FCC Scraps Decades-Old TV Ownership Cap

The Federal Communications Commission voted 2-1 Thursday to scrap the
national television ownership cap, a rule that for years blocked any
single broadcaster from owning stations reaching more than 39 percent of
American households. 

The party-line vote hands local broadcasters a long-sought path to merge
and build the kind of scale that streaming giants and Silicon Valley
tech companies have enjoyed for years without similar restrictions. FCC
Chairman Brendan Carr has argued for some time that the cap was a relic
of an earlier media era that no longer reflects how Americans actually
consume news and entertainment, and that it left traditional
broadcasters at an unfair disadvantage against deep-pocketed streaming
platforms. 

The agency said future mergers will still be reviewed individually
rather than approved automatically. “This will empower the FCC to
approve deals that promote the public interest while allowing the agency
to reject any deals that do not meet that standard,” the FCC said in a
statement. 

Nexstar, the broadcaster best positioned to benefit from the change,
welcomed the decision. “For too long, local broadcasters were handcuffed
from reaching the scale they needed to compete on a more level playing
field,” a company spokesperson said. “Modernizing these rules will help
ensure broadcasters can continue investing in local journalism and
providing the free, trusted news and information that communities across
America rely on every day.” 

Nexstar’s $6.2 billion bid to acquire rival Tegna remains paused while a
federal judge weighs an antitrust lawsuit brought by DirecTV and several
state attorneys general, who argue the combined company would gain
outsized pricing leverage over pay-TV distributors that could ultimately
hit consumers. Thursday’s vote does not resolve that separate legal
fight, though the FCC’s Media Bureau already cleared the transfer of
Tegna’s broadcast licenses in March without a full commission vote. 

The lone dissent came from Commissioner Anna Gomez, the commission’s
only Democrat, who contended Congress stripped the FCC of authority to
adjust the cap once it locked in the current limit in 2004. The Biden
administration’s FCC had opposed lifting the cap and, in 2023, blocked
Tegna’s proposed $5.4 billion merger with Standard General. 

Consumer advocacy groups are already signaling they intend to fight the
decision in court. Free Press, a left-leaning media advocacy nonprofit,
said it plans to appeal the vote, continuing a pattern of activist
groups seeking to tie up deregulation efforts in litigation rather than
let market competition play out. Whether those challenges succeed will
determine how quickly broadcasters can act on the new freedom the FCC
just granted them. 

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