Trump FCC deregulation threatens local broadcasting

Editor's note:

Tom Wheeler served as the 31st Chairman of the Federal Communications Commission from 2013-2017.

“There is no other industry in the world like broadcasting,” the CEO of the National Association of Broadcasters (NAB) Gordon Smith told his annual convention. “No other industry has, at its core, such an overarching focus on bringing communities together and serving the public good,” Smith opined. “No other media industry is as dedicated to supporting our local communities.”

That “overarching focus” on “serving the public good” is being stealthily watered down, with the industry’s support, by the Trump Federal Communications Commission. In little-noticed decisions, the agency has been removing regulatory requirements to protect broadcast localism, shield a diversity of local voices, and avoid the establishment of a dominant national broadcaster.

Exhibit One: imagine broadcast localism without a local broadcast studio. Local emergency coverage, investigative reporting, and neighborhood news all originate in a local studio. That is why the FCC “requires that each broadcast station keep its main studio in or near its community of license,” a FCC Fact Sheet explains. “The obligation to provide such local service is fundamental to the public trustee status of a broadcast licensee.”

For almost 80 years serving the local community meant local production of news and community reporting. The Trump FCC, voting along party lines, is now preparing to eliminate this “fundamental” part of a licensee’s local community obligation.

Exhibit Two: skirting Congress’ mandate that no single broadcaster have more than 39 percent of the national audience. Only three months after taking over, the Trump FCC resurrected (again on a party line vote) a 1985 decision that allowed UHF (channels above 14) broadcasters to count only half their coverage area when calculating the congressional ownership cap.

Called the “UHF discount,” the decision reflected the old disparity between a UHF signal and a VHF signal. This disparity, however, disappeared in 2009 when all television became digital. Some even consider UHF frequencies to be better suited for a digital signal. Even though the basis for the old decision no longer exists, the Trump FCC dusted it off to give big broadcast companies a path around the congressional prohibition on concentrated ownership. Applying their ”discount,” the congressional ownership cap magically increased and the door to further media consolidation was opened.

Exhibit Three: using contracts to get around local ownership rules. To promote a diversity of local voices, the FCC rules prohibit any one company from owning more than one of the top four television licenses in a market, as well as other restrictions on local broadcast consolidation. Clever lawyering, however, got around that by creating so-called joint sales and service agreements (JSAs) in which one company, flouting the intent of the rules, took control of the operations of another local station just as though they owned it. The last FCC outlawed this charade. Within two weeks of assuming control of the commission, however, the Trump FCC – without a commission vote – revoked that prohibition, thus creating yet another means for consolidating broadcast power.

In short, the Trump FCC has set the stage for a dramatic overhaul of the national landscape. It took no time for one company to seize the opportunity.

Sinclair Broadcast Group, owner of more TV stations than anyone else and a Trump election ally, quickly embraced the new reality. In May, Sinclair announced an agreement to purchase Tribune Broadcasting’s 42 television stations for $3.9 billion. The transaction will give Sinclair access to almost three-quarters of American households. Bloomberg observed the deal was “made possible after the U.S. Federal Communications Commission voted…to ease a limit on TV-station ownership.”

A creative abuser of JSAs before their reinstatement, Sinclair will once again have the ability to exert effective control of stations FCC rules would otherwise prohibit them from running. And, when the FCC eliminates the local studio rule, Sinclair – long known for requiring their stations to carry right-wing programs produced by headquarters – will have an open field to replace local voices with national control.

“[N]obody wants to do what we do – live and vital localism,” Smith reminded the broadcasters’ gathering. Unfortunately, it now appears that broadcast localism, a diversity of local voices, and the congressional mandate against one company dominating local broadcasting are about to become casualties of the Trump FCC.