Cable lobby readies a lawsuit over the FCC's move to scrap the 39 percent TV ownership cap

Techdirt writes that FCC chief Brendan Carr is particularly interested in helping Sinclair, Tegna and Nexstar merge, and it calls that a reward for their loyalty to the president ^[11]. Under the rule at issue, no one company that owns broadcast stations can reach more than 39 percent of the country's TV households ^[2]. The report does not put a dollar figure on the extra money the cable side expects combined groups to extract ^[5].

On paper, the cable lobby's petition is about the FCC's authority to repeal the rule ^[4]. Free Press makes the same authority argument for a different reason. "Changing this limit requires congressional action, but Carr doesn't care," Free Press General Counsel Matt Wood said ^[7]. His forecast is about local news: "The result would be just one or two dominant broadcasters in every market," Wood said ^[8].

The cable plaintiffs are objecting to consolidation among the companies that would bill them more ^[5]. Comcast NBCUniversal is among the cable giants that have lobbied the FCC to also eliminate the rules keeping the big four networks from merging, according to Techdirt ^[10]. The same report says Comcast and Charter lobbied, successfully, for less scrutiny of their own consolidation across broadband and TV ^[12].

For anyone who pays for or budgets for local broadcast channels, two decisions set the exposure. The first is whether the FCC grants the petition and keeps the cap while the case runs ^[4]. The second is how a court rules on the agency's authority. If the FCC grants the stay and then loses, the station groups you negotiate with stay the size they are now. With a stay and an FCC win, mergers can go ahead, only later. Without a stay, an FCC loss is the hardest cell to plan for, because combinations may already be under way when the ruling lands. The fourth cell, no stay and an FCC win, is the outcome the cable lobby is warning about, and it is the one where combined groups form soonest ^[5].

I'd plan against the two no-stay cells until the FCC answers the petition, since a denial would let mergers proceed while the case is still open. The trade-off is setting aside budget for higher payments that a stay, or a court loss for the FCC, would make unnecessary.