Critics say Trump’s FCC is trying to help a pro-Trump media company grow larger.
Earlier this year, Trump's Federal Communications Commission (FCC) chief Ajit Pai moved to reinstate a regulatory loophole that will allow Sinclair Broadcast Group, the nation's largest TV station owner by coverage, to buy Tribune Media, another large TV station owner, in a controversial $3.9 billion deal. This would create a national broadcasting giant with more than 230 stations reaching 72 percent of households across the country.
Sinclair is known for its right-wing political orientation, as well as its coziness with the Trump administration. The Maryland-based TV giant, which already owns or operates 173 local stations, reportedly struck a deal with Trump's presidential campaign for favorable election coverage, and earlier this year hired former Trump aide Boris Epshteyn as its chief political analyst.
Now, leading Democratic lawmakers on the House Energy and Commerce committee want to know if Trump's FCC is giving Sinclair "preferential" treatment by reinstating the so-called "UHF discount," which will allow the company to gobble up smaller rival Tribune Media. The UHF discount will allow Sinclair to exceed the 39 percent federal TV ownership limit by "discounting" the reach of Tribune's UHF stations.
"Since the beginning of the Trump Administration, the FCC has taken a series of swift actions that have benefitted Sinclair," Democratic lawmakers Frank Pallone of New Jersey, Diana DeGette of Colorado, and Mike Doyle of Pennsylvania, wrote in a letter on Monday to FCC Chairman Ajit Pai, the former Verizon lawyer whom Trump tapped to lead the agency in January.
The lawmakers want to know "whether actions taken by the FCC under your leadership show a pattern of preferential treatment for Sinclair, and whether a series of interactions between your office, the Trump campaign and Trump administration, and Sinclair demonstrate inappropriate coordination."
"This was a move to benefit one firm, namely Sinclair, and one political agenda, namely Trump's."
The UHF discount is an obsolete relic of a pre-digital TV era in which over-the-air VHF (very-high-frequency) stations were more powerful than UHF (ultra-high-frequency) stations, leading regulators to allows UHF station owners to "discount" by 50 percent the reach of those stations for the purposes of federal media ownership rules. This meant that UHF station owners could exceed federal media ownership limits by "discounting" the reach of those stations.
But the 2009 digital TV transition rendered the VHF-UHF distinction meaningless for consumers. So why would the FCC reinstate such an antiquated rule in 2017? The answer, according to FCC critics, is to pave the way for even more media consolidation and, specifically, to allow a powerful pro-Trump media company to grow even larger.
"This was a move to benefit one firm, namely Sinclair, and one political agenda, namely Trump's," said Todd O'Boyle, program director at DC-based public interest group Common Cause. "This deal should have been dead on arrival, because it's simply not in the public interest. The level of monopoly here would be troubling for any firm, but especially for a firm that has such a spotty history of advancing a partisan political agenda."
Sinclair's coziness with the Trump administration has been well documented. In their letter to the FCC, the lawmakers cite reports that Trump's son-in-law and political advisor Jared Kushner "struck a deal" with Sinclair to "secure better media coverage." The letter also cites a report alleging that Trump himself met with Sinclair's CEO after the election and asked: 'What do you need to happen in your business?'"
O'Boyle of Common Cause pointed out the irony of Pai, who famously declared that he wanted to take a "weed whacker" to unnecessary Obama-era regulations, actually reinstating a regulation—the UHF discount—that the Obama-era FCC eliminated. To FCC critics, Pai's action reeks of hypocrisy because it shows that Trump's FCC actually favors government regulation—as long as that regulation benefits Trump's political allies.
"For years, Pai has complained about so-called 'burdensome' regulations," O'Boyle told Motherboard. "The UHF discount was eliminated because the FCC decided that it had outgrown its technical basis. But now we have Ajit Pai re-regulating the market in the service of a favored company."
A FCC spokesperson did not immediately respond to a request for comment about the lawmakers' letter.
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