Broadcast Attorney: UHF Discount Could be In Play at FCC

Jan 02, 2024

By Ted Hearn, Editor of Policyband

Washington, D.C., Jan. 2, 2024 – TV station owners just got bopped on the beak by the Federal Communications Commission regarding local TV station ownership limits.

Could another bloody nose be on the way? It’s possible.

That’s the view of prominent broadcast attorney David Oxenford, a partner at Wilkinson Barker Knauer in Washington, D.C.

In a Jan. 2 blog, Oxenford said the Democratic-controlled FCC could take a look at the so-called UHF Discount, which is an FCC rule that allows a single TV station owner to serve more than 39% of TV households nationally. The FCC did not take up the UHF Discount or the 39% statutory cap set by Congress during its most recent quadrennial review of its broadcast ownership rules.

“With a fifth Commissioner now on the FCC, the UHF Discount could again be considered, particularly if there is a proposed acquisition that places the issue before the FCC by relying on the discount to comply with the ownership rules,” Oxenford said.

The “fifth Commissioner” was a reference to Democrat Anna Gomez who voted with fellow FCC Democrats, Chair Jessica Rosenworcel and Commissioner Geoffrey Starks, to tighten local TV station ownership rules in an order released by the FCC last Tuesday.

The UHF Discount was abolished in 2016 under Democratic FCC Chairman Tom Wheeler, but reinstated the next year under Republican FCC Chairman Ajit Pai.

As Oxenford explained, the UHF Discount counts “UHF stations as reaching only half the households in their market.” In theory, a broadcaster with only UHF stations could reach 78% of TV households without breaching the 39% statutory cap.

Oxenford said “there are several television companies that have exceeded” the 39% cap “by relying on the UHF Discount.”

According to TVNewsCheck’s Top 30 TV Station Groups for 2023, only Nexstar Media Group is currently over the 39% cap by reaching 68% of TV households nationally.

Even without the UHF discount, Nexstar might not be required to start divesting stations if the FCC honored precedent. Under the Wheeler FCC, the agency grandfathered TV station groups pushed over the 39% cap by elimination of the UHF discount.

Still, as Oxenford noted in a 2016 blog, the grandfather protection applied “so long as the current licensee stayed in place. On sale of a company exceeding the cap, some divestiture would be required to come into compliance with the new limits.”

Oxenford said the FCC opened a proceeding under Pai to examine whether it could alter the 39% cap on its own or it would take a new law passed by Congress. “That proceeding has never been resolved,” he said.