The big news in the broadcast industry in August was the Federal Communications Commission’s vote to eliminate its TV-station ownership cap.
Advocates of removing the limit, which bars a single broadcaster from reaching more than 39% of all U.S. TV households, argued that it hindered local stations and their ownership groups from competing effectively with social media giants, digital ad platforms and streaming services—competitors never envisioned in 2004 when the cap was raised from 35% to 39%.
Those favoring its continuation argue that the FCC lacks the authority to eliminate the cap without new legislation, and that the move will promote further media consolidation and a loss of voices in markets.
With all of that said, this really isn’t a column about lifting the cap. Rather, it’s about competition in a government-regulated market and a comment from Gary Weitman, chief communications officer at Nexstar Media Group.
An Aug. 6 Variety.com article quoted Weitman as saying, in part: “The FCC’s decision to eliminate the broadcast ownership cap is a welcome, necessary and long-overdue recognition of today’s competitive landscape, which is dominated by legacy Big Media and Big Tech. For too long, local broadcasters were handcuffed from reaching the scale they needed to compete on a more level playing field by outdated federal rules that didn’t apply to the largest and most powerful companies like Google’s YouTube, Meta’s Instagram or Netflix.”
The comment made me wonder how else local broadcasters have been “handcuffed from” competing “on a more level playing field by outdated federal rules.” If the 22 years since the 39% cap was established is a standard for determining what is “long overdue,” how about the 30 years since Congress and the FCC established rules for the transition from analog to DTV or the 28 years since the first digital TV signals went on air?
Broadcasters are required to use MPEG-2 TS, a compression scheme and digital packaging technology first published in the mid-1990s. Since then, a succession of more-efficient compression algorithms has been released—with the latest (VVC) being 75% to 80% more efficient than MPEG-2. On the packaging and encapsulation side of the ledger, the world began to embrace IP as the World Wide Web gathered steam in the early 1990s.
Now, the television industry waits to see what the FCC will do when it comes to sunsetting ATSC 1.0 so it can fully embrace a new standard that has no restrictions on using the latest—and most efficient—compression schemes as they come along, nor the inability to encapsulate and package bits like the rest of the world.
The hope is the agency will make rules enabling broadcasters to transition by setting up ATSC 1.0 lighthouses to free up channels to take full advantage of the ATSC 3.0 capabilities and services while continuing to transmit legacy DTV to viewers with older sets.
While the FCC and the industry may indeed overcome this hurdle, I am not confident that, in the long run, it is possible to expect a government-regulated industry to compete with unregulated businesses—especially when 20 or 30 years seems to be how long it takes for the regulator to modernize rules, and unregulated competitors can pivot on a dime.
