In a closely watched case, a three-judge panel of the federal court of appeals in Washington dismissed a challenge to the FCC vote last fall to restore the UHF discount, a decision that allowed TV station groups to extend their reach to as much of 78% of TV homes. It’s good news for groups bumping up against the current effective cap of 39% and looking to buy more stations.
A three-judge panel of the U.S. Court of Appeals in Washington today dismissed a challenge to the FCC’s restoration last fall of the so-called UHF discount of the national TV ownership cap, which effectively allowed station groups to increase their coverage from 39% of TV homes to as much as 78%.
In a two-page ruling, the panel didn’t get to the merits of the case. It ruled that the interest groups opposed to media consolidaton that bought the suit lacked standing. “[T]he record did not contain—and petitioners’ initial submissions failed to provide—evidence that any member of any petitioner organization is a viewer in an affected market or otherwise stands to be injured by the identified consolidation.”
The FCC decision to restore the discount opened the door for groups bumping up against the 39% to acquire more stations. Sinclair Broadcast Group seized the opporutnity, agreeing to merge with Tribune Media in a $3.9 billion deal that would have extended its reach to 66%.
But last week, the FCC all but scuttled that deal, citing Sinclair for “lack of candor” and “misrepresenation” in its transfer application and designating the deal for hearing before an administrative law judge.
With the overhang of the court challenge gone, the FCC will proceed with its review this fall of the national ownership, in which it is expected to eliminate or reset the ownership cap without a UHF discount. The current consensus in Washington communication circles is that the agency will raise the cap from 39% to 50%.
FCC Chairman Ajit Pai, in a prepared statement, said he was pleased with the court decision “pending the completion of our comprehensive review of the national ownership cap.”
NAB spokesman Dennis Wharton was also pleased. “The Wheeler FCC’s decision eliminating the UHF discount without consideration of the national TV ownership cap was inappropriate and ignored the market power of massively deregulated pay TV providers.
“FCC Chairman Pai deserves enormous credit for righting this wrong, and for providing an opportunity for local broadcasters to better serve our tens of millions of viewers.”