Raising 39% Cap No FCC Slam Dunk

But UHF discount would pave way for Sinclair-Tribune deal

The FCC’s reinstatement of the UHF discount on April 20 means the way is cleared for, say, Sinclair Broadcast Group to buy Tribune Media’s stations if it is so inclined — Sinclair said last week it was not commenting on industry rumors. But those thinking the regulator would move swiftly to also raise the 39% national ownership cap have another thing coming.

The discount won’t be reinstated until 30 days after the UHF decision is published in the Federal Register, so it will be a couple of months before a Sinclair-Tribune deal would square with FCC rules. That would not stop the wheels from being set in motion, though, since it is a matter of when, not if.

The UHF discount is coming back because when the FCC eliminated the rule under former chairman Tom Wheeler, it didn’t adjust the cap that prevents station groups from collectively reaching more than 39% of the national television audience accordingly, FCC chairman Ajit Pai said. He said the discount effectively lowered the cap for anyone who could otherwise have bought UHF stations, and the FCC shouldn’t restrict rules in one area without loosening them in another.

But Democratic FCC member Mignon Clyburn, who dissented vigorously from the decision, would be an almost sure no vote for raising the cap, and Republican Michael O’Reilly doesn’t think the FCC has the authority to modify the 39% cap, which is in a statute he helped craft when he was a Congressional staffer.

Clyburn said she did not understand why the FCC could not just leave the repeal decision in place until it com­pleted Pai’s planned review of both the discount and the cap, which will begin later this year. But she signaled she did understand, citing the plans of a few big media companies such as a Sinclair SEC filing about potential future station buys and CBS chairman and CEO Les Moonves saying it would be looking to buy stations if the cap were lifted.