The United States Federal Communications Commission voted 2-1 on Thursday to rescind the rule preventing local broadcast station owners from reaching more than 39 percent of US television households. The FCC will instead assess applications that exceed the threshold individually, based on whether they serve the public interest.
The decision could accelerate consolidation among local television station owners. Supporters say it could help broadcasters attract investment, increase local programming and compete with national networks; critics say it removes a major safeguard against excessive media concentration.
At a glance:
- The 39 percent limit was most recently raised in 2004, after the FCC had restricted local broadcast ownership since 1941.
- The new approach will review proposed mergers above 39 percent on a case-by-case basis rather than applying an automatic cap.
- FCC Commissioner Anna Gomez said the change was illegal and argued that only Congress can lift the limit.
- The FCC previously waived the rule when approving Nexstar’s $3.54bn purchase of Tegna, a deal that could give Nexstar coverage of 80 percent of US TV households if it is not reversed by courts.
| Previous rule | New approach | |
|---|---|---|
| Ownership threshold | Owners were barred from reaching more than 39 percent of US TV households. | Applications above 39 percent can be considered individually. |
| Treatment of weaker signals | Stations with weaker over-the-air signals could be partially counted against the cap. | The FCC’s new case-by-case approach replaces the automatic cap review. |
| Policy rationale | The limit was intended to restrict concentration in local broadcast ownership. | The FCC says it is removing restrictions to help attract capital and generate revenue. |
What the FCC approved
The commission voted to replace the automatic 39 percent limit with an individual review of television company mergers that would exceed it. The FCC said each application would be assessed to determine whether it is in the public interest.
The FCC has limited ownership of local broadcast stations since 1941 and most recently increased the cap to 39 percent in 2004. Under the previous rules, weaker over-the-air signals could be partially counted against a company’s ownership total.
Why supporters back the change
FCC Chairman Brendan Carr said the existing restriction was outdated and was making it harder for local broadcasters to survive. He pointed to the sharp decline in local newspapers and said the change could help local television owners invest in local programming and gain leverage against national networks.
The agency said the new rule would remove artificial restrictions on broadcast television’s ability to attract capital and generate revenue. The practical effect is that companies seeking to expand beyond 39 percent will no longer face an automatic prohibition, but will still need FCC approval under the new review process.
Critics question the authority and impact
Anna Gomez, the FCC’s sole Democrat, called the proposal illegal and said only Congress can lift the cap. Senate Commerce Committee Chair Ted Cruz, a Republican, also said he was sceptical that the FCC could increase the limit without an act of Congress.
Critics argue that the decision could give a small number of station owners excessive market power. Clayton Weimers of Reporters Without Borders North America said the FCC had abandoned an important safeguard and that the organisation was evaluating legal avenues to challenge the decision.
The Tegna-Nexstar precedent
In March, the FCC approved the $3.54bn sale of local television station owner Tegna to Nexstar despite objections from Democratic-led states. The commission said it waived the 39 percent rule when approving the deal.
If the acquisition is not reversed by courts, Nexstar’s presence would expand to cover 80 percent of US television households. The earlier waiver illustrates the kind of large transaction that could now be considered under the FCC’s new case-by-case framework.
Questions readers ask
Does the decision automatically allow any company to reach more than 39 percent of US TV households?
No. The FCC said applications exceeding 39 percent will be reviewed individually to determine whether they are in the public interest.
Has Congress approved lifting the cap?
The supplied source says Gomez argued that only Congress can lift the cap, while Cruz expressed scepticism that the FCC could do so without an act of Congress. It does not report congressional approval.
What happens to the Tegna-Nexstar deal?
The FCC approved the $3.54bn transaction in March. The source says it could expand Nexstar’s coverage to 80 percent of US TV households if courts do not reverse it.
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