Yesterday the FCC voted by a 3-2 margin to eliminate long-standing media ownership prohibitions that include cross-ownership of a television station and a newspaper and common ownership of radio and TV stations serving the same market. The order, which addressed petitions for reconsideration of the FCC’s August 2016 decision to retain many of the agency’s media ownership rules, is one of two major broadcast-related decisions handed down yesterday at the FCC’s monthly open meeting. By a 3-2 vote along partisan lines, the FCC also adopted rules to implement the next-generation broadcast television transmission standard, known as ATSC 3.0, on a market-driven, voluntary basis. (See separate story below.) In a press release announcing the media ownership decision, the FCC noted that, “for too long, the Commission has failed to acknowledge the pace of change in the media marketplace by maintaining broadcast ownership rules that do not reflect today’s digital age.” Describing the order as a vote “to modernize [the] broadcast ownership rules and to help promote ownership diversity in the broadcast industry,” the FCC predicted that its action “will provide broadcasters and local newspapers with a greater opportunity to compete in the digital age.”

Specifically, the FCC order eliminates media ownership rules that the FCC had retained or reinstated as part of its August 2016 order in the 2010/2014 Quadrennial Review proceeding, including (1) the Newspaper/Broadcast CrossOwnership Rule which dated back to 1975, (2) the Radio/Television CrossOwnership Rule, and (3) rules that treat joint sales agreements (JSAs) among broadcasters within the same market as attributable ownership interests. The order also modifies the Local Television Ownership Rule by eliminating the “eight voices test,” which had barred a single entity from owning two television stations in the same market unless eight or more independently-owned TV stations remained to serve that market. Moreover, as specified in the FCC press release, the order “permits exceptions to the prohibition on an entity owning two of the top four stations in a market if it can be shown that a particular transaction would be in the public interest.” While JSAs will no longer be treated as attributable ownership interests, broadcasters will still be required to file their JSAs with the FCC. The FCC also confirmed that issues pertaining to the national cap on broadcast station ownership that are not a part of the Quadrennial Review docket will be considered in a separate proceeding. 

Asserting that the rule changes will enable broadcasters and newspapers to better serve their local communities and compete against online and other alternative news platforms that have become more prevalent in recent years, FCC Chairman Ajit Pai called it “a simple proposition” that “the media ownership regulations of 2017 should match the media marketplace of 2017.” Along a similar vein, FCC Commissioner Brendan Carr endorsed the agency’s vote as one which “acknowledge[s] the reality that many of our current media ownership rules are outdated and counterproductive.” However, as FCC Commissioner Mignon Clyburn lamented in a dissenting statement that “today will go down in history as the day when the FCC abdicated its responsibility to uphold the core values of localism and diversity in broadcasting”; Commissioner Jessica Rosenworcel quipped that “I am hard pressed to see any commitment to diversity, localism or competition” in the majority’s decision to give “the green light for a single company to own the newspaper and multiple television and radio stations in your community.”