The Federal Communications Commission will vote Aug. 6 on a proposal that could dramatically reshape local TV ownership by loosening long-standing limits on how many stations a single company can own. FCC Chairman Brendan Carr announced the vote Wednesday in an op-ed for Breitbart.

Carr couched the announcement in a critique of the current ownership cap, which limits station groups to reaching no more than 39% of the U.S. population. Carr wrote:

As Congress provided in the Communications Act, the FCC licenses local broadcast TV stations and, in turn, those stations have an obligation to operate in the public interest—not a narrow, partisan one. Broadcasters understood that meeting their public interest obligations meant identifying and responding to the needs of the local communities they were licensed to serve.

So, what changed? For one, New York and Hollywood interests have steamrolled those local TV stations and the broader media market in recent years in ways that run directly counter to the regulatory framework that Congress and the FCC put in place.

The ownership cap was established by the Telecommunications Act of 1996 and later modified by the Consolidated Appropriations Act of 2004.

Carr argued that local broadcasters cannot compete with what he called “national programmers” — specifically Disney and Comcast — whose content now reaches 100% of the U.S. population through broadcast, cable, streaming and other digital platforms. The national ownership cap, he wrote, no longer prevents monopolies but instead protects the country’s largest media companies. He wrote:

The results speak for themselves. Local TV stations today lack the power to preempt or refuse to air national programming that does not fit their communities’ values. National programmers are now charging local TV more and more for the privilege of airing their shows. Local TV stations are struggling to find the resources to produce live, trusted, and local news programming. Many local broadcast TV stations are getting hollowed out as a result and turning into little more than mouthpieces for programming produced in New York and Hollywood. That is not what Congress or the FCC intended.

It’s time to restore balance to the broadcast airwaves. And the FCC has a plan to do just that.

Carr said the Aug. 6 vote would technically preserve the 39% cap but allow “case-by-case” exemptions when the FCC determines they would serve the public interest. He did not explain what criteria the commission would use to make that determination, particularly for companies that already own hundreds of stations.

There’s another wrinkle in the ownership cap that’s rarely discussed, perhaps because it complicates the conversation. It’s called the UHF discount.

Under the rule, television stations broadcasting on UHF channels (14 and higher) count as reaching only half of the households in their markets when the FCC calculates compliance with the national ownership cap. VHF stations (channels 13 and lower), by contrast, count at full value.

The discount made sense decades ago, when most Americans watched television with over-the-air antennas. UHF signals generally didn’t travel as far as VHF signals, so the FCC assumed UHF stations reached fewer viewers.

But today, far fewer Americans rely on antennas. Horowitz Research estimates that only about 20% of U.S. households use them, down from 32% in 2020. That means station groups can technically comply with the 39% ownership cap while reaching far more of the country through cable, satellite and streaming services. Critics argue the FCC’s calculations no longer reflect how Americans actually watch television.

Gabelli Research estimates that without the UHF discount, Nexstar — the nation’s largest owner of local TV stations — would already reach well over half of U.S. households, even though the FCC counts its national reach at 39%.

A long trend of relaxing ownership rules

If the Republican-controlled FCC relaxes the 39% ownership cap, as it almost assuredly will, it would be the latest step in a decades-long march toward fewer ownership restrictions. Along the way, the FCC has scrapped rules barring newspapers from owning TV stations in the same market and eased limits on how many stations one company can own or control in a single city.

For most of the FCC’s history, the trend has been toward allowing broadcasters to own more stations. The commission first imposed ownership limits in 1941, and by 1944 no person or company could own more than five TV stations. That cap rose to seven stations in 1954 and 12 in 1984.

At that point, Congress shifted the focus from the number of stations to how much of the country a single company could reach, setting a national audience cap of 25%. That threshold was eventually raised to 35% and then to the current 39%.

The FCC tried to push the cap even higher in 2002, voting to raise it to 45%. But after opponents sued, the 3rd U.S. Circuit Court of Appeals ruled that only Congress — not the FCC — could make that change.

Congress directed the FCC to “modify” the ownership cap to 39%. Keep that word — “modify” — in mind. It becomes central to the question of whether the FCC has the authority to change the cap without Congress.

The Supreme Court has already weighed in on the FCC’s authority to change telecommunications rules without Congress. In a 1993 decision involving another provision of the Telecommunications Act — not the ownership cap itself — the Supreme Court said the FCC could “modify” the rules. There’s that word again. What does it actually mean?

Justice Antonin Scalia supplied a definition: “’Modify,’ in our view, connotes moderate change.” He then illustrated the distinction in memorable terms: “For the body of a law, as for the body of a person, whether a change is minor or major depends to some extent upon the importance of the item changed to the whole. Loss of an entire toenail is insignificant; loss of an entire arm tragic.”

Congress reinforced that point in 2004 when it amended the Telecommunications Act. The law expressly states that the FCC’s periodic review authority “does not apply to any rules relating to the 39 percent national audience reach limitation.”

That language is the cornerstone of opponents’ argument that the FCC does not have the authority to change ownership rules; only Congress does. (The American Television Alliance lays out that case in a detailed legal paper.)

The immediate impact

Any change to the ownership cap would have immediate consequences for what could become the largest local TV consolidation in U.S. history: Nexstar’s proposed acquisition of Tegna. Without changes to the current rules, the combined company would reach roughly 80% of U.S. households.

President Donald Trump initially opposed relaxing the cap. Less than three months later, however, he changed his stance, urging the FCC to approve the deal. “Letting Good Deals get done like Nexstar – Tegna will help knock out the Fake News because there will be more competition, and at a higher and more sophisticated level… GET THAT DEAL DONE!” he wrote on social media.

Even if the FCC changes the ownership rules, however, the merger still faces another major obstacle: a lawsuit filed by the attorneys general of eight states — California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia — seeking to block the deal.

What’s next?

On Aug. 6, the FCC is likely to loosen the 39% ownership cap. Opponents will almost certainly sue, arguing that only Congress — not the commission — has the authority to make such a sweeping change. The case will likely wind its way through the federal courts, and long before judges reach a final decision, voters will decide whether Democrats regain control of Congress — a result that could complicate or even undo the FCC’s plans.

In the meantime, Carr argues that leaving the rules unchanged carries its own risks. He wrote:

If the FCC does not act, we do not need to imagine the bleak media future ahead. Just look at local newspapers. Much like the national cap, the FCC maintained an outdated rule for more than 40 years that limited investment in local newspapers. The FCC kept that rule in place until 2017, long after the economics of local journalism had shifted. Meanwhile, local newspapers shut down by the dozen, and many Americans are now left to choose from a small number of national papers. We can’t let local broadcast TV follow the same path.