NAB: Stand-alone UHF Discount Decision Would Be Illegal

Says without broader contextual analysis, eliminating discount would be 'arbitrary and capricious'

The National Association of Broadcasters Monday told the FCC that it should not consider eliminating the UHF discount without also considering the wider implications of any ownership modification, and that to do so would be "arbitrary and capricious." That is as much as saying it would be illegal (The Administrative Procedures Act makes such agency actions unlawful).

That came in comments on the FCC proposal, under acting chairwoman Mignon Clyburn, to eliminate the discount, and signaled that it would consider any TV station transfers dating from that September proposal as though the discount were no longer in effect.

The FCC only counts one half of a UHF station's audience toward its 39% national ownership cap, dating from when UHF's--in the analog era--were weaker and less desirable. In digital they are the beachfront property the FCC is trying to move broadcasters off of in the incentive auction. The FCC signaled years ago that given that change of fortune in the digital switch, it would likely want to remove the discount, but has taken no action to date.

"NAB believes that to rationally evaluate the public interest harms and benefits of modifying the method for calculating compliance with the national TV ownership rule, the Commission must also understand the impact of any change on the broader rule and on all the goals the FCC designed the rule to promote," NAB told the commission.

"Reconsidering the UHF discount on a stand-alone basis will hinder the Commission’s ability to determine whether the proposed change effectuates the purposes of the national television ownership rule," NAB added.

"By re-evaluating its methods for calculating compliance with the national television ownership rule in the context of an examination of the rule itself, the Commission can  develop a complete record and analyze whether the change proposed in the Notice would promote or hinder the policy goals undergirding the national ownership limit," NAB said. "While NAB takes no position on what the ultimate outcome of any such review should be, the analysis is essential to the Commission’s ultimate determination regarding both the cap and any related calculation methodologies, if the agency is to be consistent with APA requirements."

NAB said it was not taking any position on whether the commission should eliminate, retain or modify the 39% cap.

It was actually an internal dispute over changing that cap that fractured the association back in the 1990's, when the networks left NAB over smaller-station efforts to cap national ownership to limit network power.