FCC, Congress Feud Over Media Ownership Loophole

FCC Chairman Ajit Pai

FCC Chairman Ajit Pai Pablo Martinez Monsivais/AP File Photo

Split down party lines, legislators and FCC commissioners fought over media mergers and net neutrality during an oversight hearing.  

One of the heads of the Federal Communications Commission called on lawmakers to look into ties between agency leadership and the Sinclair Broadcast Group as the media giant prepares to purchase Tribune Media in an “unprecedented” deal.

“All of our media policy decisions seem custom built for [Sinclair] and I think it merits investigation,” said FCC Commissioner Jessica Rosenworcel before the House Energy and Commerce Subcommittee on Communications and Technology.

As the owner of the largest chain of TV stations in the country, Sinclair reaches 38 percent of U.S. households through its 173 nationwide outlets. If the merger with Tribune goes through, it will allow Sinclair to reach 72 percent of households across the country.

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Though the company’s potential reach is almost twice the 39 percent audience cap imposed on broadcasters by Congress, the deal may still go through under a legal loophole revived by FCC Chairman Ajit Pai that discounts the market size of broadcasts on the ultra-high-frequency spectrum—everything above Channel 13.

Democratic lawmakers joined Rosenworcel in criticizing Pai for paving the way for the mega-merger. Rep. Frank Pallone, D-N.J., called out the controversial chairman for failing to answer questions about his relationship with Sinclair, saying his evasiveness “does not inspire confidence.” While she acknowledged that large mergers often receive backlash, Rep. Debbie Dingell, D-Mich., said she couldn’t remember a deal that’s been more widely opposed than Sinclair-Tribune.

Pai also got flak for rolling back the so-called “main studio rule” earlier this week, which required local broadcasters to maintain newsrooms in the communities they serve. While the chairman claimed the rule was outdated in the age of digital media, lawmakers pointed out that removing the regulation would lower costs for large broadcasters like Sinclair and Tribune, allowing them to eliminate local studios and produce programming out of offices in New York, Chicago and other major cities.

While criticism of the Sinclair deal came primarily from Democrats, partisan lines showed through on a number of other controversial issues at the hearing, including net neutrality.

The room was split on the issue, with Republicans applauding FCC leadership for pushing to deregulate internet service providers and Democrats chastising them for potentially limiting free speech online.

Rep. Bill Johnson, R-Ohio, claimed that the technological innovation of recent decades was made possible because the internet “is the one area the federal government couldn’t figure out how to regulate.”

“We can’t throw water on the campfire of American innovation and ingenuity” with Title II regulations, he said.

Full committee Chairman Rep. Greg Walden, R-Ore., expressed his disapproval of the previous administration’s expansion of Title II to internet providers, saying Congress should have final say on the issue of net neutrality. Pai agreed.

While Democratic lawmakers said they largely agreed with the previous administration’s decision on net neutrality, the sharpest condemnation of the Title II rollback came from Commissioner Mignon Clyburn, an Obama-appointee who has publicly opposed Pai on the issue.

“Instead of looking out for millions of little guys, the commission’s majority once again chose to align with the interests of a handful of multibillion-dollar providers,” she said in her opening statement.

However, both parties seemed to agree on the importance of closing America’s digital divide by extending broadband coverage to the 34 million Americans currently living without internet access. The FCC’s initiative to deploy a nationwide 5G network would directly address the issue, commissioners said.

While there wasn’t a consensus on what the first steps should be in this process, lawmakers and agency heads agreed that addressing the issue is crucial to bringing rural citizens into the 21st-century economy and maintaining America’s place as a leader in broadband technology.

“There’s a huge opportunity cost to America’s inertia on this issue,” Pai said.

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