The Federal Communications Commission voted Thursday to rescind the rule that bars local broadcast station owners from reaching more than 39% of the total number of US TV households in a move that could help spark more industry consolidation.
The FCC voted 2-1 to lift the cap in favor of a new case-by-case approach. The commission’s sole Democrat, Anna Gomez, said the proposal was illegal and argued only Congress can lift the cap. Many critics argue the move will lead to excessive market power among station owners.
Under the rules, stations with weaker over-the-air signals can be partially counted against a company’s ownership cap. The FCC has limited the number of stations local broadcast station owners can own since 1941 and most recently raised the cap to 39% in 2004.
FCC Chair Brendan Carr said the move is about helping local broadcasters survive and pointed to the sharp decline in local newspapers. “We should stop hamstringing this one segment of the broader market with outdated restrictions,” Carr said.
In March, the FCC approved the $3.54 billion sale of local television station owner Tegna to Nexstar despite objections from Democratic-led states.
The acquisition, if not reversed by courts, will expand Nexstar’s presence to cover 80% of US TV households. The FCC said it was waiving the 39% rule in approving the deal.