The Federal Communications Commission (FCC) sets limits on the number of broadcast stations (radio and TV) an entity can own, as well as limits on the common ownership of broadcast stations and newspapers. As required by Congress, the FCC reviews its media ownership rules every four years to determine whether the rules are in the public interest and to repeal or modify any regulation it determines does not meet this criteria.
In December 2007, the Commission completed the 2006 quadrennial review of its media ownership rules. This review involved an analysis of the marketplace in which radio, television, and newspapers operated alongside of – and sometimes provided similar programming – as other media such as satellite TV and radio, cable TV, and the Internet. As a part of the review, the FCC also addressed a 2004 court decision that blocked several ownership rule changes the Commission adopted in 2003. The FCC in 2007 voted to modestly relax its existing ban on newspaper/broadcast cross-ownership, which had been in effect for more than 30 years. It left the other rules intact as they existed pre-2003.
To kick off the 2010 quadrennial review, the FCC held public workshops between November 2009 and May 2010 (Washington, DC; Columbia, SC; Tampa, FL; and Stanford, CA). The workshops were held to encourage input from the public, academics, industry stakeholders, and the public interest community on a range of media ownership issues and the methods the FCC should use to analyze them. On May 25, 2010, the Commission released a Notice of Inquiry (NOI) in the 2010 quadrennial seeking comment on the current media ownership rules. In July 2011, a court decision affirmed the Commission’s decision in the 2006 quadrennial review to retain several of the rules, but vacated and remanded the modified newspaper/broadcast cross-ownership rule, as well as measures taken to foster ownership diversity. Following the court’s decision, in December 2011, the Commission released a Notice of Proposed Rule Making (NPRM) proposing modest changes to the broadcast ownership rules in response to the media marketplace and the court’s action. The Commission developed a substantial record in the proceeding, including a number of economic studies commissioned to help inform its review of the media ownership rules. With 2014 approaching, however, the Commission faced the need to commence the next quadrennial ownership review. Thus, on March 31, 2014, the Commission adopted a Further Notice of Proposed Rule Making (FNPRM) initiating the 2014 review, incorporating the record from the 2010 proceeding, and seeking new and additional information and data on market conditions and competitive indicators as they exist today. The 2010/2014 quadrennial review remains ongoing. Details of the current ownership rules are summarized below.
Newspaper and Broadcast Station Cross-Ownership
Although the Commission revised the newspaper/broadcast cross-ownership rule in its 2006 quadrennial review order, the court’s 2011 decision vacated and remanded that modified rule. As a result, the Commission’s rules continue to prohibit common ownership of a daily newspaper and a full-power broadcast station (AM, FM, or TV) if the station’s service contour encompasses the newspaper’s city of publication.
National TV Ownership
The 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. For the purposes of calculating the “national audience reach” under this rule, TV stations on UHF channels (14 and above) count less than TV stations operating on VHF channels (13 and below), this is also known as the UHF Discount. Although the National TV Ownership rule is no longer subject to review in the FCC’s quadrennial review proceeding, in September 2013, the Commission commenced a separate rule making proceeding specifically proposing to eliminate the UHF Discount. The Commission notes in its rule making that the transition to digital television has undermined the technical justification for the discount and that the discount now has the effect of distorting the national audience reach rule. That proceeding remains ongoing.
Dual TV Network Ownership
The rule effectively prohibits a merger between any two of these television networks: ABC, CBS, Fox, and NBC.
Local TV Multiple Ownership
The rule allows an entity to own up to two TV stations in the same DMA if either (1) the service areas – known as “Grade B signal contours” – of the stations do not overlap; or (2) at least one of the stations is not ranked among the top four stations in the DMA (based on market share), and at least eight independently owned TV stations would remain in the market after the proposed combination.
Local Radio/TV Cross-Ownership
The rule imposes ownership restrictions based on a sliding scale that varies by the size of the market: (1) in markets with at least 20 independently owned “media voices” (defined as full power TV stations and radio stations, major newspapers, and the cable system in the market) an entity can own up to two TV stations and six radio stations (or one TV station and seven radio stations); (2) in markets with at least ten independently owned “media voices” an entity can own up to two TV stations and four radio stations; and (3) in the smallest markets an entity may own two TV stations and one radio station. In all markets, an entity must comply with the local radio and local TV ownership limits.
Local Radio Ownership
The rule imposes ownership restrictions based on a sliding scale that varies by the size of the market: (1) in a radio market with 45 or more stations, an entity may own up to eight radio stations, no more than five of which may be in the same service (AM or FM); (2) in a radio market with between 30 and 44 radio stations, an entity may own up to seven radio stations, no more than four of which may be in the same service; (3) in a radio market hosting between 15 and 29 radio stations, an entity may own up to six radio stations, no more than four of which may be in the same service; and (4) in a radio market with 14 or fewer radio stations, an entity may own up to five radio stations, no more than three of which may be in the same service, as long as the entity does not own more than 50 percent of all radio stations in that market.