Thursday, March 30, 2017

Expected FCC Reversal Could Lead To TV Deals

The FCC is planning to reverse an Obama-era rule that prevented major television-station owners from buying stations or readily selling themselves, a move that could touch off a wave of deals among media companies.

According to The Wall Street Journal, the proposal, which would effectively loosen a national cap on audience share for station owners that the rule had tightened, is scheduled to be put before the Federal Communications Commission in late April, an agency official said. Chairman Ajit Pai is expected to announce the plan on Thursday afternoon.

The longstanding ownership cap limits TV groups to a 39% national audience share. But for years, the government said station owners didn’t have to fully count UHF stations in calculating their share because UHF was typically a less powerful signal. The Obama-era FCC eliminated the so-called UHF discount last September, contending that the distinction between UHF stations and VHF stations had effectively disappeared.

The FCC under Mr. Pai is expected to revert to the previous rule in one of a series of actions he is taking as he plans to reverse several policies adopted under his predecessor, Tom Wheeler, who was FCC chairman for much of President Barack Obama’s second term.

TV station owners have contended that fully counting the UHF channels unfairly penalized them at a time when other types of media have been growing rapidly.

While the return of the UHF discount will likely lead to some deals, television executives are also pining for a relaxation of the rules that limit the number of television stations one broadcaster can own in a market.

Currently, one company can own two TV stations in a market only if eight independent TV stations remain afterward. That limits such possibilities to big and midsize markets and leaves out smaller markets where many TV stations are economically challenged, broadcasters say.

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