NAB Advocates for Overhauling Ownership Restrictions
The National Association of Broadcasters (NAB) is advocating for significant changes to federal ownership regulations that were established during a time when traditional media dominated, well before the rise of streaming platforms like Netflix and social media giants like YouTube.
Unfair Competition for Local Broadcasters
In a recent episode of the NAB Podcast, Rick Kaplan, the organization’s chief legal officer, articulated the trade group’s position on the competitive challenges faced by broadcast stations. He pointed out that while streaming and cable services can operate freely on a national or global scale, television broadcasters are limited to owning stations that reach no more than 39% of U.S. households. Kaplan argues that this cap hampers broadcasters’ ability to pool resources and maintain robust local news operations.
Kaplan stated, “The defining feature of most of them is that they reach the entire country, if not the entire globe. But broadcasters, for example, are restricted from owning stations that would give them more than 39% of the country in terms of television households.” This outdated ownership structure, created when the Federal Communications Commission (FCC) was established in the late 1920s and 1930s, was initially intended to prevent media monopolies, a concern that Kaplan believes is no longer relevant.
Recent Legal Changes and Their Implications
The NAB achieved a notable victory in August when the U.S. Court of Appeals for the Eighth Circuit invalidated the FCC’s “top four” rule, which prohibited a single entity from owning two of the four highest-rated television stations in a local market. Kaplan referred to this ruling as vital for broadcasters competing against larger platforms with greater reach.
“Television is not the only game in town,” he explained, noting the range of alternatives that consumers have at their fingertips. The court’s decision could prompt a reevaluation of regulatory practices, with both the NAB and the FCC poised to take action.
Ownership Caps and Their Impact on Radio
Similar restrictions exist for radio broadcasters, who are also bound by local ownership limits. For instance, in New York City, a single company can own a maximum of five FM stations among over 100 available, a limitation that has remained in place for three decades, predating the influence of satellite radio and streaming services.
Kaplan believes that relaxing these ownership rules could enhance consumer choice by enabling broadcasters to support a wider variety of formats that might not thrive in a fragmented market. He suggested that if broadcasters could own multiple stations, they could diversify programming rather than duplicate it.
The NAB anticipates that the FCC will revisit radio ownership rules in its upcoming quadrennial review, which has lagged behind schedule.
Regulatory Authority and Future Considerations
Some critics argue that the FCC lacks the authority to alter the 39% national ownership cap without congressional approval. This figure was established in 2004, following a prior consideration to raise the previous limit. Kaplan, however, dismisses this notion, asserting that Congress did not intend to restrict the FCC’s regulatory power in this area.
Kaplan underscored that the Supreme Court has consistently upheld the FCC’s broad authority to regulate broadcast ownership, emphasizing public interest. FCC Chairman Brendan Carr has expressed openness to reviewing ownership restrictions, acknowledging the competitive pressures broadcasters face.
Kaplan remarked, “Why are big tech companies who can buy countries several times over able to operate unfettered while broadcasters have all these rules and regulations?” This sentiment reflects the growing concern over inequities in the media landscape.
Opponents of deregulation often cite potential risks, such as diminished local representation and decreased diversity in viewership options. However, Kaplan maintains that broadcast stations are inherently tied to local programming, differentiating them from national cable channels and streaming platforms. He argues that shared operational costs among multiple stations can actually support, rather than undermine, local journalism.
As the NAB encourages station owners and managers to engage with their congressional representatives and submit feedback to the FCC, the future of broadcast ownership regulation remains a critical topic in the industry.
For further information on the FCC and its regulatory processes, visit FCC’s official website.