Broadcast industry’s top lawyer makes case for deregulation in NAB podcast

The National Association of Broadcasters is pressing federal regulators to overhaul ownership restrictions that date to an era when television networks and newspapers dominated American media – decades before Netflix, YouTube or the iPhone existed.

In a recent episode of the NAB Podcast, Rick Kaplan, the organization’s chief legal officer, outlined the trade group’s argument that broadcast stations face an uneven competitive landscape.

While streaming services and cable channels can operate nationally or globally without restriction, television broadcasters cannot own stations reaching more than 39% of U.S. households — a cap that Kaplan said limits stations’ ability to pool resources and sustain local news operations.

“The defining feature of most of them is that they reach the entire country, if not the entire globe,” Kaplan said of modern media platforms. “But broadcasters, for example, are restricted from owning stations that would give them more than 39% of the country in terms of television households.”

The ownership rules, established when the Federal Communications Commission was formed in the late 1920s and 1930s, were designed to prevent excessive media concentration.

But Kaplan argued that those concerns no longer apply in a landscape where consumers choose from dozens of streaming services, social media platforms and cable networks — none of which face similar geographic limitations.

The NAB secured a significant win in August when the U.S. Court of Appeals for the Eighth Circuit struck down the FCC’s “top four” rule, which barred a single company from owning two of the four highest-rated television stations in a local market. Kaplan called the decision critical for stations trying to compete with platforms that have vastly greater scale.

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“Television is not the only game in town,” he said. “Just think about what you do when you go home or your family does when they go home. What do they turn on? And all these things are interchangeable, whether it’s a streaming service or they get on YouTube or TikTok or local station.”

The court ruling shifts the thinking on regulation, with the association and FCC primed to move.

The FCC has historically been required to review its ownership rules every four years, but that process has lagged significantly. The commission only recently opened its 2022 quadrennial review.

Radio faces similar constraints

Radio broadcasters operate under equally restrictive local ownership caps. In New York, the largest U.S. radio market, a single company can own no more than five FM stations out of more than 100. Those limits were established three decades ago, before satellite radio services like SiriusXM or streaming platforms like Spotify entered the market.

Kaplan argued that consolidation could actually benefit listeners by enabling owners to support niche formats that wouldn’t be financially viable in a fragmented market.

“If we were able to now offer to our clients a more diverse array, and I can own, say, 10 stations or 20 stations, then I can have all sorts of formats and all sorts of flares,” he said. “I’m not going to duplicate my formats. That makes no sense.”

The NAB expects the FCC to address radio ownership rules within the next year as part of its quadrennial review process.

Authority debate over national cap

Some opponents of deregulation claim the FCC lacks authority to change the 39% national ownership cap for television without congressional approval. Congress set that figure in 2004 after the FCC had considered raising the previous 35% limit to 45%. At the same time, lawmakers exempted the national cap from the FCC’s mandatory four-year review cycle.

Kaplan dismissed the argument that this exemption stripped the FCC of regulatory authority.

“Congress is not stupid. Congress would have said that,” he said. “All Congress said was you don’t have to review it anymore.”

He noted that the Supreme Court has repeatedly affirmed the FCC’s broad authority to regulate broadcast ownership in the public interest, and that the commission adjusted ownership caps multiple times before 2004.

Chairman signals openness to reform

FCC Chairman Brendan Carr has indicated support for revisiting ownership restrictions. Kaplan said Carr, who previously served as a commissioner, understands the competitive pressures facing broadcasters.

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“He looks at this issue and says, why in the world are big tech companies who can buy countries several times over, why are they able to operate unfettered while broadcasters have all these rules and regulations that just from day one restrict our ability to compete?” Kaplan said.

Critics of deregulation argue that consolidation reduces local voices and diversity of viewership options.

Kaplan countered that broadcast stations’ business model depends on local programming — unlike national cable channels or streaming services — and that sharing operational costs across multiple stations enables rather than threatens local journalism.

“If we go away, who’s going to cover the local news?” he said. “It’s not Fox News or MSNBC or CNN or anything in between or around. It is your local stations.”

The NAB has encouraged station owners and managers to contact members of Congress and file comments with the FCC.