The Republican FCC commissioner says the agency should consider raising the cap that limits the reach of TV station groups to 39% of TV homes at the same time it decides what to do about the UHF discount, one factor in calculating that reach.The effect of eliminating the discount, he says, would only be to "substantially tighten the national ownership limit."
FCC’s Ajit Pai Proposes Easing Nat’l TV Cap
The FCC shouldn’t ax its UHF discount without also considering raising its national cap on broadcast TV station ownership — which currently bars broadcasters from owning television stations reaching more than 39% of the nation’s TV homes, FCC Commissioner Ajit Pai said Thursday.
“This step is long overdue, notwithstanding any change to the UHF discount,” the GOP commissioner said in the written text of his testimony for a hearing before the House Communications and Technology Subcommittee. “Eliminating the UHF discount would substantially tighten the national ownership limit.”
Pai’s comments were quickly endorsed by the National Association of Broadcasters. “We think Commissioner Pai’s comments make a lot of sense,” said Dennis Wharton, an NAB spokesman. “The FCC shouldn’t just cherry pick one ownership rule without looking at all of the media ownership rules holistically,” Wharton added.
The FCC proposed to eliminate the UHF discount in September, without considering a relaxation of the 39% cap — a move that observers say could put the brakes on consolidation in the TV media marketplace.
Some broadcasters have been relying on the discount -– a long-time loophole in the FCC’s ownership regulations — to beef up their station portfolios. The discount has basically allowed broadcasters to count UHF stations in their portfolios as reaching only half the homes in their markets, while the VHF stations in their portfolio count all homes in the market, toward the 39% cap.
Without raising the 39% cap, eliminating the discount — that is, requiring broadcasters to count the UHF stations in their portfolios as reaching all homes in the market — could put a severe damper on the ability of some broadcasters to grow.
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The discount was adopted by the FCC in 1985, during the analog broadcasting era, when U’s were generally considered technically superior to VHF signals. Since broadcasters switched to digital transmission technology in 2009, U’s have generally been considered superior to V’s, undermining the discount’s technical justification.
The FCC’s proposal to do away with the discount would grandfather the portfolios of groups that currently exceed the cap, thanks to the discount. The three companies that exceeded the 39% cap as of September were Ion Media, Trinity Broadcasting and Univision.
The FCC also proposed to grandfather the portfolios of companies that as of September had pending station acquisitions that would have pushed them above the cap, if the FCC eliminates the discount — a move that would appear to cover Tribune Broadcasting’s acquisition of the Local TV stations.
Comments on the FCC’s proposal to eliminate the UHF discount are due at the agency on Monday.
Comments (3)
Bill Evans says:
December 12, 2013 at 4:14 pm
“The discount was adopted by the FCC in 1985, during the analog broadcasting era, when U’s were generally considered technically superior to VHF signals. Since broadcasters switched to digital transmission technology in 2009, U’s have generally been considered superior to V’s, undermining the discount’s technical justification.”
Someone didn’t check content…V’s superior to U’s first, then U’s superior to V’s….
Don Thompson says:
December 12, 2013 at 8:08 pm
I bet Sinclair’s plan is to evade the 39% cap by getting the FCC to sign an LMA or SSA with Canada and Mexico and have those foreign populations count in the base.
Don Thompson says:
December 12, 2013 at 8:11 pm
I think before the U.S. government accommodates the cashcasters with lighter regulations, lawmakers should require digital TV stations reaping bid retransmission consent windfalls to refund taxpayers the $2 billion they spent to subsidize DTV converter box coupons.