FCC Tees Up Rule Change That Could Spur Wave of TV Industry Mergers

Federal regulators plan to reverse an Obama-era rule that prevented major television-station owners from buying stations or readily selling themselves, a move that could touch off a wave of deals among media companies.

The proposal, which would effectively loosen a national cap on audience share for station owners that the rule had tightened, is scheduled to be put before the Federal Communications Commission in late April, an agency official said. Chairman Ajit Pai is expected to announce the plan on March 30. The longstanding ownership cap limits TV groups to a 39 percent national audience share. But for years, the government said station owners didn’t have to fully count UHF stations in calculating their share because UHF was typically a less powerful signal.

The Obama-era FCC eliminated the so-called UHF discount last September, contending that the distinction between UHF stations and VHF stations had effectively disappeared. The FCC under Chairman Pai is expected to revert to the previous rule in one of a series of actions he is taking as he plans to reverse several policies adopted under his predecessor, Tom Wheeler, who was FCC chairman for much of President Barack Obama’s second term.