UHF discount

The FCC acted within the scope of all laws when it moved this spring to reinstate a discount that makes it easier for UHF broadcast owners to gain market share, the agency told the D.C. Circuit on Tuesday.

Yesterday, in a very short one page decision, the US Court of Appeals rejected the requests filed by public interest groups to stay the effect of the FCC’s decision to reinstate the UHF discount. While, contrary to some reports, this does not signal the court’s final approval of the FCC’s decision to reinstate the discount, it does suggest the direction which the court is likely to take in its assessment of this FCC decision.

It turns down public interest groups that say the move will “make it easier for the nation’s largest television ownership groups to acquire additional stations, and crowd out diverse and local voices.” The move clears the way for Sinclair’s purchase of Tribune.

In a joint filing to the FCC,Free Press, United Church of Christ, Prometheus Radio Project, Media Mobilizing Project, Media Alliance, National Hispanic Media Coalition and Common Cause say the commission’s plan “lacks any legal or policy support and effectively contravenes the statutory limit on national television ownership.”

The two House Democrats tell FCC Chairman Pai that restoring the UHF discount would further concentrate station ownership. They also say take a shot at Sinclair Broadcast Group.

FCC Chairman Ajit Pai says he wants to restore the national ownership cap’s UHF discount at the FCC’s April 20 meeting and he has the votes to do it. After that, he says in a blog post, “we’ll launch a comprehensive review of the national ownership cap … later this year.” Effect of restoring the discount would be to double the current limit to 78% of TV homes.

The FCC has requested comments on a petition for reconsideration of the elimination of the UHF discount. Given that the deadlines that had initially been published by the commission fell during the holidays, the FCC has extended them. Comments are now due on Jan. 10, with replies on Jan. 23.

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 Dec. 27 to comment, and other parties until Jan. 6 to reply to any comments 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.

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. There will likely be an appeal of this decision centering on the issues raised by the dissenting commissioners.

On Wednesday, the FCC issued a long-expected Order abolishing its 30-year policy of applying a “UHF Discount” when calculating a broadcaster’s compliance with the 39% national TV ownership cap. Those looking for a silver lining should note that the FCC also asserted its authority to change the cap, giving hope of eventual relief to broadcasters now pressed up against it.

They say all good things must come to an end, and for the FCC’s UHF discount, it appears that the end has arrived.  On Wednesday, the FCC issued a Report and Order eliminating its 30-year old policy of applying a 50% “discount” to market populations served by UHF stations when calculating compliance with the 39% national TV ownership cap, declaring that “the UHF discount cannot be justified in the digital world.”

The FCC today tightened limits on owning television stations by eliminating the practice of only counting part of some stations’ audience, a move opposed by many broadcasters. The commission in a 3-to-2 Democratic-led party-line vote abolished the 30-year-old UHF discount. Under the eliminated discount, the agency counted only half of households in a TV station’s local area, when judging ownership against the limit of reaching 39% of U.S. TV households.

In December, the Competitive Carriers Association (CCA), a trade association that represents most wireless carriers with the exception of Verizon Wireless and AT&T, filed comments at the FCC in response to the proposed rulemaking to eliminate the so-called UHF discount. The filing would be downright funny if it wasn’t so desperate, specious and irresponsible. The issue has absolutely no impact on the wireless industry. So why would CCA file? Was it a mistake?

In comments on whether the FCC’s long-standing policy on counting the reach of group broadcasters should be changed, some broadcasters say the commission doesn’t have the authority to drop it and suggest a grandfathering scheme; NAB says it should be considered only as part of broader ownership reform; and a public interest group wants a limit on any grandfather status.

Like the story of the blind men and the elephant, the FCC’s proposal to eliminate the UHF discount thrusts out its hand, touching only one aspect of the FCC’s ownership rules, and risks discovering later that there is much more to the elephant than its tail.

Back in September the commission proposal to abandon its UHF discount. (It also suggested that it might be interested in establishing a VHF discount.) The Notice of Proposed Rulemaking has now made it into the Federal Register, which means that comments deadlines have now been established. If you have anything to say to the FCC about the proposal, you’ve got until Dec. 16 to file comments and until Jan. 13, 2014, to file reply comments.

Jamming a stick into the spokes of the TV station acquisition marketplace, the FCC on Thursday proposed to eliminate its UHF discount—a long-time loophole in the agency’s national ownership rules that some broadcasters have been relying on to beef up their station portfolios. The FCC will grandfather portfolios of groups that currently exceed the nominal 39% cap and companies that have pending station acquisitions that would push them above the cap, ending today.

The FCC is expected to launch a process Thursday to change the way it counts a company’s stations against a cap that limits holdings to coverage of no more than 39% of the nation’s TV households.

On Sept. 26, the FCC will hold its next open meeting and, according to a Public Notice, will consider several issues important to different parts of the broadcast industry. For television broadcasters, there will be concerns about the proposal to do away with the “UHF discount,” which gives UHF stations a 50% discount in determining the number of households they reach when determining an owner’s compliance with the limitation that prevents any one company from owning stations that reach more than 39% of the U.S. TV households.

Getting rid of the outdated UHF discount is fine if Congress would simultaneously raise the ownership cap to 45% so groups can contend with new marketplace challenges. They are in a running battle for survival. None should be held back from accumulating more stations and benefitting from the economies and negotiating clout that come from size.

With the FCC indicating it will review the old provision that boosts how many TV stations a group can own, affected broadcasters are scrambling to make sure changes apply only to deals going forward and that they don’t have to divest current holdings. Feeling the heat: Tribune, Fox and Sinclair.