Regulators Tighten TV-Station Ownership Curb by Cutting Discount

  • Move opposed by broadcasters including Fox and Sinclair
  • FCC says groups needn’t sell stations as result of change

Federal regulators tightened limits on owning television stations by eliminating the practice of only counting part of some stations’ audience, a move opposed by broadcasters including 21st Century Fox Inc. and Sinclair Broadcast Group Inc.

The Federal Communications Commission in a 3-to-2 Democratic-led party-line vote on Wednesday abolished the 30-year-old UHF discount. Under the eliminated discount, the agency counted only half of households in a TV station’s local area, when judging ownership against the limit of reaching 39 percent of U.S. TV households.

Groups that exceed the limit as a result of the change needn’t sell stations, but must comply in future transactions, meaning future deals could result in sales to conform with the regulation. Companies over the limit without the discount include Tribune Media Co., Ion Media Networks Inc. and Univision Communications Inc., the FCC said.

The FCC last month voted to preserve other TV and radio station ownership restrictions, including a ban on owning both a daily newspaper and a nearby broadcast station. The live audience for broadcast TV has been shrinking for years, and broadcasters have said they need to be freed of “antiquated and unreasonable” rules to vie with digital competitors.

42 Stations

Tribune, with 42 stations in cities including New York, Los Angeles and Chicago, where it is located, in an annual filing told investors that abolishing the UHF discount would affect its ability to acquire additional stations. Gary Weitman, a spokesman, in an e-mail said the FCC decision is a “non-issue” since company holdings comply with the rules.

The discount is a relic of days when UHF stations -- broadcasting on channels 14 through 51 -- 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, and the discount “acts only to undermine the national audience reach cap,” the FCC said in its order.

With the termination of the UHF discount, Univision’s national audience reach will rise to 44.8 percent, leaving it unable to buy TV stations in any new market, said Commissioner Ajit Pai, a Republican. An e-mail to a Univision spokesman wasn’t immediately returned.

The FCC shouldn’t change the discount without also considering modifying the national cap, Fox said in a filing. The agency didn’t have the authority to make the change in limits set by Congress, Sinclair said in a filing.

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