Last week, the FCC released a draft Report and Order which, if adopted at its August regular monthly open meeting, will repeal the 39% cap that currently limits the nationwide reach of local television station owners.  That cap prohibits one owner from having interests in TV stations reaching more than 39% of the nation’s TV households.  Computation of the 39% reach assumes that any TV station in a Nielsen TV market reaches all of the TV households in that market.  However, it also includes a 50% discount for UHF stations, a relic of a previous era when VHF stations (those on channels 2 through 13) dominated and UHF stations were considered disadvantaged and thus worthy of being counted as only half the audience reach (a dynamic that is considered to have been reversed in the digital broadcasting world).  Yet, as we wrote here, that UHF discount is still in place.

The Commission’s proposal is to eliminate the cap, but to conduct a case-by-case review of any proposed acquisition that would take an owner above 39% (while still using the 50% UHF discount).  In reading the draft Order, it appears that the FCC would be starting from a presumption that the nationwide reach of a particular broadcaster is not a public interest problem – unless someone shows that it is.  The draft Order states that there are many other video entertainment delivery competitors with nationwide reach – including the TV networks, cable networks and, more importantly in today’s world, all of the streaming companies.  According to the FCC, just being able to deliver programming on a nationwide basis does not raise issues for consumers, as a consumer has the choice of many different national programming providers.  Issues may be more likely to arise on the local level if access to local news and information is limited.  However, those questions of local ownership are not being considered in this proceeding, which is looking only at the limits on the ability of one owner to own stations that have a greater nationwide reach than currently allowed.  Local ownership limits are being considered in the Quadrennial Review proceeding, likely to be resolved later this year.