulation, arguing it was designed for a marketplace without MVPD and online competition. Commissioner Mignon Clyburn, who was also at the witness table,  said the proposal was to get rid of the best of broadcast regulations.

House Democrats on the panel suggested the dereg was yet another thumb on the scale for the Sinclair-Tribune deal.

A determined, almost combative, Pai said that the text of the decision would be published Thursday, calling it "news that's fit to print."

"NAB strongly supports Chairman's Pai plan for modernizing broadcast media ownership rules," said NAB spokesman Dennis Wharton. "For 40 years, policymakers and the courts have blessed countless mega-mergers among national telco, cable and satellite program giants, while at the same time blocking broadcast/newspaper or radio/TV combinations in single markets.

"This nonsensical regulatory approach has harmed the economic underpinning of newspapers, reduced local journalism jobs, and punished free and local broadcasters at the expense of our pay TV and radio competitors. We look forward to rational media ownership rules that foster a bright future for broadcasters and our tens of millions of listeners and viewers."

“On behalf of my 2,000 member news organizations, I applaud FCC Chairman Pai’s leadership in circulating an Order to repeal the 42-year-old ban on broadcaster and newspaper cross-ownership," said News Media Alliance (NMA) President David Chavern. "Outdated regulations preventing investment in one sector of the media market do not make sense, particularly when newspapers compete with countless sources of news and information every day. The news media industry must have economies of scale to compete in today’s marketplace and to reinvest in reporters and newsgathering operations that maintain an informed democracy and a functioning society.”

NMA represents almost 2,000 newspapers.

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.