A coalition of cable television and broadband Internet companies from nearly a dozen states have filed a formal petition with the Federal Communications Commission (FCC) asking the agency to reconsider its decision to eliminate a long-standing rule that limits the number of broadcast TV and radio stations one company may own outright.
The filing was made this week by a group consisting of broadband and cable TV trade associations from states like Colorado, Florida, Indiana, Minnesota, Michigan and Pennsylvania. The request calls for an administrative stay and injunction pending a judicial review of the matter — a strong indication that the groups, and others, are likely preparing a legal challenge to the FCC’s earlier decision to eliminate the national TV ownership cap.
In August, the FCC voted 2-1 along party lines to remove the ownership cap, which previously limited broadcasters to owning a collection of licensed TV stations that reach less than 40 percent of the American viewing population.
The measure had broad Republican support, with backing from FCC Chairman Brendan Carr, who said the elimination of the ownership rule was necessary to help broadcasters compete against streaming services and support their local news initiatives.
After more than a month of delays, the FCC formalized the act by publishing it on October 1. The rule change takes effect 60 days from the date it is published in the Federal Register.
But opponents of the move, including the cable TV and broadband groups, argue that the FCC exceeded its authority because Congress set the broadcast TV limitation through legislation.
They also noted that when the FCC implemented the 39 percent threshold, the agency described its action as “nondiscretionary” and mandated by Congress. The groups contend the FCC therefore lacks authority to modify, waive or eliminate the limit without congressional action.
The petition also challenges the FCC’s conclusions about the potential economic effects of eliminating the cap: The associations argue additional broadcast consolidation will increase the bargaining power of station groups during retransmission consent negotiations, leading to higher fees for cable and satellite television providers and higher bills for consumers.
Some pay TV providers, like DIRECTV, have long opposed consolidation with this view in mind, arguing that allowing a broadcaster to grow their share of licensed TV stations will lead to demands for more money in exchange for the privilege of redistributing channels to their subscribers.
Nexstar, Sinclair, the E. W. Scripps Company and TEGNA are among the local broadcasters that have raised distribution fees on cable and satellite TV companies over the past decade in an attempt to generate more income to account for dips in core advertising revenue.
In their filing on Tuesday, the broadband and cable TV groups cite industry data showing retransmission consent revenue increased 31 percent from $11.5 billion in 2019 to $15.1 billion in 2023. That was an increase of more than 135 percent from $6.4 billion in 2015.
The groups are asking the FCC to rule on their stay petition no later than the date the repeal order is published in the Federal Register. If the commission does not grant relief by then, the associations said they will seek a stay from a federal appeals court before the order takes effect.
The broadband and cable TV coalition is the latest to threaten a lawsuit over the elimination of the TV ownership cap. In an August interview with The Desk, Newsmax CEO Christopher Ruddy said his company was also looking at ways to challenge the matter in court, but needed to wait for the FCC to publish its order in the Federal Register before it could act.
