Key Points
- In a letter to lawmakers, FCC Chairman Brendan Carr said the Media Bureau’s approval of Nexstar’s acquisition of TEGNA is not a final decision.
- The deal could still be brought before the full board of commissioners for examination; a broadband association has filed a petition requesting the FCC to do just that, Carr noted.
- The deal is already being challenged in federal antitrust lawsuits and faces regulatory scrutiny.
A broadband industry group has filed a petition with the Federal Communications Commission (FCC) that requests the agency’s three sitting commissioners to review a March order from the Media Bureau approving Nexstar Media Group’s $6.2 billion acquisition of TEGNA.
The petition was noted in a letter sent to federal lawmakers by FCC Chairman Brendan Carr in April, which the agency made public on Tuesday, through which Carr said the Media Bureau’s sign-off on the deal was “not a final action by the full Commission.”
Carr noted that a group called the Broadband Communications Association of Pennsylvania filed an emergency application in late March challenging the Media Bureau’s approval of multiple TV station license transfers from TEGNA to Nexstar. That request for review is still pending, and it isn’t clear if the three-panel board of commissioners will take up the issue in the near future.
Nexstar immediately closed on its acquisition of TEGNA after receiving approvals from the FCC and the U.S. Department of Justice. The deal is being challenged in two federal antitrust lawsuits filed by several state attorneys general and pay TV provider DIRECTV. Both cases are playing out in California; last month, a judge overseeing the case issued a preliminary injunction that effectively requires Nexstar to operate TEGNA as a subsidiary business without interfering in its operation or otherwise folding its stations into the broader company while the lawsuit continues. (Nexstar is appealing that order.)
Ordinarily, transactions involving a large broadcaster like Nexstar would not be approved without one or both companies divesting TV stations. Under current federal rules, one broadcaster is not allowed to have direct ownership of local TV stations that reach more than 39 percent of the American viewing audience. The deal involving TEGNA puts Nexstar over that threshold.
In letters sent to Senator Maria Cantwell and Representative Ted Cruz last month, Carr wrote that the agency viewed the limitation as a rule that the agency can waive, rather than a firm law it must follow.
“Given that the full Commission has made clear that the national ownership cap is an FCC rule and not a statutory limit, the Media Bureau had the legal authority to waive that rule” when approving the Nexstar-TEGNA transaction, Carr said.
Carr claimed Nexstar’s acquisition of TEGNA was substantially smaller than other transactions approved by the FCC during Republican terms in the past, including Nexstar’s acquisition of Media General in 2017. By contrast, the FCC has rejected similarly-sized or smaller transactions during Democratic administrations, noting the Media Bureau’s feet-dragging when Standard General offered to acquire TEGNA under former FCC Chairwoman Jessica Rosenworcel. In that case, the Media Bureau deferred the case to an administrative law judge, prolonging the process until a “shot clock” established by TEGNA and Standard General to close the deal expired.
Under Carr’s leadership, the FCC has been more-favorable to consolidating in the media and technology sector, he said. The Nexstar-TEGNA deal aside, Carr pointed to the FCC’s approval of a deal that allows Charter Communications and Cox to merge and Verizon’s acquisition of broadband provider Frontier.
“In my time as Chairman, the FCC has not blocked a large transaction without a Commission vote,” Carr said. “This represents a departure from the agency precedent set during the Biden years.”
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