national ownership cap on television

This week brought the news that the Biden administration has nominated Anna Gomez for the open Democratic FCC seat that Gigi Sohn was to fill until she asked that her nomination be withdrawn in March, after a prolonged debate over her confirmation.  Gomez is experienced in government circles, having worked at NTIA (a Department of

It’s a new year, and it’s time to look ahead at what Washington may have in store for broadcasters this year.  The FCC may be slow to tackle some of the big issues on its agenda (like the completion of 2018 Quadrennial Review or any other significant partisan issue) as it still has only four Commissioners – two Democrats and two Republicans.  On controversial issues like changes to the ownership rules, there tends to be a partisan divide.  As the nomination of Gigi Sohn expired at the end of the last Congress in December, the Biden administration was faced with the question of whether to renominate her and hope that the confirmation process moves more quickly this time, or to come up with a new nominee whose credentials will be reviewed by the Senate.  It was announced this week that the administration has decided to renominate her, meaning that her confirmation process will begin anew.  How long that process takes and when the fifth commissioner is seated may well set the tone for what actions the FCC takes in broadcast regulation this year.

Perhaps the most significant issue at the FCC facing broadcasters is the resolution of the 2018 Quadrennial Review to assess the current local ownership rules and determine if they are still in the public interest.  As we wrote last week, the FCC has already started the 2022 review, as required by Congress, even though it has not resolved the issues raised in the 2018 review.  For the radio industry, those issues include the potential relaxation of the local radio ownership rules.  As we have written, some broadcasters and the NAB have pushed the FCC to recognize that the radio industry has significantly changed since the ownership limits were adopted in the Telecommunications Act of 1996, and local radio operators need a bigger platform from which to compete with the new digital companies that compete for audience and advertising in local markets.  Other companies have been reluctant to endorse changes – but even many of them recognize that relief from the ownership limits on AM stations would be appropriate.Continue Reading Looking Into the Crystal Ball – What’s Coming in Broadcast Regulation in 2023 From the FCC

April brings with it a milestone – as it is the end of the first quarter since all radio stations have had to have their online public inspection file “live” so that anyone, anywhere, can view a station’s compliance with rules that previously could only be judged by going to the station and reviewing the paper public file. April 10, in particular, is important, as it is when Quarterly Issues Programs Lists, summarizing the most important issues facing the community which the broadcaster serves and the programs that the broadcaster aired to address those issues, must be in the online public file for all full-power radio and TV stations. We wrote about the importance of these sometimes overlooked documents here, as these are the only FCC-mandated documents that reflect how a station has served the needs and interests of its community. We have also noted that, in the past license renewal cycle, missing Quarterly Issues Programs lists were the source of the most fines issued to broadcasters. Now that compliance can be judged at any time by the FCC, their importance is only magnified. So be sure that you get these documents into your online public file by April 10.

EEO Public Inspection File Reports, summarizing a station’s employment record for the prior year, are also to be uploaded to a station’s online public file. For radio and TV stations in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas, these reports need to be completed and included in the public file by April 1 by all stations that are part of employment units with 5 or more full-time (30 hours per week) employees. In addition, radio stations in employment units with 11 or more full-time employees in Delaware and Pennsylvania, and TV stations in Texas with 5 or more full-time employees, also need to file EEO Mid-Term Reports, commonly referred to as FCC Form 397 applications. While the FCC is considering the abolition of the Mid-Term Report (see our article here), the obligation is still in place so, for now, stations must comply.
Continue Reading April Regulatory Dates for Broadcasters – First Quarterly Issues Programs Lists in Online Public File for All Radio Stations and Other Important Dates

March is one of those months where without the Annual EEO Public File Reports that come up for different states every other month, or without the Quarterly Issues Programs List and Children’s Television Report obligations that arise following the end of every calendar quarter. But this March has two very significant deadlines right at the beginning of the month – Online Public Files for radio and Biennial Ownership Reports – that will impose obligations on most broadcasters.

For radio stations, March 1 is the deadline for activating your online public inspection file. While TV stations and larger radio clusters in the Top 50 markets have already made the conversion to the online public file, for radio stations in smaller markets, the requirement that your file be complete and active is Thursday. As we wrote here, there are a number of documents that each station should be uploading to their file before the deadline (including Quarterly Issues Programs Lists and, if a station is part of an employment unit with 5 or more full-time employees, Annual EEO Public Inspection File Reports). As the FCC-hosted online public file date-stamps every document entered into the file, and as the file can be reviewed by anyone at anytime from anywhere in the world, stations need to be sure that they are timely uploading these documents to the file, as who knows who may be watching your compliance with FCC requirements. And this is not the only big obligation for broadcasters coming up in March.
Continue Reading March Regulatory Dates for Broadcasters – Including Online Public File for Radio and Biennial Ownership Reports, Effective Date of ATSC 3.0, Comments on TV National Ownership and Media Modernization, and GMR Extension

At its December meeting, the FCC adopted a Notice of Proposed Rulemaking to review the national ownership cap for over-the-air television, which limits one owner from having attributable interests in television stations reaching more than 39% of the national audience. That Notice was published in the Federal Register on Friday, setting February 26 as the date for initial comments, and March 27 as the date for reply comments. When the FCC last year reinstated the UHF discount (see our article here), one of its justifications for the reinstatement was that the elimination of the discount could not be done without a full review of the national ownership rules – as the elimination of the discount could affect the video marketplace, and any potential adverse effects should be studied before abolishing the UHF discount (the discount counts each UHF station as reaching only one-half the audience of a VHF station). When the FCC reinstated the discount, the Commission promised to initiate this rulemaking proceeding.

The NPRM basically asks two fundamental questions – does the FCC have the authority to amend the cap, and if does, should it use that authority to make changes now? The initial question is based on the fact that the 39% limit is written into statute by Congress. Obviously, this is a fundamental question, and the usual political party divide over the interpretation of ownership rules is not fully in evidence here. Republican Commissioner O’Rielly indicated in his statement supporting the initiation of the proceeding that he believes the FCC does not have the power to change the cap – only Congress can do that, as Congress set the cap and did not provide explicit authority for the FCC to review or amend it. The two Democratic Commissioners also questioned that authority – so one of these three Commissioners would have to change their initial understanding of the law for any change to become effective, or Congress would have to step in.
Continue Reading Comment Dates Set on National TV Ownership Caps – Can and Should the FCC Amend the 39% Audience Cap?

The FCC yesterday released the agenda for its April 20th meeting – and it includes three broadcast items.  Two deal with noncommercial broadcasters (undoing the requirement for noncommercial broadcasters to get Social Security Numbers from its board members so that they can acquire an FCC Registration Number for them – see our articles here and here on this issue – and one allowing noncommercial broadcasters to interrupt programming to raise funds for unrelated non-profit organizations- see our article below).  But in a decision which, if adopted, will likely have an immediate impact on the market for the purchase and sale of television stations, the FCC released a draft order, to be voted on at the April 20 meeting, proposing to reinstate the UHF discount.

That discount, in assessing the broadcaster’s compliance with the 39% cap on the nationwide audience that any broadcaster can reach with TV stations in which it has an attributable interest, accords half the weight to the population of television markets in which a broadcaster holds a UHF station.  The discount was adopted back in the days of analog television, when UHF stations had signals that were harder for most viewers to receive, and the stations were more expensive to operate than VHF stations.  In the digital world, that deficit has disappeared, underlying the September decision of the Commission (which we summarized here) to abolish the discount.  The September decision did away with the discount, and the Commission had effectively put on hold television transactions that would exceed the cap for several years while considering the September order.  This effectively froze the acquisition of new stations by the major television groups – a freeze that may quickly thaw if the Commission follows through and adopts its draft order on April 20.
Continue Reading FCC Releases Draft Order to Reinstate UHF Discount at April 20 Meeting – A New Round of TV Consolidation? 

As we wrote here, the FCC has requested comments on a petition for reconsideration of the elimination of the UHF discount – which had counted UHF stations as reaching only half of their market in assessing an owner’s compliance with the National Ownership Rules for TV.  These rules limit an attributable owner from having

While several parties went to Court to challenge the FCC’s decision ending the UHF discount, one broadcaster decided instead to ask for reconsideration. That petition for reconsideration has now been published in the Federal Register, giving interested parties until December 27 to comment, and other parties until January 6 to reply to any comments that are filed. This reconsideration petition may give a new Republican-led FCC its first opportunity to revisit the FCC’s multiple ownership rules which have been the subject of several petitions for reconsideration, as we suggested might happen in our review (here) of the impact on communications law of the election of Donald Trump as the new President.

The UHF discount counted only half the audience reached by UHF stations in assessing an owner’s compliance with the 39% national cap on audience. The FCC ended that discount in September (see our summary here), finding that in a digital world, UHF channels were no longer inferior to VHF ones. Given that most TV stations are operating on the UHF band after the digital conversion, the FCC determined that the discount was not justified in the current television marketplace. A number of TV groups argued with that determination, contending that, in today’s media market, there was no reason to impose what was in effect a tightening of the national ownership cap. The elimination of the discount capped acquisitions by several TV groups, and actually put a few over the 39% limit. In addition, broadcasters have argued that the discount was in effect when Congress adopted the 39% cap, so any change would need to be authorized by Congress. While other parties have filed an appeal with the US Court of Appeals, it is likely that the Court will defer to the FCC and allow it to reconsider the abolition of the UHF discount (which the two Republican Commissioners opposed when it was adopted).
Continue Reading Reconsideration of FCC Order on UHF Discount Published in the Federal Register – Starts Clock on Comments and Consideration of the Multiple Ownership Rules by a Republican-Led FCC

Last week, the FCC released its order eliminating the UHF discount. Under this discount, a TV broadcaster, in determining its compliance with the national ownership limit prohibiting any owner from having attributable interests in stations serving more than 39% of the nationwide television audience, would include in its count only one-half of the audience of any market served by a UHF station. This discount originated in the analog world, when UHF stations tended to have smaller audiences as their signals were harder to receive, and yet their operational costs were higher. Three years ago, the FCC proposed to eliminate the discount, as the technical inferiority of UHF stations no longer exists in the digital world (see our post here describing the FCC’s proposed action). This decision, reached in a 3 to 2 vote of the Commissioners, will put several broadcast groups over the national cap, while others will come close to it, limiting their ability to expand into new markets. Did the video distribution marketplace demand this action?

In fact, the Commission’s majority decision really did not examine in any detail the public interest factors justifying this action. Instead, the FCC focused almost totally on the fact that, in the digital world, UHF stations were no longer technically inferior. That was essentially stipulated by all parties, and the Commission viewed the decision as simply being one that was necessary to keep up with technology – as UHF stations were no longer inferior to VHF stations, there was no reason to give owners of these stations a discount in computing compliance with the national ownership limits. The Commission also pointed to the fact that, in the days before the digital transition, it had warned TV broadcasters that an end to the UHF discount was coming. But changes in the media marketplace in the 15 years since many of these statements were made, with the rise of multichannel video program providers and over-the-top television services like Netflix that were not even imagined 15 years ago, are given only a passing reference, as pointed out by the dissenting Republican commissioners.
Continue Reading Eliminating the UHF Discount and Limiting the National Ownership Reach of Television Groups Without Reviewing the Media Marketplace