New FCC Proposals Could Also Affect Media Industry - Opposing Views

New FCC Proposals Could Also Affect Media Industry

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The FCC's big announcement about plans to roll back net neutrality has stoked fear in those who support an open internet, but another of its proposals has some broadcast media agencies worried.

Current policy dictates that media companies can only expand to the point of reaching 39 percent of all U.S. households. The UHF discount weighs how much different stations count towards the limit, with UHF channels counting half as much as VHF channels, The Washington Post reports. Variety notes that the UHF discount was revoked by the previous FCC's administration in 2016, but was reinstated by FCC Chairman Ajit Pai in April.

The FCC wants to revisit and potentially raise the limit, as well as renegotiate the UHF discount. If both policies are relaxed, large media companies would be able to consolidate and grow larger.

The change could help small, struggling franchises continue, but might push independent channels out of the market.

The limit was last changed in 2004. Pai says a review is due, citing "considerable marketplace changes, such as technological developments and increased video programming options for consumers" as the reason.

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Although the proposal would not likely be implemented until 2018, it comes at an opportune time for conservative media company Sinclair, whose $3.9 merger with Tribune would require divestitures under current law. According to The Washington Post, a successful union of both companies would allow Sinclair to reach 3 in 4 households.

"The lengths to which Chairman Pai will go in order to help Sinclair monopolize the local television news industry is astonishing," said Karl Frisch, the executive director of the watchdog group Allied Progress, according to Variety. "His move is not only the latest in a series of rule changes tailor-made for Sinclair’s benefit, it is an egregious, and likely illegal, example of overreach by the FCC."

Several Democrats sent a letter in September about to Pai regarding their "grave concerns" with his vision to change media, CNN Money reports.

"Moves to repeal the media ownership rules threatens to create a world of corporatized, nationalized content being force fed to consumers under the guise of local news and public affairs programming," the letter read.

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It didn't seem to have much impact on Pai. Earlier in November, the FCC repealed a rule that prevented companies from owning both a radio channel or TV station and a newspaper in the same market. It also made it easier for media companies to own more than one local TV station.

The FCC's relaxation of media consolidation rules comes at the same time as the Justice Department is trying to prevent AT&T from acquiring Time Warner, which oversees CNN.

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