Cable Industry: FCC Needs to Close TV Station Ownership ‘Loopholes’

Dec 22, 2023

By Ted Hearn, Editor of Policyband

Washington, D.C., Dec. 22, 2023 – The cable industry and TV stations owners are taking their battle over federal media ownership rules right to the last second.

The two sides have been engaged in an intense lobbying struggle in recent days, mainly because the Federal Communications Commission is under a court order to issue a ruling by Dec. 27.

Cable, led by NCTA - The Internet & Television Association, wants the FCC to tighten the rules, while TV stations are seeking a major rollback of a rule that disallows one entity from owning more than one ABC, CBS, NBC or Fox station in a market – the so-called top four rule.

NCTA says the top four rule has “loopholes” that trigger signal blackouts and higher payments to TV station owners.

“The [FCC] and the Department of Justice have repeatedly found that the common ownership of two top-four stations in a market gives the owner increased leverage in retransmission consent negotiations that harms competition and leads to increases in retransmission consent costs, higher consumer prices, and an increased risk that multiple top stations go dark simultaneously,” NCTA said in a Dec. 21 letter to the FCC.

TV stations are allowed to bypass a strict reading of the top-four rule by owning low power TV stations or airing network programming on digital multicast streams. Via this method, Gray TV controls access to all Big Four networks in Harrisonburg, Va., according to NCTA.

On Dec. 19, TV station owners affiliated with the Big Four networks defended the right of a single TV station owner to control the programming of more than one Big Four network.

“The tangible benefits of dual and multiple affiliations are particularly critical in small markets, where viewers often rely primarily if not solely on over-the-air broadcast signals for local news and other programming,” the Big Four affiliates said in a letter documenting a videoconference call with aides to Democratic FCC Commissioner Anna Gomez.

Judging by the focus on the lobbying, the FCC could be leaning toward adopting a rule that low power stations and multicast streams are no longer exempt from the top four rule, which would prevent replication of the Gray TV’s quadropoly. At the same time, the FCC might grandfather stations that currently have multiple network affiliations.

Nevertheless, the Big Four affiliates told the FCC that the grandfather proposal would be harmful to TV station owners.

“Even if broadcasters were not required by the [FCC] to ‘undo’ existing network affiliations in these circumstances, there is no doubt that constraints on a single broadcaster airing more than one network-affiliated program stream via an LPTV station or multicast stream would disincentivize investment, hamper growth, and limit broadcasters’ ability to sell their business and exit the industry,” the Big Four affiliates said.

NCTA said the U.S. today has 92 markets “in which a broadcaster controls the programming of two or more top-four networks using [a low power] TV station or multicast stream, adding that in 17 of these markets a local TV station is affiliated with three or four of the Big Four networks. The U.S. has 210 TV markets, ranked by the number of TV households in each one.

“As the [FCC] considers how to treat existing combinations under the loophole, triopolies and quadropolies should receive especially close scrutiny by the [FCC] before any grandfathering is permitted,” NCTA said.