The Federal Communications Commission voted 2-1 on Thursday to eliminate the national cap on television station ownership, removing a limit that has stood for more than two decades and opening the door to a wave of consolidation across the broadcast industry.
The rule barred any single company from owning stations reaching more than 39 percent of American television households. It will be replaced by a case-by-case review of acquisitions, swaps and other transactions, The Hill reported.
The vote fell along party lines. Chairman Brendan Carr and Commissioner Olivia Trusty, both Republicans, supported the change. Commissioner Anna Gomez, the panel's only Democrat, opposed it, Quartz reported.
Carr has argued that the cap made little sense at a time when local broadcasters compete with streaming services, social media platforms and other digital companies that face no equivalent restrictions. The commission said in a statement that eliminating the cap would allow broadcasters to compete with unregulated digital rivals, according to The Hill.
Gomez called the move unlawful on its face, arguing that because Congress set the 39 percent threshold in federal law, only Congress can change it, Variety reported. Colorado Public Radio reported that Representative Frank Pallone of New Jersey, the ranking Democrat on the House Energy and Commerce Committee, made the same argument in a letter to Carr earlier this year. Senate Commerce Committee Chairman Ted Cruz has also questioned whether the FCC could act without legislation.
The commission maintains that the cap is an agency rule rather than a statutory requirement and can therefore be lifted under the Communications Act, Quartz reported.
The National Association of Broadcasters welcomed the decision, calling it a generational step toward strengthening local stations. Senator Elizabeth Warren said the vote would roll out the red carpet for antitrust problems, according to Quartz.
Nexstar Media Group, which owns more local stations than any other company, stands to benefit most. The broadcaster is pursuing a $6.2 billion acquisition of Tegna that would give the combined company a footprint of at least 60 percent of American television households. A federal court has blocked the deal, Quartz reported, citing NBC News. CNN reported that supporters of the cap said they would challenge Thursday's action in court.