The Federal Communications Commission (FCC) on Thursday voted to eliminate a long-standing rule capping the number of households a single broadcaster can reach nationwide, a move the commission said is necessary to better help television networks compete with the rapid growth of tech companies in the media sector.
The now-scrapped rule, which had been in place since the early 2000s, limited the number of viewers any single broadcaster could reach at 39 percent of the national television viewing audience.
It will be replaced with what the agency said will be “a granular, case-by-case review.”
“The video marketplace has changed dramatically with the proliferation of digital platforms—all of which enjoy unrestricted national reach,” the commission said in a statement announcing the vote. “Eliminating the national cap will allow broadcasters to better compete with these unregulated digital giants. The market also reflects a growing imbalance of power in the network-affiliate relationship, which the national cap intended, but failed to curb, as evidenced by network control over online video carriage, preemption rights and revenue sharing requirements.”
The rule change is likely to have major implications on the future of television news and could accelerate consolidation by media companies across the country.
The FCC’s Thursday vote is considered a victory for any local TV news broadcaster as they look to compete in a broader landscape.
Nexstar Media Group had been urging the FCC to change its ownership cap rules in recent months as it looks to grow its business.
Nexstar, which also owns The Hill and cable news channel NewsNation, is already the largest provider of local news in the country and is currently pursuing a multibillion-dollar merger with fellow local news provider Tegna.
The FCC earlier this year waived the local news ownership cap as it approved the Nexstar-Tegna merger. The approved merger was subsequently challenged in court by a group of state attorneys general who argue the deal could hurt competition.
FCC Commissioner Ana Gomez, the body’s only Democrat, blasted the FCC’s vote, calling it “unlawful on its face and a profound departure” from long-standing department rulemaking.
“I recognize that broadcasters are facing serious economic pressures. But addressing one pressure point in isolation, without looking at the full picture of rules, obligations, and relief already on the table, risks setting the wrong incentives,” Gomez said in a statement. “Broadcasters get special regulatory treatment because they serve their communities. Piecemeal fixes that ignore that trade-off will undermine that mission instead of strengthening it.”
The National Association of Broadcasters (NAB), which represents broadcasters like Nexstar, Tegna and other local news providers, meanwhile applauded the FCC’s action.
“The FCC’s decision to eliminate the outdated national television ownership cap marks a generational step toward strengthening local stations and ensuring they can compete in today’s media marketplace,” NAB CEO Curtis LeGeyt said. “Today the FCC helped level the playing field and strengthen local stations’ ability to deliver the trusted news and emergency information millions of Americans rely on.”
In a statement on Thursday, Nexstar said the FCC’s decision “is a welcome, necessary and long-overdue recognition of today’s competitive landscape, which is dominated by legacy Big Media and Big Tech.”
“For too long, local broadcasters were handcuffed from reaching the scale they needed to compete on a more level playing field by outdated federal rules that didn’t apply to the largest and most powerful companies like Google’s YouTube, Meta’s Instagram, or Netflix,” a spokesperson for the company said. “Modernizing these rules will help ensure broadcasters can continue investing in local journalism and providing the free, trusted news and information that communities across America rely on every day.”
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