06/15/2018

Pai Preparing July Vote on 39% Cap/UHF Discount Review

FCC chairman Ajit Pai is said to be planning a vote at the July 12 meeting on adjusting the 39% audience reach cap on a broadcast group's TV station ownership, according to a report in Bloomberg News.

If the FCC votes to retain the UHF discount or alternatively raise the cap, it could allow Sinclair's proposed merger with Tribune to go through even if a court decision ultimately reverses the FCC's UHF discount decision. 

The court could rule before July 12 to reverse the FCC and thus invalidate the discount, but if the FCC votes to eliminate the discount but raise the cap to achieve a similar loosening on national station ownership, the deal could still go through, but with Sinclair having to spin off more stations. The FCC could also eliminate the cap altogether, which would mean the deal could proceed as planned, presuming the FCC ultimately approved it.

Related: Some Major TV Groups Push FCC for Right to Keep, Transfer UHF Discount

Pai has said that the UHF discount is arguably an anachronism that could be eliminated, but that that would have to be considered along with the 39% cap. He is widely expected to loosen the cap to allow broadcasters to heavy up in the face of competitors--cable and over-the-top and satellite and telco video providers--who have no similar local or national ownership limits.