Dems Warn FCC Against Ignoring Station Cap

Democratic leaders in Congress have urged members of the FCC that they must comply with the current 39% U.S. coverage cap on station ownership, and specifically mentions Sinclair Broadcast Group. Future commissions, it says will be forced to order “divestitures when the company requests to renew licenses that exceed the statutory cap.”

The letter, from Democratic leader Nancy Pelosi, Energy and Commerce Committee Ranking Member Frank Pallone Jr. and Subcommittee on Communications and Technology Ranking Member Mike Doyle,  says: “We write to remind the commission that it is prohibited from allowing any single company to own broadcast stations that break the national ownership cap. To comply with the law, the commission is required to order divestitures in any transaction in which a company — including Sinclair Broadcast Group — attempts to acquire stations that reach more than 39% of the national broadcast audience. If the commission fails to comply with the law now, future commissions will be forced to order such divestitures when the company requests to renew licenses that exceed the statutory cap.”

It closes by saying: “We will be closely monitoring the commission’s action in this area. We encourage you to spend the commission’s time exploring ways to promote both minority media ownership and a diversity of programming on our airwaves instead of treading down this path that is contrary to the will of Congress.”

The full text of the letter:

Dear Chairman Pai, Commissioner Clyburn, Commissioner O’Rielly, Commissioner Carr and Commissioner Rosenworcel: 

We write to remind the commission that it is prohibited from allowing any single company to own broadcast stations that break the national ownership cap.  To comply with the law, the commission is required to order divestitures in any transaction in which a company—including Sinclair Broadcast Group (Sinclair) — attempts to acquire stations that reach more than 39% of the national broadcast audience. If the commission fails to comply with the law now, future Commissions will be forced to order such divestitures when the company requests to renew licenses that exceed the statutory cap. 

Congress acted in 2004 to set the maximum national audience reach for entities owning TV stations at 39%. Congress passed this law on a bipartisan basis to protect consumers, encourage independent voices in their media market, and prevent one station group from serving more than 39% of the population. By explicitly excluding review of the cap from the congressionally-mandated quadrennial review of broadcast ownership rules, we made clear that the FCC is not permitted to change or evade that national cap. Commissioner O’Rielly correctly testified at a recent FCC oversight hearing that only Congress can change the cap. As Commissioner O’Rielly also rightly noted, Congress did not intend to allow a company to circumvent the cap using outdated rules such as the UHF discount.  His reading of the law is consistent with the position of at least two other sitting commissioners.

We were therefore surprised when Commissioner O’Rielly refused to say whether he will allow a company to acquire licenses that would exceed the nationwide cap set by Congress. This is not a judgment call — no commissioner has the authority to ignore the law. 

The law requires that if the FCC approves any transaction that would exceed the statutory cap — including the applications by Sinclair to acquire licenses owned by Tribune Media — that it orders the company to divest any stations necessary within two years. The commission does not have the authority to waive this statutory requirement. 

Ignoring the statutory cap now would force future commission’s to act to enforce the law properly. Specifically, the final backstop to ensure compliance with the law comes when a company applies to renew its licenses. The commission cannot renew licenses for group owners when those licenses exceed the 39 percent cap — the FCC must order divestitures at that time. While commission practice is to grandfather licenses during renewals when those licenses violate commission rules, the FCC cannot waive the law. Neither this commission nor any future commissions may grandfather a license renewal that violates the statutory cap.

When each of you was sworn in as commissioners, you swore to faithfully discharge the duties of your office. These obligations include enforcing the laws of the United States as passed by Congress. The majority of the commission correctly believes that Congress imposed a 39% national cap for broadcasters and that we did not create any loopholes around this cap. To comply with your oath, you are required to order divestitures when necessary to stay within the restraints of the law.

We will be closely monitoring the commission’s action in this area. We encourage you to spend the commission’s time exploring ways to promote both minority media ownership and a diversity of programming on our airwaves instead of treading down this path that is contrary to the will of Congress. 

Thank you for your consideration of these concerns, which are shared by many of our colleagues in the Congress.