Unlikely Allies CPAC, CWA, Free Press and Newsmax Oppose Killing TV Ownership Cap

“The record shows that the need for TV broadcasters to gain scale now has become an emergency,” NAB said. The CPAC Foundation’s Center for Regulatory Freedom called the FCC's approach “legally indefensible, analytically weak, and technologically outdated.”

The commission must act to eliminate the cap, or broadcasters will be driven out of business due to competition from tech platforms, a host of broadcasters said in comments. “Local broadcasting is at a dangerous juncture and time is of the essence,” said Nexstar. “The National Cap selectively applies a severe, World War II-era regulatory tool to television broadcasters that are struggling to compete with the unregulated giants of the Internet age,” said a joint filing from the four network affiliate station groups. “Left unchecked, these dominant Big Tech and Big Media platforms will only concentrate more power and may eventually crowd local broadcasters out of the ecosystem entirely -- ending localism and local news for good,” said Sinclair Broadcast.

Free Press disputed that broadcasting is actually in dire straits. “Broadcast companies’ representatives have repeatedly told investment analysts in the past year how resilient their live sports and local news programming are in the face of changing viewing patterns,” Free Press said. “The push for national consolidation has nothing to do with enriching viewers’ lives -- only shareholders’ wallets.”

NAB said data shows the diminishing reach of broadcasting. “No rational basis exists for retaining a national restriction on any TV broadcasters in a marketplace where all broadcast television combined garners only 18.5 percent of total TV usage in the country, while unconstrained streaming platforms garner 46 percent (with YouTube alone receiving 12.8 percent of all TV usage).”

Questions of Authority

Nearly every opponent of the proposal to eliminate the national cap argued that the FCC lacks the authority to do so. Unlikely allies Newsmax, the Communications Workers of America, the Free State Foundation (FSF), Free Press, CPAC and others pointed to the 2004 Consolidated Appropriations Act, in which Congress codified the 39% audience reach cap and explicitly said the FCC couldn’t review it as part of the quadrennial review process. That action shows that “Congress intended to retain for itself the authority to define and/or modify the cap,” FSF said, an argument echoed in every opposition filing.

"The clear, specific, unequivocal, and repeated actions by Congress establishing today’s 39 percent limit reveals Congress’ intent to maintain the cap and prevent the FCC from weakening it,” said Newsmax in comments signed by CEO Chris Ruddy, a longtime friend of President Donald Trump. “The Commission’s failure to square its proposed rule with this statutory constraint is not a minor procedural oversight -- it is a fundamental legal flaw that threatens the legitimacy of the entire process,” said CPAC.

Due to statutory language, an FCC order eliminating the national cap is likely to be overturned by the courts, either due to the end of Chevron deference or the major questions doctrine, said FSF, Newsmax and a joint filing from three media law professors. “Any attempt by the FCC to alter or circumvent the congressionally enacted 39% national audience reach cap would almost certainly trigger the major questions doctrine,” said the filing from Christopher Terry of the University of Minnesota, Israel Balderas of Elon University, and Caitlin Ring Carlson of Seattle University. “Given the Court’s abandonment of Chevron in Loper Bright and its insistence on clear congressional authorization in cases of economic or political consequence, challenges to FCC rulemaking are no longer deferential affairs.”

FCC Chairman Brendan Carr has repeatedly said that the FCC has the authority to eliminate the cap (see 2505160064), and NAB, Nexstar and E.W. Scripps backed that stance in their comments. In 2016, under Chairman Tom Wheeler, the agency concluded it had the authority to alter the cap in a proceeding on eliminating the UHF discount, NAB and Nexstar noted. If Congress had sought to eliminate FCC authority over the cap, it would have explicitly done so rather than remove the cap only from the scope of quadrennial reviews, Nexstar added.

If the FCC concluded now that it lacked authority to eliminate the cap, it would be the sort of regulatory “flip-flop” that the U.S. Supreme Court condemned when it eliminated Chevron deference, NAB said. “The Supreme Court’s criticisms of the now-defunct Chevron doctrine demonstrate judicial hostility to what certain commenters urge the FCC to do here.” Free Press countered that NAB’s argument doesn’t make sense and “requires people to believe that the FCC is free to change any number set by Congress itself unless Congress also wrote into the law ‘and the agency can’t change this figure either.’”

Several opponents of eliminating the cap, including Communications Workers of America and Asian Americans Advancing Justice, said the FCC should eliminate the UHF discount instead, since UHF stations haven’t been considered less valuable stations for decades. However, arguing that the FCC has the authority to alter the discount but not eliminate the national cap amounts to “splitting the statutory baby,” NAB said. “Such a tortured interpretation cannot be regarded as the ‘best reading’ of the statutory language.”

Effects on Local Journalism

Proponents of eliminating the cap said broadcast consolidation is necessary for the industry to survive and preserve localism and journalism.

The Center for American Rights cited expanded opportunities for local stations to “invest in quality news and entertainment programming” and prevent a “Hollywood-Silicon Valley axis” from “dominating entertainment.” Scripps said that “even if a broadcast owner were allowed to own stations in all 210 [designated market areas], they would remain obligated to serve each of their local communities, both as a condition of their licensing, and as a competitive necessity.” FCC inaction on the cap would allow “local television stations to go the way of local newspapers before them,” said Entravision. Sinclair said that if local broadcasters like it "are forced to compete with one hand and both legs tied behind their back, they will lose -- and viewers will lose one of the last remaining sources of local journalism.”

Along with eliminating the cap, the FCC should coordinate with DOJ to ensure that there's clarity about the definition of broadcaster advertising markets, Sinclair said. The FCC and DOJ should “develop a Memorandum of Understanding regarding broadcast television transactions to ensure that transactions that are permitted under Commission rules are not stymied by outdated definitions of the relevant market for antitrust analysis.”

NCTA, NTCA and other MVPD groups said removing the cap would lead to broadcasters having outsized leverage in retransmission consent negotiations, as well as higher rates and cable bills. “Eliminating the rule poses a real threat to consumers’ wallets,” the American Television Alliance said. It added that if the FCC eliminates the cap, it could ameliorate the effects on retrans by restricting broadcaster blackouts and broadening rules on joint negotiation. FSF agreed: “Modifying the national television ownership cap without commensurate deregulatory relief for facilities-based MVPDs risks entrenching a marketplace currently distorted by regulatory asymmetries rather than promoting vigorous competition and furthering consumer welfare.”

NAB and other broadcast interests said the FCC should ignore MVPD concerns about retransmission consent. “MVPDs are in no need of assistance,” said Nexstar. “Further, this is not an appropriate proceeding in which to micromanage private distribution negotiations between MVPDs and broadcasters, let alone to calibrate ‘leverage’ in such negotiations to MVPDs’ desired level."

Employee and Minority Interests

Greater broadcast consolidation will make it harder for minorities to participate in the market, said the National Hispanic Media Coalition and Asian Americans Advancing Justice. “As large regional and national station groups use their leverage and resources to buy control of more and more outlets, opportunities for ownership by new entrants will be even more limited than they are today,” NHMC said.

“When consolidation rules change, workers see lost jobs, worsened job security, and lower wages and benefits,” said the National Association of Broadcast Employees and Technicians-Communications Workers of America. Media ownership concentration also leaves the news media ecosystem “more susceptible to the type of editorial compromise and capitulation that endangers our democracy.”

If the FCC eliminates the cap, a wave of broadcast deals will follow, putting numerous companies into a position similar to that recently faced by Skydance and Paramount, Free Press said. Broadcasters looking to make deals “will need to gain approval from the FCC, an agency that is currently led by a radical ideologue who has repeatedly demonstrated his willingness to use the deal-approval process as a way to ensure fealty to Donald Trump and his fascist agenda,” the group said. “That means deal applicants must become supplicants to a dictatorial president, and show fealty by changing their corporate diversity policies as well as their editorial news coverage.”