Ajit Pai | Media Matters for America

Ajit Pai

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  • 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.”

  • The Sinclair-Tribune merger might be in big trouble because of Sinclair's shady business tactics 

    FCC signals it will slow-track the merger, citing Sinclair’s practice of using legal loopholes to skirt ownership rules

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    Sarah Wasko / Media Matters

    On July 16, Federal Communications Commission (FCC) Chairman Ajit Pai issued a statement saying he had “serious concerns” about the pending acquisition of Tribune Media by conservative local TV giant Sinclair Broadcast Group. The statement said the FCC would not be able to approve the acquisition outright and Pai will recommend that the matter be sent to an administrative law judge -- a move, according to Politico, that is “often viewed as a deal-killer.”

    In the July 16 statement, Pai cited evidence that “certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law.” In other words, the FCC can’t approve the deal because Sinclair would be breaking the law -- and doing it so blatantly that even Pai, a Trump appointee who’s currently being investigated for leading the FCC in deregulation efforts that suspiciously benefit Sinclair, couldn’t turn the other way.

    In fact, the company outlined in its final proposal to the FCC exactly how it would use legal loopholes to continue controlling stations in practice that it would legally be required to sell. It identified at least four local TV stations it was planning to sell, while simultaneously entering into agreements to continue controlling certain services and marketing for those stations -- WGN in Chicago, IL; KUNS in Seattle, WA; KAUT in Oklahoma City, OK; and KMYU in Salt Lake City, UT. It was planning to sell WGN to a newly formed company run by a Sinclair business partner, and to sell the other three to Sinclair-affiliated conservative pundit Armstrong Williams for well below market price. (Two additional stations, KDAF in Dallas, TX, and KIAH in Houston, TX, were going to be sold to another company affiliated with Sinclair, Cunningham Broadcasting.) 

    These legal maneuvers are commonly known as “sidecar” agreements, and Sinclair is notorious for using them in a manner that’s been described as bordering on “regulatory fraud.” Basically, when Sinclair bumps up against an ownership cap in a local market, it sells one of its stations to nominally fall below the cap. Then it uses “sidecar” agreements -- sometimes known as shared service agreements, joint sales agreements, or local marketing agreements -- to keep operating the station anyway.

    For example, Sinclair doesn’t actually own any local TV stations in the Wilkes-Barre/Scranton area of Pennsylvania -- but it still controls some content and/or handles operations at three stations there (WOLF, WSWB, and WQMY). And because of Sinclair’s complicated web of agreements, one of those Wilkes-Barre stations (WOLF) is sharing news anchors with two other Sinclair stations in entirely different states.

    According to Reuters, Pai's draft order to send the acquisition to a hearing goes so far as to cite potential "deception" by Sinclair in pursuing these kinds of legal arrangements. It’s unclear if the order for a hearing will definitely end Sinclair’s bid -- but it is a damning, if incredibly belated, recognition of the blatantly absurd regulatory tricks the company regularly employs to get its way.

  • Trump-obsessed media outlets again ignore critical net neutrality news

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    Dayanita Ramesh / Media Matters

    Today, senators voted on a resolution to undo a 2017 move by the Federal Communications Commission (FCC) to end net neutrality regulations, but major television and print media outlets have devoted little more than a few mentions to the issue.

    This dearth of coverage may stem in part from the distraction of President Donald Trump, as since his election, media outlets have been laser-focused on his statements and actions. Several significant Trump-related stories did break today, but it’s nonetheless obvious that media outlets have done little to address their Trump obsession and prioritize the many other issues that matter to Americans.

    Net neutrality requires internet service providers (ISPs) like Comcast, AT&T, and Verizon to give their users equal access to all internet content. Upending these rules means that, for a fee, ISPs can prioritize certain websites, allowing them to load more quickly on their users’ devices, and slow down or even block other sites. As Wired’s Klint Finley explained, “Well-established services from deep-pocketed companies like Google, Facebook, and Microsoft will likely remain widely available. But net-neutrality advocates argue that smaller companies that don’t have the money to pay for fast lanes could suffer. In other words, protecting net neutrality isn't about saving Netflix but about saving the next Netflix.”

    The FCC, led by Trump-nominated Ajit Pai, decided last year to end net neutrality rules in a move that voters across the political spectrum largely opposed. Leading up to the FCC’s vote, though, many media outlets were shockingly silent on the repercussions of upending consumer protections on internet access.

    As Democratic senators made a last-ditch effort to salvage net neutrality rules -- which passed in the Senate -- coverage by many media outlets is still nowhere to be found.

    Today on national cable news, MSNBC Live with Stephanie Ruhle and Fox Business’ FBN AM mentioned the net neutrality vote in brief headline segments. Fox News aired two segments on The Daily Briefing with Dana Perino and Shepard Smith Reporting, and CNN has not mentioned the vote at all.

    Fox Business and One American News Network, a decidedly pro-Trump outlet known for pushing conspiracy theories, aired full reports of the net neutrality vote. Both of the reports recited Chairman Pai’s debunked talking point that the deregulation will encourage investment in broadband infrastructure and disparaged Democrats for insisting upon the vote at all.

    Additionally, a Nexis search for “net neutrality” produced zero results among the nation’s top newspapers, including The New York Times, The Washington Post, The Wall Street Journal, the Los Angeles Times, the Chicago Tribune, the New York Post, and USA Today.

  • The Trump FCC is now being investigated for making rules changes to help Sinclair

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    Sarah Wasko / Media Matters

    The nefarious relationship between the Trump-era Federal Communications Commission (FCC), conservative local TV news giant Sinclair Broadcast Group, and the Trump administration itself is now under investigation.

    On February 15, The New York Times reported that the FCC inspector general has opened an internal investigation into potential improper conduct by Trump-appointed FCC chair Ajit Pai and his aides in advocating for deregulatory rules that specifically benefited Sinclair.

    The Times noted that little is known about the extent of the investigation, which was launched at end of last year but had been undisclosed until now. The investigation began after several lawmakers called on the inspector general to investigate a “disturbing pattern of a three way quid-pro-quo.” Congressional letters to the inspector general, David Hunt, detailed reports of communications and meetings involving Pai, the Trump White House, and Sinclair executives. According to the Times report:

    A New York Times investigation published in August found that Mr. Pai and his staff members had met and corresponded with Sinclair executives several times. One meeting, with Sinclair’s executive chairman, took place days before Mr. Pai, who was appointed by President Trump, took over as F.C.C. chairman.

    Sinclair’s top lobbyist, a former F.C.C. official, also communicated frequently with former agency colleagues and pushed for the relaxation of media ownership rules. And language the lobbyist used about loosening rules has tracked closely to analysis and language used by Mr. Pai in speeches favoring such changes.

    In November, several Democrats in Congress, including Mr. Pallone, called on the inspector general’s office to explore all communications — including personal emails, social media accounts, text messages and phone calls — between Sinclair and Mr. Pai and his staff.

    The lawmakers also asked for communications between Mr. Pai’s office and the White House. They pointed to a report in March 2017 from The New York Post, in which Mr. Trump is said to have met with Sinclair’s executive chairman, David Smith, and discussed F.C.C. rules.

    The internal investigation could also tackle a series of recent FCC actions that have directly allowed Sinclair greater room to expand:

    • In April, the FCC reinstated an outdated media ownership rule known as the UHF discount, making room for a new level of local media consolidation at the hands of big media groups like Sinclair.
    • Weeks later, Sinclair announced it was proposing to acquire Tribune Media, a huge local news merger that wouldn’t have been allowed without the UHF discount in place. The FCC and Trump’s Department of Justice are now the only agencies that need to approve the deal.
    • In October, the FCC voted to eliminate a rule that required local news stations to maintain offices within the communities they serve, making it easier for Sinclair to consolidate and centralize local news resources as it buys up more stations.
    • In November, the FCC rolled back rules that limit broadcast station ownership, allowing for Sinclair to more easily own or operate multiple stations -- or merge stations -- in the same local media markets.

    Sinclair’s unprecedented gains under Pai’s purview are not just significant in terms of media consolidation; they’re ideologically dangerous. The company is known for requiring its local news stations across the country to air almost-daily segments that function as Trump propaganda. Its pending acquisition of Tribune would allow these segments to quietly spread further into major cities and battleground states ahead of the 2020 presidential race.

    The new FCC internal investigation, however, could throw a wrench in Sinclair’s plans. According to the Times, “Antitrust experts said this new investigation may complicate the reviews of the Sinclair-Tribune deal by the F.C.C. and the Justice Department. Even if the deal were approved, they said, any conclusions of improper conduct by Mr. Pai could give fuel to critics to challenge the review in courts.”