Congress Amends National TV Ownership Cap; FCC Seeks Comments on Retention of UHF Discount; Two Commissioners Question Motive

In June 2003, the FCC modified several broadcast ownership rules, including expansion of the national TV ownership cap from 35 percent to 45 percent of the national audience. In that same decision, the Commission decided to retain the 50 percent UHF discount, pursuant to which only one-half of the market of a UHF station is counted for purposes of determining compliance with the ownership cap. The rationale for the UHF discount is that UHF stations have smaller service areas and viewing shares than VHF stations in the same market.

On Jan. 22, 2004, President Bush signed into law the Consolidated Appropriations Act of 2004, Pub. L. No. 108-199, 118 Stat. 3 (2004) (“Appropriations Act”). Section 629 of the Appropriations Act reduced the national TV ownership cap to 39 percent as the result of a Congressional compromise. Due to another provision of that section, the Commission will now review its ownership rules every four years, instead of every two years as previously required.

In view of the 39 percent national TV ownership cap established by Congress, the FCC last week announced that it would seek comments on whether to retain the 50 percent UHF discount. The Commission notes that Congress did not address the UHF discount and seeks comments on whether to retain the UHF discount in view of the revised ownership cap. Comments are due by March 19, 2004, with reply comments due by March 29, 2004.

Yesterday, the two Democratic Commissioners (Copps and Adelstein) issued a Public Notice questioning whether the UHF discount inquiry was motivated by last week’s oral argument in the appeal of the Commission’s June 2003 changes to the ownership rules. Since the FCC has now asked the court to hold that appeal in abeyance pending the Commission’s decision on the UHF discount, Commissioners Copps and Adelstein ask “whether this is an attempt to avoid a substantive court decision on an apparent weakness and inconsistency in the June 2 media ownership order.”

Please contact us if you wish to file comments or if you have any other questions regarding the Commission’s ownership rules.