FCC Relaxes Rules On Media Company Mergers
The Federal Communications Commission has voted to eliminate some regulations regarding the mergers of media companies. FCC Chairman Ajit Pai said that the rules were harmful to traditional media outlets in today’s media world. The regulations were eliminated in a 3-to-2 vote.
The rules that federal regulators rolled back are decades old. They were first put in place in the 1970s to ensure diversity on the air and in print. Pai believes that rules that once enforced a wide variety of viewpoints are no longer needed and that eliminating the rules would bring broadcast ownership rules into the digital age.
One repealed rule prevented one company in a given media market from owning both a daily newspaper and a TV station. Regulations restricting the number of TV and radio stations that any media company could simultaneously own in a single market were also repealed by the agency. A rule that restricted TV stations in the same market from merging with each other under certain conditions was also eliminated.
In his remarks about the matter, Pai said, “It will open the door to pro-competitive combinations that will strengthen local voices and better serve local communities.” The FCC vote comes one month after the agency decided to no longer require broadcasters to operate a physical studio in the markets where they are licensed. Another vote to rescind rules prohibiting one company from owning stations that serve more than 39 percent of U.S. television households is expected in December.
The National Association of Broadcasters expressed satisfaction with the changes to the rules. In a statement, the trade group said, “These rules are not only irrational in today’s media environment, but they have also weakened the newspaper industry, cost journalism jobs and forced local broadcast stations onto unequal footing with our national pay-TV and radio competitors.”
Sinclair, a conservative broadcasting company, is expected to be a major beneficiary of the deregulatory moves. Sinclair is currently seeking to acquire Tribune Media for $3.9 billion. Now, Sinclair may not need to sell off many of its stations to secure regulatory approval for the deal.
The move could potentially lead to the ownership of more newspapers, radio stations and television broadcasters concentrated in a handful of companies. Critics of the FCC repeal say they are concerned about a small number of industry players dominating the media market. A federal appeals court is expected to hear challenges to the new rules.
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