Editorial: Rethinking Cap

8/12/2013 12:01:00 AM Eastern

According to FCC sources, the commission’s acting
chairwoman, Mignon Clyburn, has circulated a notice of proposed rulemaking (NPRM) that
would do away with the UHF discount
on station ownership.

That is the rule that counts only
one-half of the households in a market
toward the FCC’s 39% national
ownership cap. The regulation dates
from the days when UHF stations
were the red-headed stepchild of the
TV band, its often-fuzzy signals tunable
only with great difficulty.

All that has long since changed.
With the DTV transition, UHF is now
beachfront spectrum due to its propagation
characteristics, and the FCC is
busy trying to encourage broadcasters
to give up that property for wireless.

Granted, it’s hard to make a case
for preserving the discount, given that
drastic shift in fortune. But speaking
of drastic shifts in fortune, it would
not be fair to apply the change retroactively,
or use it to undo any deals in
the pipeline.

According to communications attorneys,
there is nothing technically
stopping the FCC from voting the
item and applying a new rule to the
“supergroup” deals currently before
it. In fact, the NPRM apparently
asks whether it should be applied to
the supergroup deals in the pipeline.
Though getting rid of the discount
would not prevent a Sinclair purchase
of Allbritton, the timing would seem
to send a signal that the FCC is concerned
about the size of those groups
and would limit Sinclair’s further expansion.
That would harken back to
former FCC chairman Julius Genachowski’s
proposal to count some TV
joint agreements as ownership under
the local caps, which appeared to
some to be a Sinclair-targeted move.

If the FCC votes to end the discount,
it should grandfather current
groups and make its decision on the
deals it is currently vetting—Sinclair/
Allbritton, Gannett/Belo, Tribune/Local
TV (the last of which might run
into UHF discount problems)—before
imposing the new limits since those
agreements were predicated on the
rules as they stood.

And while ending the discount appears
to make sense on its face, the
timing is not the best. And imposing
any new limits, rather than easing
others, seems to be another one of
those shoves toward the tar pits by
the commission.

As with joint sales and operating
agreements and the UHF discount,
broadcasters are using existing rules
to try to provide the regulatory relief
denied them by the decade of
inaction on lifting the newspaper/
broadcast cross-ownership rules or
loosening ownership limits. If FCC
leadership means it when they say
they want a vibrant broadcasting
business, it sends the wrong message
by picking this moment to start limiting
their ability to generate revenue,
create larger and more stable companies
and try new business models.

Our hope is the FCC is simply signaling
that it recognizes the “supergroup”
phenomenon and the relevance of
the UHF discount issue that has been
kicking around since the 2009 DTV
transition. It is an NPRM seeking
comment after all, not an FCC order.
The commission under Clyburn
is opening dockets on those deals as
well, in the interests of transparency.
So long as that does not translate into
hasty action the FCC will repent in
court, the acting chairwoman is simply
doing her job.


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