FCC Votes 2-1 to Restore UHF Discount; Clyburn, O'Rielly Agree Agency Can't Alter National Cap

Though the FCC voted 2-1 Thursday to restore the UHF discount and re-examine the rule later this year along with the national broadcast ownership cap, both Commissioner Mignon Clyburn, who dissented from the vote, and Commissioner Mike O’Rielly said in news conferences after the meeting they believe altering the national cap is the province of Congress. “Something of that significance, I would appreciate additional guidance from Congress,” said Clyburn in response to a question from Communications Daily. O’Rielly reaffirmed his view the agency doesn’t have authority to change the cap, and said he's interested to see how the matter “gets litigated out.”

Clyburn was also the lone dissenter on a vote to change the rules on reporting of ownership data to be less of a burden to noncommercial educational stations, which she said would make it harder for the FCC to collect meaningful media ownership information. A vote to allow third-party fundraising for some NCE stations was unanimous.

The UHF discount order on reconsideration voted Thursday doesn’t alter the 39 percent coverage of national population ownership cap itself, but brings the discount back and says the FCC will consider the discount and the national ownership cap sometime in 2017, Chairman Ajit Pai said. The discount is “inextricably linked" to the cap, Pai said. Asked how the FCC would take action on the cap without the support of the other commissioners, he said his office hasn’t made “any substantive decision” on how to move forward.

The FCC’s 2016 action to get rid of the UHF discount without considering the national cap was “illogical and likely unlawful,” Pai said Thursday, but Clyburn and public interest officials said the same of Thursday’s order. Clyburn said the order showed Pai’s “hypocrisy” in claiming he believed in doing away with outdated rules, and said the discount had been “resurrected” from a “regulatory crypt.” Restoring the discount is “a cynical political ploy to help large broadcast companies become larger, notwithstanding the lack of any sustainable legal rationale for doing so,” said Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman in an email. The FCC reinstated “a technically obsolete rule” and justified it “by promising to change a rule Congress has specifically prohibited the FCC from changing and making it more difficult for smaller stations owned by women and people of color,” said United Church of Christ Office of Communication attorney Cheryl Leanza in a post on medium.com.

Broadcasters were pleased by the UHF discount vote, which is expected to boost dealmaking in the industry (see 1703310061). “Today’s action by the Federal Communications Commission is a welcome step towards creating a more level playing field for all local broadcasters in their relationships with television networks, satellite operators, cable providers, and streaming video services,” said Tribune Media in a release. “This represents a rational first step in media ownership reform policy allowing free and local broadcasters to remain competitive with multi-national pay TV giants and broadband providers,” said NAB.

Clyburn opposed an FCC order on reconsideration that will allow board members of NCE stations to avoid submitting personal information to receive FCC registration numbers because of its effect on collecting demographic data, she said. Pai has repeatedly said his FCC will be “data-driven," and the order counters that, Clyburn said. The FCC’s ownership rules have been “repeatedly faulted” by the 3rd U.S. Circuit Court of Appeals for not being based on real data, she said. Those ownership rules have little relevance to NCE stations, O’Rielly said. “Absent any practical reason to impose the collection burden coupled with the overall harm to public broadcasting, I am pleased to support its rejection.” he said. The FCC shouldn’t impose regulatory burdens on volunteers serving on the boards of public TV stations, Pai said.

America’s Public Television Stations supported the order. “We are pleased the Commission recognized that individuals who serve on noncommercial educational station boards are unpaid volunteers and should not be subject to unnecessary reporting requirements while providing a valuable public service,” APTS said.

An order allowing NCE stations that don’t receive CPB funding to fundraise for nonprofit third parties during 1 percent of their annual programming was approved unanimously, but Clyburn expressed reservations. “Will we be asked one year from now to allow 10 percent of total airtime for third-party fundraising?” Clyburn asked. It wouldn’t be appropriate for the order to be a gateway for NCE stations to turn into fundraising vehicles, she said. “My support does not expand beyond the limitations outlined in this Order,” she said. O’Rielly specifically disagreed, saying he thought the order was too restrictive. “Perhaps in the future, we should look to increase the permitted amount of fundraising to 5 percent of annual hours, or even more, from the 1 percent provided in the item.” The order will make it easier for NCE stations to fundraise for important causes without “having to file paperwork with the Commission and then wait for an answer,” Pai said. APTS praised the FCC for leaving CPB stations from the order, and the National Religious Broadcasters lauded the FCC vote. “This sensible policy will permit our members to better educate their listeners and viewers about critical needs in their communities -- something that is clearly in the public interest," said NRB CEO Jerry Johnson in a release.