Some Broadcasters United for NAB Plan to Keep UHF Cap, Extend to VHF
TV broadcasters and NAB apparently resolved differences over what should happen to the national ownership cap and asked FCC Chairman Ajit Pai to pursue the association's proposal (see 1811270062) to keep the current 50 percent cap for UHF stations and extend it to VHF's, said an ex parte filing. NAB President Gordon Smith and representatives from factions that previously offered differing national cap plans -- including Nexstar CEO Perry Sook and Graham Media CEO Emily Barr -- brought the consensus to Pai Feb. 11, said a filing posted Thursday in docket 17-318. Lack of industry consensus was making it difficult for the FCC to act (see 1811010041).
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CEOs who attended represented the various groups behind the most prominent national cap proposals, an industry attorney said. Sook previously backed no cap (see 1810170052), while Barr and Gray’s Pat LaPlatney were part of a group of midsize broadcasters that pushed for a 50 percent national cap (see 1807050037). Ion CEO Brandon Burgess, Univision and Trinity (see 1807130052) pushed for the UHF discount to remain. Attendees spoke on behalf of the NAB TV board, the filing said.
None of the companies present commented. Industry lawyers said the consensus was seen preferable to the current uncertain position. Many of the cap proposals date from before the U.S. Court of Appeals for the D.C. Circuit rejected a challenge to the current cap, one pointed out. Circumstances changed after those proposals were drafted, the attorney said. “Anything short” of preserving the current discount “would be tantamount to reregulating an industry that already competes with one hand tied behind its back,” the filing said. By presenting a unified voice, the station owners are making it easier for the FCC, a broadcaster said. The proposal has more weight with everyone "singing the same tune," the broadcaster said.
While NAB refers to its cap proposal as the “status quo,” it would actually maintain the current 50 percent discount for UHF stations and extend the same discount to VHF's. NAB conceded the original rationale for the UHF discount no longer applies but said the discount and extension to VHF are merited because of increased competition. TV stations must remain “competitively viable” to continue offering local news, the filing said. The national cap is based on “a fiction” because it presumes stations reach 100 percent of the TV households in their designated market areas, the filing said. That “significantly exaggerates the competitively effective reach of TV stations,” NAB said.
By keeping the UHF discount and extending it to VHF outlets, the FCC would be effectively raising the national cap to 78 percent, said S&P Global analyst Justin Nielson in an interview. Though that wouldn’t have the same effect as eliminating the cap, it could significantly affect Nexstar buying Tribune. Though Sook pledged to divest stations to come under the current cap (see 1812030055), 47 of the deal’s 207 stations are VHF, and some are in major cities where a 50 percent discount would greatly affect the combination’s total audience reach, Nielson said. If the NAB proposal were enacted, Nexstar/Tribune would likely have to divest fewer stations, he said.
"Pushing for the discount to now apply to all stations is nothing but a transparent bid for a bigger loophole," emailed Free Press Policy Manager Dana Floberg. NAB's plan is "bogus" and "math-defying," she said.