The Federal Communications Commission signaled it will vote on Aug. 6 to repeal the longstanding cap on ownership of TV stations, replacing a limit that keeps owners from controlling stations in more than 39% of markets with a case-by-case review of transactions.
“Today, national programmers can distribute their programming to 100 percent of the country — either through their own streaming services or through deals they cut with nationwide ‘virtual cable companies,’ like YouTube TV,” FCC Chairman Brendan Carr wrote in an op-ed published by Breitbart.
“The cap no longer constrains their control over distribution in this respect.”
What the Change Means
A decision to eliminate the cap might have immediate consequences. Nexstar, one of the largest owners of TV stations in the US, has been barred by a federal court from completing its recent acquisition of Tegna, a smaller TV station owner, on the grounds that the transaction would give Nexstar too much control over local TV properties across the country. Nexstar also owns national outlets like the CW broadcast network and the NewsNation cable-news outlet.
The FCC said removing the cap does not represent automatic approval of future deals. “There may be transactions that would have exceeded the limits of the 39% national cap that do not promote the public interest and those will be denied,” the regulator said Wednesday.
“On the other hand, there may be transactions that would have exceeded the cap that do promote the public interest and could gain Commission approval.”
Industry Reaction
Nexstar is in favor of the move. “The FCC’s decision to review the national television ownership cap is a welcome and long-overdue step toward bringing broadcast regulation into the modern media marketplace,” the company said in a statement.
“These rules were last updated before Netflix streamed a single movie, before the first iPhone, and before Instagram existed, and they continue to single out local broadcasters based on a competitive landscape that disappeared with the VCR.”
The National Association of Broadcasters also applauded the initiative. It said the move “will empower local stations, ensuring they can better compete, invest and serve their communities with the most trusted and freely available news and information, premier sports and entertainment.”
The Bigger Picture
There have been signs in recent months of the new power that station owners might gain. In September of last year, both Nexstar and another large TV station owner, Sinclair, said they would preempt episodes of ABC’s “Jimmy Kimmel Live” after the host made remarks about the killing of conservative activist Charlie Kirk. The Disney network pulled Kimmel’s show for a handful of days before returning him to the air.
The Bottom Line
The FCC will vote on Aug. 6 to repeal the 39% national TV station ownership cap, replacing it with a case-by-case review. The move could allow Nexstar to complete its acquisition of Tegna, which a federal court has blocked. Nexstar and the National Association of Broadcasters support the change. The FCC says it will still reject deals that do not serve the public interest.
