The Federal Communications Commission is caving to the broadcast lobby, and on Thursday moved to scrap its essential nationwide broadcast ownership cap. This deregulatory giveaway will help a handful of media giants swallow broadcast TV. The only worse idea is eliminating the FCC.
The cap dates to the bunny-ears era, when the public airwaves were scarce and the government had the good sense to keep them out of a few corporate hands. Congress in 1996 formally codified a 35% limit on the share of U.S. households that a broadcast owner’s stations could collectively reach, which lawmakers in 2004 raised to 39%. Imagine if Amazon couldn’t command more than 39% of U.S. households. Imagine that—a country that actually set a ceiling on one corporation’s reach. The cap exists precisely so that no one company can command the public airwaves the way Amazon commands delivery.
Chairman Brendan Carr wrongly calls the cap arbitrary and out of step with today’s consolidated media market. That is exactly backward. The cap has only grown more necessary as cable networks, streamers and Big Tech have swallowed one another. It is the one rule that keeps any diversity alive.
“National programmers today are free to reach 100% of their relevant markets by distributing their programming direct to consumers or through deals they cut with virtual cable companies,” Mr. Carr noted. “Cable channels can reach 100% of the country. Social-media sites can reach 100% too. Same with Netflix, podcasts, and all other forms of digital content.” Mr. Carr offers the disease as the cure. A country where every screen is owned by five companies is not the model to copy. It is the disaster to avoid.
Broadcasters are struggling as Americans cut the cable cord and social media gobbles up local advertising dollars. Their answer to competition is to merge. Removing the cap will let broadcasters combine to reach more viewers, giving them more leverage with advertisers and the cable and streaming providers with which they negotiate to carry their stations. That leverage will be used to squeeze local news, local voices and local jobs. Fewer independent stations mean fewer competing outlets for local advertisers, which means less funding for the local coverage communities depend on. Every consolidation brings another shuttered newsroom. That is precisely the loss of localism that case-by-case review pretends to police.
We are not at all sympathetic to Texas Sen. Ted Cruz, but his argument is exactly right: the FCC requires Congress’s approval to lift the cap. The cap is the law, and it should stay. Congress wrote the 35% limit in 1996 and raised it to 39% in 2004. An industry-captured chairman does not get to delete a statute the industry finds inconvenient.
Mr. Carr cites a 2002 D.C. Circuit Court of Appeals ruling, which held the FCC is required by federal law to repeal or modify regulations that are no longer in the public interest. The cap is emphatically still in the public interest. The ruling compels enforcement, not repeal.
There is an even stronger legal case that the cap protects the First Amendment by keeping a few corporations from controlling the airwaves and the speech on them. That is a good reason to enforce the cap—period.
The agency says it will enforce the cap on a “case-by-case approach” based on a review of “the Commission’s interests in localism, viewpoint diversity, and competition.” Broadcast deals “that do not promote the public interest” will be denied. Good. Deny them. This is exactly what a regulator is for: protecting localism, viewpoint diversity and competition from the rent-seeking of media giants. Under that standard, every request from a giant to get bigger should fail.
Mr. Carr has invoked the commission’s expansive power to promote “the public interest” to threaten networks and affiliates that run content or late-night comedians Mr. Trump does not like. His latest threat has been against ABC. Want a deal that exceeds the ownership cap approved? Better not run Jimmy Kimmel. There is the rent-seeking. There is the political abuse: waivers for the President’s friends, public-interest sermons for his critics. A chairman is using the public airwaves as a cudgel against speech he dislikes. That is the strongest argument for keeping the cap and the public-interest review, not for scrapping them.
All of this argues for a bipartisan stand in Congress to keep the cap and strengthen the FCC’s power to regulate the public airwaves. Better yet, give the FCC the resources to do its job. The FCC is not a regulatory anachronism. It is the only referee the public airwaves have. Democrats are right to preserve that sweeping power for when they next control the White House. That is what the power is for. The broadcast lobby would have more credibility demanding that the FCC be reined in if it were not trying to hand the public airwaves to a handful of corporations that will hollow out local newsrooms for the sake of quarterly margins.
