The Federal Communications Commission (FCC) voted 2-1 on August 6 to rescind a longstanding rule limiting how many U.S. television households a single broadcast company can reach. The decision eliminates the 39% ownership cap, replacing it with a case-by-case review process for future mergers and acquisitions.
FCC Chair Brendan Carr and Republican Commissioner Olivia Trusty supported the move, while Democratic Commissioner Anna Gomez opposed it. The vote marks a significant shift in media ownership policy, with implications for local journalism and industry consolidation.
Immediate Impact and Core Decisions
The FCC’s action removes a 22-year-old cap that had restricted companies from owning stations reaching more than 39% of U.S. TV households. The rule, first established by Congress in 2004, was designed to prevent excessive media consolidation. Under the new framework, the FCC will evaluate proposed mergers based on public interest considerations, including commitments to local journalism and viewpoint diversity.
The decision follows the FCC’s waiver of the 39% cap in March to approve Nexstar Media Group’s $6.2 billion acquisition of Tegna, a deal currently blocked by an antitrust lawsuit from eight states. If finalized, the Nexstar-Tegna merger would give Nexstar control over stations reaching at least 60% of U.S. households, far exceeding the previous limit.
Rationale for the Change
Proponents of the rescission argue that the 39% cap is outdated and hinders local broadcasters’ ability to compete with digital platforms like YouTube, Netflix, and Google, which face fewer regulatory restrictions. Chair Carr stated that the policy was "hamstringing" local broadcasters in a saturated media landscape, where streaming now accounts for over 40% of viewing and traditional TV revenue is declining.
Carr emphasized the importance of preserving local journalism, noting that local TV stations remain a primary source of trusted news for many communities. "We should stop hamstringing this one segment of the broader market with outdated restrictions," he said.
Opposition and Legal Concerns
Commissioner Gomez called the decision "unlawful on its face", arguing that only Congress has the authority to lift the cap, as it was codified in federal law. She warned that eliminating the cap would shift economic pressure from national programmers to large station groups, which she described as "national companies that own local stations and increasingly dictate what airs on them."
Critics also argue that the move could lead to further consolidation, reducing competition and limiting diverse viewpoints. Free press advocates protested outside the FCC’s headquarters, holding signs documenting concerns over media censorship and control.
Broader Industry Context
The FCC’s decision reflects broader challenges facing local broadcasters, including declining advertising revenue, cord-cutting, and competition from streaming services. The agency has previously cited the collapse of local newspapers as a cautionary tale, urging action to prevent a similar fate for local TV stations.
The vote aligns with the FCC’s broader push to modernize media ownership rules, though legal challenges are expected. The Nexstar-Tegna merger, currently tied up in court, may serve as a test case for how the new case-by-case approach will be applied in practice.