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Broadcast Ownership Rules Should Reflect the Competitive Marketplace

ISSUE SUMMARY

The internet has transformed the media marketplace, yet TV and radio broadcasters are still restricted by outdated rules dictating the number and type of outlets they may own. Policymakers should support modernizing these rules to account for the rise, and increasing influence, of digital media and big tech.

Here's why:

TV and radio stations are best able to serve their local communities when allowed to compete effectively in the marketplace. Congress recognized this in the 1996 Telecommunications Act by requiring the Federal Communications Commission (FCC) to review its broadcast ownership rules every four years and to repeal or modify those no longer necessary in the public interest as the result of competition.

In 2017, the FCC attempted to update many of the local broadcast ownership rules by:

  • Eliminating the 1975 newspaper/broadcast cross-ownership ban;
  • Eliminating the 1970s-era radio/TV cross-ownership rule;
  • Reforming the local TV ownership rule to permit the ownership of two TV stations in smaller markets, as well as the largest ones; and
  • Eliminating the rule treating the joint sale of advertising time by TV stations as equivalent to common ownership.

Broadcasters applauded the long overdue modernization of these rules. Unfortunately, however, a federal appeals court, by a 2-1 vote in the fall of 2019, failed to properly account for dramatic changes in marketplace competition and vacated the FCC's commonsense updates. As a result, broadcasters again are subject to analog-era rules that the FCC had found were no longer in the public interest. In January, the Supreme Court heard oral arguments in a review of the Third Circuit's decision.

Additionally, the FCC began its mandated 2018 quadrennial review of the ownership rules in December 2018. Among other actions, broadcasters are uring the FCC to update its local radio ownership caps, which have not changed since 1996, prior to the advent of satellite radio, audio streaming services and smartphones.

The bottom line:

Local stations are a critical source of information and entertainment in every community across the country, and it takes significant resources to provide up-to-the minute news and emergency journalism, among other services. No other medium has the responsibility, the ability or incentive to serve the public's needs.

As competition from big tech continues to grow, policymakers should support the FCC's modernization of radio and TV ownership rules to reflect the current marketplace. To continue offering free, over-the-air service, broadcasters must be able to compete on a level playing field for audiences, advertising and investment.






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