DIRECTV and several state-level broadband organizations have filed a petition with the Federal Communications Commission (FCC) seeking to block a proposed acquisition of Ion-affiliated television stations owned by Inyo Holdings.
In comments filed with the FCC this week, the groups said the E. W. Scripps Company’s proposal to acquire nearly two dozen stations owned by Inyo exceeds current rules that limit the amount of TV stations a company may own directly.
The stations were divested by Scripps to Inyo several years ago in order to satisfy regulatory concerns over the company’s acquisition of the Ion television network, which brought several Ion owned-and-operated stations into Scripps’ ownership portfolio.
Over the past year, broadcasters have announced a number of station acquisitions and swaps following the election of President Donald Trump, who is believed to view consolidation in the media industry in a more favorable light.
As first reported by The Desk, Scripps announced its intention to re-acquire the stations from Inyo in February, saying it would pay around $54 million to bring the stations back under its direct ownership. Scripps has operated many of the stations from its master control hub in Indianapolis through its affiliation arrangements with Inyo, which is otherwise a separate company.
DIRECTV and the broadband groups complain that Scripps acquiring the stations from Inyo would concentrate too much power with a single broadcaster, particularly when it comes to distribution fees that DIRECTV and others must pay Scripps for the privilege of providing their channels to subscribers.
“In re-acquiring these stations, Scripps will own television stations covering 40.29 percent of U.S. households,” the filing said, adding that the figure takes into account a perk known as the “UHF Discount” that allows broadcasters to divide the reach of stations operating on UHF frequencies when it comes to federal ownership limitations.
The groups also challenged the FCC’s ability to waive the national ownership cap. They argued Congress codified the 39 percent limit in the 2004 Consolidated Appropriations Act by directing the FCC to adopt the cap, excluding it from the agency’s periodic review of broadcast ownership rules and restricting the FCC’s ability to forbear from enforcing it.
The filing acknowledged that the FCC’s Media Bureau recently rejected similar arguments when it approved Nexstar Media Group’s acquisition of TEGNA, a decision that also involved a waiver of broadcast ownership limits. But the groups said they believe that decision was legally flawed and raised questions that should be resolved by the full commission or the courts.
The Media Bureau has also rejected similar petitions made by DIRECTV challenging acquisitions made by other broadcasters over the past year, none of which have been successful.
Broadcasters and the FCC have generally rejected arguments that the national cap is an absolute statutory limit. Over the past year, the agency has treated the cap as an FCC rule subject to waiver, rather than a hard limit imposed directly by Congress.
