The Supreme Court on Thursday reversed a lower-court decision allowing former FCC Chair Ajit Pai’s relaxation of media ownership rules to stand. How the decision impacts tower owners remains to be seen. Increasingly, stations have chosen to lease, rather than own their towers. During a sale or purchase, if there is a tower lease, then that agreement typically becomes one more element of the transaction.
The broadcast industry and several Republican lawmakers had been seeking to relax the ownership limits for decades, saying the restrictions were outdated. Television networks and their local affiliates, including ABC, NBC and CBS, backed the appeals, arguing that consolidation would help ensure the economic survival of local television amid competition from internet companies that provide video content. Television stations have said they are increasingly losing advertising dollars to digital platforms, reported Reuters.
In 2017 the FCC, under Pai, a Republican, eliminated the rule that barred companies from owning two television stations in a market that didn’t have at least eight independently owned stations. The change also let companies own two of the top four stations in some markets if the agency grants a waiver. In addition, the FCC eliminated separate bans on ownership of both a daily print newspaper and a broadcast station in the same coverage area, and on ownership of both a radio and television station in a single market, noted Bloomberg.
The National Association of Broadcasters commended the outcome. NAB CEO Gordon Smith called the FCC’s decision a “long-overdue modernization of its broadcast ownership regulations” that was “lawful and appropriate.”
“I don’t think this is going to facilitate a wave of acquisitions,” said Washington-based broadcast attorney Jack Goodman. “What it does, is facilitate some transactions,” such as those involving both TV and radio stations. Prospective new owners won’t need to spin off some stations to gain FCC approval of a transaction, Goodman told Bloomberg.
Backers of stronger rules said they would press for renewed action from the FCC, which periodically reviews media ownership limits. Several restrictions remain, including a rule that usually prohibits owning two of the top four TV stations in a market. The radio ownership limits remain unchanged.
The FCC under Democratic President Joe Biden, “is likely to move more slowly and cautiously” in easing those rules than the Commission would have under former President Donald Trump, said Matthew Schettenhelm, an analyst at Bloomberg Intelligence.
It’s unclear what Acting Chair Jessica Rosenworcel will do. The Democrat voted against the change in 2017. “While I am disappointed by the Court’s decision,” she said in a statement, “the values that have long upheld our media policies — competition, localism, and diversity — remain strong.” The agency, currently evenly split between Democrats and Republicans, is set to have a Democratic majority once President Joe Biden nominates and the Senate confirms a new commissioner. The FCC could then seek to reverse the 2017 order.
The cases are FCC v. Prometheus Radio Project, 19-1231, and National Association of Broadcasters v. Prometheus Radio Project, 19-1241.
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