AdWeek reports the Federal Communications Commission has voted to start looking at changing the way it counts television stations against the total national ownership cap.
Right now, a station’s value is based on whether it’s VHF or UHF. According to the FCC, UHF stations “count less than TV stations on VHF channels.” Some argue station groups like Sinclair are taking advantage of that rule in their recent station acquisitions.
Commissioner Ajit Pai argued the change might put a stop to future deals.
First, Pai suggested that the discount should not be eliminated without reviewing the 39 percent ownership cap, which is as dated as the UHF discount and hasn’t been reviewed by the FCC since 2002. He also took issue with how the FCC proposed to grandfather the rule to Sept. 26, the same day the FCC proposed, but did not pass the rule.
“It’s not the law of the land now, but the grandfathered clause tells the marketplace to behave as if it’s already been eliminated, making the rulemaking process a reality before it’s voted,” Pai said. “It would dampen the market for broadcast stations and depress value.”
According to the FCC, the current ownership rule “… does not limit the number of TV stations a single entity may own nationwide so long as the station group collectively reaches no more than 39 percent of all U.S. TV households.”[TVNewsCheck]