Should the FCC eliminate or tweak its 39% broadcast television ownership cap? That’s rapidly become a question that has yielded two widely divergent answers. For the NAB, the answer is an absolute yes. But, for a group described by Influence Watch as “a nonpartisan, right-of-center public policy think tank that advocates for laws and policies promoting free enterprise,” the FCC has a big obstacle preventing it from making any change.
That think tank is the Free State Foundation, led by President Randolph May. In a FCC filing in response to MB Docket No. 17-318, the FSF cheered FCC Chairman Brendan Carr for his “Re: Delete, Delete, Delete” initiative, with FSF scholars broadly supporting his wide-reaching efforts to erase regulations that, “at best, have faded into irrelevance and,
at worst, arbitrarily anoint winners and losers in what would otherwise be a highly
competitive and efficiently operating marketplace.”
Regarding video programming distribution specifically, “without question it is appropriate to revisit the broader regulatory framework that unfairly and uniquely burdens legacy video providers — broadcast stations, to be sure, but also facilities-based multichannel video programming distributors such as cable, direct broadcast satellite, and telco TV providers —even as they suffer steady viewer losses to rapidly growing Big Tech platforms already
multiple times larger in terms of subscribers.”
With the current Media Bureau proceeding focused on the national television ownership cap, set at 39% by Congress in 2004, and the cap’s impact in a world where Alphabet, Meta, Amazon, Netflix and Apple compete against broadcasters, public policymakers are being asked by FSF to consider “consequence that one-sided (that is to say, asymmetric) relief for broadcasters would have on the still heavily regulated relationship between local television stations and facilities-based MVPDs.”
With a marketplace “safeguarded by competitive forces” the goal, FSF warns the Commission that it must be mindful “not to exacerbate existing opportunities for arbitrage via an asymmetric, piecemeal approach, particularly in the fraught retransmission consent context.”
This, FSF, says, is especially true given the Supreme Court’s Loper Bright ruling, which ended “Chevron deference” giving agencies such as the FCC delegated authority and the upper hand in matters including regulatory policy adoption and levying a forfeiture.
“Accordingly, if the FCC concludes that it should — and can, in a post-Chevron
appellate environment — modify the national television ownership cap, at the same time it
should urge Congress to modernize the Communications Act, and, in the interim,
identify additional ways to eliminate unwarranted rules targeting facilities-based
MVPDs.”
The FSF, where Andrew Long is a Senior Fellow and co-authored the filing with May, also believes that modifying the national television ownership cap without “commensurate deregulatory relief for facilities-based MVPDs” risks entrenching a marketplace “currently distorted by regulatory asymmetries rather than promoting vigorous competition and furthering consumer welfare.”
A ‘CLEAR AUTHORITY TO ACT’
In contrast, the NAB on August 4 filed comments urging the FCC to altogether eliminate of the national television ownership cap, calling it “an outdated rule that prevents local broadcasters from reaching more than 39% of U.S. households.”
That view is wholly unsurprising, given past comments the association led by President/CEO Curtis LeGeyt has offered since the start of the Trump Administration.
Unlike the FSF, which kept its argument brief, the NAB’s legal team led by Rick Kaplan and Jeri Timmerman filed an 29-page argument affixed with past communication, which can be seen here.
As the NAB sees it, “The revolution wrought by the internet and digital technologies has altered the media and advertising landscape beyond recognition. In this environment, an ownership rule imposed on only one market participant — broadcast TV — does not promote the public interest but hurts it.”
Furthermore, Kaplan and Timmerman write that “the record shows no justification for retaining an ex ante limitation placed just on TV broadcasters in a market characterized by unprecedented competition and content diversity, overwhelming consumer choice, and abundant options for advertisers. On the contrary, the record demonstrates that repealing the national ownership TV rule is not merely important or urgent but is a true emergency for TV broadcasters’ competitive viability.”
But, what about the Loper Bright ruling?
The NAB contends the Commission has authority to repeal the national TV ownership rule and must do so now. “The Supreme Court has made clear that ‘[o]nly the written word is the law,’ and no reviewing court can overlook statutory language on the strength of ‘suppositions about intentions or guesswork about expectations’ or other ‘extratextual considerations. [O]nly the words on the page constitute the law,’ and the words Congress used in the 1996 Act and re-used in the 2004 Appropriations Act did not statutorily codify the 39 percent limit or forbid the FCC from modifying or eliminating its national TV rule.”
As such, the NAB concludes, “Nothing in Loper Bright changes how the relevant provisions of the 2004 Appropriations Act should be construed, nor alters the FCC’s correct conclusion that it has authority to modify or remove the national cap and the UHF discount – that case was about judicial deference to agency interpretations of statutes, not how agencies should interpret statutes.”
