The FCC's notice of proposed rulemaking (NPRM) on eliminating the UHF discount continues to be "in flux" according to one FCC source as the commissioners' offices negotiate changes, but it could get rid of the discount for any deals done after Sept. 26. Other deals would be grandfathered.
Acting chairman Mignon Clyburn has teed up a vote for Sept. 26 on eliminating the UHF discount. Even broadcasters who would be just as happy for the discount to remain concede it is tough to argue against getting rid of it purely from a policy perspective. UHF stations were spectrally inferior to analog, which was the reason the FCC only counted half their audience toward the national ownership cap of 39%. In digital, they are superior.
Plus, broadcasters can read the policy tea leaves. There are likely at least two (Democratic) votes for getting rid of the UHF discount, which is all the acting chairwoman needs in this abbreviated, three-member commission.
But the key issue now is when eliminating the discount will go into effect. At press time they were still negotiating that point--which was described as "still in play--but it appeared to be leaning toward Sept. 26: "I think generally the cut-off is going to be seen as the release of the NPRM," said one FCC source.
The Democrats appear to be leaning toward signaling to would-be buyers that the commission will treat the Sept. 26 vote to approve the rulemaking as the date it will start counting all UHF eyeballs. That could happen even though it must still get comment on the rulemaking, which includes other elements, and vote a final order. One source said that seemed to be where the order was headed, but that the point was still in play and could change by Monday.
The idea of making the NPRM the trigger is to prevent a land rush of deals trying to get in under the wire, said one source, adding there is precedent for having an NPRM assume the new rules are in effect in the interim between the NPRM and order votes.
Broadcasters argue that would be unfairly jumping the gun. "It's not fair and it's not good government," said one D.C. broadcast exec following the item closely.
As previously reported, the item also asks whether the FCC should start applying a discount to VHFs now that the fortunes are reversed. But it does not ask whether the 39% cap needs to be raised, which some Washington broadcasters see as a glaring omission given that the FCC does say in the order that it has the authority to adjust the cap.
The commissioners offices had no comment at press time on the negotiations.