UHF Discount Foes Fire First Legal Shot

Opponents of FCC Chairman Ajit Pai's restoration of the UHF discount, which helped pave the way for a possible Sinclair/Tribune merger, have taken their first shot in federal court, saying the decision was illegally arbitrary and capricious and served no public interest purpose.

Late Monday (Sept. 25), a coalition of nonprofit media consolidation critics including Free Press, Common Cause, the National Hispanic Media Coalition and Prometheus Radio Project, laid out their case for why the decision to reinstate the discount was arbitrary and capricious and not in the public interest.

The previous Democratic-led FCC had eliminated the discount as an outmoded artifact of the analog TV era.

The groups, filing their opening brief in the U.S. Court of Appeals for the D.C. Circuit, said the FCC did not present any "valid or factual legal basis" for the discount's return.

The discount means that a TV station group owner has to count only half a UHF stations audience toward the 39% national audience reach cap. It dates from the analog era when UHF stations were the weaker signals, which is the reverse in digital. Chairman Pai argued that, while the discount may indeed need to go, the FCC should have considered that move in concert with rethinking the 39% cap with which it was inextricably linked, he argued.

THe groups say the FCC did not err in treating the discount as a separate item because the decision did not "tighten" the cap, but furthered its purpose. Without the discount, a station could reach up to 78% of the country, they point out.

"The best indication that reinstating the discount was not actually intended to maintain the status quo, is the fact that, just two weeks after the Commission issued its decision reinstating the discount, Intervenor Sinclair announced plans to acquire Intervenor Tribune," they told the court. That deal could give Sinclair, already the largest TV station group at slightly under the 39% cap, a reach of over 70% of the country.

They said the decision to reinstate the cap is arbitrary and capricious—and thus violates the Administrative Procedure Act—because it is premised on a move—reconsidering the 39% cap—that the FCC does not have the authority to make because the 39% figure was established by Congress.

Even Republican Commissioner Michael O'Rielly, who voted to reinstate the discount, questions the FCC's authority to change the 39% cap absent direction from Congress. Even if it did have the authority, they say, it would still be arbitrary and capricious to retain a policy that "serves no legitimate purpose" in anticipation of a future FCC review—of the cap—which does not appear to have sufficient votes—it would need O'Rielly's—and will take years to conclude, "if ever."

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.