Coalition questions FCC authority to modify broadcast ownership rules set by Congress

A broad coalition of industry groups, rural broadband providers and labor unions has mounted coordinated opposition to broadcaster proposals to eliminate or modify the national television ownership cap, citing concerns over rising retransmission consent fees and questioning the Federal Communications Commission’s legal authority to make such changes.

The opposition comes as the FCC’s Media Bureau seeks to refresh the record in the National Television Multiple Ownership Rule proceeding, which would address the 39% national audience reach cap that currently limits how many television stations a single company can own across the country.

NTCA–The Rural Broadband Association presented data showing rural multichannel video programming distributors faced average retransmission consent fee increases of $104,020 in 2024, representing a 33% jump over 2023 levels. These fees now constitute 37% of total operating expenses for rural operators, up from 27.9% in 2023.

“These retransmission consent fee increases have consequences for rural communities as rural MVPDs are driven from the market,” NTCA stated in its filing. Nearly one-quarter of surveyed rural providers indicated they are unlikely to continue offering MVPD service, while 7.9% report existing plans to exit the market entirely.

Michael Romano, NTCA’s executive vice president, said the bargaining power imbalance between small rural providers and consolidated broadcast groups remains a significant factor in fee escalation.

Survey data showed 94% of rural providers cite increased programming costs as a reason for discontinuing video service, while 64.2% identify difficulty negotiating with consolidated broadcast groups as a significant factor.

Multiple parties challenged the FCC’s authority to modify the ownership cap, arguing Congress retained that power when it set the current 39% limit in the 2004 Consolidated Appropriations Act.

The American Television Alliance, representing pay-TV providers, argued that Congress simultaneously set the specific cap and excluded it from the FCC’s periodic ownership rule reviews. “Congress neither wanted to, nor did, select a specific national cap while at the same time allowing the Commission to change that cap as soon as the very next day,” ATVA stated.

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NCTA–The Internet & Television Association echoed this position, stating that “the best reading of this statutory language is that, in expressly imposing the 39% national cap by statute and removing the cap from the Commission’s quadrennial ownership rules review, Congress eliminated the Commission’s authority to modify or repeal the cap.”

Legal arguments gained additional weight following the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which ended judicial deference to agency interpretations of ambiguous statutes. Under the new standard, courts must determine the best reading of statutory language rather than deferring to agency positions.

The National Association of Broadcast Employees and Technicians-Communications Workers of America argued that broadcast companies’ financial performance contradicts industry distress claims. The union pointed to recent earnings reports showing Nexstar Media Group reported “record” fourth-quarter revenue and increased its dividend for the twelfth consecutive year.

“If the broadcast industry were actually facing an existential threat, the best evidence would be its financial performance,” NABET-CWA stated. “The broadcast companies are unable to produce that evidence because it does not exist.”

The union also challenged industry arguments that consolidation would benefit local news, citing research showing larger station groups often duplicate content across markets rather than increase local programming.

Opposition groups consistently raised concerns about potential consumer price increases from further broadcast consolidation.

ATVA presented data showing declining broadcast viewership alongside rising retransmission fees, creating what they termed a “doom loop” where higher fees drive cord-cutting, which further pressures broadcasters to raise fees.

Broadcasters mount unified push to eliminate national ownership restrictions in latest FCC filing

The group noted that eliminating the ownership cap would occur alongside recent court decisions allowing more local broadcast consolidation, potentially compounding broadcaster leverage in retransmission negotiations.

“Most retransmission consent agreements have ‘after acquired station’ clauses in them,” ATVA explained. “So when a large station group with higher rates purchases a smaller station group with lower rates, the smaller group’s rates automatically increase—as do consumer bills.”

The ownership cap debate occurs as broadcasters seek regulatory relief to compete with streaming platforms and tech companies.

Major broadcast groups, including Nexstar, Sinclair and Gray Television, have supported eliminating or modifying current ownership restrictions.

Broadcast ownership groups argue survival requires consolidation amid streaming competition

However, opposition filings suggest the regulatory battle may face significant legal hurdles regardless of policy merits. The convergence of congressional intent, Supreme Court precedent, and documented consumer impacts presents a complex regulatory landscape for the FCC to navigate.

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The Commission has not indicated a timeline for action on the ownership cap proceeding, though industry observers expect continued debate as broadcasters and their opponents present additional evidence and legal arguments.