FCC May Favor 50% US TV Cap, Which May Not Be at July Meeting That May Have Kidvid Vote
The FCC is seen leaning toward an order that would set a 50 percent national ownership cap but may no longer be shooting for a July commissioners’ meeting agenda that's also expected to include an NPRM on relaxing kids' video rules, broadcast lawyers and executives said in interviews Monday (see 1806140055). Several said the agency may need more time to settle on a final ownership cap number and arrive at a final cap order, and one suggested the agency may no longer be seeking to beat the expected ruling against the UHF discount by the U.S. Court of Appeals for the D.C. Circuit. If an FCC order on the cap is held until the agency’s August meeting, it's still likely to beat the expected court verdict, attorneys said. The July agenda is expected to be released Thursday.
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The 50 percent cap proposal -- which includes eliminating the UHF discount altogether -- has the support of many broadcasters, including Hearst, Gray and Graham Media. Nexstar and Sinclair want the ownership cap removed altogether, but Sinclair CEO Chris Ripley said last week Sinclair buying Tribune potentially could be restructured to fit under a 50 percent ownership cap. NAB recommended preserving the 39 percent cap and applying a discount to the calculation of every TV station’s reach, but that proposal isn't thought to have legs at the agency. Though Sinclair/Tribune would be at 58 percent as currently constructed, several attorneys said Sinclair could likely get under a 50 percent cap and minimize the effect on the Tribune deal through the use of divestitures and joint sales agreements. The FCC and Sinclair didn't comment.
A 50 percent cap is seen as a possible compromise that would please some broadcasters, raise the cap, avert an expected loss in the D.C. Circuit and not attract as much political heat as a more radical cap alteration, many lawyers said. Some heat is expected from broadcasters, Sinclair or anti-media consolidation advocates no matter the agency’s course, the attorneys said. “Regardless of what the FCC does, this is destined for court,” said former Commissioner Robert McDowell, now at Cooley.
Critics of the 50 percent plan said the number isn’t well supported in the record and would be vulnerable to legal challenge. Nexstar CEO Perry Sook expects a higher number (see 1806140055), and some attorneys said the agency could set the cap at 50 percent but allow pending mergers such as Sinclair to be grandfathered. A plan that included a special carve-out for Sinclair/Tribune would likely add to the perception that the FCC favors that company, lawyers said.
Broadcasters and an FCC official said an NPRM on kidvid rules is to be the media modernization item for July’s meeting agenda. Though the contents aren’t precisely known, it's expected to seek comment on proposals advanced by Commissioner Mike O’Rielly to allow content on multicast channels to satisfy kidvid requirements, and relax restrictions on when that programming can be aired (see 1805020063). The multicasting proposal is intended to ensure that children without access to streaming services or MVPDs still have access to quality children’s television, attorneys said.
O’Rielly is aiming to receive broad support, his office said: “Our target is bipartisan compromise.” The kidvid NPRM offers some tentative conclusions, an FCC official said, but it’s not clear what those conclusions are. O’Rielly was tapped by Chairman Ajit Pai to head the effort to update the kidvid rules.
Satisfying kidvid rules with multicast channels could be acceptable if it can be shown that content on those channels will reach the same number of children, Common Sense Media Senior Counsel Ariel Fox Johnson said. That will need to be shown through data, she said. The same consideration applies to relaxing the rules on timing, she said.
The current rules are past due for an update, said Gray Television Deputy General Counsel Robert Folliard. With so many other offerings on MVPDs, streaming and online, few children rely on broadcast kids content, he said. Some children, especially in low-income households, may not have access to content outside broadcast TV and not all of the options provide the same quality of content, Fox Johnson said.