FCC relaxes media ownership rules, modifies lifeline program

Also approves ATSC 3.0 television transmissions

If there is any federal agency that gives the Illinois legislature a run for their money for being the most dysfunctional in the United States, the Federal Communications Commission would win hands down.

An example of this came Thursday when the FCC relaxed the media ownership rules and modified the lifeline program in votes coming down among party lines.

The Republican-led agency voted 3-2 to ease restrictions on the rules, a huge victory for broadcast companies. For one, the newspaper/radio/TV crossover rule was eliminated, meaning newspapers once again can buy radio and TV stations. Also gone is the “eight-voice test”, which meant eight television stations had to be in a market after two television stations combine. Modified was the ban against common ownership of two of the top-four stations in a given market, now decided on a case-by-case basis.

Also eliminated was the joint sales agreement attrition rules, meaning a TV station was count against the ownership cap if it sells more than fifteen percent of ad time.

Democratic commissioners Jessica Rosenwarcel and Mignon Clayburn slammed the moves, calling them anti-consumer and would hurt diversity and localism. Many in the broadcast industry (notably the NAB and other TV and advertising trade groups) wanted the rules changed or eliminated, citing the need for economies of scale competition from other platforms who are not regulated, such as cable. streaming services, and tech companies such as Facebook, Apple, and Google. However, many of the nation’s TV groups make a boatload of money, thanks to retransmission consent fees and political advertising.

Not affected was the radio caps which stays at eight per market, nor the television ownership cap, which remains at 39 percent. The FCC would have to consult with Congress in order to raise the percentage number.

As for the crossownership rules, their demise comes too late for some, as many of them who were grandfathered in 1975 when they were adopted. Among the companies split in the last few years include Tribune (who split into tronc and Tribune Media), Belo (who spun-off their TV properties) and Gannett, who did likewise with the TV group remaining themselves Tegna.

Expect a legal challenge to today’s actions – in 2003, the FCC relaxed the rules only to have the courts reinstate them. This time however, the chances of the rules surviving a court challenge this time around appear to be slim to none.

The biggest winners from today’s deal are apparently big media companies. Already, there is talk about several companies vying to acquire 21st Century Fox’s portfolio of properties (excluding Fox Broadcasting, its O&Os, and Fox News) and Sinclair, who now may not have to divest many stations as they thought. This is the latest in deregulatory actions taking place this year, as Republicans became the FCC majority. Earlier, the FCC reinstated the UHF discount in a scam meant to benefit Sinclair Broadcasting, so they can buy Tribune Media.

Also voted on was the ATSC 3.0 standard broadcasters want to use to deliver Ultra high-definition 4K signals and “targeted” advertising to consumers. Once again this vote fell along a 3-2 party-line vote, with Democrats once again claiming the move would harm consumers. Currently, television stations broadcast in the ATSC 1.0 standard.

Meanwhile, the FCC also voted to modify the lifeline program in yet another party-line vote. Under the new rules, the FCC refined the rules clarifying premium Wi-Fi and other similar services does not qualify as mobile broadband under the lifeline program. Also, Chairman Ajit Pai wanted a verification process to make sure those who qualify for the program really did; the FCC Democrats suggested the process would disqualify more lower-income residents. The key to the modification  was to “prevent waste, fraud, and abuse.”

As yours truly wrote last March, eliminating the lifeline program would hurt communities hit hard by poverty and gun violence in the Chicago area – notably the West and South Sides of Chicago and numerous poor, low-income suburbs ranging from Maywood and Melrose Park to the west to many south suburbs and Northwest Indiana cities such as Hammond, Gary, and East Chicago.  The Republicans’ vote in this matter – and Pai’s in particular – tells you how little they think of these communities – many of them dominated by African-Americans and Latinos. If Pai is talking about “bridging the digital divide”, his actions Thursday widened it as much as the racial segregation persisting in Chicago.

Next up on the agenda for December is the net neutrality rules, on if there’s any indication, are likely good as gone.

Merry Christmas, everyone.