Pulling the 39% Thread: Why the FCC Must Fix More Than the Broadcast Cap
The Federal Communications Commission’s (FCC) 39% broadcast-ownership cap is a rule for a three-network world trying to govern a streaming one. Retiring it makes sense. Retiring it by itself does not.
For four decades, the FCC has barred any company from owning television stations that collectively reach more than 39% of U.S. television households. The rule reflects an older theory of broadcast regulation—one that treats the airwaves as a scarce public resource and promotes competition, localism, and viewpoint diversity through bright-line ownership limits rather than case-by-case review.
That theory once had an intuitive logic. When the modern cap emerged, most Americans got their news and entertainment from stations affiliated with the “Big Three” networks. Limiting any owner’s national footprint could plausibly prevent too much editorial influence from accumulating in too few hands.
That media world has vanished. Broadcasters now compete not only with one another, but also with streaming services, virtual multichannel video programming distributors (vMVPDs), podcasts, and social platforms whose national and global reach dwarfs anything a station group could assemble under the 39% cap. The rule now binds the competitors least able to bear it while leaving their largest rivals untouched.
The FCC has signaled that it intends to repeal the cap and review broadcast consolidation case by case. As a matter of competition policy, that move is overdue. As a matter of law, it is messier. Congress wrote the 39% figure into an appropriations statute, raising the question of whether the FCC may erase it on its own.
The policy debate also cannot stop at ownership. Broadcast regulation operates as an interconnected system. Its other parts include retransmission consent, which governs the terms and fees under which distributors carry broadcast signals; must-carry rules, which can require carriage of qualifying local stations; and FCC standards requiring the parties to negotiate in good faith. Together, these rules divide bargaining power among many of the same companies.
Removing the cap would give larger station groups more leverage over the cable, satellite, and streaming distributors that carry their signals. The retransmission regime was not designed to offset that added power. Repealing the cap while leaving the carriage rules untouched would therefore do less to eliminate a distortion than to move it elsewhere.
The better course is comprehensive reform. Because ownership limits, retransmission consent, and bargaining standards all fall within the FCC’s jurisdiction, the agency should consider them together. Otherwise, repeal may simply reshuffle bargaining power among industry players while consumers keep paying the bill.