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Nexstar asks court to review FCC ownership limits

The largest owner of local broadcast TV stations in the country says the agency's quadrennial review contained numerous legal errors.

The largest owner of local broadcast TV stations in the country says the agency's quadrennial review contained numerous legal errors.

The major cities where Nexstar Media Group owns or operates one or more local television stations. (Courtesy image)
The major cities where Nexstar Media Group owns or operates one or more local television stations. (Courtesy image)

Nexstar Media Group has asked a federal court to review a recent Federal Communications Commission (FCC) decision that limits the number of television stations a broadcaster may own at one time.

The petition for review was filed in the Fifth Circuit Court of Appeals on Monday, and claims the FCC overstepped its authority by upholding a long-standing rule that prohibits a broadcaster from owning licensed stations that reach more than 38 percent of American TV households.

Nexstar is the largest TV broadcaster in the country, with more than 160 licensed stations under its direct ownership. It controls around 40 more TV stations through shared services agreements with other companies, including Mission Broadcasting and White Knight Broadcasting, a practice that is technically permissible but has drawn immense scrutiny from cable and satellite groups following demands from Nexstar and other companies for higher retransmission consent fees.

Broadcasters and their lobbying arms, including the National Association of Broadcasters (NAB), say federal ownership rules have not kept pace with advancements in technology, with local TV station owners facing increased competition from streaming video services. They claim local broadcasters should be allowed to scale up their operations in order to better compete with the likes of Netflix, Amazon’s Prime Video, Disney Plus and new services that broadcast networks have launched on their own.

Nearly three decades ago, federal lawmakers charged the FCC with conducting a review of broadcast-related regulations every four years, and updating or repealing those that are no longer warranted. The ownership rules were part of the FCC’s quadrennial review for 2018, which it finally published in December 2023 after the broadcast industry sued to force the agency to finalize the review.

The decision was not kind to broadcasters, with officials at the FCC upholding the limitation on TV station ownership. It also declined to review similar ownership rules for licensed AM and FM radio stations, which are slightly more generous than restrictions imposed on TV station owners.

“This approach is a product of the Communications Act and the values in the law that have always informed our approach to media policy — support for localism, competition, and diversity of ownership,” Jessica Rosenworcel, the chairperson at the FCC, said in a statement. “These values support jobs and journalism. They are important. Even as times change, these values remain. So does the law.”

DOCUMENT: Read Nexstar’s petition for review over the FCC’s quadrennial report [PDF]

This week, Nexstar said the FCC’s decision was “replete with legal errors,” in that it violated both the Administration Procedures Act and the 1996-era telecommunications law that required the quadrennial review in the first place.

“Among other things, the Quadrennial Order fails to consider important data submitted by participants, reaches conclusions directly contrary to the record, and employs reasoning that is illogical and inconsistent,” attorneys for Nexstar wrote in the February 26 brief.

Nexstar said the decision also illegally “tightens media ownership rules in spite of the statute’s clear deregulatory purpose and the lack of basis for such tightening,” and that another section concerning content-based multicasting efforts “ignores important First Amendment and statutory authority concerns that participants raised directly with the Commission during the notice-and-comment period.”

The last point is important, because Nexstar and other broadcasters sometimes use a single television station to distribute programming from more than one major network. The decision to switch the television industry from analog to digital broadcasting more than a decade ago meant TV station owners could put programming from one network like ABC on their main signal, and secondary programming from another network like CBS, Fox or NBC on a digital sub-channel. The practice is common in small television markets and rural areas where launching a television station would be expensive or otherwise difficult.

In December, the FCC tightened its multicasting rule, saying it would consider the local reach of “the combined audience share of all free-to-consumer, non-simulcast multicast programming airing on streams owned, operated, or controlled by that station as measured by Nielsen Media Research or by any comparable audience ratings service.” Doing so could mean some TV stations that currently broadcast network programming from ABC, CBS, Fox or NBC on a secondary digital channel might be prohibited from doing so in the near future.

Nexstar said the FCC’s quadrennial review as a whole was “arbitrary, capricious, contrary to law, unsupported by substantial evidence, and an abuse of discretion.” It offered no specific evidence to that effect, but did provide the complete quadrennial review report as published by the FCC two months ago, which comprised the bulk of its 110-page court filing.

The FCC has not responded to the petition as of Thursday morning.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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