tv station ownership

The Federal Communications Commission voted 2-1 in favor of allowing TV station ownership groups to own more outlets, easing the way for more consolidation.

The Thursday vote that favored the change means companies can own local stations that cover more than 39% of the U.S. They could also own more than two stations in a single market.

The measure supported by FCC Chairman Brendan Carr will allow the agency to approve deals that put station ownership groups over the cap if the agency determines that they are promoting the public interest. Carr has said the agency would consider such issues as commitment to local journalism and “viewpoint diversity.”

“In my view, if you care about trusted sources of local news and information, you have to care about the future of local TV stations,” Carr said. “They are the economic engines that produce the paychecks for so many of the local journalists that remain in the business. So how can the FCC maximize the odds that those institutions continue to survive and hopefully thrive into the future? To start, we should stop hamstringing this one segment of the broader market with outdated restrictions.”

The station groups say the ability of tech companies such as Google and Netflix to reach every consumer in the U.S. puts them at a disadvantage. At the same time, streaming now accounts for more than 40% of all viewing, according to Nielsen, pulling consumers away from traditional TV. Television stations are also seeing their share of carriage fees from cable and satellite companies shrink due to cord-cutting.

Declining viewership and revenue have also made it more challenging to sustain multiple local TV news operations in a single market.

Anna Gomez, the lone Democrat on the commission, opposed the measure, saying the rule change will only help big firms get bigger and more powerful.

“Eliminating the cap does not free local broadcasters from economic pressure, it just changes who is doing the squeezing,” Gomez said in a statement issued ahead of the vote. “The large station groups positioned to grow even larger under this decision are not local broadcasters, they are national companies that own local stations and increasingly dictate what airs on them.”

The measure ending the cap limits also faced push back from consumer groups and state government officials who believe station consolidation will result in journalist layoffs and fewer voices for the communities they serve.

TV station owners and its lobbying group the National Assn. of Broadcasters have been clamoring for a change in the rule, citing the changes in technology that have occurred since the ownership limit. The 39% threshold was set in 2004 when streaming video was still a nascent business.

Jeff McCall, a professor of communications at DePaux University, agrees the current limit is outdated in the current media environment. “Local broadcasters are struggling in terms of audience and revenue, and this plan could give them some needed relief,” he said.

But McCall added that having the FCC decide who benefits from the rule change will face resistance.
“it will give the FCC wide discretionary powers and open up any decisions to second-guessing and, of course, court challenges,” he said.

There are also likely to be questions on how even-handed Carr will be when faced with a proposal that puts a station owner over the caps. The chairman has made his name by threatening to pull the broadcast licenses of TV stations that irritate President Trump with their coverage and commentary. Even Trump-supporting Republicans such as Sen. John Kennedy, R- La., have raised concerns the FCC’s scrutiny of broadcast content could be violating the right to free speech.

In April, the FCC called for an early review of the licenses for Disney’s eight broadcast TV stations, a day after Trump demanded that ABC fire late-night host Jimmy Kimmel over a joke about First Lady Melania Trump.

Carr also questioned whether ABC’s daytime show “The View,” where negative Trump commentary occurs often, should qualify as a bona fide news program that is exempt from giving equal time to qualified candidates.

Carr also believes large media companies such as Disney and NBCUniversal parent Comcast hold too much sway over the stations affiliated with their networks.

“New York and Hollywood interests have steamrolled those local TV stations and the broader media market in recent years in ways that run directly counter to the regulatory framework that Congress and the FCC put in place,” he wrote. “Their national programs naturally reflect the values of the New York and Hollywood executives that produce them. This power imbalance has contributed to a steady decline in locally produced news — and with it, a weakening of the public’s trust in the media.”

Earlier this year, a group of attorneys general filed suit to block Nexstar Media Group’s proposed $6.2-billion acquisition of Tegna, arguing it violates a 112-year-old U.S. antitrust law by knocking out a major competitor. The deal would give Irving, Texas-based Nexstar control of 265 television stations across the country, up from 164. And, in dozens of markets, including San Diego and Sacramento, Nexstar would own multiple TV network affiliates.

U.S. District Judge Troy L. Nunley issued a preliminary injunction in April that forbids Nexstar — which owns KTLA-TV Channel 5 in Los Angeles — and Tegna, from combining operations. Nexstar is appealing.