FCC Chair’s broadcaster ownership cap proposal draws harsh criticism from Democratic commissioners

FCC Chairman Ajit Pai
FCC Chairman Ajit Pai (FCC)

FCC Chairman Ajit Pai is proposing a review of the national ownership cap and the UHF discount applying to broadcasters, and the move is drawing tough criticism from two fellow commissioners.

In response to the proposal, both commissioners Jessica Rosenworcel and Mignon Clyburn have accused Pai of ignoring Congress’s warning to not change or ignore the ownership laws and of pushing out potentially divisive news right before the Thanksgiving holiday.

“Today’s proposal from FCC leadership asks to either eliminate or modify the existing national media ownership cap. On this subject, Congress has made it clear that the FCC is not permitted to change or evade the cap, which statutorily prohibits a single broadcaster from acquiring stations that reach more than 39% of the national television audience. In fact, just yesterday, Congressional leaders warned the FCC not to use its regulatory authority to ignore the law. The FCC proposal asks what authority the Commission has to eliminate or modify the ownership cap and the answer is simple: there is none. This proposal is a giveaway to the largest station group at the expense of diversity, localism, and competition,” said Rosenworcel in a statement.

“In just two days, many of us will join friends and family in celebrating the spirit of Thanksgiving. But as we learned today the FCC majority is about to deliver a cornucopia full of rotten fruit, stale grains, and wilted flowers topped off with a plate full of burnt turkey,” said Clyburn in a statement. “Tucked away in this ‘Pre-Holiday News Dump’ is yet another proposal that reportedly seeks to allow even greater media consolidation. Ignoring federal law, it could open the doors to a single company reaching in excess of the 39% national broadcast audience cap set by Congress more than a decade ago.”

RELATED: FCC reinstates UHF discount, likely opening broadcast TV M&A floodgates

Pai said that when the Commission earlier this year reinstated the UHF discount, it was so it could review the rule later on while conducting a simultaneous review of the 39% national cap.

Pai is proposing the FCC seek public opinion on whether to modify, retain, or eliminate the ownership cap and the UHF discount, which allows broadcasters to count UHF stations as 50% toward the ownership cap.

“With respect to legal authority, in 2016 the Commission ‘conclude[d] that [it] has the authority to modify the national audience reach cap, including the authority to revise or eliminate the UHF discount’; we will take a fresh look at this issue as well,” said Pai in a statement. “A comprehensive review of the rule is warranted in light of considerable marketplace changes, such as technological developments and increased video programming options for consumers, since the cap was last modified in 2004.”

Criticisms from his Democratic peers notwithstanding, Pai has come under fire from numerous parties for enacting policies that seem to favor big broadcasters like Sinclair.

The FCC’s recent decisions to loosen ownership rules for broadcasters—opening up the possibility for companies to own newspapers and broadcast stations, or multiple broadcast stations, in one market. He also authorized the deployment of the ATSC 3.0 next-gen TV standard. Both moves were viewed as favorable treatment of Sinclair, which has been a big vocal proponent of ATSC 3.0 and is in the midst of trying to acquire Tribune Media, a move that would make Sinclair far and away the largest owner of broadcast television stations.