WASHINGTON — The Federal Communications Commission voted 2-1 Thursday to repeal a national ownership cap that limited how many television households a single company could reach, immediately drawing potential court challenges from critics who argue the agency lacks statutory authority for the move.
The previous rule prevented any one media company from owning broadcast stations that collectively reached more than 39 percent of U.S. television households. Broadcasters have long sought the cap's removal, saying it hindered their ability to scale operations.
FCC Chairman Brendan Carr supported the repeal, calling it overdue given the changing competitive media landscape. Carr said inaction risked local stations declining along the same trajectory as newspapers.
Carr argued that allowing broadcasters to expand their scale would help them attract capital and boost advertising revenue, enabling stations to produce more local news and programming as a counterweight to growing national programmers.
Commissioner Anna Gomez, the sole Democrat on the commission, voted against the repeal. She said the large station groups positioned to expand are national companies, not local broadcasters, and that they increasingly dictate content for local markets.
Gomez warned the decision could shrink newsrooms as large groups cut costs in local operations. Replacing a squeeze from technology giants with one from large media companies, she said, offers no protection to the communities the cap was designed to serve.
Skepticism about the FCC's authority cuts across party lines. Sen. Ted Cruz, R-Texas, has voiced doubts the commission can repeal the cap on its own.
Michael O'Rielly, a former Republican commissioner, has said authority for such a change rests with Congress, since the cap was established by statute. Former House Majority Leader Tom DeLay, who negotiated the 39 percent figure into a 2004 appropriations bill, wrote that regulatory agencies cannot defy laws enacted by Congress.
The National Association of Broadcasters, the industry's primary lobby, quickly praised the decision. Broadcasters have consistently argued the cap prevented them from competing with unregulated technology firms that have siphoned off local television advertising revenue.
Nexstar Media Group, a major player in broadcast television, championed the repeal. The company previously obtained an FCC media bureau waiver to merge with Tegna, a transaction that created a broadcast entity reaching approximately 80 percent of the country with around 260 stations.
The Nexstar-Tegna merger closed, but a judge ordered the companies to keep assets and operations separate pending an antitrust lawsuit brought by state attorneys general and DirecTV over concerns about market concentration.
