The Federal Communications Commission voted to repeal the national cap on television-station ownership Thursday, potentially clearing the way for further consolidation of broadcasters.
In a 2-1 split, the agency voted to eliminate a rule that prohibits any company from owning television stations reaching more than 39% of U.S. TV households. The FCC said it will instead review proposed station acquisitions on a case-by-case basis.
The FCC said the cap had become outdated and hindered broadcasters' ability to compete for viewers and advertising dollars against streaming services, podcasts and other digital platforms that face no comparable restrictions.
The FCC's move is part of a broader effort by the Trump administration and its allies to eliminate regulations that they view as antiquated or excessively limiting for businesses.
FCC Chairman Brendan Carr, a Republican who has long advocated eliminating the cap, said removing it will help level the playing field for broadcasters.
"Repealing the national cap will provide essential relief for local broadcasters by restoring a healthy counterbalance to the growing leverage of national programmers," Carr said at the meeting.
Carr also said allowing local broadcasters to increase their holdings will give them more leverage with networks such as ABC, CBS and NBC.
"Congress never envisioned that local broadcast TV stations would become nothing more than undifferentiated pass-throughs of national programming produced in Hollywood and New York," Carr said.
The order could face legal and political challenges over whether the FCC -- not Congress -- has the authority to repeal the rule.
"Congress set this cap in federal law, and only Congress can change it," said Democratic FCC Commissioner Anna Gomez, who cast the lone dissenting vote.
Gomez also criticized removing the cap itself, saying it would hurt local news as consolidation would lead to more cost-cutting by a handful of big broadcasters.
Senate Commerce Committee Chairman Ted Cruz (R., Texas), during a hearing earlier this year also questioned whether the FCC has authority to modify the ownership limit.
The FCC said in its order that the cap is a commission rule rather than a statutory requirement and therefore can be lifted under the Communications Act.
Congress established the 39% limit in 2004, intervening after the FCC moved to raise the cap to 45%.
The FCC earlier this year granted Nexstar Media Group a waiver to complete its acquisition of Tegna, a deal that exceeds the ownership cap. Although that transaction has closed, it is being challenged in court by eight states seeking to block the merger on antitrust grounds.
Companies at or near the 39% ownership limit include Nexstar, Fox, CBS parent Paramount and E.W. Scripps. Industry analysts have identified Sinclair and Gray Media as potential acquirers if larger station transactions become less restricted.
Fox and Wall Street Journal parent News Corp share common ownership.
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