Broadcasters Want UHF Discount Back, or Permanent Grandfathering
The FCC acted arbitrarily in eliminating the UHF discount and should reinstate it, said NAB and numerous broadcasters in replies posted in docket 13-236 Tuesday in response to a reconsideration petition by Ion Media and Trinity Christian Center. “The FCC’s decision to artificially separate the UHF Discount from the national audience reach cap and eliminate it without considering the effect on the overall cap was the worst kind of results-driven decision-making,” said those two jointly. Broadcasters criticized the argument the UHF discount is no longer technically merited, and that the FCC doesn’t have the authority to reverse the decision to eliminate it. Bringing back the discount is seen as an early goal of the new agency, industry officials said (see 1701110067).
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Before getting rid of the UHF discount, the FCC should have examined the national ownership cap, said NAB and nearly every broadcaster that commented, including Sinclair, Nexstar and Ion. “Regardless of whether the UHF discount remains relevant today, the Commission had an obligation to consider the national audience reach cap in its totality, just as Congress did when it put the current cap into place,” Nexstar said. Altering the discount without considering the cap is analogous to the FCC removing joint sales agreements without considering the larger ownership rule framework, which led to that rule change being overturned in court, broadcasters said. Free Press, which has filed in support of the elimination of the discount, didn't comment.
In reconsidering the elimination of the discount, re-examine the cap, said Sinclair and NAB. “Television stations face increased national competition from a host of new services,” the company said. “The National Cap is simply no longer justified in today’s media environment.” Reconsidering the UHF discount by itself “would make it impossible for the Commission to assess how this change impacts the national TV ownership rule itself,” NAB said.
If the FCC does rethink the cap, it shouldn't wait for that process to be complete to get rid of the discount, said Univision. “A prudent course would be to rescind the Order and then refresh the record to consider not only the question of the Commission’s jurisdiction, but also whether competitive marketplace realities justify any limits on national television station ownership.” CBS also urged haste, in a recent meeting with an aide to Commissioner Mignon Clyburn, according to an ex parte filing.
Though opponents of restoring the discount and the FCC argued the DTV transition made the discount no longer relevant since it made UHF the more desirable part of the television band, broadcasters said that isn't relevant. “The continuing need for the UHF discount to address UHF/VHF signal disparity is irrelevant to the lawfulness of solely eliminating the UHF discount,” Ion said. “Even assuming that the FCC is correct that the DTV transition rendered the UHF Discount obsolete, that does not justify simply disposing of the rule regardless of its impact on other rules.”
If the FCC doesn't bring back the UHF discount, it should grant companies that were assembled when it was in effect permanent grandfathering, said Univision. Permanent grandfathering “would provide for continuity of service to minority communities that have come to rely on Univision,” said the station owner. “Absent permanent grandfathering, Univision would be restricted in its ability to transfer stations, raise capital, attract new investors and provide new programming.” The decision “not to provide full grandfathering of existing UHF combinations failed the test of reasoned decision-making,” said Ion.