FCC clears way for big TV mergers, eases broadband price limits
FCC Chairman Ajit Pai made good today on his vow to reinstate a rule that makes it easier for big TV station owners to grow bigger.
The Federal Communications Commission voted Thursday for new light-touch rules aimed at broad business broadband deregulation, loosening price caps and restrictions created to boost competition in the market that provides high-capacity internet to businesses, hospitals, libraries, schools, public safety offices, ATM networks, and cell phone networks. The data showed that approximately 97 percent of business customer locations had access to two or fewer BDS providers, with almost three-in-four locations with only a monopoly provider. Democrats in Congress have raised their fears with the commission that more consolidation could harm consumers.
BDS generated a number of back-and-forth debates during Tom Wheeler's tenure as FCC chairman.
The FCC on Thursday voted to restore an arcane rule that has allowed station groups to fall within media ownership limits.
The National Association of Broadcasters high-fived the 3-2 vote to reinstate the discount.
The FCC says today that the decision restricted deals "without any analysis of whether this tightening was warranted given current marketplace conditions".
Pai, however, argued that the elimination of the discount needed to go hand-in-hand with an examination of the media ownership cap. Currently, Sinclair Broadcast is said to be nearing a potential deal to acquire Tribune Media's 42 TV stations, and large broadcast powers like Nexstar Media and CBS have both expressed interest in expanding their broadcast TV footprints should the FCC revert back to the old ownership rules. The agency's 2011 Information Needs of Communities Report (INC Report) recommended such action, and in a statement accompanying the 2012 proceeding, former Chairman Genachowski said, "Allowing noncommercial stations to partner with charities, churches, and other religious organizations, schools, and other non-profits to raise money for worthy causes will enable these stations to help meet the needs of their local communities".
A Sinclair/Tribune deal "would be bad news for consumers" because it would reduce independent voices in some markets and could lead to higher pay-TV bills because Sinclair charges more than Tribune for cable companies to carry their stations, Pelosi and Pallone wrote.
FCC officials said the new business data services rules are aimed at allowing competition rather than regulation to determine pricing.
Pai said FCC price controls were preventing existing providers from expanding their networks and discouraging new entrants, such as cable companies.
Clyburn complained that the new rules define a market as competitive even if it has only one bulk broadband provider, as long as a competitor has access lines within half a mile.
The European Union is concerned that this sudden change of course, followed by the rapid action that is foreseen in the draft Report and Order may be harmful for consumers and competition, and that it will further aggravate the imbalance in BDS regulatory practice that already exists between the USA and EU and other nations.
"Instead of taking action to promote competition and deployment, serve the public interest, and prevent the exercise of market power that is a drag on the USA economy, Chairman [Ajit] Pai and Commissioner [Michael] O'Reilly have approved an order that doubles down on incumbent market power, forcing businesses, hospitals, schools and ultimately consumers to pay more for essential connectivity", Berenbroick said.