For Media Ownership, 39 Percent Rule is Law, 

NOT a Suggestion

As the Senate prepares to examine media ownership rules tomorrow, traditional over-the-air broadcasters are undeniably in a difficult spot. Once trusted titans, local television stations now face enormous headwinds as consumers and advertisers shift away like sand at low tide. In response, some national station owners are now pushing for regulatory relief from the Federal Communications Commission (FCC) to allow bigger station groups to reach more viewers. However, as a veteran Congressional staffer and former FCC Commissioner, I can attest that authority to do so comes with an ultimate limitation. Specifically, Congress intentionally and permanently blocked local broadcasters from holding or controlling licenses with a collective national audience reach above 39 percent. Arguments suggesting otherwise or trying to bypass this prohibition lack factual basis or value. Local broadcasters’ only recourse—good or bad—is to advocate for Congress to amend the law.

Understanding the national ownership cap, as it is commonly referred to, requires a brief review of the history behind the statute. While these trips down memory lane often elicit eye rolls, the legislative history matters. It sheds light on why Congress set the cap at 39 percent.

In the early 2000s, the FCC attempted to align media ownership reviews with antitrust standards while approving a merger that exceeded the then-current cap. This caused an uproar from some within Congress, and the Senate Commerce Committee painfully considered legislation to statutorily tie the agency’s hands. Key legislators were worried on several fronts, including the impact on the network-affiliate power balance.

When the legislative process dragged, then Senator Ted Stevens (R-AK) inserted the current national cap language into an appropriations bill. The final text capped ownership at 39 percent, blocking any sell-off of stations under the pending merger, and ended the applicability of the FCC’s quadrennial media ownership review process to the national cap.

Those wanting to ignore the national cap make an interesting claim. Foremost, they argue that Congress went through the difficult task of shutting the front door but left a window open, allowing the FCC to change, waive, or dismiss the cap, at its leisure, under a “preserved authority.” This seems based on the notion that by specifically precluding the use of the quadrennial review, the language doesn’t specifically prevent a new agency from proceeding to alter the cap.

But this is pure fantasy. To effectuate its intent, Congress needed to turn off the quadrennial (which was changed from biennial in the same law) to prevent that process from subsuming its new national cap. On the other hand, Congress did not need to explicitly stop a future FCC item from changing the cap. That is because it specifically established a statutory limit, which the agency cannot dismiss or waive. Reading the law otherwise is to demand that the Legislative Branch always insert belts and suspenders into lawmaking. Had Congress wanted to leave discretionary authority for the agency on the issue, the body was well-versed on how to do so.

Even ignoring Congressional intent, proponents cannot explain how this cap contrasts with other provisions in the statute, such as foreign ownership, that explicitly allow agency flexibility to exceed the established thresholds, while this provision does not. Are we to believe that Congress has written implicit waiver authority into any and all provisions of the Communications Act that don’t explicitly provide for it? What would be the justification for the hard-fought inclusion of forbearance authority or other flexible, deregulatory provisions in the law, if the Commission is allowed to ignore existing limitations at will? Believing this would reduce the legislative process for communications matters to a new low.

Having discussed this issue with scores of communications practitioners over the last 20 years, I cannot in good conscience support making an end-run around Congress because some think it is the easier path to a desired outcome.

All of this is not to suggest that certain broadcasters may not have substantive merit to their need for relief. But even if granted, keep in mind that it would likely only be helpful to a select few companies seeking to grow beyond the limits today, and some desiring a profitable exit. Clearly, not every broadcaster wants to bulk up or is desirable enough to be merged into a larger entity. Within most television markets, the creation of very large broadcast station groups could shift the competitive balance. Any residual medium and smaller-sized broadcasters should be deeply leery of the merger activity's benefits for the entire sector.

As my mother used to say, life isn’t fair. Broadcasters’ future path in a digital world is a difficult one. The fix, however, is not to pretend a legally crafted and enacted provision of law became magically meaningless for convenience’s sake.