Fcc Plows Ahead With Scrapping Tv Ownership Cap 

The Federal Communications Commission voted 2-1 on Thursday to wipe out a longstanding limit restricting the reach of any one TV station owner to no more than 39 percent of U.S. households, setting the stage for bigger broadcast mergers in the years to come.

But the FCC is also bound to face court challenges, with many detractors arguing the agency is treading past its own statutory limits and warning about the potential ills of media consolidation.

Lawmakers first ordered the FCC to set the ownership cap at 39 percent in a 2004 appropriations law, reflecting longstanding belief that no one broadcast company should be allowed to grow too powerful. However, FCC Chair Brendan Carr and the broadcast industry have argued that the law didn’t prohibit future agency leaders from reconsidering the specific limit.

Carr and the industry also say scrapping the restriction is vital to the financial well-being of broadcasters as they compete in an ever-more-crowded media marketplace with cable and streaming rivals. And Carr has cast the move as a way to curb the power of national TV programmers over affiliate station owners.

“We should learn from our mistakes with the local newspaper industry, and we should not let the same thing happen to the local broadcast TV industry,” Carr said at Thursday’s open meeting. “Trusted sources of local reporting, broadcast over the public airwaves, are worth protecting and worth fighting for.”

Carr’s changes would establish a case-by-case review of mergers and would allow deals to exceed the 39 percent reach if the commission deems them to be in the public interest. The agency already applies the public interest standard to merger reviews, leaving it unclear exactly what factors Carr would weigh.

The chair’s oversight of broadcast media regulations has already attracted critics from both parties who accuse him of running afoul of the First Amendment by punishing President Donald Trump’s least favorite TV networks. Critics have warned that this case-by-case approach could open the door to arbitrary decision-making rooted in undue political pressures. Some protesters rallied with signs outside the FCC headquarters on Thursday, alleging Carr has engaged in censorship.

Carr maintains that he applies the FCC rules impartially.

Democratic Commissioner Anna Gomez was the sole dissent in Thursday’s vote, arguing the change will allow a flood of consolidation. She and other opponents have argued that removing the cap could hurt local news and raise cable prices for consumers.

“Congress set this cap in federal law and only Congress can change it,” Gomez said on Thursday, also questioning the benefits of nixing the cap. “A handful of station group giants does not represent the wishes of local broadcasters.”

The one other commissioner, Republican Olivia Trusty, voted in favor of Carr’s plan to end the cap. Trusty cited the many TV marketplace changes since the cap was still imposed and defended the greater scale that Thursday’s action would allow broadcasters.

Reservations about Carr’s move are rippling through Capitol Hill, including among some senior Republicans overseeing the agency.

“I’ve raised serious concerns that the commission lacks the authority to carry that out without congressional authorization,” Senate Commerce Chair Ted Cruz (R-Texas), who convened a hearing on the topic earlier this year, told POLITICO on Tuesday.

Conservatives have been divided over the issue, particularly worried about the implications for right-leaning media.

The vote is a boon for TV station owners such as Nexstar and Sinclair, both of which have won Trump’s support in their quests to expand. They will be able to more easily pursue new acquisitions.

But Chris Ruddy, a friend of Trump and head of the conservative cable outlet Newsmax, repeatedly raised concerns about lifting the limit. Ruddy also fought against the recent $6.2 billion merger of broadcasters Nexstar and Tegna, a deal that cemented Nexstar’s status as the nation’s largest broadcaster with more than 250 TV stations.

The FCC’s Media Bureau staff waived the 39 percent cap to approve the Nexstar-Tegna deal in March, but a court has halted the transaction while an antitrust trial plays out. Opponents include DirecTV, Newsmax and a bipartisan group of state attorneys general.

Many Republicans have cheered Carr on, including senior Republicans on the House Energy and Commerce Committee such as Richard Hudson (R-N.C.), and see relaxing the broadcast cap as a key deregulatory priority.

But other Republicans have joined Democrats in expressing anxiety about the FCC’s actions. They include former House Majority Leader Tom DeLay, a Texas Republican who was in office when Congress established the cap.

“Regulatory agencies cannot defy or modify laws enacted by Congress,” DeLay wrote in an op-ed chiding Carr this week. “If Chairman Carr wants to raise the statutory cap, he should ask Congress to pass a law giving him authority to do that.”