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FCC votes to allow some broadcasters to buy more TV stations

21 April 2017, 02:29 | Melvin Schneider

FCC votes to allow some broadcasters to buy more TV stations

FCC votes to deregulate business data services market, handing another victory to large telecoms

The commission said "this approach properly balances the commission's need to improve its broadcast ownership data with the potential chilling effects that a mandatory reporting requirement could have on participation in NCE station governance".

Comparing the regulation of the BDS market issue to Alice in Wonderland, FCC Chairman Ajit Pai said the FCC drank a potion that drove them to overregulate the market. The rule deregulates pricing in a majority of counties and more than 90 percent of buildings using the services.

The moves came as Pai is expected to soon try to roll back the controversial net neutrality rules for online traffic that were pushed through by former chairman Tom Wheeler.

The vote was unanimous, though with commissioner Mignon Clyburn concurring rather than dissenting. She opposed both regulatory changes Thursday.

"Today, the FCC is wiping the slate clean, and later this year, we will begin a new proceeding to review comprehensively the future of the national cap, including the UHF discount", he said, pledging to "everything in my power to ensure that this review does not similarly take three years to complete".

Jefferies' John Janedis said in a recent research note that large broadcasters like Nexstar and Sinclair and smaller acquisition targets stand to benefit from the return of the discount. It enables station owners to just count half of the viewers reached by UHF stations in the calculation to determine when they hit the ceiling that limits them to reaching 39% of all households.

Tribune Media was formerly Tribune Co., which owned the Los Angeles Times and other dailies before spinning off its newspapers into a separate company in 2014. He said the FCC "did not examine whether the facts justified a more stringent cap".

Pai, however, argued that the elimination of the discount needed to go hand-in-hand with an examination of the media ownership cap.

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The move, not wholly unanticipated by broadcasters, could potentially kick off a wave of broadcast TV consolidation.

The FCC's action will reduce competition, ownership diversity and local content and "is a huge gift for large broadcasters with ambitious dreams of more consolidation", she said.

"There is no justification for the FCC to restore the UHF Loophole", House Minority Leader Nancy Pelosi and and New Jersey Democrat Rep. Frank Pallone of New Jersey, wrote to Pai this week opposing the change. "The UHF Loophole is unfair to the public because it treats UHF stations differently only for one goal - to let big station conglomerates own more stations across the country". "The move also increases leverage for broadcasters enabling them to charge cable companies higher fees to carry their signals, a price ultimately borne by higher cable rates for consumers nationwide". The Order will permit incumbent telephone carriers to raise prices on business broadband customers across most of the United States.

"The FCC's BDS deregulation order is a 186 page all-out assault on America's small businesses, schools and local economies", she said. BDS provides the backhaul that connects mobile towers to the wired internet.

"Price regulation - that is the government setting the rates, terms and conditions for special access services - is seductive", Pai said. "Regulators will always struggle to set the right price".

According to the Internet Innovation Alliance (IIA), a pro-deregulation policy group whose members include AT&T, the market is "highly competitive". BDS already costs small businesses billions - a price consumers end up paying.

Front and center at the FCC's meeting was a vote on proposed changes to regulations on Business Data Services (BDS) - high-capacity broadband connections created to serve businesses, schools, libraries and government agencies.



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