U.S. FCC to launch 'comprehensive review' of media regulations

WASHINGTON (Reuters) - Federal Communications Commission Chairman Ajit Pai on Tuesday said the top U.S. telecommunications regulator will launch a “comprehensive review” of regulations that restrict consolidation among media companies, potentially opening the door to a new wave of deals among broadcasters and newspapers.

FILE PHOTO: Ajit Pai, Chairman of U.S Federal Communications Commission, delivers his keynote speech at Mobile World Congress in Barcelona, Spain, February 28, 2017. REUTERS/Eric Gaillard

At a speech to broadcasters in Las Vegas, the FCC chief said the commission will vote on May 18 to start the review. He noted that close to 1,000 pages of media regulations are on the books.


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He vowed to “aggressively” modernize the FCC’s rules and “cut unnecessary red tape and give broadcasters more flexibility.”

He said the review will include revising the government’s’ media ownership rules, “including one dating back to 1975,” adding that the review will cover rules pertaining to traditional broadcasters, newspapers and cable and satellite carriers. Pai said the ownership review will be a “much more fact-based discussion.”

Revising or ending a cross-ownership ban could be a big win for newspaper companies and broadcasters. Many Democrats strongly oppose relaxing the rules, saying it would lead to major companies controlling a growing number of media outlets.

The National Association of Broadcasters has asked the FCC to reconsider the decision, saying “broadcasters must be permitted to achieve economies of scale and scope.”

In 2016, the FCC under Democratic President Barack Obama voted to retain nearly all rules limiting cross-ownership of newspapers, radio and TV stations in the same market. Struggling newspaper companies had pushed for the FCC to relax the restrictions. The rules also bar companies from owning more than two TV stations in the same market and also limits the number of radio stations that can be owned in one market.

The FCC’s barriers to media consolidation go back to 1975, when the commission banned cross-ownership of a newspaper and broadcast station in the same market unless it granted a waiver, but allowed existing ownership structures to remain in place.

Pai, named chairman by Republican President Donald Trump in January, said last year the FCC should have repealed the ban on ownership of a broadcast station and newspaper in the same market, citing the closing of 400 U.S. newspapers, or about a quarter of daily titles, since 1975 as advertising revenue has sharply declined.

“It makes no sense for the government to be discouraging investment in the newspaper industry,” Pai said last year.

Last week, the FCC voted to reverse a 2016 decision limiting how many television stations some broadcasters can buy. The decision could lead to a possible acquisition by Sinclair Broadcast Group Inc SBGI.O of Tribune Media Co TRCO.N, some Democrats in Congress said.

Pai said last Thursday that he plans to take a new look at the current overall limit on companies owning stations serving no more than 39 percent of U.S. television households.

Last year, the FCC left in place rules barring mergers among the top four national television broadcast networks: Walt Disney Co's DIS.N ABC, CBS Corp's CBS.N CBS, Comcast Corp's CMCSA.O NBC and Twenty-First Century Fox Inc's FOXA.O Fox.

Pai also said the FCC plans to vote to eliminate the “main studio rule” requiring radio and television broadcast stations to maintain a main studio in or near the community of their license.

Reporting by David Shepardson, Editing by Franklin Paul and David Gregorio