FCC

Pai Poised to Propose Restoring UHF Discount

Move had been widely expected from chairman in 'rollback' mode 3/30/2017 8:39 AM Eastern

FCC Chairman Ajit Pai will reportedly circulate an item soon rolling back yet another Tom Wheeler era regulatory change, according to a report in the Wall Street Journal. The move was widely expected.

Broadcasters were looking for that to happen given the chairman's opposition to the discount's elimination and his signal he would be reviewing that change and the fact that the FCC did not loosen media ownership regs in last year's quadrennial media ownership rule review.

Up until the vote last fall to eliminate the discount, the FCC had counted only 50% of a UHF station's audience reach toward the 39% ownership cap given that UHF had traditionally been the weaker signal vis a vis VHF. That changed after the digital switch, when their fortunes were reversed and UHF became the more desirable channel position given those signals superior propagation characteristics.

Wheeler circulated an item eliminating the discounts back in the summer of 2016. It was approved in September.

The timing of the order's circulation would give broadcasters gathering in Las Vegas for the annual NAB Show something to cheer when the chairman makes his appearance there.

Under then FCC chair Mignon Clyburn, the commission back in 2013 voted to propose eliminating the discount.

The UHF discount item grandfathered existing ownership groups that would be over the 39% cap once the discount was scrapped. But it did not propose replacing it with a VHF discount, which the FCC had asked for input on.

With the discount gone, UHFs had to count all their audience, which was in effect yet another limit on ownership and would not allow groups including Ion and Tribune to be sold in their entirety.

The National Association of Broadcasters has argued that the FCC should not treat the discount in a vacuum but in relation to the goals of the national ownership caps.

Pai dissented from the September 2016 vote to scrap the cap. While he acknowledged that it was probably time to eliminate the cap, he said that should not happen without also reviewing the 39% national cap.

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