Broadcasters Pushing for 78% Cap, FCC Seen Leaning Toward Less
TV station owners fear the FCC is leaning toward a national cap lower than they want, and are seeking to characterize a 78 percent cap as maintaining “the status quo.” That's according to interviews with broadcasters, broadcast attorneys and a letter to all five commissioners filed Monday. “Nothing in the record provides any basis for tightening the national ownership cap,” said Ion, Nexstar, Tribune, Univision and others that in total represent almost 500 stations.
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The letter re-emphasizes industry consensus on NAB’s national cap proposal. It described that plan -- which keeps the 39 percent cap but applies a 50 percent discount to both UHF and VHF TV stations -- as an effective 78 percent. An earlier NAB filing (see 1902150061) touting the consensus and proposal didn’t spell it out as proposing a 78 percent cap. Monday’s letter appears intended to “amplify” NAB’s position and emphasize the number broadcasters are requesting in the hope of heading off FCC proposals for a smaller cap, industry officials said. The primary focus of the Monday letter is the 78 percent figure, said Ramar Communications President Brad Moran, who signed.
Though the cap is officially 39 percent, it’s not wrong to say 78 percent is the “status quo” because under the current rules, a broadcaster that owns only UHF stations would be able to grow up to 78 percent audience reach thanks to the 50 percent discount for each such station, broadcasters and their lawyers said. “The FCC has overseen a television broadcast industry with an effective 78% cap since Congress instituted it 2004,” the Monday letter said. NAB and the FCC didn’t comment.
Under the association's plan, the 50 percent UHF discount would apply to both UHF and VHF stations and be rebranded as a counter to the competitive disadvantage broadcasters face against less-regulated competitors in other media sectors. “The big guys don’t have limits on them,” said Moran. Neither the most recent NAB filing on the cap nor Monday’s letter mentions the proposal would increase the cap from its current level by extending the discount to VHF stations. “Most stations transitioned to UHF with the DTV transition nearly a decade ago,” the letter said. The current “effective” cap is lower than 78 percent, and likely closer to 60 percent, a broadcaster noted.
The cap is “outmoded,” but if the FCC is going to maintain it, don’t harm broadcasters, the letter said. The NAB proposal would “preserve Congress’ determination and intent,” the broadcasters said. “Television broadcasters’ biggest competitors for viewer eyeballs and advertiser dollars -- cable television networks and Internet video -- face no ownership limitations”
An FCC plan proposing a 78 percent cap might be politically controversial, so NAB and broadcasters want to characterize it as not being much of a change, a broadcaster said. The letter emphasizes the number of broadcasters behind the plan, and the FCC is seen as more likely to support a cap plan backed by industry consensus, said Pillsbury Winthrop broadcast lawyer Scott Flick.
“This proposal would be a dramatic expansion of an antiquated regulatory loophole that should never have been resurrected,” emailed Free Press Policy Manager Dana Floberg. “A true ‘status quo’ proposal would mean returning to this regulatory structure where broadcasters' actual audience reach is counted without any unjustifiable discounts.” By relying on a “false” status quo, station-owners show their cap proposal is “bankrupt,” Floberg said.