Dec 18, 2018 - Economy & Business

FCC starts second round of media consolidation wars

FCC Chairman Ajit Pai

FCC Chairman Ajit Pai. Photo by Win McNamee/Getty Images.

The Federal Communications Commission is fueling the war over media consolidation by opening the door to another deregulatory spree targeting rules that stop local broadcasters from merging.

Why it matters: The FCC may have killed the Sinclair-Tribune deal, but the overall trend is towards fewer owners for local news outlets — which are still vital sources of information for many Americans.

Details: The FCC voted last week to begin a legally-mandated review of the agency’s media ownership rules.

  • That includes asking whether the current rule — which bans a company from owning more than one of the top four stations in a market — “continues to foster competition, the stated primary goal of the rule, and thus should be retained or whether the promotion of localism or viewpoint diversity also provides justification for retaining the rule.” (Right now, you can own two stations in a market — but only one of the top four, unless the FCC waives the prohibition.)
  • It also asks for input on the necessity of a rule that two of the nation’s top four networks — NBC, ABC, CBS and Fox — can’t merge at the local level.

The big picture: The deregulation of the local media space has added more juice to an already merger-hungry market among broadcasters.

  • In an email, Paul Gallant, an analyst with Cowen Washington Research Group, said that getting rid of the prohibition on owning two of the top-four stations “would really improve the long term health of TV stations, especially in smaller markets.”

The other side: Opponents of media consolidation says it shrinks the number of voices from which consumers can get important local news and information.

  • Last year, the FCC decided to make it easier for the same person to own a broadcast station and a newspaper in the same market. It also removed a requirement that there be eight independently owned stations in any given market.
  • “We’re getting to a point where if they weaken it even further in small markets you could have one media voice across the board,” said Gigi Sohn, a top adviser to former FCC Chairman Tom Wheeler, a Democrat.

Yes, but: Not included in the review is the overall cap on what percentage of the overall national audience a single company's network of stations can reach.

What’s next? The public will be able to submit comments on the FCC’s review — which doesn’t suggest any specific proposals — before the agency releases a final report. The agency could keep the rules the same, change them or eliminate them outright.

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