Federal regulators rolled back decades-old rules on Thursday, making it far easier for media outlets to be bought and sold — potentially leading to more newspapers, radio stations and television broadcasters being owned by a handful of companies.
“Few of the FCC's rules are staler than our broadcast ownership regulations,” Pai said. By eliminating them, he said, “this agency finally drags its broadcast ownership rules to the digital age.”
One long-standing rule repealed Thursday prevented one company in a given media market from owning both a daily newspaper and a TV station. Another rule blocked TV stations in the same market from merging with each other if the combination would leave fewer than eight independently owned stations. The agency also took aim at rules restricting the number of TV and radio stations that any media company could simultaneously own in a single market.
A major beneficiary of the deregulatory moves, analysts say, is Sinclair, a conservative broadcasting company that is seeking to buy up Tribune Media for $3.9 billion.
“This has a huge impact,” said Andrew Schwartzman, an expert on media law at Georgetown University. He added that the decisions will “reduce or eliminate” the need for Sinclair to sell off many stations to receive regulatory approval for the deal.
The FCC vote is the latest to ease regulations for the broadcast industry. It came the same day that the agency approved the deployment of Next Gen TV, a new broadcast standard that is ultimately expected to lead to improved audio and video quality on over-the-air television, as well as targeted advertising. And it came one month after the FCC voted to no longer require broadcasters to operate a physical studio in the markets where they are licensed.
The National Association of Broadcasters welcomed Thursday's vote.
“These rules are not only irrational in today’s media environment, but they have also weakened the newspaper industry, cost journalism jobs and forced local broadcast stations onto unequal footing with our national pay-TV and radio competitors,” the trade group said in a statement.
Critics of the FCC repeal effort say that the decision will lead to the concentration of power in the hands of a dwindling number of media titans.
“Instead of engaging in thoughtful reform,” said Democratic FCC Commissioner Jessica Rosenworcel, “this agency sets its most basic values on fire.
“As a result of this decision, wherever you live, the FCC is giving the green light for a single company to own the newspaper and multiple television and radio stations in your community. I am hard pressed to see any commitment to diversity, localism, or competition in that result.”
Senate Democrats this week called on the FCC's inspector general to launch a probe of the agency, over concerns that its impartiality with respect to Sinclair had been “tainted.”
“This merger would never have been possible without a series of actions to overturn decades-long, settled legal precedent by Chairman Pai,” Sen. Maria Cantwell (D-Wash.) and 14 other lawmakers wrote in a letter. The letter added that Pai has “signaled his clear receptiveness to approving the Sinclair-Tribune transaction and in fact paved the way for its consummation.”
The FCC didn't immediately respond to a request for comment. Sinclair declined to comment.
In his remarks Thursday, Pai said it was “utter nonsense” that his agency's decisions on media ownership would lead to a company dominating local media markets by buying up newspapers and radio stations.
“It will open the door to pro-competitive combinations that will strengthen local voices,” he said, and “better serve local communities.”