ACA: FCC Can’t Mess With UHF Discount Basis

WASHINGTON—The American Cable Association is among those raising concerns about the potential impact of any new media consolidation.

ACA represents smaller and medium-sized, independent cable companies whose subscribers primarily are in rural and smaller suburban markets.

In comments (opens in new tab) to the Federal Communications Commission, the trade group discussed possible changes to the rule that bans a TV station group from reaching more than 39 percent of U.S. TV households.

It said that broadcasters must demonstrate that any benefits of new consolidation would outweigh the downsides including harms related to retransmission consent. “ACA remains skeptical that such a case can be made, and the recent revelations that allegedly ‘local’ news anchors must read scripts delivered from Sinclair corporate headquarters have only deepened our skepticism," ACA President and CEO Matthew M. Polka stated in an announcement.

[Read: State AGs Say FCC Can't Raise Ownership Cap]

The group responded to discussions about the UHF discount, which allows UHFs to reduce the number of households their signals reach when calculating audience reach. It noted that the system was created when analog UHF signals were weaker than analog VHF signals; now, it said, the NAB wants to expand the discount based not on signal strength but because stations “reach” a smaller audience than they did before as broadcast ratings have decreased — thus all stations UHF and VHF alike should now receive a discount.

ACA countered by saying the FCC has no discretion to change the basis of how the UHF discount is calculated; and that even if it could, the commission can’t rationally provide all stations with the same discount. “Ratings have nothing to do with a station’s ‘reach,’ at least as the FCC has always understood that term, and the FCC cannot now change that understanding, which, since at least 2004, has been Congress’ understanding too,” it wrote.

The cable group said the commission will have to justify any “Everybody Discount” in the same way it must justify raising or eliminating the national 39 percent cap itself. “If the FCC lacks authority to raise the ownership cap directly, it also lacks authority to circumvent the cap through creative changes to the UHF discount.”