Key Points
- The National Association of Broadcasters (NAB) is urging the FCC to reject a request to delay the elimination of the national television ownership cap.
- Ten state and regional cable and broadband trade associations want the FCC to put the decision on hold while courts review whether the agency has the authority to eliminate the cap.
- The longstanding rule prevents a single television station owner from reaching more than 39 percent of U.S. television households, subject to existing ownership calculations.
The National Association of Broadcasters (NAB) is urging federal regulators to reject an effort by cable and broadband companies to temporarily block the elimination of a longstanding rule limiting how many television households a single broadcast company can reach.
In a filing submitted October 9, the NAB said the Federal Communications Commission (FCC) should move forward with its decision to eliminate the national television ownership cap, which generally limits broadcasters to reaching 39 percent of U.S. television households.
The FCC voted 2-1 in August to eliminate the restriction, with Chairman Brendan Carr supporting the change and Democratic Commissioner Anna Gomez opposing it. The agency released its final order October 1.
Under the new policy, the FCC would review proposed television station acquisitions individually rather than automatically applying the national ownership limit. The agency already employed that strategy when it green-lit Nexstar Media Group’s $6.2 billion acquisition of TEGNA, which came after the FCC’s Media Bureau granted waivers to its ownership rules in all markets where Nexstar and TEGNA own competing stations.
The NAB was one of several organizations to call on the FCC to eliminate the broadcast TV ownership cap last year.
Ten state and regional cable and broadband trade associations are challenging the FCC’s August decision. They want the FCC to delay implementing the change while federal courts determine whether the agency had the legal authority to eliminate the cap. Their central argument is that Congress established the 39 percent limit in 2004, leaving the FCC without authority to repeal it independently.
NAB disagrees, arguing that Congress never explicitly removed the agency’s longstanding authority to modify television ownership regulations.
The cable and broadband associations have also warned that eliminating the restriction could allow broadcasters to acquire more stations, giving larger station groups additional leverage when negotiating carriage fees with pay television providers. Those fees, known as retransmission consent payments, are what cable and satellite companies pay broadcasters for permission to carry their local television signals.
NAB argues that the potential for higher fees is not sufficient reason to delay the FCC’s decision. The association noted that any proposed station acquisition would still require federal regulatory approval. The FCC could approve a transaction, impose conditions or reject it, while larger deals could also face antitrust reviews. Cable and broadband companies would have opportunities to raise objections before those acquisitions were approved, the organization argued.
“Interested parties, including Petitioners, will be able to comment upon, oppose, or propose conditions on these TV station transactions before the Commission makes any decision,” attorneys for the NAB wrote in a filing this week.
The association also argued that potential increases in carriage fees might not occur until years after an acquisition, depending on when existing distribution agreements expire.
NAB said maintaining the ownership restriction puts broadcasters at a competitive disadvantage because cable and broadband providers do not face comparable limits on their national reach. The NAB said allowing broadcasters to expand could help them compete with larger media and technology companies while supporting local news, weather, sports and emergency programming (though, as The Desk has reported, some broadcasters have already shut down local newsrooms and laid off journalists while they lobby for consolidation in the industry).
The FCC’s decision has not yet taken effect. Under the order, the new policy becomes effective 60 days after publication in the Federal Register.
Some opponents of broadcast ownership reform are already preparing to sue the agency once the rule takes effect. In an interview with The Desk, Newsmax CEO Christopher Ruddy chastised Carr as “not good for conservatives” and said eliminating the broadcast TV ownership rule was a “blatant violation of federal law.” He confirmed his company was likely to sue over the rule change, but needed to wait for it to be published in the Federal Register before they can bring the matter to court.
