Broadcasters Target Local Station Caps in QR Filings; Fox Wants Dual-Network Rule Gone

Ownership limits single out broadcasting from all other FCC licensees, NAB said. “The local radio and TV rules are irrational,” the group argued. “No other media or FCC licensees are subjected to any comparable ex ante restrictions.”

Nexstar, Sinclair and Gray Media -- the three largest broadcast station owners in the U.S. -- all focused their attention on local TV ownership limits, saying that repealing them is an existential issue for broadcasting because of competition from Big Tech. “Clinging to the Local Television Ownership Rule risks making the operation of local TV stations untenable in large swaths of the country,” said Gray. Nexstar said that without “elimination of the Local TVO Rule, local television stations -- the primary source of breaking news, severe weather reports, and locally-based journalism -- will follow the severe decline of daily local newspapers.”

Radio station groups made similar arguments against the FM and AM subcaps. “Preserving localism and diversity in local markets can be achieved only if broadcast radio can fully compete in today’s media marketplace on a level playing field,” said a joint filing from Connoisseur Media, Midwest Communications and other station groups. “This requires that local radio no longer be constrained by the outdated ownership rules.”

NAB and broadcast station groups said the statute that mandates the FCC’s quadrennial reviews, Section 202(h) of the Telecommunications Act of 1996, requires the agency to do away with rules no longer in the public interest, pointing to a recent 8th U.S. Circuit Court of Appeals decision that it said underscores that requirement. The FCC “must fulfill Congress’s deregulatory mandate in Section 202(h) and its even longer-standing goal of promoting a competitively viable broadcast service capable of effectively serving local communities in all-sized markets.”

Dual-Network Rule

Fox said the FCC should eliminate the dual-network rule, which bars the big four networks from being commonly owned. “Elimination of the Dual Network Rule would strengthen both competition and localism by giving the owners of the targeted broadcast networks greater flexibility to strengthen themselves and compete with digital video providers,” Fox said. The company has been rumored to be in talks with Paramount to run its CBS stations, and a media broker told us Friday that Fox’s filing is seen as adding strength to that rumor.

“Importantly, transactions contemplated by these networks would still be subject to fulsome review by antitrust regulators and (assuming any transfer of licenses along with a network) the Commission itself,” Fox added.

Newsmax, Gray, the American Television Alliance (ATVA) and the affiliate station ownership groups all supported the FCC preserving the dual-network rule. The networks “have 100% household reach wherever there is broadband, which is practically everywhere,” said the affiliate station groups in a joint filing. “Relaxing the Dual Network Rule would give those same Networks the ability to achieve even greater scale in local markets, to the detriment of local television stations and the communities they serve.” Fox countered that retaining the dual-network rule would be arbitrary and capricious.

The Center for American Rights argued that the FCC should stop using the number of owners in a market as a measurement of viewpoint diversity, saying most of the big four networks are left-leaning. “You can take your pick of liberal anchors and liberal reporters delivering news of interest to coastal elites,” the group said. “That’s not view point diversity.” The better measurement is "the real results in the field," it added. “Do viewers trust their local stations to report ‘fair, unbiased, and fact-based’ news?”

Big 4 Retrans

DirecTV and ATVA also said the FCC should adopt the DOJ’s market definition for broadcasting. Broadcasters compete in two markets, retransmission consent and advertising, DirecTV noted, and the FCC should weigh transactions using a “big four retransmission consent” market definition that would consider when a proposed station transfer would cause harm in the retrans consent product market.

In addition, broadcasters reiterated arguments that the FCC should change its definition of the broadcasting market to include streaming and online advertising. The agency's “historic assumption that broadcast television competes only -- or even primarily -- with other local broadcast stations is no longer factually or economically supportable,” Sinclair said. “Were the Commission to define the ‘product market’ in which broadcasters compete to include cable channels and video streaming, it would effectively give broadcasters the green light to engage in unchecked local consolidation,” said ATVA.

Consolidation Opponents

Opponents of dropping local ownership limits said the quadrennial review doesn’t have a deregulatory presumption, and eliminating the caps will hurt localism. "There is no empirical evidence that loosening the local media-ownership rules would meaningfully enhance localism or diversity," said a joint filing from Public Knowledge; longtime broadcast consolidation opponent Gigi Sohn; the Multicultural Media, Telecom and Internet Council; two independent film groups; and four university professors. That lack of evidence means that any relaxation of the rules would lose a court challenge, the filing said. “At a minimum, before the Commission takes any action to raise the local broadcast ownership caps, it should commission empirical research on the current state of local broadcast media, especially local news coverage, viewpoint diversity, and competition, and evaluate the effects of recent media consolidations.” Every FCC quadrennial review order has led to a prolonged court battle.

NCTA said the FCC should retain its existing ownership rules and reinstate the recently vacated top-four prohibition. “The harms of multiple station ownership in a market are particularly acute when the stations at issue are Big Four network affiliates,” the group said. Free Press argued that the 8th Circuit decision eliminating the top-four prohibition has already “created an ongoing consolidation killing frenzy.”

Doing away with local radio limits would make it harder for new entrants and minorities to break into radio and could lead to consolidation that would destroy the AM radio service, said the National Association of Black Owned Broadcasters. The musicFirst Coalition and Future of Music Coalition said in a joint filing that “if local FM ownership is further deregulated, thereby granting even higher local market shares to the largest AM/FM clusters, then independent, locally-owned AM/FM stations may be put out of business as a result.”

Free Press likewise said history shows that consolidation hurts local journalism. It pointed to a 2024 study that found that Sinclair purchasing a station typically led to “an almost immediate decline in the mentions of local places” on news programming. “There are numerous studies empirically demonstrating that stations acquired by Sinclair reduce local coverage in favor of national coverage,” Free Press said.

“Some of the same mega-corporations that claim to foster heartland values and diverse viewpoints are instead petitioning the federal government to grant them the right to reach every home in America, creating dominant media empires that would squelch competing voices, gut local newsrooms, and raise pay TV prices on hardworking Americans,” said Newsmax. CPAC argued that “contractual tension” and “evolving business models” in the broadcast space don’t “establish a need for new rules.”

Sinclair disputed stats showing that consolidation leads to a loss of local news. “An analysis of Nielsen data conducted by the NAB found a 35% increase in local broadcast television newscasts between November 2011 and November 2021, equating to an increase in news hours of more than 40% over that period.” The idea that the FCC can retain local ownership limits, and that will preserve localism is “a false choice,” the company said. “Assuming that local broadcasters would be able to continue providing the same level of local service they do today while they run in place (and their larger competitors continue to advance, unshackled by artificial ownership constraints) is magical thinking.”