Newsmax challenges FCC ownership cap review in detailed filing

Newsmax Media filed extensive comments with the Federal Communications Commission opposing changes to broadcast television ownership limits, arguing that relaxing restrictions would reduce competition and viewpoint diversity in local markets.

The cable news network submitted a 33-page document on July 23 responding to the FCC’s request to refresh the record on ownership rules. Current regulations cap broadcast station ownership at 39 percent of national television households, though some groups exceed 50 percent when accounting for a technical discount applied to UHF stations.

“Simply put, the Horizontal Ownership Cap is good for diverse voices and that is good for all voices, including conservative ones,” wrote Christopher Ruddy, Newsmax’s chief executive officer.

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The filing presents both policy and legal arguments against modifying ownership limits. Newsmax, which went public this year and trades under ticker NMAX, contends current consolidation levels already concentrate too much control among major broadcast companies.

Distribution leverage concerns

Newsmax detailed competitive concerns stemming from its negotiations with cable and satellite providers. The company claims broadcast station owners use local television leverage to favor their own cable networks over independent competitors.

“Based on interactions with multiple distributors, Newsmax believes that Fox Corporation, for example, attempted to undermine Newsmax’s distribution on pay-TV platforms in order to promote a competing service, the Fox News Channel,” the filing stated.

The company cited Nexstar Media Group’s ownership of broadcast stations and cable news channel NewsNation as problematic. According to Newsmax, Nexstar uses broadcast leverage to secure higher license fees for NewsNation despite lower ratings.

“Although NewsNation has very low ratings, which Newsmax vastly surpasses throughout multiple dayparts, Nexstar appears to have used its broadcast stations as leverage to coerce pay-TV distributors to pay a higher license fee for NewsNation,” the document stated.

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Legal authority questions

Beyond policy arguments, Newsmax contends the FCC lacks authority to modify ownership limits without congressional authorization, citing the Supreme Court’s Major Questions Doctrine.

“Although Congress between 1996 and 2004 directed the FCC to review the Horizontal Cap, and explicitly gave the Commission permission to change it, in 2004 Congress unequivocally set the national audience reach limit at 39 percent and removed any authority for the Commission to adjust it,” the filing argued.

The company also wants elimination of the UHF discount, arguing the technical rule is obsolete since digital television transmission eliminated signal quality differences between UHF and VHF stations.

Newsmax warned against repeating radio industry consolidation, noting major broadcasters including iHeartMedia, Cumulus Media and Audacy have undergone debt restructurings or bankruptcy following acquisition sprees.

Major television station groups carry substantial debt loads, with Nexstar at $6.5 billion, Sinclair at $4.2 billion and Tegna at $3.09 billion.

The FCC requested updated comments in June but has not indicated any timeline for potential rule changes.