Interrupting TV's M&A Broadcast

Broadcast stations may soon be sending a different signal. The Federal Communications Commission has opened a public comment period on a proposal that could make broadcast stations equal for the purpose of determining ownership caps. If adopted, it could put the brakes on the recent round of consolidation among station owners.

A single company is currently prohibited from owning stations that, in aggregate, reach more than 39% of total TV households nationwide. But owners have been allowed to count only 50% of the TV households in their market areas toward the cap for stations broadcasting via ultrahigh frequency, or UHF, signals. The FCC says the so-called UHF discount was adopted 30 years ago when those signals were considered technically inferior to very high frequency, or VHF, signals. But the transition from analog to digital broadcasting means that is no longer true. UHF signals are now, if anything, superior to VHF, the FCC argues. By making it easier to breach ownership caps, removing the discount could make it more difficult for companies to merge in order to gain heft in negotiations with TV networks and pay-TV providers.