The Federal Communications Commission on Thursday voted to repeal a longstanding rule, in a 2-1 vote, that restricted local station ownership to 39% of the U.S. television audience.
The cap, which had been in place for the past 22 years, will be replaced by one that looks at station consolidation on a case-by-case basis. Voting in favor of eliminating the rule were FCC Chairman Brendan Carr, a Republican, and Olivia Trusty, a fellow GOP commissioner. Anna Gomez, the lone Democrat on the commission’s board, voted no.
Carr recently called the current cap rule “outdated,” saying in a recent Breitbart op-ed that it puts local broadcasters at a disadvantage because they cannot grow to the “same scale that their competitors are free to enjoy.”
“Eliminating the cap does not free local broadcasters from economic pressure; it just changes who is doing the squeezing,” Gomez said in a statement. “The large station groups positioned to grow even larger under this decision are not local broadcasters; they are national companies that own local stations and increasingly dictate what airs on them.”
This new policy is certain to face legal challenges, as the 39% rule has been federal law enacted by Congress in 2004, replacing a previous cap limit of 35%, which had been in place since the 1990s.
Carr believes that the FCC has the legal authority to repeal the law.
Should the new rule take effect, media companies like Nexstar would be among the biggest beneficiaries of this ownership requirement change. It is already in the process of acquiring Tegna in a $6.2 billion deal.
However, it cannot proceed as state attorneys general from eight states have asked a judge to put the merger on hold pending an antitrust lawsuit.
