FCC considering rule that could keep big media companies from getting bigger

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The FCC said it plans to consider changing the way it measures media ownership “to ensure that its rules reflect the current state of television broadcasting technology.”

Currently, a media company’s stations can’t reach more than 39 percent of the nation’s households with television.

However, some stations count toward that 39 percent cap differently than others. Ultra High Frequency — or UHF — stations count half as much as Very High Frequency — or VHF — stations. This “discount” on UHF stations lets big broadcasters like CBS and FOX acquire more stations without stepping over the 39 percent boundary.

The FCC said Thursday that it is considering counting UFH and VHF stations equally. Broadcasters that exceed 39 percent without the discount on UHF stations will be grandfathered in and can keep their stations.

“With the transition of full-power stations to digital broadcasting in 2009, the technical inferiority of UHF appears to be a thing of the past,” the agency said. “Therefore, the technical justification for the UHF discount no longer seems to exist.”

With this announcement, the FCC has created "a regulatory purgatory for broadcasters" while the agency debates doing away with the discount, House Energy and Commerce Chairman Fred Upton (R-Mich.) and Communications and Technology Subcommittee Chairman Greg Walden (R-Ore.) said in a statement.

The FCC is "potentially sidelining countless jobs and billions of dollars in new investment" by announcing that it is considering eliminating the discount, the two lawmakers said.

"Rather than following the good process of adopting new rules and then applying them prospectively ... the FCC instead will apply as yet undefined rules to applications filed anytime after today."

Ajit Pai, the FCC’s only Republican while the agency waits for the Senate confirmation of Sen. John Cornyn (R-Texas) aide Michael O’Rielly — dissented to the proposed change, criticizing the agency for creating this uncertainty for broadcasters and pushing for larger reforms.

The FCC is missing the forest for the trees, Pai said. “We should ask whether it is time to raise the 39 percent cap.”

Raising the cap “is long overdue notwithstanding any change to the UHF discount,” he said.

This post was updated at 4:12 p.m.