FCC plans to relax broadcast TV ownership rules by reinstating UHF discount, report says

FCC Chairman Ajit Pai
Chairman Ajit Pai. Image: FCC

FCC Chairman Ajit Pai may be planning to restore the UHF station discount that will relax the ownership rules for broadcasters.

According to The Wall Street Journal, the commission is set to announce its plans today. The move would reverse a decision by the previous FCC to remove the UHF discount that reduced how much lower-power UHF stations counted toward the broadcast TV ownership cap.

Last year, the FCC changed the UHF discount governing ownership rules for broadcast stations so that UHF stations would now have to count 100% of their reach toward the cap, instead of the previous 50%.

Since that time, broadcasters like CBS have urged the FCC to reinstate the UHF discount before making any further reforms on the ownership rules that currently cap a broadcast station group’s national audience reach at 39%.

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The potential move by the FCC would fulfill the wishes of many broadcasters looking to acquire more stations. Broadcasters including CBS and Nexstar—which recently completed a $4.4 billion acquisition of Media General—are looking to grow in order to better compete.

“Well, we do anticipate there will be deregulatory activity … as we roll through the year. Some things will happen sooner than others. We're optimistic that the UHF discount will be reinstated and then an NPRM issued to discuss all ownership rules, both local and national that the FCC I think will work through,” said Nexstar Media CEO Perry Sook according to a Seeking Alpha transcript.

Comcast-owned NBCUniversal and Tribune Media have both backed restoring the discount and Sinclair Broadcast Group went so far as to urge the FCC to eliminate the ownership cap all together.

“As the Commission noted in the Quadrennial Review Order—yet entirely failed to consider in the UHF Order—television stations face increased national competition from a host of new services, including satellite companies, cable networks, OTT providers, and direct subscription services. The National Cap is simply no longer justified in today’s media environment,” wrote Sinclair in an FCC filing.

In September 2016 when the FCC issued the order to eliminate the UHF discount, then-Commissioner Pai called the action “arbitrary and capricious.”

“I would have supported eliminating the UHF discount in the context of a general review and adjustment of our 39% national cap. But the Commission should not eliminate the UHF discount without also considering an adjustment to the national cap to reflect today’s marketplace. Indeed, I believe that the Commission is acting unlawfully by taking that step,” said Pai in a statement.