Deregulating Media Ownership for the Modern Era
TL;DR
Background: The way Americans consume video content has fundamentally changed. Once dominated by traditional broadcast television, the landscape now teems with streaming services, social-media videos, and online news. In this new world, the rules governing who can own and operate television stations serve to stifle competition. The Federal Communications Commission (FCC) is now considering a sweeping review of these regulations as part of an initiative dubbed “Delete, Delete, Delete.”
But… For decades, the FCC has enforced rules to ensure a diverse media landscape with multiple viewpoints and a focus on local communities. These rules limited how many TV stations one company could own—both nationally and within a local area—on grounds that preventing excessive concentration promotes competition and prevents a few powerful voices from dominating the airwaves. But the rise of digital media has drastically altered the competitive environment.
However… The FCC’s outdated ownership rules hinder broadcasters’ ability to compete effectively in a market dominated by digital platforms, streaming services, and online content. The regulations impose asymmetric burdens on broadcasters, favoring their largely unregulated digital competitors. While broadcasters must navigate ownership caps, public-interest obligations, and licensing requirements, digital players face few comparable constraints. This regulatory imbalance leaves traditional broadcasters at a structural disadvantage in vying for audiences, talent, and advertising revenue.
KEY TAKEAWAYS
Ending the National Ownership Cap
Under a decades-old FCC rule, no single entity may own television stations that collectively reach more than 39% of U.S. households. In the current market, this national cap restricts broadcast groups’ ability to achieve scale and compete for audiences, advertising dollars, and high-quality programming with much larger digital and streaming companies, who enjoy national and even global reach. The rule was originally designed to prevent any single voice from dominating the airwaves, but in today’s decentralized digital environment, that concern is far less pressing.
Furthermore, empirical evidence suggests the current rules do not promote diversity or localism. Writing for a unanimous U.S. Supreme Court in FCC v. Prometheus (2021), Justice Brett Kavanaugh concluded that the FCC had acted reasonably in determining that its media-ownership rules were no longer needed to serve the agency’s public-interest goals—including viewpoint diversity—given the dramatic changes in the media marketplace. The decision reflects growing judicial recognition that legacy regulatory frameworks may actually inhibit broadcasters’ ability to serve local communities and compete with unregulated online platforms. Revisiting the national cap is a necessary step toward modernizing media policy for a competitive and pluralistic information environment.
Relaxing Local-Ownership Rules
Current FCC rules generally prohibit common ownership of more than one of the four highest-rated TV stations in a given local market. They also ban ownership of more than two stations in any market, regardless of market size or competition. These rigid, across-the-board rules do not reflect the current reality in which broadcasters face intense competition from numerous online-video providers, as well as social media. The FCC’s limits prevent stations from achieving the scale needed to support local services like news and public-affairs programming, and to compete effectively. Moreover, applying the same restrictions to large metropolitan areas and small rural markets alike ignores vast differences in competitive conditions.
Section 202(h) of the Telecommunications Act of 1996 requires the FCC to review, repeal, or modify ownership rules that are no longer necessary. The FCC should recognize that the entry and growth of digital-video competitors have rendered these local-ownership rules not just unnecessary, but harmful to competition and consumer welfare.
Revisiting Joint Sales Agreements
Joint sales agreements (JSAs) allow one television station to sell advertising time for another station within the same market. Historically, the FCC considered JSAs involving 15% or more of a station’s advertising time as attributable-ownership interests, effectively counting them toward ownership caps. But the FCC reversed this stance in 2017 by eliminating the attribution rule and permitting broader use of JSAs without affecting ownership calculations.
The current “Delete, Delete, Delete” proceeding is an opportunity to further relax the JSA regulations. These agreements provide essential operational efficiencies and support for local journalism, especially in smaller markets. In an era dominated by digital and streaming platforms, such collaborative arrangements could prove vital for traditional broadcasters seeking to remain competitive and financially viable.
Critics of JSAs often argue that they enable de-facto consolidation, potentially reducing viewpoint diversity in local markets. But this concern overlooks the economic realities faced by many small and mid-sized broadcasters, particularly in areas where advertising revenues are thin and operational costs are rising. JSAs can preserve independent voices by enabling stations to remain on the air through shared resources, rather than being forced to shut down or sell outright. Rather than treating JSAs as stealth consolidation, the FCC should recognize them as flexible tools that help sustain pluralism and local content in a highly competitive media ecosystem.
Diversity and Localism Concerns
While deregulation may affect viewpoint diversity and “localism,” ownership limits are a crude and ineffective tool in an era when consumers can access virtually unlimited information sources online. Rather than achieving viewpoint diversity via ownership restrictions, the FCC should consider targeted programs to support minority and female ownership as more effective alternatives.
“Localism” is the principle that broadcast licensees should serve the needs and interests of their local communities. Critics of relaxing ownership rules argue that deregulation would sacrifice local coverage in favor of regional or national coverage, which is often dominated by larger metropolitan areas.
But despite (or even because of) the current ownership limits, local broadcasters continue to struggle financially. In response to such challenges, broadcast stations often reduce local news coverage. By contrast, consolidated ownership groups might be better positioned to invest in local news and programming, or to share resources internally.
Moreover, the rise of digital-only local news outlets suggests that there are already various channels available to meet local-information needs.
For more on this issue, see ICLE’s comments to the FCC’s “Delete, Delete, Delete” initiative or read the Truth on the Market post “ICLE’s Comments, Comments, Comments Re: Delete, Delete, Delete.”