FCC Acting Chairwoman Circulates NPRM To Remove UHF DiscountUnclear how it would affect deals in pipeline, but it could put a damper on Sinclair's future growth 8/02/2013 06:31:22 PM Eastern
Things are getting interesting at the Clyburn FCC.
According to a notice on a portion of the FCC site - a legacy of former Chairman Kevin Martin - that shows what items the chair has circulated for a vote by the other commissioners, there is a notice of proposed rulemaking (NPRM) on "Amendment of Section 73.3555(e) of the Commission's Rules, National Television Multiple Ownership Rule, Notice of Proposed Rule Making."
An FCC spokesperson could not clarify what the NPRM was about, but section (e) deals with the UHF discount and according to an FCC source familiar with the NPRM, it does repeal the UHF discount, but grandfathers existing combos.
Clearly the NPRM timing suggests the acting chairwoman is looking more closely at the so-called Super Group deals, though it is unclear what impact the NPRM could have on deals in the pipeline. According to the source, the NPRM asks whether the discount should still apply to transactions before the commission if the item is approved.
The discount dates from the days of analog broadcasting when UHFs were less desirable than VHFs. In the digital realm, UHFs are now beachfront real estate due to their propagation characteristics, which is the reason the FCC is trying to reclaim as many of those channels as possible to auction for wireless broadband.
The FCC currently has a 39% cap on one TV station owner's share of U.S. TV households, but UHFs only get credited with 50% of a market's households dating from those days of tough-to-tune UHF signals.
Removing the discount would not threaten Sinclair/Allbritton, but it could prevent others from heavying up if it mean going beyond 39%, and would prevent Sinclair from getting any bigger since it is currently at about 38%.