Ownership Deregulation Opponents Point to Nexstar Profits in Cap Comments

Nexstar “tells the Commission that broadcasting will ‘cease to exist absent elimination of the ownership cap' -- while at the same time reporting tremendous financial success to Wall Street,” said the American Television Alliance (ATVA). In their own joint filing, Nexstar, Sinclair, NAB and network affiliate groups rebuffed arguments that the FCC doesn’t have authority to alter the national ownership cap. “Nothing in the record warrants the Commission reversing its correct and consistent position that it possesses the authority to modify or eliminate the national TV cap and UHF discount,” the broadcasters said.

Nexstar’s proposed $6.8 billion purchase of Tegna is a 31% premium over that company's average stock price, Newsmax said. “This announcement only underscores that this entire docket likely is more about a payday for a few corporate executives and their shareholders than it is about localism, competition, or viewpoint diversity.” The broadcasters' joint filing argued that Newsmax opposes relaxation of the cap because it fears competition.

Altafiber said that “before the Commission pulls the fire alarm, it must first find an actual fire. When addressing the investment community, both Nexstar and Sinclair paint a dramatically different picture -- a picture of strong, thriving and dominant businesses -- businesses that had record high revenues in 2024.”

There has been no market failure “warranting any change to the ownership rules,” said the Multicultural Media, Telecom and Internet Council (MMTC), the National Association of Black Owned Broadcasters (NABOB), LGBT Tech, the National Consumers League and others in a joint filing.

The FCC “cannot ignore a key and incontrovertible fact: these companies continue to report considerable profits,” said the National Association of Broadcast Employees and Technicians-Communications Workers of America. “The reason the industry does not refer to their financial reports and earnings calls is simple: the financial evidence flatly contradicts the claim that they are facing an existential threat.” Broadcasters in their joint filing said the cap “skews the media and advertising markets in favor of digital advertising behemoths, increasingly consolidated pay TV/broadband providers, and unregulated global streaming platforms,” preventing competition with big tech.

Also in their joint filing, broadcasters focused on arguments that the FCC doesn’t have authority over the cap. They disputed claims by MVPD and public interest groups that the 2004 Consolidated Appropriations Act, in which Congress codified the 39% audience reach cap and said the FCC couldn’t review it as part of the quadrennial review process, shows that the agency can’t change the cap. The broadcasters said such arguments “ignore, overread, or otherwise misconstrue the actual words on the page and improperly rely on flimsy extratextual sources and considerations, including their own opinions and beliefs about congressional intentions, for support.” Congress could have explicitly blocked the FCC from altering the cap but didn’t do so, they said. “Congress chose not to forbid the Commission from revising or repealing the national TV cap. Congress’s choice must be construed as intentional and purposeful.” Congress similarly didn’t give the FCC the power to alter the UHF discount without changing the cap, the broadcasters added.

Eliminating the cap is required to comply with President Donald Trump’s executive order calling for anticompetitive regulations to be removed, said the Foundation for American Innovation. A coalition of conservative groups -- including Americans for Tax Reform, Heritage Action for America, the Digital First Project, the Center for American Rights and others -- also argued that the FCC and Chairman Brendan Carr have authority over the cap in a letter to Carr. “We fully support your efforts to modernize the FCC’s broadcast regulations, and we look forward to seeing the benefits to consumers, communities, and public safety as a result.”

Litigation Likely

If the FCC exceeds its authority by altering the cap, the rule change will be tied up in litigation, said Newsmax. “The only thing the Commission will get if it alters the national television multiple ownership limit is a permanent injunction,” it said, calling arguments from NAB “a statutory construction pretzel.” Altafiber said that while “broadcasters may win on paper, the inevitable litigation stands to delay the relief that broadcasters claim is so vital to their very survival, which, according to them, must occur now.”

The broadcasters countered arguments that changing the cap would run afoul of recent U.S. Supreme Court rulings on Chevron deference or the major questions doctrine. The latter has been applied when agencies claim new power in new areas or power without congressional authority, they said: “That is not the case here. The FCC has exercised its general licensing and rulemaking authority over broadcasters’ national reach with judicial approval,” and Congress has several times told the FCC to modify the cap.

FCC action on the national cap could be weakened in court if the agency takes up proposals to apply ownership limits differently to networks, the joint broadcast filing said. The FCC “must continue to apply any national audience reach cap equally to all station owners, whether the stations are network-owned, network-affiliated, or independent,” it said. “Joint Broadcasters also note the legal complexity of not applying the cap (or lifting it) uniformly and believe the Commission should instead be focused on completing this long-standing rulemaking expeditiously by eliminating the cap universally.”

NBCUniversal also blasted the proposal to apply rule changes differently to network stations. “There is no legal justification for treating different station groups differently based on ownership,” the company said. “By offering relief to only certain entities and not others, based solely on the ownership composition of those entities and without any other legitimate justification, such disparate treatment would be unconstitutional.” ATVA and NCTA also condemned singling out networks.

Hurting Diversity, Smaller Broadcasters

MVPD, civil rights and public interest groups all said that widespread broadcast consolidation would harm consumers.

Such consolidation will limit diverse voices, said a joint filing from the United Church of Christ Media Justice Ministry, Asian Americans Advancing Justice, the National Hispanic Media Coalition and others. “Any increase in ownership limits will spur more mergers, which will expand the impact” of Carr’s pressure campaign against corporate diversity efforts, the groups said. “Despite plain civil rights mandates and an abject failure to meet them, this Commission required many companies to eliminate their programs to ensure that women, people of color, people with disabilities, and the LGBTQ community are treated fairly in order for their mergers to be approved.”

“All rural communities, minority groups, and poorer households stand to lose under this rescission,” said the Hispanic Federation. The joint filing from MMTC, NABOB and other civil rights groups likewise argued that industry consolidation would make it even more difficult for smaller broadcasters and new entrants to obtain financing. The National Action Network, a civil rights group founded by Rev. Al Sharpton, said weakening the cap “would accelerate consolidation, reduce locally originated coverage, and close pathways for new entrants' outcomes directly at odds with both the Communications Act and the public interest.” Free Press submitted a petition with 8,500 signatures urging the FCC not to relax the ownership cap.

NCTA, ATVA and other MVPD filers noted that consolidation will also lead to increased retransmission consent rates and higher bills for consumers. “The record shows that eliminating the national cap would increase broadcasters’ leverage against MVPDs -- not online providers,” said ATVA. If the FCC alters the cap, it should mitigate that leverage by strengthening rules against joint negotiation of retransmission consent deals, NCTA said.

The joint broadcasters suggested NCTA “might have considered sitting this one out” due to the proposed Charter/Cox deal. They “hope that everyone following these proceedings can keep the pay TV industry’s arguments straight: efficiencies and combinations are good so long as they involve large pay TV/broadband providers, but not-so-good if they involve broadcasters of any size.”