FCC

ACA: UHF Discount Should Not Convey

Cable group says divestitures needed if groups are sold 8/03/2016 1:10 PM Eastern

The American Cable Association has told the FCC it strongly supports eliminating the UHF discount, and even the grandfathering of existing combos, but said those grandfathered station groups' discount should not convey if they are sold to a new owner.

 

FCC chairman Tom Wheeler in June circulated for a vote by the other commissioners a proposal eliminating the discount .

 

The discount dates from the analog era when UHF signals were weaker than VHF. The FCC decided to count only half a UHF's signal coverage toward its 39% cap on the number of households any broadcast group could reach.

 

The FCC has been talking about eliminating the discount ever since the digital switch, when UHF suddenly became the stronger signal due to its propagation characteristics.

 

In a letter to the FCC this week, the ACA said that eliminating the discount is justified "by the facts, the record."

 

Retaining the discount would "exacerbate the harmful effects" of consolidation by allowing the largest groups to maintain an audience share beyond what Congress had envisioned (with the 39% cap, which was legislated), the ACA said.

 

The group noted that it sees that consolidation as an unfair thumb on the scale in retrans negotiations and sees the UHF discount elimination as a way to mitigate that.

 

The FCC plans to grandfather existing combos, as well as any deals in the works, as of the time of the Notice of Proposed Rulemaking's June 28 release.

 

The ACA said it is OK with that, as long as the FCC requires divestments to get under the 39% cap if any of those grandfathered groups are sold.

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