In another major action undertaken yesterday at the FCC’s December open meeting, the agency adopted a Notice of Proposed Rulemaking (NPRM) that will initiate a “comprehensive review” of the agency’s current 39 percent cap on national television audience reach and the related question of whether the UHF Discount should be eliminated.
Last assessed by the FCC in 2004, the TV ownership cap limits any single entity from owning or controlling television stations that, together, reach more than 39 percent of the national viewing audience. The UHF Discount—which was repealed by the Tom Wheeler-led FCC last year before being reinstated in April—allows licensees of commercial television stations in the UHF bands (Channels 14 through 51) to count half of their potential viewers in every market when calculating their compliance with the national audience cap. Maintaining that the NPRM “makes no tentative conclusions” about whether the 39 percent cap “should be modified, retained, or eliminated,” the FCC confirmed in a press statement that it will seek stakeholder comment “about whether a cap is still needed and what public interest goals it would promote.” Additional questions on which input will be solicited include (1) the level at which the cap should be set, (2) marketplace and other changes that should be considered in the context of modifying or eliminating the cap, (3) whether the current cap should be retained in the interest of promoting localism, and (4) how compliance with the cap should be calculated. Like the net neutrality order, the item was adopted by a 3-2 margin along party lines, with both FCC Democrats dissenting.
Declaring, “the marketplace has changed considerably due to the explosion of video programming options and various technological advances since the cap was last considered in 2004,” FCC Chairman Ajit Pai explained, “we need to examine whether our rules should change accordingly.” Despite questioning whether the FCC possesses the authority to modify the cap, which had been mandated by Congress, FCC Commissioner Michael O’Reilly nevertheless voted in favor of the NPRM on grounds that there is no prospect for Congressional review at this time. In a dissenting statement, however, Commissioner Jessica Rosenworcel voiced no doubt that the rulemaking proceeding “is unlawful” and reminded her colleagues that, “at the direction of Congress in the Consolidated Appropriations Act of 2004, the FCC is statutorily prohibited” from enacting changes to the 39 percent cap. As she described localism, diversity and competition as “bedrock principles of our national media policy,” Commissioner Mignon Clyburn agreed that “giving a single broadcaster the means to buy up enough local stations to exceed the 39 percent cap is inconsistent with the statute and must be rejected.”