F.C.C. Opens Door to More Consolidation in TV Business

F.C.C. Opens Door to More Consolidation in TV Business


Local media organizations, he has argued, would have a greater shot at competing against those internet giants by combining resources in local markets.

“It’s a simple proposition: The media ownership regulations of 2017 should match the media marketplace of 2017,” Mr. Pai said on Thursday. “That’s the proposition the F.C.C. vindicates today — nothing more, nothing less. And it’s about time.”

Democrats on the commission said that rolling back the rules would hurt people who relied on local stations for news coverage.

“During the first 10 months of 2017, the F.C.C. majority has given the green light to more than a dozen actions that are a direct attack on consumers and small businesses,” said Mignon Clyburn, a Democratic commissioner, who voted against the orders. “And most Americans are unaware that the agency established to protect the public interest has traded in that role for the chance to grant the wish lists of billion-dollar companies.”

While local news audience numbers have declined in recent years, about 57 percent of Americans get most of their news from television, with local news leading cable outlets and national broadcasts, according to the Pew Research Center.

Public interest groups fear major corporations like Sinclair or CBS would grow more powerful through the relaxation of rules. Private equity investors who have purchased television stations and newspapers to flip them for a profit are also expected to take advantage of the changes.

“Our media ownership numbers are already dismally low,” said Carmen Scurato, the director for the National Hispanic Media Coalition, a nonprofit that promotes greater diversity in media. “These actions on Thursday shut out our voices.”

Some academics are skeptical that the relaxation in rules will result in more robust local news coverage, as Mr. Pai envisions.

There is little evidence that mergers in local media have resulted in more jobs and stronger journalism, said Victor Pickard, a professor at the Annenberg School for Communication at the University of Pennsylvania. Instead, the relaxation of rules could result in business models like that of Sinclair, which sends programming created from its station in Washington to be run at stations across the nation, critics of the changes have said.

“Media concentration has been a concern since the 1940s, and this is a major reversal,” Mr. Pickard said. He added that internet platforms did not create news content on their own so were not real competition to broadcast journalism.

“The fact that media content is coming from many sources, including the internet, isn’t evidence of real competition because that isn’t where actual journalism is coming from,” Mr. Pickard said.

Mr. Pai’s actions have also drawn strong criticism from Democratic lawmakers and some conservative media companies like Newsmax. Representatives Frank Pallone Jr. of New Jersey and Elijah E. Cummings of Maryland called on the inspector general of the F.C.C. this week to investigate Mr. Pai’s relationship with Sinclair to see if he was giving favors to the company he regulates. Earlier this week 13 senators called on Mr. Pai to recuse himself from any actions related to media ownership because of concerns of ties to Sinclair.

Mr. Pai has rebutted the claims of coordination with Sinclair.

It is unclear who would first take advantage of the new rules. But a company like Sinclair could benefit from the elimination of a rule that prevents one entity from owning two top stations in a local market. Through its Tribune deal, Sinclair would have about 10 markets with more than one of the four top stations. And with the new rules, it may not have to divest those stations, some analysts say.

The National Association of Broadcasters, the lobbying group for television and radio broadcast station and network owners, said the rules would also help small, independent television owners, who have gone in to lobby Mr. Pai to support the changes.

“The F.C.C.’s past decisions retaining the local ownership rules depended upon the agency closing its eyes and covering its ears to avoid recognizing what is clear to any consumer with a TV remote or a smartphone — that local broadcast stations and newspapers do not exist in a vacuum and that broadcasters and newspaper owners must compete with myriad other outlets for viewers, listeners, readers and advertisers,” the group said in a blog post.



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