FCC in Possible Boost to TV Mergers Announces Vote to Ease Rule
FCC Said to Move Toward Easing Rule That Discourages TV Deals
(Bloomberg) -- Federal regulators in the U.S. are considering rolling back a rule passed by Democrats last year that restricts broadcast companies including Sinclair Broadcast Group Inc. and Tribune Media Co. from buying more TV stations.
Federal Communications Commission Chairman Ajit Pai, a Republican, on Thursday asked the agency to vote at its April 20 meeting on resuming the practice of counting just part of some stations’ audience when judging their holdings against a national limit of serving 39 percent of U.S. TV households.
Pai and a fellow Republican who now form the majority at the FCC dissented from the decision by Democrats last year to stop discounting audience size for stations that once used so-called UHF signals. Democrats also preserved other media ownership rules, including a prohibition on owning both a daily newspaper and nearby broadcast station.
Tribune, with 42 TV stations, surged this month after Reuters reported that Sinclair, which owns or helps operate 173 stations, had approached the company to discuss a possible merger. The companies would collectively reach more households than allowed by the FCC.
Broadcasting companies have been combining to reduce costs and gain negotiating leverage with cable companies, which pay fees to rebroadcast local signals to subscribers. Bigger scale could also help companies win more favorable terms from television networks like CBS Corp., which provide programming and want a portion of that money.
At the same time, President Donald Trump’s vows to deregulate businesses and his pick of Pai to lead the FCC have spurred expectations that limits on broadcaster ownership will be raised or eliminated. TV stocks have gained.
The discount at issue is a relic of days when UHF stations -- broadcasting on channels 14 and higher -- used signals that didn’t reach as far as stations assigned lower-numbered channels. For technological reasons that disadvantage disappeared with the switch to digital TV in 2009.
To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net.
To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman