This potential FCC rule change could be disastrous for local media diversity

This potential FCC rule change could be disastrous for local media diversity 

Free Press policy analyst Dana Floberg: “If the FCC loosens the national ownership cap, it'll be even easier for Sinclair and other big broadcasters to merge their way to national broadcasting monopolies” 

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Melissa Joskow / Media Matters

With conservative local TV behemoth Sinclair Broadcast Group’s unprecedented expansion plan now in sudden peril, advocates are warning that the fight for local news is far from over. The Trump Federal Communications Commission (FCC) is still very much in favor of media deregulation, and it’s poised to consider another move that could homogenize your local news.

July brought a bombshell announcement from the FCC: Sinclair’s proposed acquisition of Tribune Media, which would give the local TV giant unprecedented control over local stations across the country, was designated for greater legal scrutiny. The decision was shocking to opponents of the deal, who had fought back as the FCC spent the last year bestowing upon Sinclair a series of regulatory giveaways that made the proposed deal possible in the first place.

In announcing the need for additional consideration -- a move that has doomed similar large transactions in the past -- the FCC cited several specific divestitures proposed as part of the deal, which would have involved Sinclair’s signature use of legal loopholes to skirt ownership caps. It even asserted that Sinclair may have misrepresented its intentions in these cases. As of publication, however, neither Sinclair nor Tribune has indicated it will pull back from the deal rather than follow through with a hearing.

In the weeks since the announcement, consumer and media advocates who had previously faced a sharp uphill battle in challenging the merger are now discussing other imminent threats to ensuring a diversity of voices in local media, including Sinclair’s larger repertoire of sketchy business practices and other consolidation efforts on the horizon.

In conversations with Media Matters, representatives from media and consumer advocacy groups said a possible FCC reconsideration of what’s known as the national ownership cap, or national television audience reach cap, could be the next big local media fight on the horizon.

As Francella Ochillo, the director of government and legal affairs at the National Hispanic Media Coalition, explained to Media Matters, loosening ownership limits “would pave the way for additional media consolidation and cross-ownership, allowing one entity to own more stations in already concentrated markets. That will also have a direct impact on the diversity of voices in those communities.”

In 2004, Congress created a statute stating that no broadcaster could own local stations reaching more than a collective 39 percent of U.S. television households. The new cap was part of the Consolidated Appropriations Act of 2004, which also specified that only Congress -- and not the FCC -- could change that 39 percent figure moving forward.

Though it does not have the power to change the cap unilaterally, the FCC, in the years since, has made changes to how that ownership reach is calculated. Most notably, the commission has waffled back and forth in recent years about using a now-outdated rule known as the UHF discount, which allows station owners to calculate their ownership reach in a misleading way that effectively skirts the 39 percent cap. The FCC’s bizarre move to reinstate the UHF discount in 2017 is what allowed Sinclair to pursue such a huge acquisition to begin with.

Some advocacy groups challenged the UHF discount reinstatement in court, but the case was recently dismissed for lack of standing, with no ruling on the merits of the case. (Earlier questioning from the panel of judges suggested skepticism of the FCC’s reasoning for reinstating the outdated rule, though. One judge said the commission seemed to be keeping the discount “on life support.”)

Now it appears that the FCC will reconsider both the UHF discount and the entire national ownership cap, though. It’s only a matter of when and how drastically things could change.

For his part, FCC Chairman Ajit Pai remains heavily in favor of media deregulation and consolidation, often under the guise of innovation; he expressed a desire to raise the national ownership cap as far back as 2013.

The commission in December gave public notice of its intent to review the current limit, introducing a Notice of Proposed Rulemaking and mentioning the possibility that the cap could be eliminated altogether.

Commissioner Jessica Rosenworcel said in a dissenting statement at the time that by pursuing new rulemaking on the national cap, “we are destroying our most basic values and tearing apart the rules that have helped keep our media markets local, diverse, and competitive.” Then-Commissioner Mignon Clyburn lamented, “The current Administration, in its quest to green light even greater media consolidation, has found a way to rewrite history” by initiating a reconsideration of the cap without the authority to do so.

A long list of major broadcasting companies stated their support for raising the cap to 50 percent after the rulemaking announcement. And Sinclair urged the FCC in an April filing to eliminate the cap altogether.

The FCC has not acted further on the reconsideration yet, though there were rumors it would to do so in July. But when it does, a change could boost not just Sinclair (which would be free to pursue other deals currently restricted by the cap) but also the many other major broadcast owners that are looking to further expand but currently cannot.

Dana Floberg, a policy analyst at consumer advocacy group Free Press, explained to Media Matters, “If the FCC loosens the national ownership cap, it'll be even easier for Sinclair and other big broadcasters to merge their way to national broadcasting monopolies.”

What’s more: Loosening or eliminating the cap would leave local media consumers -- especially some communities of color that rely more heavily on local broadcast news -- with fewer options.

Ochillo described this significant potential impact of a corporate-friendly change to the cap. “As media consolidation increases, the number of voices controlling the local media broadcasts will decrease. That means that media ownership could become even more homogenous than it is today. The FCC must honor its commitment to promote diversity in media ownership.”

Posted In
Media Structures & Regulations
Network/Outlet
Sinclair Broadcast Group Inc.
Person
Ajit Pai
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