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Posted by on Oct 29, 2017 in Business tech, Tech Trending | 0 comments

FCC Wants to Ease Rules to Benefit Broadcast Giant Sinclair

FCC Wants to Ease Rules to Benefit Broadcast Giant Sinclair

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On the campaign trail, Donald Trump promised to fight media mergers that concentrated more power in fewer hands. But his Federal Communications Commission is paving the way for huge broadcasting companies to get even bigger.

Thursday night, the FCC unveiled a proposal to relax its media-ownership rules. The plan would lift a ban preventing companies from owning both a broadcast station and a newspaper in the same market, and ease restrictions on the number of television and radio stations a single owner can control in a market. The FCC is expected to vote on the proposal during its open meeting next month, and with Republicans in the majority at the agency, it will likely pass.

The proposal describes the changes as necessary to help broadcasters and newspapers compete against digital-media companies that face no restrictions on how many websites, apps, or streaming video services they can own. But the rules have already attracted controversy because they will most immediately benefit Sinclair Broadcast Group, which plans to buy Tribune Media for $3.9 billion.

“I think it has reached a point where all our media-policy decisions seem to be custom built for this one company, and I think it merits investigation,” Democratic Commissioner Jessica Rosenworcel said during a congressional oversight hearing Wednesday.

The new proposal is part of a series of FCC decisions that aid large broadcasters, and there are likely more to come.

Despite the growth of digital media in recent years, television is still the most common news source among Americans, according to a Pew Research study last year. About 46 percent of respondents often get at least some of their news from local TV. By comparison, 38 percent said they often get news online.

Sinclair owns 173 TV stations and Tribune owns 42. Together, the two companies estimate that they could reach 73 percent of US households.

Federal regulations generally limit the reach of a broadcasting company to 39 percent of US homes. In April, however, the FCC gave broadcasters additional wiggle room by reviving 1980s-era rules that allow Sinclair and other broadcasters to count some stations as reaching only half as many households as they can. According to an FCC filing, Sinclair will be 6.5 percent over the limit even with this “discount.” In a conference call Thursday, senior FCC staffers said the FCC will review the national ownership limits by the end of the year.

Sinclair is generally seen as a conservative-leaning media organization. For example, it requires its stations to air particular content, including commentary from former Trump administration official Boris Epshteyn. Earlier this year, Politico reported that President Trump’s son-in-law Jared Kushner told business executives that the Trump campaign struck a deal with Sinclair for better coverage. That adds a political layer to what might otherwise be a technocratic debate over the appropriate level of competition in local news markets.

Senior FCC staffers denied that the rules were designed to benefit a particular company during the Thursday conference call. Indeed, not all of the changes proposed immediately benefit Sinclair. Tribune spun off its newspapers into a new company called Tronc last year, and neither it nor Sinclair own many radio stations, so the cross-ownership rules don’t really affect the merger. But the FCC has made life easier for Sinclair this year.

Current regulations prohibit companies from owning two of the top four stations in a particular market. The FCC’s new proposal would allow exemptions in markets where, for example, the size difference between the fourth largest and fifth largest is slight. It would also eliminate a rule that prohibits mergers that would reduce the total number of broadcast owners in a market to fewer than eight.

After acquiring Tribune, Sinclair would have 10 stations that run afoul of the old rules, including stations in markets like Seattle and St. Louis, according to FCC filings. The new rules could spare Sinclair from having to sell those stations, if it can get the necessary exemptions in time.

Earlier this week, the FCC voted to eliminate rules that required broadcast station owners to have a studio within 25 miles of the city where the station is licensed. The change will free companies like Sinclair from having to spend money on local studios in every community where they operate.

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