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 Background on FCC Rules

Sweeping Changes Proposed for Ownership Limits

In 2003, the Federal Communications Commission (FCC) voted to repeal several rules that encouraged diverse media ownership and helped limit unchecked media consolidation.  

A wide range of public interest groups filed an appeal with the Third Circuit Court of Appeals to stop those rules from taking effect.  In June 2004, the Court stayed the effective date of the new rules and ordered the FCC to rewrite them.

In June 2006, the FCC restarted the process of rewriting its media ownership rules. It's widely believed the FCC will relax or eliminate its media ownership rules sometime in 2007.

The 2003 Proposed FCC Rules

Despite having held only one hearing on the complex issue of media consolidation over a 20-month review period, the FCC in 2003 voted 3-2 to overhaul limits on media concentration.  The rule changes would have (1) increased the aggregate television ownership cap to enable one company to own stations reaching 45% of our nation's homes (up from 35%), (2) lifted the ban on newspaper-television cross-ownership, and (3) allowed a single company to own three television stations in large media markets and two in medium ones.

In the largest markets, the rule changes would have allowed a single company to own up to three television stations, eight radio stations, the cable television system, cable television stations, and a daily newspaper.   

Broadcast Ownership Cap

Prior to the June 2003 FCC rule changes, TV networks were limited to controlling 35% of the national TV audience.  The FCC order would have increased this limit to 45%, allowing the big television networks (CBS, NBC, ABC, and FOX) to go on a buying spree acquiring local TV stations around the country.

The conglomerates that own these networks already dominate TV viewership, controlling as much as two-thirds of the prime-time audience.  These conglomerates also control the production of most of the programming they air on their networks.

The FCC order would have made the situation much worse, allowing more concentration of ownership and control over programming.  By arbitrarily choosing to increase by 10% the number of local TV affiliates a network could own, the FCC would have opened the door to less localism, diversity, and competition in most every media market in the country.

Congress stepped in to overturn the broadcast ownership rule changes.  After first voting to keep the ownership cap at 35%, both the House and Senate raised the aggregate cap to 39% by attaching a rider to a massive funding bill.  The 39% cap allowed Viacom/CBS and News Corp/FOX to keep all their stations.

UHF Discount

Another congressional fix (and the FCC rule) left unchanged the FCC's UHF 50% discount policy.  When designed in the 1980s, this discount compensated for the technical limitations of UHF stations that had weaker signals and reached fewer viewers than VHF stations.  This policy allowed UHF stations to count as reaching only 50% of the households that a VHF station reached for purposes of the broadcast cap.

The technological limitations of UHF signals are not a problem today.  That's because today, over 85% of consumers receive both UHF and VHF signals from cable and satellite transmissions, and there is no difference between a UHF and VHF signal when they are transmitted by satellite or cable.  Yet UHF stations continue to be counted as half a station when it comes to the national cap on network ownership of local stations.  This makes it even easier for the networks to grow and represents another blow to consumers.

More Information

• PBS's NOW with Bill Moyers has put together an extensive Web site about media consolidation.  It includes a summary of the 2003 rule changes, the way things used to be, and consolidation's impact on local media.

• The Center for Digital Democracy has created a helpful chart on the progression of the rule changes.

• Consumers Union has created a factsheet of myths and realities about the FCC and their June 2, 2003 decision about the media ownership rules.

The FCC is once again rewriting its media ownership rules. Take Action to protect diversity, localism and competition. To learn about other media ownership issues, read What's at Stake. See who's working on these issues in your community -- and across America -- and Get Involved.

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