The US Federal Communications Commission (FCC) voted 2-1 on March 20 to abolish the rule limiting owners of local television stations to broadcast reach of 39% of US TV households. The decision took effect immediately, replacing the cap with a case-by-case review approach.
The local TV ownership cap had been in place since 1941, with the 39% threshold last adjusted in 2004. Under the old rule, stations with weaker broadcast signals could be counted at reduced percentages toward a company's ownership total, creating obstacles for major mergers and acquisitions.
FCC Chairman Brendan Carr, who backed the repeal, argued it will help local TV stations survive as the newspaper industry sharply declines. “We should stop tying down this segment of the market with outdated regulations. I do not want local television to follow the same path as local newspapers,” Carr said.
However, the FCC's sole Democratic commissioner, Anna Gomez, strongly opposed the move, calling it unlawful because she said only Congress has the authority to lift the 39% cap. She warned the decision “is an invitation for a wave of deals” and grants “more control over the public airwaves to a small number of companies whose content pleases the current administration.”
Under the new policy, the FCC will review merger applications from TV companies exceeding 39% broadcast reach on a case-by-case basis to assess whether they serve the public interest. The agency said the change aims to “remove artificial restrictions on broadcast television's ability to attract capital and generate revenue.”
The decision follows the FCC's approval in March of Nexstar's $3.54 billion acquisition of local TV operator Tegna, despite opposition from Democratic-led states. Unless overturned by a court, the deal would expand Nexstar's reach to 80% of US TV households, far exceeding the previous 39% cap. The FCC said it granted a waiver for the transaction.
Senate Commerce Committee Chairman Ted Cruz (R-Texas) last month also expressed skepticism about the FCC raising the 39% cap without congressional approval. Meanwhile, Clayton Weimers, executive director of Reporters Without Borders' North American branch, said the move “abandons one of the last significant barriers against excessive concentration of media ownership in the US” that ensures “no company or individual can dominate what millions of Americans watch, hear, and understand about the world.” Weimers added that his organization is considering all legal options to challenge the FCC's decision.
