At the behest of several public interest and minority broadcasting groups, the DC Circuit Court of Appeals ordered a temporary, administrative stay yesterday of the FCC’s recent decision to reinstate the “UHF discount,” which had been scheduled to go back into effect on June 5. The discount allows licensees of television stations broadcasting in the UHF spectrum bands to count half of the television households in their markets when determining compliance with the FCC’s 39% cap on national audience reach.
Enacted in 1985, the UHF discount was promulgated at a time when UHF signals were deemed to be technically inferior to VHF and the market coverage of UHF stations was limited, thus placing UHF stations at a competitive disadvantage against their VHF counterparts. In a 3-2 ruling along party lines, the Tom Wheeler-led FCC voted last August to eliminate the UHF discount. Citing the effects of the 2009 digital television transition, the FCC reasoned that UHF channels have since become “equal, if not superior, to VHF channels” and that continued maintenance of the UHF discount “acts only to undermine the national audience reach cap.” Nevertheless, on April 20, the FCC’s twomember Republican majority reinstated the UHF discount pending the launch of rulemaking proceedings on potential changes to the national audience cap and other broadcast media rules, concluding that the FCC had erred in eliminating the discount “without simultaneously considering whether the [national audience] cap itself should be modified.”
In a motion for an emergency stay of the April 20 order filed last Friday, Free Press, Common Cause, the Prometheus Radio Project, the Media Mobilizing Project and the National Hispanic Media Coalition affirmed that they had asked the FCC to stay the June 5 implementation date but that the agency had not responded to their request. As they pointed to the short amount of time remaining before the effective date and the potential for “irreparable harm” to the viewing public once the UHF discount order goes back into effect, the groups termed it “arbitrary and capricious” for the FCC “to adopt a provision that lacks any independent technical or policy support and which contravenes the statutory limit on national television ownership.” The groups also warned that reinstatement of the UHF discount is likely to unleash a new wave of broadcast industry consolidation as evidenced in part by Sinclair Broadcasting’s recently-announced $3.9 billion acquisition of Tribune Media. Intervening in support of the FCC, the National Association of Broadcasters (NAB) countered, however, that a grant of the requested stay “would directly harm NAB members by tightening the national TV ownership limit through alteration of the rule’s calculation methodology without any consideration of whether a more restrictive rule serves the public interest.”
The court termed its action as an administrative stay which is intended to give the three-judge appellate panel additional time to review documents, submitted by the FCC and the petitioners on June 1 and on June 2, respectively, arguing for or against the long-term emergency stay requested by the petitioners. There was no word from the court as to when a ruling on the motion for emergency stay is expected.