FCC considering eliminating UHF discount

[GoldenShine9 1509]

http://www.tvnewscheck.com/article/69437/fcc-mulls-hard-39-cap-on-tv-ownership

 

Good thoughts, as some companies are going over it. But it won't work, since Sinclair and others could use shells once over the 39% mark. Unless they get tougher, in which case some will have to divest - and finding owners might be difficult.

[CircleSeven 1945]

Long Overdue. But it probably won't do any good.

 

Also, if and when Tribune spin-off/sell those newspapers and acquire WNEP & WTKR/WGNT outright, they'll be like 2-3% over the cap. It would be good news for Ion, since they've benefit the discount since the Paxson ownership days.

 

Yeah, that would take eons to find suitable buyers, unless new companies (that has absolutely no ties to a parent company to use as a shell) be formed, and it would be hard to get out from the ground. Thanks to Sinclair, they've basically vacuumed many of the groups away. Like from Abry/Act III/River City in the 90s, to Four Points/Freedom/Newport/Cox/Barrington/Fisher/Titan/Allbritton right now. It would be lovely to see how the devils in Maryland can handle 92 stations they've bought within the last two years. But you also see that the FCC have yet to act on any further apps from Sinclair (except for the KDBC to Cunningham), like the Barrington stations (which it has been sitting there since those apps posted March 18).

 

I think the timing of this happening, just when Sinclair scored another acquisition and they knew that they are edging close to that cap. I think this could be a part of what they might do for the whole media ownership. FCC already docketed the Media General/Young, Gannett/Belo & Tribune/Local TV deals. If they're working on a PRM on this, then they should do an NPRM on the LMA/JSA/SSAs for markets where legal duopolies aren't allowed. That's where they really need to hit. But it would take a rugged village to eliminate the status quo. And by this recent M&A activity, it would be beyond difficult.

 

And even if it does go into effect, these bigger companies are going to try to find another slick-ass loophole to crawl through.

[GoldenShine9 1509]

 

Long Overdue. But it probably won't do any good.

 

Also, if and when Tribune spin-off/sell those newspapers and acquire WNEP & WTKR/WGNT outright, they'll be like 2-3% over the cap. It would be good news for Ion, since they've benefit the discount since the Paxson ownership days.

 

Yeah, that would take eons to find suitable buyers, unless new companies (that has absolutely no ties to a parent company to use as a shell) be formed, and it would be hard to get out the ground. Thanks to Sinclair, they've basically vacuumed many of the groups away. It would be a lovely show to see how they can manage 92 stations they've bought within the last two years. But you also see that the FCC have yet to act on any further apps from Sinclair (except for the KDBC to Cunningham), like the Barrington stations (which it has been sitting there since those apps posted March 18).

 

I think the timing of this happening, just when Sinclair scored another acquisition and they knew that they are edging close to that cap. I think this could be a part of what they might do for the whole media ownership. FCC already docketed the Media General/Young, Gannett/Belo & Tribune/Local TV deals. If they're working on a PRM on this, then they should do an NPRM on the LMA/JSA/SSAs for markets where legal duopolies aren't allowed. That's where they really need to hit. But it would take a rugged village to eliminate the status quo. And by this recent M&A activity, it would be beyond difficult.

 

And even if it does go into effect, these bigger companies are going to try to find another slick-ass loophole to crawl through.

 

A few thoughts that I can think of:

 

* The ownership cap could be increased to a compromise level, say 49% or 59%, but with no UHF discount.

 

* To avoid punishing those who choose big, huge markets and level the playing field more (like networks), they should be allowed to go over the cap if they do not have more than, say, 25 total stations (not markets) - that includes duopolies, shells, satellites and low-power stations.

 

* The shell issue is a difficult one. What if there are no suitable buyers and the station would otherwise shut down? They should require them to go to an auction, and if within 90 days there is no bidder that is able to accommodate the station (i.e. does not have assets in that market), then shells would be permitted. Such would be most likely to happen in smaller markets. For that rule, there would be NO grandfather clause either...sorry Sinclair, but those shelled stations go to immediate auction.

[sanewsguy 509]

Bad move FCC. The UHF discount is needed to help keep the local TV business afloat. If Sinclair wants to own as many stations as they want, let them. If you don't like that fact, don't watch their stations. Simple as that. Sinclair is nowhere near having a monopoly on the local broadcast business so there shouldn't be anything to worry about. They may be the biggest, but they're certainly not the baddest.

[GoldenShine9 1509]

 

Bad move FCC. The UHF discount is needed to help keep the local TV business afloat. If Sinclair wants to own as many stations as they want, let them. If you don't like that fact, don't watch their stations. Simple as that. Sinclair is nowhere near having a monopoly on the local broadcast business so there shouldn't be anything to worry about. They may be the biggest, but they're certainly not the baddest.

 

If they want to fix it in stealth, they could raise the ownership cap to 78% and make it not count for anything...

[Thundershock MN 169]

Big deal. Did you all miss this portion of the article: "But one well-placed industry source said the rulemaking is expected to include a proposal that would grandfather the discounts for UHF stations that are already included in a broadcaster’s station portfolio." I've can't remember the FCC implementing anything ex post facto. So, this doesn't do a thing. They debated this around the time of the digital transition and did nothing then. So, now to placate the masses and look tough they are going to look into it again. Too little, too late.

 

So, they want to slow down the station acquisitions by doing this. If anything this might accelerate the process as station groups will want to buy/sell before the rule change (if it happens) takes affect.

 

I can't stand this grandstanding by the FCC. They act outraged when the masses get worked up at loophole being exploited but, it was their inaction that allowed them to be abused over, and over again. If the FCC was really concerned they would closed them after the first time they are used. I can think of a handful or two of loopholes that have been used and abused over the years that the FCC has done nothing about.

-LMA/SSA's to get around ownership limits, or not defining rules regarding them.

-UHF discount.

-FM Translators used to get around ownership limits.

-CBS' clever use of signal contours to aquire WLNY.

-KVNV/KJWP's cross country move using the old WWOR legislation.*

-KFVE/KGMB's switcheroo of IP to get around doing a TOC.

 

I could go on and on. But, I think I prove my point that they have done nothing to correct loopholes when they first appear. So, it comes across to me as nothing more then political grandstanding.

 

*In fairness the FCC did attempt to stop this. However, as it was congressional legislation they had to fix it though futher legislation. The FCC tried to block them out by promptly denying PMCM and then isssuing VHF licenses to NJ and Deleware (now WACP & WMDE). The issue is this backfired when the courts ruled they overstepped there bounds by denying the move.

[GoldenShine9 1509]

If they grandfather all existing arrangements, that creates a double standard of sorts and locks in Sinclair's huge portfolio while penalizing any efforts by other companies to try to expand their reach and catch up.

 

A stealth way to eliminate the UHF discount is to raise the ownership cap to 78% but that may not be too popular.

[Thundershock MN 169]

 

If they grandfather all existing arrangements, that creates a double standard of sorts and locks in Sinclair's huge portfolio while penalizing any efforts by other companies to try to expand their reach and catch up.

 

A stealth way to eliminate the UHF discount is to raise the ownership cap to 78% but that may not be too popular.

 

No, everyone is playing by the same set of rules. Anyone can use the UHF discount now. If they choose not to use it that is there own choice. If the rule change takes place nobody will be able to take discounts going forward. So, It's the same for everybody past/present/future.

[CircleSeven 1945]

From the B&C today, the FCC has already decided to get rid of the discount fees they charge UHF stations, now it will be charge the same rate for both UHF & VHF. This makes tons of sense since many have move to the UHF post-transition. Probably not good news for broadcasters who would have to pay extra fees. That will go in effect next year.

 

They haven't announce what they would do with that other "UHF Discount".......

[CircleSeven 1945]

Well, the B&C states it looks like Thursday will be the NPRM vote date. And should it does get the nod, they still have to see whether when the law goes in effect. They even stating that the Discount may not count for deals being consummated past Thursday, yet the companies that are already over the cap (Univision & Ion for example) could get grandfathered status.

[GoldenShine9 1509]

 

Well, the B&C states it looks like Thursday will be the NPRM vote date. And should it does get the nod, they still have to see whether when the law goes in effect. They even stating that the Discount may not count for deals being consummated past Thursday, yet the companies that are already over the cap (Univision & Ion for example) could get grandfathered status.

 

If that is the case, than deals sending over it (like Tribune-Local TV) would need retooling at least. Also expect Sinclair to start shelling existing stations to free up room.

[The Frog 395]

The FCC should consider introducing a VHF discount.

[GoldenShine9 1509]

 

The FCC should consider introducing a VHF discount.

 

If that is the case, maybe a two-tiered discount? 50% for Channels 7-13, 33% for Channels 2-6 (given their high unpopularity in most areas, except in mountainous regions).

[CircleSeven 1945]

On the eve of the NPRM vote, the Daily Variety have wrote a piece about the end of the UHF Discount. On the final paragraph, one law firm specialist pointed out that it was “almost inevitable that no matter what the FCC does it will end up in court.”

 

I strongly don't think it would go that far where it would have the courts to intervene. But could they even go that far as to even do that?

[T.L. Hughes 760]

The FCC has voted on a proposal to eliminate the UHF discount in a 2-1 vote. It proposes grandfathering existing stations already owned as well as deals currently ongoing that have yet to be formally approved by the FCC or even shareholders of those groups being purchased (such as Sinclair's innumerous station purchases up to yesterday's purchase of eight New Age Media stations as well as those still pending such as the Barrington and Allbritton deals, the Gannett-Belo deal and the Tribune-Local TV deal), but not those made after the FCC releases the Notice for Proposed Rulemaking that was also approved today (September 26). It also proposes that when grandfathered UHF's are sold, the discount will not transfer with them. It is not a full repeal necessarily, as commissioner Ajit Pai (the lone dissenting vote) stated "[it] only proposes to eliminate the UHF discount. It does not actually end the UHF discount. The UHF discount will be the law of the land tomorrow and every day after that unless the Commission votes to repeal it".

[GoldenShine9 1509]

I don't think it means much at all, since Sinclair's shells are nowhere near 39% on an individual basis.

[GoldenShine9 1509]

They made mentions of a VHF discount in the FCC proposal here: http://apps.fcc.gov/ecfs/comment/view?id=6017468638

 

A phased VHF discount would be best, given the greater difficulties in most situations in the Low VHF band. Perhaps a one-third charge on RF 2 to 6 (i.e. allow 3 stations on that band to equal one on UHF) and a one-half or two-thirds charge on RF 7 to 13, with full charge on UHF?

 

There is one situation where VHF is still advantageous though: in mountainous terrain.

[CircleSeven 1945]

FCC Commissioner Ajit Pai is suggesting that the commission should raise the cap (past 39%). The NAB backs what he says, as a spokesperson said, "The FCC shouldn’t just cherry pick one ownership rule without looking at all of the media ownership rules holistically".

 

Of course this benefits broadcasters who are nearly at the brink of being close to the current cap, like Fox & Hearst, and with Tribune's pending acquisition with Local TV would get them over the cap, but guaranteed that their deal will be grandfathered, should the discount officially ends. Should Raycom, Gray, or LIN, even Nexstar (at around 14% after pending approvals) expands in anyway, they could still have alot of room left with the current ownership cap.

 

This would also benefit those devils of Maryland, who've just love to buy everything but the kitchen sink. Good Luck trying to raise the cap. The ones who are in favor the end of the discount, aren't in any rush to raise the cap.

[CircleSeven 1945]

It looks like the NAB & TBN wrote their disapproval comments to the proposed elimination of the discount.

 

I'm waiting for the Heathens of Hunt Valley to say something. Unless they won't say anything because the deadline was today to file a comment.

[CircleSeven 1945]

 

It looks like the NAB & TBN wrote their disapproval comments to the proposed elimination of the discount.

 

I'm waiting for the Heathens of Hunt Valley to say something. Unless they won't say anything because the deadline was today to file a comment.

 

Speaking of the devil........

 

It looks like everybody made sure to comment on this matter. Because today....

 

Fox, ION, Univision, and look what we have here, Sinclair, have stated their disapproval comments. In contrast, Block, Competitive Carriers Association, and Free Press, made approval comments.

 

Meanwhile, the FCC has made plans to shelve its proposed plan to relax the cross-ownership against several media outlets. Something that the broadcasters would call this very one-sided.

[GoldenShine9 1509]

Speaking of the devil........

 

 

 

It looks like everybody made sure to comment on this matter. Because today....

 

 

 

Fox, ION, Univision, and look what we have here, Sinclair, have stated their disapproval comments. In contrast, Block, Competitive Carriers Association, and Free Press, made approval comments.

 

 

 

Meanwhile, the FCC has made plans to shelve its proposed plan to relax the cross-ownership against several media outlets. Something that the broadcasters would call this very one-sided.

 

Interesting that Block (a small broadcaster) is in support, I wonder if they feel they will be swallowed up otherwise?

[GoldenShine9 1509]

Reading the Sinclair rebuttal, they say the cap is unconstitutional and they are calling for ELIMINATION of the cap - if so, maybe their goal is total domination of the marketplace?

[Mrtraveler01 737]

 

Reading the Sinclair rebuttal, they say the cap is unconstitutional and they are calling for ELIMINATION of the cap - if so, maybe their goal is total domination of the marketplace?

 

What was their reasoning behind saying that the cap was unconstitutional?

 

(Sounds like they're pretty clueless about the Constitution.)

[Mrtraveler01 737]

I decided to read it and it was pretty much as stupid as I thought it was

 

 

More fundamentally, the 39 percent limit, on its face, is a direct abridgement on the

freedom of speech – at its core, the rule is simple: a direct ban on any television licensee owning

stations which provide programming (and thereby exercising its speech rights) to more than 39

percent of the population of the United States. In addition, given that competing media outlets,

such as cable operators, direct broadcast satellite service providers, and Internet content

providers, are under no FCC ownership limitations whatsoever, it is obvious that the television

ownership cap raises serious Equal Protection Clause concerns. Finally, given that there is no

record support for a national ownership cap at the precise 39 percent level, as compared to any

other level, the limit is arbitrary and capricious, in violation of the Due Process Clause

Of course they don't grasp the concept of anti-Monopoly laws which do apply to other industries like radio and the telecommunications industry (Remember the At&T/T-Mobile merger that fell through?) which does get a lot of scrutiny from the FCC. The FCC's job is to do what the FTC does for every other industry and that is prevent monopolies in the broadcasting industry. I'm guessing Sinclair's legal department got their law degree off the back of a cereal box.

 

If Comcast does decide to go after TWC, I'm pretty certain that it's going to face a lot of scrutiny.

 

(I read the Fox one as well and that one seems to be more grounded in reality...and logic.)

[sanewsguy 509]

I think Sinclair needs to go back and look at the shell concept and try to perfect it some more. I would not have companies that exist solely to purchase stations for Sinclair but find other legitimate entities that are willing to buy the stations for Sinclair and then pay Sinclair to run them. For instance, Meredith or Cox or some other company (example)could buy a station in one market where Sinclair already operates and then just pay them to run the station. Problem solved.