NAB: FCC Should Act on 2017 Docket and End 39% Broadcast Ownership Cap
The FCC should use a still-open 2017 proceeding to eliminate the national ownership cap, NAB said in a letter to the agency Wednesday. The rule bars any single TV broadcaster from owning stations that, as a group, reach more than 39% of the total number of U.S. TV households. “This outmoded rule prevents broadcasters -- but not any other video service providers -- from competing for audiences and vital advertising revenues across the county,” NAB said.
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The last Republican-controlled FCC sought comment on doing away with the cap in 2017, but it never went beyond the NPRM stage. Current FCC Chairman Brendan Carr supported that NPRM as a commissioner and dismissed arguments at the time from the FCC’s Democrats and then-Commissioner Mike O’Rielly that only Congress could eliminate the ownership cap (see 1712140054). As chairman, Carr has said in interviews that he supports eliminating rules to allow broadcasters to achieve greater scale (see 2503070034).
The FCC should act on the 2017 rulemaking “and completely repeal the outdated and competitively harmful national broadcast TV ownership restriction,” NAB's letter said. The FCC has authority over the cap because Congress never used language preventing it from doing so, NAB said. The group pointed out that the FCC has previously claimed to have the authority to alter the cap under both Chairman Ajit Pai and his predecessor, Chairman Tom Wheeler, though Wheeler sought only to alter the UHF discount. Under the U.S. Supreme Court's decision in Loper Bright v. Raimondo Enterprises, which eliminated Chevron deference, courts are encouraged to see agency interpretations that remain consistent over time as useful guidance for interpreting a statute, NAB said.
"This is an old, flawed argument that just won't go away," said Andrew Schwartzman, senior counselor at the Benton Institute for Broadband & Society. "Then-Commissioner O'Rielly, who was in the room when the statute was drafted, has said that Congress intended to make the national cap permanent." NAB's argument "is even weaker today than before Chevron was overruled because it depends on stretching the plain language of the law far beyond its actual words."
The trade group’s call to eliminate the cap entirely represents a shift from its stance in 2017 (see 1811270062), when it called for the FCC to preserve the 39% cap but give all TV broadcasters a 50% discount on how their audience reach is counted against the cap. Under current rules, UHF stations already receive that discount. “Continued marketplace trends over the past seven years make clear there is simply no good reason to keep any artificial limits on TV station groups’ audience reach,” NAB said.
Broadcasters had previously been divided over how much the cap should be relaxed, but NAB said Wednesday that its entire TV board supports the proposal to eliminate it. An NAB blog post on the cap elimination proposal urged readers to pressure legislators to modernize broadcast ownership rules.
The agency should eliminate the cap because of the amount of competition broadcasters now face and because it's based on the theoretical reach of stations rather than the actual audience a broadcaster reaches, NAB argued. “The theoretical reach of a station or station group now says virtually nothing relevant about the competitively effective reach of the station or group in the marketplace,” the letter said. “The difference between the fictional presumption of stations’ 100 percent audience reach and broadcast TV’s actual single digit reach is profound and stark,” it said. “Marketplace and technological changes since the FCC began this proceeding in 2017 have made reform of the national TV ownership cap more urgent than ever, and the record here supports expeditious repeal of the rule.”