[Senate Hearing 119-498]
[From the U.S. Government Publishing Office]
S. Hrg. 119-498
WE INTERRUPT THIS PROGRAM: MEDIA
OWNERSHIP IN THE DIGITAL AGE
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HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 10, 2026
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
64-348 PDF WASHINGTON : 2026
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
TED CRUZ, Texas, Chairman
JOHN THUNE, South Dakota MARIA CANTWELL, Washington,
ROGER WICKER, Mississippi Ranking
DEB FISCHER, Nebraska AMY KLOBUCHAR, Minnesota
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD MARKEY, Massachusetts
MARSHA BLACKBURN, Tennessee GARY PETERS, Michigan
TODD YOUNG, Indiana TAMMY BALDWIN, Wisconsin
TED BUDD, North Carolina TAMMY DUCKWORTH, Illinois
ERIC SCHMITT, Missouri JACKY ROSEN, Nevada
JOHN CURTIS, Utah BEN RAY LUJAN, New Mexico
BERNIE MORENO, Ohio JOHN HICKENLOOPER, Colorado
TIM SHEEHY, Montana JOHN FETTERMAN, Pennsylvania
SHELLEY MOORE CAPITO, West Virginia ANDY KIM, New Jersey
CYNTHIA LUMMIS, Wyoming LISA BLUNT ROCHESTER, Delaware
Brad Grantz, Republican Staff Director
Nicole Christus, Republican Deputy Staff Director
Lila Harper Helms, Staff Director
Melissa Porter, Deputy Staff Director
C O N T E N T S
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Page
Hearing held on February 10, 2026................................ 1
Statement of Senator Cruz........................................ 1
Statement of Senator Cantwell.................................... 2
Statement of Senator Capito...................................... 66
Statement of Senator Kim......................................... 68
Statement of Senator Moran....................................... 70
Statement of Senator Rosen....................................... 71
Statement of Senator Young....................................... 73
Statement of Senator Klobuchar................................... 75
Statement of Senator Fischer..................................... 77
Statement of Senator Markey...................................... 79
Statement of Senator Moreno...................................... 81
Statement of Senator Lujan....................................... 82
Witnesses
Chris Ruddy, Chief Executive Officer, Newsmax Media.............. 4
Prepared statement........................................... 6
Curtis LeGeyt, President and Chief Executive Officer, National
Association of Broadcasters.................................... 38
Prepared statement........................................... 39
Thomas Johnson, Partner and Co-Chair of Issues and Appeals, Wiley
Rein LLP....................................................... 47
Prepared statement........................................... 49
Steve Waldman, President, Rebuild Local News..................... 53
Prepared statement........................................... 55
Appendix
Letter dated February 9, 2026 to Hon. Ted Cruz and Hon. Maria
Cantwell from Gary Shapiro, Executive Chair and CEO, Consumer
Technology Association......................................... 89
Letter dated February 10, 2026 to Chairman Ted Cruz and Ranking
Member Maria Cantwell from Matthew F. Wood, VP of Policy &
General Counsel, Free Press Action............................. 90
Letter dated February 10, 2026 to Hon. Ted Cruz and Hon. Maria
Cantwell from Ebonie Riley, SVP, National Action Network....... 141
Response to written questions submitted to Chris Ruddy by:
Hon. Ted Cruz................................................ 143
Hon. Maria Cantwell.......................................... 143
Hon. Tammy Baldwin........................................... 144
Hon. John Hickenlooper....................................... 144
Hon. John Fetterman.......................................... 145
Hon. Lisa Blunt Rochester.................................... 145
Response to written questions submitted to Curtis LeGeyt by:
Hon. Ted Cruz................................................ 146
Hon. Maria Cantwell.......................................... 147
Hon. John Hickenlooper....................................... 148
Hon. Lisa Blunt Rochester.................................... 150
Response to written questions submitted to Thomas Johnson by:
Hon. Ted Cruz................................................ 150
Hon. John Hickenlooper....................................... 151
Hon. Lisa Blunt Rochester.................................... 152
Response to written questions submitted to Steve Waldman by:
Hon. Ted Cruz................................................ 153
Hon. Maria Cantwell.......................................... 156
Hon. Tammy Baldwin........................................... 165
Hon. John Hickenlooper....................................... 169
Hon. John Fetterman.......................................... 170
Hon. Lisa Blunt Rochester.................................... 171
WE INTERRUPT THIS PROGRAM: MEDIA
OWNERSHIP IN THE DIGITAL AGE
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TUESDAY, FEBRUARY 10, 2026
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:20 a.m., in
room SR-253, Russell Senate Office Building, Hon. Ted Cruz,
Chairman of the Committee, presiding.
Present: Senators Cruz [presiding], Fischer, Moran, Young,
Moreno, Capito, Cantwell, Klobuchar, Markey, Rosen, Lujan, and
Kim.
OPENING STATEMENT OF HON. TED CRUZ,
U.S. SENATOR FROM TEXAS
The Chairman. Good morning. We interrupt this program for a
Senate Commerce Committee hearing on media ownership in the
digital age.
For over a century, broadcast media stood at the epicenter
of America historical and cultural life. It brought the Nation
classics like ``I Love Lucy'' and shaped the music landscape
with Elvis or The Beatles on ``The Ed Sullivan Show.'' Twitter
being what it is, I watched The Beatles on ``The Ed Sullivan
Show'' yesterday, and, wow, they were young. It showed
Americans the realities of war, the wonder of the Apollo 11
moon landing, and the defining political moments of their time,
from the Nixon-JFK debate to President Reagan's clarion call to
``tear down this wall.'' Through these shared viewing
experiences, broadcasters helped to embed iconic moments in the
collective American consciousness.
The media's power to frame events and shape public
perception is substantial. So, it is understandable why
Congress placed limits on broadcast media ownership intended to
prevent a monopoly on programming and viewpoints. Indeed, for
much of the last century, holding a broadcast license was often
called a license to print money. With limited competition,
station owners commanded massive audiences and steady profits,
but that era has passed. Cable and satellite ushered in 24/7
news, while the Internet and mobile technologies unleashed a
wave of streaming services, news and entertainment sites, and
social media flooding Americans' screens with endless content
and fragmenting what were previously universal audiences.
Today, broadcasters are fighting to stay competitive
against media and tech company with national and often global
reach. This raises an important question: are longstanding
broadcast media ownership rules still relevant in the digital
age, and if so, to what extent? In recent years some of these
rules have been rolled back or eliminated. Whether more reform
is needed or if today's status quo remains sound policy is what
we will explore today.
In the Telecommunications Act of 1996, Congress anticipated
the rise of today's competitive market by directing the FCC to
periodically review its broadcast ownership rules with an eye
toward deregulation. That's what statute says right now. Every
4 years, the FCC was to decide whether to repeal or modify any
regulation that no longer served the public interest. One rule,
however, was deliberately set out: the national TV audience
reach cap. In 2004, Congress specifically directed the FCC to
set this cap at 39 percent of U.S. television households, and
it has remained at the same level for 22 years.
Now, as several major mergers loom, the FCC is considering
lifting or eliminating this cap. Some argue that lifting the
cap will allow broadcasters to scale, to invest more in local
news outlets across the country, and to better compete with
deep-pocketed tech companies. Others say lifting the cap will
consolidate viewpoints and hand control over to newsrooms in
New York and Hollywood, choking out local views, but more
fundamental than the optimal policy is the law. It may be the
case that the FCC cannot modify the 39-percent cap because
Congress set that number in statute. I look forward to hearing
these perspectives and more today.
If there's one thing that's clear, it's this: current media
ownership rules were written in a vastly different
technological age. The days when broadcasters built a uniform
global village across America's living rooms is over as media
has splintered into thousands of websites, TikTok accounts,
podcasts, and other form of content, each catering to its own
niche audience. Yet even in this fragmented landscape, the
media's ability to shape national discourse remains incredibly
powerful, making questions about market concentration as
important as ever. This hearing is designed to inform Congress
in answering these questions: should Congress revisit
underlying statutes, and does the FCC have appropriate
authority or flexibility to address today's evolving media
landscape? I'm grateful to our witnesses for being here today
to help us in this effort, and I now turn to Ranking Member
Cantwell.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman, and thank you
for calling the hearing and the witnesses to be here today.
This is a subject that, generally, I would say I care a lot
about, and I do think that today we'll get into a pretty big
debate about the amount of digital content now in advertising
and controlling that market. I also think we'll hear a lot
about why it's not a good idea for consumers to have so much
content behind paywalls and them not being able to access it. I
think the first two witnesses will agree on that. I'm not sure
they're going to agree on other things, but they are going to
agree there.
This past Sunday, more than 100 million Americans watched
the Super Bowl. Obviously, I'm very happy about my state of
Washington and the Seattle Seahawks bringing home a second
Lombardi Trophy. Right now millions----
The Chairman. On the over-under on whether you'd make it a
minute before saying that. I had it--I had the under.
[Laughter.]
The Chairman. Congratulations.
[Laughter.]
Senator Cantwell. Thank you.
Senator Klobuchar. And you did it with the former Vikings
quarterback to add to our pain. To add to our pain.
[Laughter.]
Senator Cantwell. I want to say there was a lot of people
helping the Seahawks----
[Laughter.]
Senator Cantwell.--a lot of Texans, a lot of--great job by
your former quarterback, yes.
So, but right now, millions are also turning to the
Olympics and watching that, and this brings communities
together, this brings fans together, it brings our country
together. But, Mr. Chairman, as the media landscapes become
more fragmented every year, those shared experiences are
becoming rarer. And as I said earlier, my concern about how
much is being eaten up by tech companies in the broadcast model
and how much is being put behind a paywall is very concerning.
That is why several years ago, as Ranking Member of the
Committee, we put out a Local Journalism Report, basically,
America's most trusted news source, and that is why my focus is
what are we going to do to help keep that? From the report, it
says modern economic literature views this through the lens of,
``information economics'' or asymmetrical information, which is
now recognized as the basic tenet of economics. Basically, what
we're saying is if you don't have a lot of competition on
information, you're not going to get perfect information.
You're going to get distorted information. So, as the report
says, in terms of economists across the political spectrum
agree that increased reporting on local conditions leads to
fairer prices for goods, a decline in local journalism, and
ensuring decreases in available information result in market
inefficiencies. So, today I'm here to fight for local
journalism.
If the Nexstar-TEGNA deal goes through, a single company
will control 265 stations, capable of reaching 80 percent of
all the television households, more than double the current
cap. And for nearly half of their audience, 100 million people,
Nexstar would own two or more stations in a media market. Now,
that concerns me. To me, that is not more local voices, that is
fewer, so I want to see how we are going to deal with this kind
of situation. We've invited Mr. Waldman, who in his testimony
says that roughly 40 local journalists for every 100,000
Americans. Today, that number is eight. That was in 2002. That
number is now down to eight.
So, the decline is not just limited to small outlets. Just
this week, we saw a massive layoff at The Washington Post. This
includes cutting over half the journalists covering local D.C.
news. So, if flagship national institutions are struggling,
imagine the pressure on small local stations and newspapers, so
creating, in my opinion, the need for more stability and
accountability, not less competition. So, the important thing
that we are here today to talk about is that local news is
quite literally, in my opinion, the seed--corn seed, if you
will, for AI. You can't have perfect information if journalists
aren't creating it, but yet we know that AI is consolidating
that data and all of that information. And if before they
weren't compensating for that, now they certainly are
perpetrating a business model that will make that even less
clear.
Mr. Waldman describes we are in a vicious cycle. Less local
news makes AI less accurate, and it makes local news less
viable, so we have to fix this. So, that is why I introduced
the bipartisan COPIED Act with Senator Blackburn to stop AI
companies from using journalist content without their consent,
why we support--and Mr. Waldman and I were just discussing--tax
credit where states are using tax credits for local journalism
as we have proposed. And AI companies should want a format
where you are creating content and that that content is
accurate and competitive in a nature that makes U.S. stack AI
information more accurate than other countries. That, to me,
seems the goal.
So, changes to the cap do not address the real structural
problem, and they risk reducing the diversity of local voices
without solving the underlying problems of economics. So, I
look forward to hearing from our witnesses about the solutions
that will help us grow local journalism for the future. Thank
you, Mr. Chairman.
The Chairman. Thank you. Now I'd like to introduce our
witnesses for today. Our first witness is my friend Chris
Ruddy, Chief Executive Officer of Newsmax, an American
conservative news media organization. Our second witness is
Curtis LeGeyt, President and Chief Executive Officer of the
National Association of Broadcasters, where he advocates on
behalf of America's television and radio broadcasters. Our
third witness is Thomas Johnson, Partner and Co-Chair of the
Issues and Appeals Practice at Wiley Rein LLP. He previously
served as General Counsel at the Federal Communications
Commission. Our final witness is Steve Waldman, Founder and
President of Rebuild Local News, a nonprofit focused on
vitalizing local news across America.
Mr. Ruddy, we'll start with you.
STATEMENT OF CHRIS RUDDY, CHIEF EXECUTIVE OFFICER,
NEWSMAX MEDIA
Mr. Ruddy. Mr. Chairman, Ranking Member Cantwell, and the
members of the Committee, my name is Chris Ruddy. I'm the CEO
of Newsmax Media. Thank you for inviting me to testify about
the important issue of broadcast media ownership.
Newsmax reaches more than 50 million Americans regularly.
We're a significant player in cable TV with the Nation's fourth
highest rated cable news channel. Forbes has described us as a
``news powerhouse.'' Our success is remarkable because the
regulatory framework of the FCC favors media conglomerates and
effectively blocks independent voices both from the right and
the left. There are 50 top cable channels in America. Newsmax
is the only one operated by an independent media company. Every
other channel is owned or created by a conglomerate. Newsmax's
success proves the system is broken and that this poses risks
to competition, consumers, and even our democracy. We need more
independent media. We need more competition, not less.
Newsmax does not hold any broadcast licenses, but we are
directly affected by TV consolidation. Large station groups
hold enormous leverage over paid TV operators through
retransmission fees, better known as retrans fees. These
station groups can dictate prices and even determine what
networks cable operators must carry. Nexstar provides a clear
example. It owns about 200 stations today, many ABC-, CBS-, and
NBC-affiliated ones. If cable operators want to carry those
stations, they have to pay Nexstar very high retrans fees. If
they refuse, Nexstar can pull the plug, go dark, leaving
viewers without the programming. Nexstar also insists that
operators carry its cable channel, NewsNation. Last year,
Newsmax delivered 5 times the rating of NewsNation, yet
operators were forced not only to carry NewsNation, but to pay
license fees higher than that paid to Newsmax.
Clearly, Nexstar's market leverage--you talked, Senator
Cantwell, about the 80-percent reach they have--suppresses
competition and harms consumers. The national television
ownership cap was meant to protect against such abuses. In
1996, Congress established this cap into law, and, later, the
cap was moved up to 39 percent. Only Congress may change the
cap. Nevertheless, the FCC subverted the law by using the so-
called UHF discount. Today, UFA--UHF stations reach a hundred
percent of households, and no discount should be applied. Yet
Nexstar used the discount to acquire Tribune and expand its
national reach to 70 percent of U.S. households a few years
ago, way above the 39-percent cap. They're not satisfied with
that, and now they want 80-percent reach, and the industry--
broadcast industry wants to replicate Nexstar's model in the
pursuit of power and money to the detriment of the public
interest.
President Reagan first adopted the cap because it was
dangerous to allow big networks to own stations in every market
across the country. At that time, he set it at 25 percent, but
since then, a bipartisan consensus developed that the public is
best served by limiting TV ownership and preserving
competition. This is why so many from both the left and the
right oppose lifting the cap. CPAC, the National Religious
Broadcasters, OAN, ZOA, and others have urged the FCC and
Congress to keep the cap at 39 percent.
Local TV is critical in providing community news. With the
collapse of newspapers, television stands alone as the primary
source of local reporting. Big Tech does hardly any local news
reporting. The TVB, Pew, and Knight studies all found that
local broadcast news is the number one source for Americans
seeking local news. Raising the cap means that two or three
corporations will eventually own most stations in the Nation
and control almost all local news. This is why consolidation
and the Nexstar deal is so dangerous.
Consolidation is also about big money. Today, a broadcast
license, as the senator said, is a license to mint money. It's
still true. Owning more licenses means more leverage over cable
operators, more retrans fees, and bigger profits. We know that
station groups cut costs by consolidating newsrooms and they--
and reduced competition at the local level allows them to raise
advertising rates. Retrans fees are significant, and they
account for more than 50 percent of broadcast revenues. Since
2010, retrans fees have risen more than 2,000 percent. Two
thousand percent. If milk prices had risen at the same rate, a
half a gallon of milk today would cost almost $40.
Consolidation has been unbelievably profitable for Nexstar.
Its EBITDA grew from $300 million in 2015 to close to $2
billion in 2024, almost a 500-percent increase. Sinclair,
Scripps, and TEGNA show similarly strong profits. It is
undeniable the FCC has already given Nexstar an excessive
concentration of broadcast licenses. Now they want even more?
The next year--the Nexstar deal works for Wall Street, but it
doesn't work for Main Street. We see this as consumers pay for
consolidation as their cable bills skyrocket. The affordability
crisis, this is a contributor. National and local consolidation
is not good. Just look at radio consolidation which the FCC and
Congress passed in the--supported in the past.
Today, three companies control all major radio licenses,
they've gutted local program, and they're all in financial
trouble. I am told the FCC is racing to approve the Nexstar
deal and will attempt to bypass the public process with a
stealth approval at the bureau level. I urge Congress to insist
that that consolidation decisions of this importance be voted
on by the full Commission, not by bureaucrats in secret. The TV
industry is too important to be handed over to a small number
of conglomerates. Congress set the cap. Only Congress should
change it after careful review. Newsmax stands ready to
participate in that process. Thank you.
[The prepared statement of Mr. Ruddy follows:]
Prepared Statement of Chris Ruddy, Chief Executive Officer,
Newsmax Media
Mr. Chairman, Ranking Member Cantwell, and Members of the
Committee:
My name is Chris Ruddy. I am the founder and Chief Executive
Officer of Newsmax Media, Inc. Thank you for inviting me to testify
today on the important issue of broadcast media ownership.
Newsmax reaches more than 50 million Americans on a regular basis
through our television channels, websites, social media, and other
platforms. Forbes has described Newsmax as a ``news powerhouse,'' and
the Reuters Institute recently ranked Newsmax among the top 12 news
brands in the United States.
We have also become a significant--and to many, surprising--player
in cable television. When we launched the Newsmax cable channel in
2014, few predicted our success, and many predicted our failure.
Yet today, I appear before you as the CEO of the Nation's fourth-
highest-rated cable news channel. In 2025, Newsmax ranked # 7 among all
cable channels, according to Nielsen.
Our success is remarkable precisely because the current regulatory
framework at the FCC and across the Federal Government overwhelmingly
favors large media conglomerates and effectively blocks independent
media voices--whether from the right or the left.
Of the top 50 cable channels, Newsmax is the only one that is owned
and operated by an independent media company. Every other channel in
the top 50 is owned by, created by, or affiliated with a major media
conglomerate or broadcast network.
Think about that. In the greatest country in the world, there is
only one independently owned media company in the top 50 cable
channels--and that company is Newsmax.
Newsmax's singular success does not prove the system works. It
proves the system is broken--and that this broken system poses serious
risks to free enterprise, competition, and ultimately our democracy.
Newsmax owns a cable network and does not hold any broadcast
television licenses. Yet we are directly affected by broadcast
ownership consolidation because large station groups wield enormous
leverage over cable and pay-TV operators through retransmission consent
fees--commonly known as retrans fees. These station groups have the
power to dictate what cable channels are carried on cable systems.
We see this clearly with Nexstar, which owns an enormous number of
ABC, CBS, and NBC stations. If cable operators want access to those
local stations, they must pay Nexstar high retrans fees. If they
refuse, Nexstar can--and does--pull its stations, leaving viewers in
the dark.
Nexstar also insists that cable operators carry its little-watched
cable news channel, NewsNation. Last year, Newsmax delivered at least
five times the ratings of NewsNation, yet cable operators were forced
not only to carry NewsNation, but to pay license fees significantly
higher than those paid to Newsmax.
We hear a great deal about the free market. But this is not the
free market. This is market leverage and manipulation used to harm
consumers and suppress competition--specifically competition from
independent voices like Newsmax.
The Committee is now reviewing the national television ownership
cap, a rule that remains one of the last meaningful protections for
competition and diversity in the broadcast and cable ecosystem.
Congress established the national ownership cap in Section
202(c)(1)(B) of the Telecommunications Act of 1996. When the FCC later
attempted to raise that cap, Congress responded decisively. In the
Consolidated Appropriations Act of 2004, Congress set the cap at 39
percent and explicitly stripped the FCC of any authority to alter the
cap. Only Congress--not the FCC--has the authority to change
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Nevertheless, the FCC subverted congressional intent by reviving
the so-called UHF discount, claiming UHF stations reach only half the
households in a market. In reality, UHF stations today reach 100
percent of households.
This regulatory sleight of hand allowed Nexstar, in 2019, to
acquire Tribune Media's stations and expand its national reach to
approximately 70 percent of the U.S. television market--in clear
violation of the law.
The broadcast industry has watched Nexstar's success and now seeks
to replicate it in a relentless pursuit of power and profit, to the
detriment of the public interest.
The national ownership cap was first instituted at the FCC under
President Ronald Reagan, who understood the danger of allowing major
networks--ABC, CBS, and NBC--to own stations in every market. At that
time, the cap was set at 25 percent.
Over the years, under pressure from the broadcast industry--not the
public--the cap was gradually raised to 39 percent, where it remains
today.
President Reagan intuitively understood that if major networks
controlled stations in every market--especially in swing states--they
could easily influence political outcomes. That would not be good for
the country, and it certainly would not be good for Republicans.
Over time, Democrats and Republicans alike reached a bipartisan
consensus that the public interest is best served by limiting national
ownership and preserving competitive, locally owned television markets.
That principle remains valid today. Despite the rise of Big Tech
and other media platforms, local television stations continue to play a
critical role in providing community news.
With the collapse of local newspapers and the gutting of local
radio due to prior consolidation, television now stands largely alone
as the primary source of local news.
Multiple studies confirm this reality:
A TVB study found that local broadcast news is the number-
one source of news overall, with 9 out of 10 Americans watching
at least once a week.
A Knight Foundation study reached the same conclusion.
A Pew Research study found that 66 percent of Americans
closely follow local television news.
Some argue that Big Tech fills the local news void. It does not.
Big Tech does not generally produce original local reporting. Most of
the local news stories appearing in my online news feeds originate with
local television stations.
When you raise the national ownership cap, you are effectively
saying that two or three corporations should eventually own most or all
television stations in America--and by extension, control local news.
That is what consolidation truly means.
Lifting the cap is also about big money.
No one on Main Street walks up to a Senator and says, ``Please lift
the cap so ABC can make a few more billion dollars this year.''
Make no mistake: a single broadcast television license is a license
to mint money. Even today, stations can be enormously valuable without
airing much programming at all, because businesses will pay fortunes
simply to acquire the license.
It is understandable that license holders want to own more
licenses. More licenses mean more leverage, more retrans fees, and
higher profits.
By cutting costs--especially local news operations--and syndicating
programming across multiple markets, large station groups can further
boost profits. Less competition also allows them to raise advertising
rates, both locally and nationally.
Then there is the real windfall: retransmission fees. Today,
retrans fees account for more than 50 percent of broadcast television
revenues on average, and for some large groups, as much as 70 percent.
The more highly-rated network affiliates a company owns, the more
leverage it has to demand higher retrans fees from cable operators.
Nexstar is again instructive. In 2010, it was a modest Texas-based
station group. After the FCC opened the door to consolidation through
waivers and the UHF discount, Nexstar embarked on a massive acquisition
spree. Today, it owns over 200 stations across 116 markets.
Since 2010, retrans fees across the television industry have risen
by over 2,000 percent. If the price of a gallon of milk had increased
at the same rate, it would cost more than $69 today.
This consolidation has been extraordinarily profitable. In 2015,
Nexstar reported EBITDA of $302 million. By 2024, EBITDA had grown to
$1.8 billion--an increase of nearly 500 percent.iii
Despite frequent claims of financial distress, major broadcasters'
financial results tell a different story. Sinclair, Scripps, and Tegna
have all recorded double-digit profit gains over the past decade and
all show healthy EBITDA profits.iv
I have no personal animus toward Nexstar or other broadcasters.
Nexstar's CEO, Perry Sook, is clearly a talented businessman who has
delivered strong returns for shareholders.
My concern is that the FCC has allowed an excessive concentration
of media power over a limited number of public broadcast licenses--
licenses that are supposed to be operated in the public interest, with
an emphasis on competition, localism, and diversity of viewpoints.
By failing to uphold its mandate and by ignoring clear
congressional law, the FCC has harmed consumers and the public.
Cable bills have risen by approximately 100 percent over the past
decade, driven largely by soaring retrans fees and forced bundling. If
the FCC continues to undermine the law, consumers will pay the price.
You will hear claims that broadcasters are suffering and need
relief through consolidation. The truth is that these companies are
quite profitable--but they took on massive debt betting that the cap
would be eliminated.
Now, as they refinance that debt at higher interest rates, they
seek regulatory relief to protect their margins.
We have seen this movie before with radio consolidation following
the Telecommunications Act of 1996. Today, three conglomerates control
most major radio licenses, local programming has been hollowed out, and
those companies are burdened by unsustainable debt.
The television industry's messaging has become extreme--claiming
consolidation somehow saves local news by cutting it, branding critics
as radicals, and insisting that allowing two or three companies to own
most stations is ``deregulation'' and ``competition.''
We know that after Nexstar merged with Tribune, profits surged
while employment dropped from 16,193 employees to 12,142--a 25 percent
decrease--in just one year. In 14 markets, Nexstar now operates two
highly rated stations but has combined their local newsrooms to cut
costs.
In its proposed merger with Tegna, Nexstar projects more than $300
million in immediate cost savings, including $135 million from
increased retrans fees and $165 million from local station savings--
typically that's achieved through newsroom consolidation.
I am a common-sense conservative and a believer in free markets.
But when the government grants a limited number of licenses in every
market that marketplace is a closed one. That's why the public has a
right--and a duty--to ensure those licenses serve the public interest.
Newsmax is not alone. CPAC and the National Religious Broadcasters
have both filed objections with the FCC, warning that lifting the cap
would harm consumers and suppress diversity of viewpoints.
It is a mistake for conservatives to claim allegiance to free
markets while endorsing consolidation that destroys competition,
stifles innovation, and drives consumer prices higher.
Just last week, the Senate Judiciary Committee--Republicans and
Democrats alike--recognized that allowing Netflix to merge with Warner
Bros. would stifle competition and harm consumers.
There is room for reasonable accommodation: targeted waivers,
limited consolidation in small markets, and a review of whether TV
affiliates are receiving fair retrans fees from the big networks.
But Congress should insist that any decisions on consolidation or
cap waivers be voted on by the full Commission, not quietly approved at
the bureau level.
Let me be absolutely clear: the television industry is far too
valuable to be handed over to a small number of conglomerates that are
unaccountable to the public.
Congress set the cap. Only Congress should change it--after careful
review. Newsmax stands ready to participate constructively in that
process.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you. Mr. LeGeyt.
STATEMENT OF CURTIS LeGEYT,
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
NATIONAL ASSOCIATION OF BROADCASTERS
Mr. LeGeyt. Good morning, Chairman Cruz, Ranking Member
Cantwell, and members of the Committee. My name is Curtis
LeGeyt, and I'm proud to testify on behalf of the NAB and our
nearly 1,300 free, local, over-the-air television stations that
serve your communities every day.
When the FCC first imposed national and local television
ownership limits, Franklin Roosevelt was President. Now, 9
decades later, those same rules still prevent broadcasters and
broadcasters alone from owning more than two stations in any
local market and from reaching more than 39 percent of American
television households. These outdated regulations distort
today's video and advertising marketplace. They advantage giant
tech platforms, global streaming services, pay TV providers,
and national cable programmers while placing local broadcasters
at a severe disadvantage.
In a digital media marketplace dominated by Google,
YouTube, Netflix, Amazon, Apple, Meta, and TikTok, ownership
restrictions that apply only to broadcasters are no longer
rational or sustainable. They prevent broadcasters from
achieving the scale necessary to compete for audience,
programming, advertising revenues, and investment capital. As a
result, your local stations remain hobbled by rules designed
for the analog era, rules that directly undermine broadcasters'
ability to provide our essential public service that remains
free and universally accessible to all viewers.
During recent crippling winter storms across vast swaths of
the country and during devastating floods in both Texas and
Washington State, it was local broadcasters, not global
streamers or national pay TV channels, that remained on the
ground and on the air in those communities providing lifesaving
information to their viewers. And beyond times of emergency,
broadcasters are delivering the fact-based, most trusted
journalism that keeps your constituents and communities
informed and connected.
Unfortunately, this local journalism is facing growing
financial pressure. Fewer than half of television stations now
report that their local news operations are profitable. Facing
ever rising news production costs and declining ad revenues,
some broadcasters are simply unable to continue maintaining
their own separate news operations. Without modernizing these
ownership rules, local television news, the last bastion of
truly local journalism in many communities, will suffer the
same fate as thousands of local newspapers.
Some argue that allowing broadcasters to achieve greater
scale would reduce local news. The data shows just the
opposite. Over the past decade, as broadcasters gained modest
additional scale, the number of local news telecasts and hours
of locally produced news increased substantially. From 2011 to
2023, local news telecasts increased by more than 40 percent,
and total hours of local news grew nearly 50 percent. Scale
allows broadcasters to invest more heavily in journalism not
less, but it's not enough.
Outdated rules also limit broadcasters' ability to provide
viewers access to marquee sports and entertainment. Instead of
subscribing to a new streaming service every time they want to
watch a game, viewers overwhelmingly prefer to watch sports on
broadcast television. However, keeping broadcasters
artificially small makes it harder to compete for increasingly
expensive sports rights against our unregulated streaming
rivals. Broadcasting share of viewership is already less than
half our streaming competitors, and this decline will continue
as premium sports content further migrates behind streaming
paywalls.
In conclusion, localism is a vital but expensive American
value. Competitively hobbled TV stations lacking sufficient
resources will not provide quality local journalism, emergency
information, valued sports, and programming that your
communities depend upon. For these reasons, we urge Congress to
support the FCC's efforts to eliminate the outdated broadcast
TV ownership restrictions that no longer serve the public
interest. I want to personally thank the many members of this
committee, as well as President Trump, who have publicly
supported us on this issue. Congress should flatly reject
arguments from a single national programmer subject to no
similar restrictions and who invests zero dollars in your local
communities.
Thank you again for the opportunity to testify today. I
look forward to your questions.
[The prepared statement of Mr. LeGeyt follows:]
Prepared Statement of Curtis LeGeyt, President and Chief Executive
Officer, National Association of Broadcasters
Introduction
Good morning, Chairman Cruz, Ranking Member Cantwell and members of
the committee. My name is Curtis LeGeyt, and I serve as President and
Chief Executive Officer of the National Association of Broadcasters
(NAB). I am proud to testify today on behalf of nearly 1,300 free,
local over-the-air television stations that serve your constituents
every day.
Local broadcast television is simple to describe, but hard to
replace. It is free. It is local. It is accountable to the public
interest obligations that come with a broadcast license.
When your constituents need verified information quickly, they turn
on the television and tune to local broadcasting. When severe weather
hits, when a wildfire moves fast, when a bridge collapses, when a child
goes missing, local stations deliver factual, lifesaving information in
real time without a paywall.
That service requires investment in journalists, on-air talent,
meteorologists, producers, engineers, towers, studios, safety equipment
and modern technology. The national broadcast television ownership cap
makes that investment harder by limiting broadcasters' ability to
compete for audience, advertising and programming in a marketplace that
no longer resembles the one that existed when this rule was created. It
is past time to level the playing field and eliminate this antiquated
restriction.
The Problem: A Twentieth-Century Cap in a Twenty-First Century Market
When the Federal Communications Commission (FCC) first imposed
limits on the national and local ownership of broadcast TV stations,
Franklin D. Roosevelt was president. Cable and satellite TV didn't
exist. The Internet was a fantasy. Big Tech was a 2,000-foot-tall radio
tower. Yet nine decades later, these rules remain, preventing TV
broadcasters from owning more than two outlets in any local market\1\
and restricting a broadcaster's national reach at 39 percent of TV
households.\2\
---------------------------------------------------------------------------
\1\ 47 C.F.R. Sec. 73.3555(b). The local TV rule prohibits the
common ownership of more than two full-power commercial TV stations in
any of the 210 Designated Market Areas (DMAs) in the U.S., regardless
of the number of stations or competitive conditions in these widely
disparate markets, ranging from New York City to Glendive, MT.
\2\ 47 C.F.R. Sec. 73.3555(e). The national TV rule bans the common
ownership of full-power commercial TV stations that reach, in the
aggregate, more than 39 percent of TV households nationwide. For
purposes of calculating ``reach,'' the rule discounts the presumed 100
percent reach of UHF stations by half. Id. at Sec. (e)(2).
---------------------------------------------------------------------------
These outdated rules unfairly skew today's video and advertising
markets. None of the dominant competitors that shape what Americans
watch face these limits. Global streaming platforms, Big Tech video
services and digital advertising giants can reach every household.
Broadcast television alone remains boxed in.
Digital technologies and the Internet have completely transformed
the video and advertising markets, making a broadcast-only ownership
cap obsolete.\3\ Global streaming platforms now account for roughly
half of total viewing, yet broadcasters are still restricted from
reaching TV households nationwide. This means we cannot effectively
compete for audiences, advertising revenues and premiere programming.
As a result, local stations' most important public service--offering
news, emergency information and valued entertainment and sports
programming in local communities at no cost to the public--is in
jeopardy.
---------------------------------------------------------------------------
\3\ See, e.g., Comments of NAB, MB Docket No. 22-459 (Dec. 17,
2025); Comments of NAB, MB Docket No. 17-318 (Aug. 4, 2025); Written Ex
Parte Communication of NAB, MB Docket No. 17-318 (Apr. 2, 2025).
---------------------------------------------------------------------------
Audience Viewing Habits and Advertising Markets Have Changed
The notion that local broadcasters compete only against one another
for audience and programming rights is out of step with the reality of
today's media marketplace. According to recent Nielsen data, streaming
platforms comprise nearly half of all television viewing, more than
double that of all broadcast television outlets combined. And those
figures understate streaming's advantage because they do not fully
capture mobile viewing on iPhones and tablets.\4\
---------------------------------------------------------------------------
\4\ The Gauge also does not include viewing of YouTubeTV, the
linear virtual multichannel video programming distribution service, in
YouTube's streaming share. Yet YouTube alone still garners about 60
percent of the share of total TV usage garnered by all broadcast
television. The ``Other'' category in The Gauge includes video gaming,
DVD playback, audio streaming, unmeasured video on demand, etc.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
This growth in streaming viewership has been accelerated by the
migration of premiere live sports away from broadcast stations to
behind these paywalled tech platforms. For example, Amazon Prime Video
viewing surged in December due to its streaming of four NFL Thursday
night games, including on Christmas Day. Netflix also featured back-to-
back NFL games on the holiday.\5\ And every major sports league,
including Major League Baseball, the National Basketball Association,
the National Hockey League and the NCAA now distribute significant
numbers of in-market and out-of-market games through global streaming
platforms. The bottom-line is that while we value the ongoing
relationship that these leagues and teams have with local broadcasters
and our networks, the games that once anchored free, over-the-air
viewing are increasingly balkanized across subscription services to the
detriment of local stations, our viewers, and the communities that rely
on us. Greater scale is needed to allow our industry to better compete
for these rights.
---------------------------------------------------------------------------
\5\ See Nielsen, Streaming Shatters Multiple Records in December
2025 with 47.5 percent of TV Viewing, according to Nielsen's The Gauge,
nielsen.com (Jan. 20, 2026).
---------------------------------------------------------------------------
The advertising marketplace has shifted even more. Digital
advertising is now the majority of local ad spending, and most of that
money does not stay in communities.\6\ It flows to digital platforms
that do not maintain local newsrooms, weather operations or public
safety infrastructure. Meanwhile, broadcast television advertising
revenue has declined sharply. These trends are the economic reality
behind what many communities are experiencing: fewer reporters, tighter
budgets and increasing difficulty sustaining robust local journalism.
---------------------------------------------------------------------------
\6\ According to Borrell Associates, local digital advertising
reached $103 billion in 2024, accounting for about 70 percent of all
local ad spending. This report reconfirmed that the ``lion's share of
digital advertising'' leaves local markets and ``goes to the pureplay
digital companies such as Google, Facebook, and others,'' with local
outlets, including TV and radio stations and newspapers, capturing only
about 15 percent of all locally spent digital advertising. Digital
platforms' reshaping of the advertising market has radically undercut
support for locally-based media and journalism, and these trends will
only continue, with Borrell estimating that local digital ad spend will
reach nearly $121 billion by 2028. Borrell Associates, 2025 Annual
Report Benchmarking Local Digital Media, at 5-9 (May 15, 2025).
---------------------------------------------------------------------------
As shown in the graphic below, broadcast television station
industry advertising revenues have declined by nearly 60 percent over
the past 25 years on a real (i.e., inflation adjusted) basis.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Outside of the largest markets, the advertising marketplace is even
more dire. Television stations in mid-sized and small markets earn only
a fraction of the ad revenues garnered by stations in the largest
markets. In 2024 the average TV station in DMAs 51-100, 101-150 and
151-210 garnered merely 23.5 percent, 17.6 percent and 12.1 percent,
respectively, of the ad revenues earned by the average station in the
10 largest DMAs.\7\ Steady declines in ad revenue hurt local TV
stations' ability to deliver high quality programming, hire and retain
talented staff, maintain local newsrooms and serve our communities
effectively.
---------------------------------------------------------------------------
\7\ Comments of NAB, MB Docket No. 22-459, at 95 (Dec. 17, 2025)
(citing BIA data).
---------------------------------------------------------------------------
The National Ownership Cap Doesn't Merely Limit Growth, it Hurts Local
Viewers
The current broadcast ownership restrictions impair our ability to
realize important economies of scale, acquire and produce content,
attract more viewers, earn necessary ad revenues, obtain needed
investment and provide free service to local communities. These rules
undermine localism and hurt competition in the video and advertising
markets by keeping broadcasters artificially weak and unable to offer
robust competition to other content providers and ad platforms.
Streaming, Big Tech and social media platforms operate at a
significant competitive advantage without these constraints. They
scale, invest, acquire rights, capture advertising and reinvest
nationally and globally without regulatory restrictions. As a result,
they have tremendous advantages over TV broadcasters in the programming
market. Eliminating the national cap would enable TV broadcasters to
better compete for advertising, produce or purchase more and better
programming (including premiere sporting events), and invest in local
journalism. This means increased competition and more and better
content, all of which is freely-available to consumers.\8\
---------------------------------------------------------------------------
\8\ NAB earlier documented the extremely high costs (running into
the tens of billions of dollars) of acquiring or producing
entertainment programming and the millions local TV stations expend
annually on local news programming, made all the more challenging for
broadcasters due to ownership rules limiting our audience reach and
thus our revenue base. See, e.g., Written Ex Parte Communication of
NAB, MB Docket No. 17-318, at 21-26 (Apr. 2, 2025) (documenting
programming costs, including local news costs that routinely represent
around one third of many stations' total annual expenses).
---------------------------------------------------------------------------
Scale is Not the Enemy of Localism. It is Often What Makes Localism
Possible
Economists have found that TV broadcasting, and especially local
news production, is subject to strong economies of scale and scope.
Restricting broadcasters' ability to scale leads to ``higher costs,
lower revenues, reduced returns on invested capital,'' resulting in
significantly less local news.\9\ The FCC itself has concluded that the
``efficiencies of common ownership'' enable TV stations to ``provide
more high-quality local programming, especially in revenue-scarce small
and mid-sized markets.'' \10\
---------------------------------------------------------------------------
\9\ J.A. Eisenach and K.W. Caves, The Effects of Regulation on
Economies of Scale and Scope in TV Broadcasting, at 2-3 (June 2011),
attached to Reply Comments of NAB, MB Docket No. 10-71 (June 27, 2011)
(explaining that economies of scale are, by definition, ``associated
with falling unit costs of production--that is, with the production of
more output,'' such as programming, ``at lower average cost--and hence
are prima facie welfare enhancing''). Id. at 1. Accord Decl. of M.
Israel and A. Shampine, Comments of NAB, MB Docket No. 10-71, at
Appendix B 49-51 (June 26, 2014) (finding that economies of scale
and scope exist in TV broadcasting and that both lead to ``increased
investment in news programming''). These studies remain unrefuted.
\10\ 2014 Quadrennial Regulatory Review, Order on Reconsideration,
32 FCC Rcd 9802, 9834, 9836 (2017).
---------------------------------------------------------------------------
The need is urgent. The Radio Television Digital News Association
(RTDNA) reports that fewer than half of TV stations now say their local
news operation is profitable, after several years of decline.\11\
Facing high and ever-rising news production costs and declining ad
revenues, some broadcasters are simply unable to continue maintaining
their own separate local news operations.\12\ Financial pressures also
have led many local stations to decrease their TV news budgets, and the
pressure is real across market sizes.\13\
---------------------------------------------------------------------------
\11\ B. Papper, K. Henderson and T. Mirabito, RTDNA/Syracuse
University, TV news profitability drops to lowest level since 2010, at
1 (July 28, 2025) (TV News Profitability Report).
\12\ The number of TV stations originating local news has dropped
by 16 in the past two years, but the number of stations receiving local
news from one of the nearly 700 stations originating news has increased
by 20 (from 402 to 422) during that time. B. Papper, K. Henderson and
T. Mirabito, RTDNA/Syracuse University, Amount of local news stays
steady--for a change, at 3 (July 21, 2025).
\13\ TV News Profitability Report at 3.
---------------------------------------------------------------------------
Importantly, data show that when station groups have been able to
achieve greater scale, local news output increased materially over
time. As shown in the graphic below, from 2011-2023, as TV station
groups producing and airing local news grew in size but fell in number
(from 140 separate groups to 62, a 55.7 percent decline), the number of
local news telecasts and hours of local news increased by 41.7 percent
and 49.7 percent, respectively.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Permitting TV station groups to achieve greater scale will further
enhance the quantity and quality of local and regional news. Ownership
policy should strengthen the services communities value most. The
national broadcast ownership cap does the opposite.
The FCC has Authority to Repeal its National Broadcast Ownership Cap
The Supreme Court has long recognized that the FCC has broad
authority under the Communications Act of 1934 to adopt, modify or
eliminate ownership rules as part of its public interest licensing
framework.\14\ That has never been in doubt. And contrary to the
misleading arguments of those who oppose ownership modernization,
Congress did not strip that authority by implication in the
Telecommunications Act of 1996 or the Consolidated Appropriations Act
of 2004.
---------------------------------------------------------------------------
\14\ FCC v. NCCB, 436 U.S. 775, 793-94 (1978) (upholding adoption
of newspaper/broadcast cross-ownership ban pursuant to the FCC's
authority under the Act to ``issue regulations codifying its view of
the public-interest licensing standard''). Accord NBC v. U.S., 319 U.S.
190, 214-18 (1943) (finding that the Act grants the FCC ``broad
licensing and regulatory powers'' and upholding adoption of chain
broadcasting rules as permissible exercise of its power to license
stations in the public interest); U.S. v. Storer Broad. Co. 315 U.S.
192, 201-203 (1956) (concluding that FCC had authority to impose rules
limiting the multiple ownership of AM, FM and TV stations under its
public interest rulemaking and licensing authority in the Act); FCC v.
Prometheus Radio Project, 592 U.S. 414, 418 (2021) (while upholding the
FCC's 2017 decision to repeal or relax several ownership rules, court
stated that the FCC possessed broad authority under the Act to regulate
broadcast media and, exercising that authority, it had historically
maintained strict ownership rules).
---------------------------------------------------------------------------
In 1996, Congress directed the FCC to modify its rules to increase
the national audience reach limitation to 35 percent.\15\ All agree
that directive did not convert the cap into a permanent statutory
ceiling. In fact, when the D.C. Circuit Court of Appeals reviewed the
FCC's early implementation of the 1996 statute, it confirmed that
Congress had not ``enshrined'' the 35 percent cap into statute.\16\
---------------------------------------------------------------------------
\15\ Telecommunications Act of 1996, Section 202(c)(1)(B).
\16\ Fox Television Stations, Inc. v. FCC, 293 F.3d 537, 540 (D.C.
Cir. 2002).
---------------------------------------------------------------------------
In 2004, following the FCC amending the cap to 45 percent, Congress
stepped in and changed the number to 39 percent through an
appropriations rider that again directed the FCC to modify its rules.
However, in doing so, Congress never removed the FCC's well-recognized
authority to amend or eliminate the national television cap at a later
date. Instead, Congress merely removed the FCC's affirmative duty to
re-examine the rule on a fixed schedule through the agency's
quadrennial review.\17\ No one can point to any statutory directive
expressly eliminating FCC authority to adjust the cap as it sees fit.
---------------------------------------------------------------------------
\17\ See Appendix.
---------------------------------------------------------------------------
Simply put, as explained in more detail in the Appendix, Congress
did not mandate a permanent cap, and nor did it prevent the FCC from
revisiting the cap at a later date. As the FCC itself has consistently
determined under Republicans and Democrats, the FCC retains authority
to modernize or repeal the national TV rule.
Opposition to Eliminating the National Cap is Driven by Anti-
Competitive Interests
Many of the loudest opponents of reform are not motivated by
protecting local service. They are direct competitors who benefit when
broadcasters are held back, especially entities that want to limit
broadcast competition while seeking scale for themselves. Others have
maintained their decades-old positions on the issue that have remained
unchanged even as the marketplace has been transformed by Big Tech and
streaming dominance. What they have in common is a lack of credible
legal or economic arguments and data to support their position.
The pay TV industry, including cable and satellite TV providers and
one national cable programmer, has consistently opposed modernizing
ownership rules, and even called for imposition of additional
restrictions. All of this aims to keep broadcasters at a competitive
disadvantage.\18\ NAB has long urged the FCC--and now we urge
Congress--to disregard the pay TV industry's advocacy to restrict
broadcast TV stations that compete with them for viewers, advertisers
and content and that negotiate with them for retransmission consent
fees. Keeping TV broadcasters artificially small and weak may be in the
pay TV industry's interest, but it is not in the public's interest.
After all, pay TV providers and national cable programmers do not
provide important local services, including the news and emergency
information that only locally-licensed broadcast stations offer, if
they have the financial wherewithal to do so. And none are freely-
available.
---------------------------------------------------------------------------
\18\ See, e.g., Comments of The American Television Alliance, MB
Docket No. 17-318 (Aug. 4, 2025); Comments of NCTA--The Internet &
Television Association, MB Docket No. 17-318 (Aug. 4, 2025); Ex Parte
Letter of DIRECTV, MB Docket No. 17-318 (Sept. 19, 2025); see also
Comments of NCTA--The Internet & Television Association, MB Docket No.
22-459 (Dec. 17, 2025) (also calling for a stricter local TV rule).
---------------------------------------------------------------------------
Newsmax, a national pay TV channel, is among the most vociferous
opponents of eliminating the national broadcast TV cap.\19\ Newsmax
does not want any TV station group expanding their national reach
because that would provide more robust competition--and free, rather
than subscription, competition--to its own news brand. This has nothing
to do with safeguarding viewpoint diversity and everything to do with
fearing the emergence of other strong, national competitors.
---------------------------------------------------------------------------
\19\ Comments of Newsmax Media, Inc., MB Docket No. 17-318 (July
23, 2025); Comments of Newsmax Media, Inc., MB Docket No. 17-318 (Mar.
19, 2018); see also Comments of Newsmax Media, Inc., MB Docket No. 22-
459 (Dec. 16, 2025) (also opposing repeal of the local TV ownership
rule).
---------------------------------------------------------------------------
The committee should evaluate arguments based on what strengthens
local journalism, preserves free access, improves emergency information
and increases competition. Maintaining the national cap fails that
test.
What's at Stake for Your Constituents
If the FCC's broadcast-only ownership limits remain frozen in time,
the harm is not theoretical. It will show up in local communities. It
will mean less local journalism and community-focused programming, and
diminished access to premiere sporting events.
Local journalism does not happen by accident. It takes sustained
investment. The national broadcast television cap restricts the revenue
base that supports those investments, especially as advertising shifts
to digital platforms that do not fund local reporting.
Free, over-the-air access to major live programming is at risk.
Live sports is among the most desired content. Its cost continues to
rise dramatically, and streaming platforms with unlimited scale are
buying more rights and placing them behind subscription paywalls.
Broadcasters need a fair chance to compete so that more marquee
programming remains available free and over the air.
Local stations must continue upgrading technology to improve
emergency alerting, weather reports, accessibility and the overall
viewer experience. A regulatory regime that suppresses investment works
against these public interest outcomes.
Conclusion
Thank you for inviting me to testify today.
Local television broadcasters are proud of the service we provide
to your constituents. We deliver our trusted local journalism, critical
emergency information and valued programming, free and over the air.
But localism is an expensive value. Analog-era regulations that
artificially limit broadcasters' ability to compete for investment,
programming, audiences and advertising revenue weaken the very services
policymakers say they want to protect.
We urge members of this committee to support the FCC in modernizing
its broadcast ownership framework and eliminating the national
television ownership cap.
I look forward to answering your questions.
Appendix: Legal Analysis of FCC Authority to Eliminate the National Cap
As consistently recognized by the Supreme Court since the 1940s,
the Commission has broad authority under the Communications Act of 1934
to adopt, alter or eliminate broadcast ownership rules ``codifying its
view of the public-interest licensing standard.'' \20\ In neither the
1996 Telecommunications Act (1996 Act) nor the 2004 Consolidated
Appropriations Act (2004 Appropriations Act) did Congress remove this
long-standing authority, which authorizes the FCC to alter or repeal
its current rule capping TV broadcasters' national reach at 39 percent,
nor did it enshrine the 39 percent cap into statute.\21\
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\20\ See supra note 14.
\21\ For additional context, please see Reply Comments of the Joint
Broadcasters, MB Docket No. 17-318, at 5-30 (Aug. 22, 2025) (explaining
that the FCC has authority to revise or repeal the national TV cap and
refuting at length the error-filled arguments to the contrary by those
parties supporting ownership rules that harm broadcasters).
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To ``promote competition and reduce regulation,'' \22\ Congress in
various provisions of Section 202 of the 1996 Act directed the FCC to
revise or modify several of its long-standing ownership rules,
including the national TV ownership cap. Specifically, Section
202(c)(1)(B) did not set a statutory cap but only told the FCC to
``modify its rules for multiple ownership set forth in section 73.3555
of its regulations . . . by increasing the national audience reach
limitation for television stations to 35 percent'' (up from 25).\23\
---------------------------------------------------------------------------
\22\ Pub. L. No. 104-104, 110 Stat. 56 (stating the purpose of the
1996 Act).
\23\ 1996 Act, Sec. 202(c)(1)(B), 110 Stat. at 111 (emphasis
added).
---------------------------------------------------------------------------
``To ensure that the FCC's ownership rules d[id] not remain in
place simply through inertia,'' \24\ Congress in 1996 also adopted
Section 202(h), which requires the FCC to review its broadcast
ownership rules biennially (now quadrennially) to determine whether
they remain ``necessary in the public interest as the result of
competition'' and to ``repeal or modify'' any rules that are not.
Section 202(h) did not give the Commission authority it had lacked to
review its rules and to retain, repeal or eliminate them--as the
Supreme Court has made clear since 1943, the agency already possessed
that authority under the 1934 Act--but only directed the FCC to
exercise its existing authority on a periodic basis so that it
``keep[s] pace with industry developments'' and ``regularly
reassess[es] how its rules function in the marketplace.'' \25\
---------------------------------------------------------------------------
\24\ FCC v. Prometheus, 592 U.S. at 419.
\25\ FCC v. Prometheus, 592 U.S. at 419.
---------------------------------------------------------------------------
Notably, when reviewing the FCC's initial biennial review of all
its ownership rules under Section 202(h), the D.C. Circuit Court of
Appeals confirmed that Congress in the 1996 Act had not ``enshrined the
35 percent cap in the statute itself'' \26\ and in fact concluded that
the FCC's retention of the 35 percent cap was arbitrary and capricious
and contrary to Section 202(h).\27\ The D.C. Circuit thus affirmed that
Congress' direction in Section 202(c)(1)(B) of the 1996 Act for the FCC
to ``modify its rules'' by setting the national cap at 35 percent did
not cement 35 percent into statute and left undisturbed the FCC's
authority to change the cap further by setting it at a different
percentage or by repealing it.
---------------------------------------------------------------------------
\26\ Fox Television Stations, Inc., 293 F.3d at 540.
\27\ Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1043-45
(D.C. Cir. 2002) (finding that the FCC had ``adduced not a single valid
reason to believe'' that the national TV ownership rule was in the
public interest, ``either to safeguard competition or to enhance
diversity'').
---------------------------------------------------------------------------
Responding to the D.C. Circuit's 2002 ruling, the FCC determined in
2003 to increase the cap to 45 percent. This 45 percent cap raised some
controversy in the analog era, and in 2004 Congress decided that a
different percentage cap was more appropriate. Even in light of the
D.C. Circuit's ruling that the 1996 Act had not enshrined the previous
35 percent cap into statute, Congress in Section 629(1) of the 2004
Appropriations Act again merely directed the FCC to amend Section
202(c)(1)(B) of the 1996 Act, this time by inserting ``39 percent'' in
place of ``35 percent.'' \28\ This action left untouched Section
202(c)(1)(B)'s original language that had only directed the FCC to
modify its rules--rules that the FCC has authority under the 1934 Act
to change--and nowhere enshrined ``39 percent'' into statute.
---------------------------------------------------------------------------
\28\ Section 629(1), Consolidated Appropriations Act, 2004, Pub. L.
No. 108-199, 118 Stat. 3, 99.
---------------------------------------------------------------------------
In Section 629(3) of the 2004 Appropriations Act, Congress also (1)
changed the FCC's required periodic reviews of its ownership rules from
biennial to quadrennial, and (2) relieved the Commission of its
mandatory duty under Section 202(h) of the 1996 Act to review the
national TV cap every four years.\29\ Textualists take notice: by its
clear terms, Section 629(3) does not prohibit the FCC from ever
reviewing the cap, but only provides that Section 202(h)'s affirmative
obligation for the FCC to review all its ownership rules quadrennially
``does not apply'' to any rules relating to the national audience reach
limit. In short, the plain language of Section 629(3) merely states
that the FCC is not required to review the national TV cap every four
years but does not prevent it from reviewing and altering the rule
under its established authority in the 1934 Act, as the Commission has
concluded since 2013 in multiple proceedings concerning the national TV
rule.\30\
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\29\ Section 629(3), Consolidated Appropriations Act, 2004, 118
Stat. at 100 (stating that Section 202(h) ``does not apply'' to any
rules relating to the 39 percent national audience reach limitation in
Section 202(c)(1)(B)).
\30\ The FCC has consistently concluded that the 2004
Appropriations Act only directed it to revise its rules to reflect a 39
percent cap and removed the requirement to review the cap
quadrennially. As the FCC explained, the 2004 Act did not impose a
statutory cap or prohibit the FCC from evaluating the rule; thus, it
retained authority under the 1934 Act to review the national cap but
was merely not required to do so as part of its quadrennial reviews.
The FCC emphasized that Congress was well aware of the agency's broad
authority--indeed, its obligation--under the 1934 Act to reevaluate its
rules and revise any that do not serve the public interest and could
have foreclosed the FCC from ever revising the national cap by making
it a statutory restriction or by otherwise withdrawing FCC authority to
modify the cap. Congress, however, did not do so but opted for a
limited measure reducing the cap from 45 to 39 percent and relieving
the FCC of its duty to reevaluate the cap in the mandated quadrennial
reviews. Report and Order, 31 FCC Rcd 10213, 10222-24 (2016). Accord
Notice of Proposed Rulemaking, 28 FCC Rcd 14324, 14329-30 (2013). See
also Order on Reconsideration, 32 FCC Rcd 3390, 3398 n.60 (2017)
(referring to FCC's previous conclusions about the national cap);
Notice of Proposed Rulemaking, 32 FCC Rcd 10785, 10788-89 (2017)
(explaining the FCC's earlier conclusions that it had authority to
modify or eliminate the national TV cap and noting the consistency of
those conclusions with previous decisions by the Third and D.C. Circuit
Courts of Appeal).
---------------------------------------------------------------------------
Those supporting retention of FCC rules that disadvantage
broadcasters erroneously claim that Section 629(3) prevents the
Commission from ever reviewing or altering the 39 percent cap because
that subsection removed it from the FCC's Section 202(h) obligation to
review all its ownership rules quadrennially. But removing an
affirmative duty to review the cap every four years clearly is not the
same as prohibiting the FCC from ever reviewing it again. Simply put,
just because someone isn't required to cook dinner or mow the lawn
doesn't mean they aren't allowed to do so. The arguments of those
opposing any changes to the 39 percent cap must fail because they are
contrary to the text of Section 629(3), which contains nary a hint of
any prohibitory language, and ``[o]nly the written word is the law.''
\31\
---------------------------------------------------------------------------
\31\ Bostock v. Clayton County, 590 U.S. 644, 653 (2020). ``We do
not inquire what the legislature meant; we ask only what the statute
means.'' Epic Sys. Corp. v. Lewis, 584 U.S. 497, 523 (2018). And
prohibitions plainly absent from statutory language should not be
inferred. See, e.g., Breuer v. Jim's Concrete of Brevard, Inc. 538 U.S.
619, 694 (2003).
---------------------------------------------------------------------------
Those claiming that the FCC lacks authority to reevaluate the 39
percent national cap also cannot explain how Section 629 of the 2004
Appropriations Act removed the FCC's authority--as affirmed multiple
times across nine decades by the Supreme Court--to adopt, amend and
eliminate ownership rules under its rulemaking and public interest
licensing authority in the 1934 Act.\32\ Section 629 does not even
mention, let alone cut back on or override, the 1934 Act or the FCC's
broad authority under it, of which Congress was well aware.\33\
---------------------------------------------------------------------------
\32\ See 1934 Act, 47 U.S.C. Sec. Sec. 303(r), 307, 308, 309, 310
and 154(i).
\33\ See, e.g., H.R. Rep. No. 104-204, at 54 (1995), reprinted in
1996 U.S.C.C.A.N. at 18 (recognizing when adopting the 1996 Act that
the FCC had regulated broadcast ownership since the 1940s).
---------------------------------------------------------------------------
Nor can the opponents of broadcast TV ownership rule reform validly
contend that Congress, when passing Section 629, somehow impliedly
repealed the FCC's powers under the 1934 Act. The Supreme Court has
made clear for 90 years--even calling it a ``cardinal rule''--that any
repeals by implication are strongly disfavored.\34\ ``Congress will
specifically address preexisting law when it wishes to suspend its
normal operations in a later statute.'' \35\ But in Section 629,
Congress did not specifically address the 1934 Act and did not suspend
its operations or the FCC's long-standing authority under it to
regulate ownership of broadcast stations. ``Congress `does not alter
the fundamental details of a regulatory scheme in vague terms or
ancillary provisions,' '' \36\ and it would not silently hide the
elephant of suspending the FCC's broad licensing and rulemaking
authority under the agency's foundational statute in any statutory
mousehole, let alone one consisting of an ancillary, less than 200-word
rider to an approximately 200,000-word appropriations bill.\37\
---------------------------------------------------------------------------
\34\ Tenn. Valley Auth. v. Hill, 437 U.S. 153, 189 (1978), quoting
Posadas v. Nat'l City Bank, 296 U.S. 497, 503 (1936); accord Me. Cmty.
Health Options v. U.S. 590 U.S. 296, 315 (2020).
\35\ Epic Sys. Corp. v. Lewis, 584 U.S. 497, 510 (2018) (citation
omitted).
\36\ Bostock, 590 U.S. at 680, quoting Whitman v. Am. Trucking
Ass'ns, Inc., 531 U.S. 457, 468 (2001).
\37\ Some opponents of ownership rule reform also perfunctorily and
erroneously contend that Section 629(2) of the 2004 Appropriations Act
shows that Congress intended to permanently remove the national cap
from FCC review. This subsection confusingly states that the FCC may
not use its authority under Section 10 of the 1934 Act, 47 U.S.C.
Sec. 160, to forbear from applying the 39 percent national cap to any
entity exceeding that audience reach limitation. But the FCC's
forbearance authority under Section 10 applies only to regulation of
``telecommunications carriers or telecommunications services,'' not to
broadcasters or broadcasting under Title III of the 1934 Act. In any
event, Section 629(2)'s nonsensical prohibition on forbearance does not
preclude other types of relief from the cap's restrictions, including
relaxation or repeal of the cap itself. The FCC rejected claims a
decade ago that Section 629(2) somehow prevented it from reexamining
and revising the national TV cap. See Report and Order, 31 FCC Rcd
10213, 10222-23 n.77 (2016). NAB agrees with the FCC. Significantly,
Section 629(2) refers specifically to the 39 percent limit in Section
202(c)(1)(B) of the 1996 Act, which as discussed above, only directs
the FCC to modify its national TV ownership rule, does not enshrine the
cap into statute, and does not prohibit the FCC from later changing its
rules.
---------------------------------------------------------------------------
Congress' decision to remove the national TV cap from the mandated
quadrennial reviews--but not to prohibit the FCC from reevaluating it
ever again--is understandable from a practical point of view. After
frequent changes to the level of the national cap in the span of a few
years, from 25 to 35 to 45 to 39 percent, Congress was reluctant to
require the Commission to turn around and reexamine the level of the
cap yet again in just a couple of years.\38\ Thus, in Section 629
Congress (1) again chose to direct the FCC to modify its rules, instead
of enshrining the 39 percent limit into statute (which it easily could
have done), and (2) chose to remove the national TV cap from Section
202(h)'s mandated quadrennial reviews but did not prohibit the FCC from
reviewing its rule at some point in the future. The ``one, cardinal
canon'' in interpreting a statute is that one ``must presume that a
legislature says in a statute what it means and means in a statute what
it says there.'' \39\
---------------------------------------------------------------------------
\38\ Despite changing the frequency of the required periodic
ownership reviews from every two to every four years in the 2004
Appropriations Act, the next mandated quadrennial review was due in
2006, given that the FCC had conducted its last biennial review in
2002.
\39\ Connecticut Nat'l Bank vs. Germain, 503 U.S. 249, 253-54
(1992).
The Chairman. Thank you. Mr. Johnson.
STATEMENT OF THOMAS JOHNSON, PARTNER AND CO-CHAIR OF ISSUES AND
APPEALS, WILEY REIN LLP
Mr. Johnson. Chairman Cruz, Ranking Member Cantwell,
members of the Committee, thank you for the invitation to
testify here today. This hearing is timely as the FCC considers
whether to repeal obsolete ownership rules that are preventing
local broadcasters from fairly competing in a media environment
dominated by the national networks, social media platforms run
by Big Tech, and online streaming services whose content does
not always reflect the views of everyday American communities
across the country.
Mr. Chairman, as the former general counsel of the FCC
during the first Trump administration, one of my proudest
moments was persuading the U.S. Supreme Court to take and
ultimately decide by unanimous vote a case that upheld Chairman
Pai's landmark media ownership reforms for the digital age,
including outdated prohibitions on newspaper and broadcast
cross-ownership. Now under Chairman Carr's leadership, the FCC
is continuing the important work of reviewing the Agency's
remaining ownership rules. In my view, all of these
prescriptive rules are outdated and ought to be repealed, and
chief among these is the national television broadcast
ownership cap.
As general counsel, I defended the Agency's bipartisan
consensus that the Agency has legal authority to eliminate that
rule, and I continue to believe so today. The reason, Mr.
Chairman, is simple. As Justices Thomas and Scalia have said
repeatedly, when interpreting a statute, we must start with the
text, and the relevant text here is straightforward. As I
explained in more detail in a letter I submitted to the--to the
FCC in the national cap record, on two occasions, in 1996 and
2004, Congress chose the language, ``modify its rules,'' to
instruct the Commission to make a one-time change to its
longstanding national ownership cap rule.
The Court of Appeals here in D.C. looked at the language in
the 1996 Act and concluded that it was ``only the starting
point from which the Commission was to assess the need for
further change.'' If Congress intended to eliminate that
discretion, the Court reasoned, ``It need only have enshrined
the cap in the statute itself.'' Only two years later, in 2004,
Congress directed the Commission to change the national cap
level again, but kept that ``modify its rules'' formulation in
place. That was not accidental. Congress had before it two
bills that would have expressly codified the cap as the D.C.
Circuit suggested, but adopted neither proposal. Congress'
choice of words to direct a one-time rule change rather than
impose a mandate, as it has in other parts of the
Communications Act even with respect to broadcast policy, those
words matter.
Now, I believe the FCC not only can modify the cap, but it
should do so. During the early days of the cap, as you
mentioned, Mr. Chairman, Americans still got their news and
other programming primarily from one of the so-called Big Three
broadcast networks. The FCC hoped that limits on audience reach
would help ensure against those then dominant voices
monopolizing the marketplace, but advances in technology have
turned that original rationale on its head. Those networks
increasingly distribute programming through their own streaming
platforms, none of which are subject to the FCC's rules.
Ironically, a rule originally intended to constrain the
power of large networks, now provides them with a competitive
advantage over smaller local stations. Meanwhile, more than
half of Americans today get their news and entertainment from
streaming services, social media, and virtual MVPDs, like
YouTube TV, for the first time, none of which are subject to
this audience reach limitation. Imagine a rule that Hulu,
Netflix, Facebook could only reach 39 percent of the
population. They exceed those numbers today and would have to
divest, but that's the world in which local broadcast lives.
Broadcast stations do have one advantage, as you mentioned,
Senator Cantwell. They remain the source of news and
information that Americans trust the most. Local newsrooms
provide unbiased reporting free from algorithmic bias and
politicized environments that infect a lot of online discourse.
Eliminating the cap would provide stations with flexibility to
take advantage of economies of scale to help them compete more
effectively with today's modern media behemoths. It would also
benefit viewpoint diversity. Affiliate groups that represent a
broad cross-section of Americans would have more leverage to
demand programming from networks and streamers that reflect
conservative and moderate values, not only the progressive
values of content creators in places like Hollywood and New
York.
Now, even without the cap in place, broadcasters involved
in an acquisition would still have to undergo the same
competition review at the Department of Justice as every other
sector of the economy. Indeed, broadcasters uniquely have to
undergo a separate public interest review at the FCC, which
historically has considered issues like localism and viewpoint
diversity that national cap proponents have talked about. In
conclusion, good deals that would otherwise be blocked by the
39-percent cap could get approved, while bad deals would not,
or as President Trump put it this past weekend, letting good
deals get done will result in ``more competition and at a
higher and more sophisticated level'' between local affiliates
and national TV networks.
I again thank the Committee. I look forward to your
questions.
[The prepared statement of Mr. Johnson follows:]
Prepared Statement of Thomas M. Johnson, Jr., Former General Counsel,
Federal Communications Commission
Chairman Cruz, Ranking Member Cantwell, and Members of the
Committee, thank you for the invitation to testify today. I am grateful
for the opportunity to discuss the important topic of media ownership
in the digital age, and in particular, why it is both lawful and in the
public interest for the Federal Communications Commission to repeal an
obsolete ownership limit on local broadcast television stations that
has limited their ability to compete in a media environment
increasingly dominated by Big Tech social media platforms, national
programmers, and other media giants who are not subject to the same
regulatory constraints.
Consumers trust their local broadcasters to provide them with
unbiased local news, weather, sports, and other programming reflective
of the communities they serve, and indeed, these FCC licensees have a
public interest obligation to serve their local communities. Given
that, it is imperative that broadcasters not be subject to
prescriptive, artificial limits on their ability to scale effectively
to continue performing their important public mission and to act as a
check on national programmers whose content does not always reflect the
views of everyday Americans across the country.
My Background Promoting Media Ownership Reform
To provide the Committee with some context on my history with these
issues: I am currently the Co-Chair of the Issues and Appeals practice
at Wiley Rein LLP, and before that, in the first Trump administration,
I served as General Counsel of the FCC under Chairman Ajit Pai and
then-Commissioner (now Chairman) Brendan Carr.
During my tenure, the Office of General Counsel took seriously its
obligation to stay within the limits of the authority that Congress
delegated to the Commission while vigorously pursuing the public
interest. I am proud that during my time at the FCC nearly all the
Commission's orders were upheld in court. Relevant here, that record
includes a unanimous Supreme Court decision in FCC v. Prometheus Radio
Project that affirmed our landmark media-ownership reforms repealing
long-outdated rules on media cross-ownership that had been held up in
litigation in the courts of appeals for decades.
As GC under Chairman Pai, I also defended the Commission's
authority to eliminate or modify an agency rule that restricts
broadcasters from owning television stations that reach more than 39
percent of our national audience. This position is consistent with the
agency's longstanding bipartisan consensus that--in the words of three
former Democratic permanent or acting FCC Chairs (Tom Wheeler, Mignon
Clyburn, and Jessica Rosenworcel)--the FCC retains ``authority to
modify the national audience reach cap'' under the Commission's
statutory mandate to ``revisit its own rules and revise or eliminate
them when it concludes such action is appropriate.'' I continue to hold
this view today.
The FCC Has the Legal Authority to Eliminate the National Cap
The reason why is simple. As Justice Thomas and the late Justice
Scalia would advise us, to discern the scope of FCC authority, we must
start with the text of the statute. And that text here is
straightforward.
As the former FCC Chairs understood, Congress gave the Commission
broad authority, ``as public convenience, interest, or necessity
requires,'' to ``[m]ake such rules and regulations. . .as may be
necessary to carry out the provisions of'' the Communications Act.
Pursuant to this authority, the FCC starting in the 1940s enacted and
subsequently modified several media ownership rules--including a
version of the national ownership cap.
Congress has never disputed the agency's authority to adopt those
rules. Rather, on two occasions, Congress has modified the agency's
judgment on specific ownership limits while preserving the FCC's
authority to change those limits as competitive circumstances require.
In the Telecommunications Act of 1996, the most comprehensive
reform to date of the Communications Act, Congress directed that the
agency ``modify its rules'' governing media ownership in several
respects, including by adjusting the national cap at the time from 25
percent to 35 percent. That ``modify its rules'' formulation is
critical. As the D.C. Circuit held in 2002, that language preserved the
FCC's discretion to change or repeal the national cap, and if Congress
intended to eliminate that discretion, ``it need only have enshrined
the 35 percent cap in the statute itself.''
Two years after that decision, and presumably aware of the court's
construction of the 1996 Act, Congress in an appropriations measure
again directed the Commission to change its rule-based national
ownership limit--which the FCC had by then modified to 45 percent--this
time requiring the Commission to lower the limit to 39 percent. But in
doing so, Congress did not enshrine the new cap in the statute, as the
D.C. Circuit suggested it might do. Congress merely substituted the
number ``39'' for ``35'' while keeping the ``modify its rules''
formulation in place.
In other words, Congress preserved the exact same language--
``modify its rules''--that the D.C. Circuit had just determined was
``only the starting point from which the Commission was to assess the
need for further change.'' And that was no accident. When Congress
passed that provision, it already had before it two bills in the House
and Senate that would have expressly codified the national cap, but it
ultimately adopted neither of those proposals.
Congress knows how to remove Commission discretion over broadcast
policy when it wants to. In the Radio Broadcasting Preservation Act of
2000, for example, Congress directed certain minimum distance
separations between broadcast channels and told the FCC it ``may not .
. . eliminate or reduce'' those distances, except ``as expressly
authorized by an Act of Congress enacted after the date of the
enactment of this Act.'' That could not be clearer. But Congress has
never used any such express restrictive language in connection with
broadcast ownership limits--not in 1934, 1996, 2004, or today. And
there is a longstanding presumption against implied repeals of
preexisting laws, especially in connection with appropriations bills.
Now, as a former FCC General Counsel, I am aware of how agencies
under the old Chevron deference regime would try to drive trucks
through any statutory ambiguity to enhance their power. To cite one
example, prior administrations relied on Chevron to attempt to impose
utility-style mandates designed for telephone monopolies on broadband
Internet providers under the mantle of ``net neutrality''--an effort
that the FCC successfully reversed while I was GC. But Loper Bright,
the case that overturned Chevron, recognized that there will be cases
where Congress expressly delegates authority over a policy decision to
a Federal agency. And the same Court that decided Loper Bright also
decided Consumers Research v. FCC one year later--which expressly
reaffirmed that Congress delegated ``significant discretion'' to the
FCC in the Communications Act to adopt rules ``in the `public
interest.' ''
Ultimately, under Loper Bright, the search must be for the best
reading of the statute. And here, there's one best reading by a mile:
Congress provided the FCC with the authority to adopt ownership rules,
repeatedly ratified that authority, and consciously used a ``modify its
rules'' formulation that preserves that authority for the future.
While critics of the FCC's authority to modify the cap purport to
invoke ``textualism,'' their arguments are oddly unmoored from the
text. They argue that a provision removing the cap from mandatory
review every four years means that the FCC cannot modify the cap at
all. But Congress did not say that. They argue that a provision
prohibiting the FCC from exercising its separate forbearance authority
means that Congress cannot exercise its rulemaking or waiver
authorities. But Congress did not say that. They argue that a provision
requiring companies in certain cases to divest enough stations to come
into compliance with the cap within two years means the FCC cannot
further modify the cap. But Congress did not say that either.
To quote Justice Alito, these arguments amount to ``pirate ship''
textualism--a method of interpretation that ``sails under a textualist
flag'' but seeks to ``update'' a statute rather than interpret it. That
is impermissible. Especially after Loper Bright, neither the FCC nor
the courts may draw strained inferences from neighboring provisions in
a statute to reach a policy outcome preferred by certain parties. To
the contrary, the best reading of the text Congress actually adopted
must prevail. Here, that means affirming the FCC's longstanding
authority to modify the national ownership cap.
Eliminating The Cap Will Enhance Competition In The Media Marketplace
The FCC not only can modify the national television ownership cap--
it should do so.
When I was at the FCC, I saw firsthand how antiquated rules based
on outdated assumptions can harm innovation, investment, and
competition in an ever-evolving technological landscape. Take ``net
neutrality,'' for example. Proponents of the Obama-era ``net
neutrality'' rules argued that we should apply the Communications Act's
Title II framework--designed for the age of rotary phones and one major
long-distance telephone network--to the modern broadband Internet
economy. As we explained to the D.C. Circuit, those rules ``hampered
broadband innovation, investment, and deployment'' and were unnecessary
given that ``transparency, market forces, and enforcement of existing
antitrust and consumer protection laws'' adequately protected against
anticompetitive or other harmful conduct in the broadband industry.
Much the same could be said for the national cap today. When the
FCC first adopted a similar rule in the 1940s, and even under the
modern incarnation of the rule adopted in 1985, most Americans still
got their news and other programming from one of the so-called ``Big
Three'' broadcast networks--CBS, NBC, and ABC. The FCC intended that
limits on national audience reach would help protect viewpoint
diversity and constrain economic concentration by ensuring that then-
dominant media voices could not monopolize the marketplace.
But advances in technology have now turned that original rationale
on its head. Those networks increasingly distribute programming through
their own streaming platforms online, none of which are subject to the
FCC's audience reach limitation, rather than through their affiliated
broadcast stations. Ironically, then, a rule originally intended to
constrain the power of large networks now provides them with a
competitive advantage over local stations that cannot scale as
effectively or have the same bargaining power to distribute content via
major online platforms.
Moreover, beyond the major networks, today's media landscape is
littered with options for eyeballs and clicks that the FCC could not
have imagined when it first started adopting ownership rules. First,
there are the cable and satellite providers who offer pay-TV packages.
Then, for the increasing number of cord-cutting Americans, there is an-
ever expanding array of streaming services, social media networks, and
virtual MVPDs like YouTube TV. Indeed, for the first time last year,
streaming viewership surpassed both broadcast-and cable-television
viewership combined. Meanwhile, social media recently overtook
television as the principal place where more than half of Americans
obtain their news.
These other media outlets face no similar arbitrary ``audience
reach limitation'' like local broadcasters do. Imagine a rule that
required Hulu or Netflix to limit subscribers to 39 percent of the
public, or that cut off Facebook users at 39 percent of the Nation's
population. According to recent Pew surveys, those services are
currently used by 52 percent, 72 percent, and 68 percent of Americans,
respectively. A similar ownership cap for digital media would require
each of those services to divest consumers today. Yet local broadcast
stations have operated under an equivalent cap for decades.
Broadcast stations do have one advantage--they remain the source of
news and information that Americans trust the most. Local newsrooms
continue to employ investigative journalists and content creators whose
mission is to provide unbiased reporting on the day's events--freed
from the algorithmic biases and politicized environments that infect
much modern online social media. As Trinity Broadcasting Network, a
Christian television broadcast licensee, put it in a comment submitted
to the FCC supporting repeal of the national cap, ``free, over-the-air
television remains one of the few distribution platforms where
religious expression can reach audiences without gatekeepers, paywalls,
or platform bias.''
Indeed, as FCC licensees using public airwaves, local broadcasters
have a public interest obligation to serve their local communities.
Precisely because of their special obligations and the unique place
they occupy in the media ecosystem, broadcasters should not be
encumbered by additional, arbitrary limits on their ability to compete
with less regulated alternatives.
Eliminating the national ownership cap would provide stations with
the flexibility to infuse additional capital into their operations and
take advantage of economies of scale that could help them compete more
effectively with today's modern media behemoths. While critics claim
that additional station consolidation would threaten broadcast's local
focus and mission, history tells a different story. The FCC has
repeatedly concluded in record-based proceedings that stronger group
ownership can benefit local programming. Indeed, to cite one recent
example, when Nexstar acquired Tribune, the post-merger entity produced
more local content than before, not less.
In any event, the alternative if the status quo continues is not a
vibrant, thriving local news economy. The alternative is that broadcast
remains an endangered species heading toward extinction. Local
newspapers have already shuttered at exponential rates. Eliminating
artificial media ownership rules imposed by the government--including
the national cap--at least gives broadcast stations a chance to adapt
and thrive in the new media environment under the same competition
rules that apply to everyone else. The public interest, which the FCC
is charged to protect by altering or repealing its rules as appropriate
when competition evolves, demands no less.
Repeal Would Enhance Viewpoint Diversity--Including Conservative
Voices
Some proponents of retaining the national cap argue that empowering
local broadcasters would somehow hurt conservative voices in media.
These arguments rely primarily on daisy-chain reasoning about how
particular station groups might exert greater influence in persuading
cable operators to carry certain programming affiliated with the
station group. To the extent that occurs, the FCC has deemed such
practices presumptively reasonable and there would be no political
valence to them. But in any event, repealing the cap would benefit
viewpoint diversity, including for conservatives.
Eliminating the national cap would empower station groups by
enabling them to scale up and bargain more effectively with national
programmers. That means affiliate groups that represent a broad cross-
section of Americans would have more leverage to demand network
programming that reflects conservative and moderate values--not the
predominantly progressive politics of content creators from large
coastal cities. Similarly, affiliate groups could bargain for more
rights to ``preempt'' national programming in favor of local content,
or more local control over what syndicated programming to air in what
time slots. This too could exercise a gravitational pull on networks,
which may be more inclined to offer programming that appeals to a
broader audience.
A similar dynamic would play out on streaming media. Right now, the
national broadcast networks use their leverage to obtain unfavorable
terms from local stations for carriage rights on streaming services and
virtual TV platforms. If station groups were allowed to expand
unencumbered by the national cap, local broadcasters would be better
positioned to obtain fair compensation for their content and bargain
for retransmission rights on virtual platforms.
By contrast, who benefits from maintaining the status quo? It's the
Big Tech and Big Media companies who dominate social media and other
online platforms and whose politics lean decidedly liberal. If the
content these companies produce turns a profit, it should be because it
resonates with Americans, not because arbitrary government mandates
crowd out potentially more popular options or allows these companies to
acquire local content for pennies on the dollar.
As a case in point, consider the history of the FCC's Fairness
Doctrine. Originally conceived as a way to ensure broadcasters would
present balanced points of view on scarce public airwaves, it
ultimately became weaponized in the 1960s as a means to silence
conservative voices in radio. Following widespread public criticism,
the rule's repeal in the 1980s led to an explosion in conservative talk
show programs, led by Rush Limbaugh, that set the model for the
conservative voices in cable news and online influencers that we have
today.
The national television ownership cap has followed a similar
trajectory. While conceived as a means to constrain the major networks,
it now empowers them to the detriment of voices in local broadcasting.
Repeal could help level the playing field and restore more balance in
how television reports on the critical political and cultural issues of
the day.
Any Concerns About Competition Or Localism Can Be Addressed Case-by-
Case
Even if one believed that larger station groups would present
competition or localism concerns in certain cases, it is quite an
inferential leap--over a yawning chasm--to think that the solution is a
prescriptive, across-the-board ownership limit pegged to 39 percent (a
number that reflects a snapshot of decades-old market realities). One
searches in vain for plausible defenses of ossifying for all time this
precise Delphic ownership limit.
Eliminating the cap would simply level the playing field so that
broadcasters are subject to the same competitive constraints as other
companies throughout the media ecosystem. That does not mean no
oversight over future broadcast deals. To the contrary, the Antitrust
Division of the Department of Justice would still scrutinize deals that
meet certain economic thresholds for compliance with competition laws--
just as it does in every other sector of the economy. The Federal Trade
Commission and related state authorities would continue to police
unfair and deceptive practices. Any deals or business practices that
are anticompetitive could still be enjoined, either by the government
or in private lawsuits.
Indeed, because broadcasters are FCC licensees charged with
operating in the public interest, any broadcast deals would have to
undergo an additional independent review at the Commission. No other
private companies to my knowledge undergo two layers of Federal
competition review, but that will continue to happen for FCC licensees,
regardless of whether prescriptive ownership rules remain in place.
That is all the more reason why they shouldn't. And because the FCC's
Congressional public interest mandate sweeps broader than concerns
about competition, the FCC could continue to examine the effects of
proposed transactions on localism and viewpoint diversity, two other
areas of concern for national-cap proponents.
In short, good deals that would otherwise be blocked by the 39
percent cap could get approved, although only after vigorous review,
while bad deals could still be blocked. Or as President Trump said this
past weekend, ``[l]etting Good Deals get done'' will result in ``more
competition, and at a higher and more sophisticated level,'' with the
large national networks that currently dominate the landscape for TV
programming.
In closing, I want to thank you again Chairman Cruz, Ranking Member
Cantwell, and Members of the Committee, for holding this important
hearing and for the opportunity to testify. I look forward to answering
your questions.
The Chairman. Thank you. Mr. Waldman.
STATEMENT OF STEVE WALDMAN, PRESIDENT,
REBUILD LOCAL NEWS
Mr. Waldman. Thank you, Chairman Cruz, Ranking Member
Cantwell, and other Committee members.
On average, two newspapers close every week in the United
States. Three thousand five hundred have shut down in the last
20 years, and perhaps most importantly, in the last 20 years,
there has been a 75-percent drop in the number of local
journalists--that's in print, TV, digital--and the consequences
for communities are really alarming. Studies show that areas
with less local news have more corruption, more government
waste, less civic involvement, less volunteering. People know a
lot about national controversies, but not all that much about
local issues: what the mayor did this year or even what the
mayor's name was.
And there's one more thing that's a bit harder to measure
but so important, is the vacuum is being filled by social media
and national news, which are leaving communities more divided.
As Senator Moran said last week about the Plainville Times,
national journalism has the habit of tearing us apart;
community journalism pulls us together. Yes, media
consolidation is one of the causes. For instance, private
equity firms in New York acquired lots of newspapers, then laid
off the local reporters in the rest of the country, but the
primary cause is the internet. Advertisers shifted spending
toward Google, Facebook, and other tech platforms and then used
their market clout to restrict competition and provide less
revenue to local publishers.
And now comes another body blow: artificial intelligence.
AI will further deplete the revenue of local news outlets. AI
companies will suck in the local news content to train and
ground the AI assistance, which then provide full answers
instead of linking prominently off to the publisher websites.
And those click-throughs are what have generated the traffic
and the revenue for the local news outlets.
When the Washington Post announced its cuts, which included
a 70-percent cut in the Metro staff, they noted that their
search traffic had dropped by half in three years. And by the
way, these drops in traffic are at conservative websites as
well, but here's the horrible paradox of all this. As AI erodes
local news businesses, that hollowness in turn will make it
worse--will make AI worse. AI works well when it has massive
amounts of data, but it really struggles when it's confronted
with the condition called information scarcity, and local news
suffers from that ailment exactly. Studies show AI routinely
provides inaccurate information on local matters, and when
malicious players are producing deepfakes and there are no
local watchdogs, those will run rampant.
And to be clear, like, AI does offer tremendous
opportunities to local newsrooms. It really does. I mean, the--
these nearly magical tools can help local news outlets do more
coverage with less money. But the tech industry has to go
farther than that and help reverse the financial crisis, the
revenue crisis that it helped to create, and I think there are
a few ways to think about that.
First, AI companies must compensate local news
organizations, including the small and medium-sized ones, for
the content they use. Many of them have made deals with big
media chains, but so far have left out thousands of smaller
players. Second, we have the big controversies and energy over
the construction of AI data centers. Well, there's an
opportunity there, too. Here's an idea: have each data center
contribute some money, a one-time donation to a community
foundation to create an endowment that would help pay for local
reporters, and those reporters can do the follow up. Did the AI
companies actually buy from local businesses as they said they
would or hire locally, or did they do the--pay their way on
electricity as they said?
And finally, AI companies and social media platforms should
pay, I believe, a mitigation fee to help finance the revival of
community news. Even a tiny fee could help pay for something
like Senator Cantwell's bill that would provide tax credits for
the hiring of local news or tax credits for small businesses
that advertise in local news, which is an idea we're seeing
Republicans push in New Hampshire and Kansas right now.
Now, on the local TV ownership caps, our group has not
taken a position on the question of whether or not Congress--
FCC has the authority to do the caps on their own, but I would
say this. First, I actually have some sympathy for both of
these arguments. You know, the--it really is true that local TV
news is incredibly important. In some places, it's the only
thing left, and so we really agree that this ought to be looked
at through the prism of whether or not it helps local news. On
the other hand, there really is a lot of evidence that
consolidation has gone in the other direction and actually
hollowed out some newsrooms.
So, my advice would be to look at that question through the
prism of whether it's good or bad for local news, and
specifically look at whether it maintains or increases or
reduces the number of local reporters and editors, not the
number of hours because if you have less local reporters and
more hours, what you actually have is more superficial local
news or more copying. So, really look at the kind of capacity.
And I think time is running out. We need to reverse this before
nothing's left. We at heart need more human reporters living in
the communities, accountable to and listening to their
neighbors, and for that revival to happen, the biggest
technology companies must quickly step up as well.
[The prepared statement of Mr. Waldman follows:]
Prepared Statement of Steven Waldman, President, Rebuild Local News
Thank you Chairman Cruz for inviting me, and for your salient
comments in the past about the importance of local news. And thank you
Senator Cantwell for your strong leadership in trying to advance public
policies to help local news.
Rebuild Local News is a nonpartisan group that develops and
advocates First-Amendment-friendly public policies that strengthen
community news. The Rebuild Local News Coalition includes 55 publisher
associations, foundations, labor unions, journalists groups and civic
groups. Together they represent 3,000 newsrooms and 15,000 journalists
around the country--though the views here are my own and don't
necessarily represent those of the member associations.
As you know, local news has collapsed. Approximately 3,500
newspapers in the past twenty years have disappeared, representing more
than 40 percent of the total which have closed.\1\ On average, two
newspapers close each week. There's been a 75 percent drop in the
number of reporters in the past 20 years.\2\ In 2002, there were about
40 reporters per 100,000 people. Now, that number is 8.2.\3\ According
to the Local Journalist Index, 184 of Texas's 254 counties, about 72
percent, fall below the already anemic national average, while 20 of
Washington's 39 counties, just over 51 percent, are in the same
position.\4\
---------------------------------------------------------------------------
\1\ Medill School of Journalism, State of Local News/News Desert
Project, Northwestern Uni-
versity. 2025. https://localnewsinitiative.northwestern.edu/projects/
state-of-local-news/2025/report/
\2\ Muck Rack and Rebuild Local News. 2025. The Local Journalist
Index. https://muckrack
.com/research/local-journalist-index
\3\ Rebuild Local News & Muck Rack, Local Journalist Index.
\4\ The LJI also shows that the statewide average journalist
density is 5.9 in Texas and 7.7 in Washington, both below the national
level. National, State and County-level journalist density is drawn
from the Local Journalist Index (LJI), produced by Rebuild Local News
in partnership with Muck Rack.
---------------------------------------------------------------------------
And of course, just to underline that no place is immune, last week
we learned that The Washington Post would be reducing its metro staff
by 70 percent, as part of a massive cut to their newsroom. The local
news crisis is spreading.
As a result of the drop in the number of reporters and outlets,
many communities have little or no local reporting on government,
schools, courts, or public safety. This collapse has real consequences
for how communities govern, how public dollars are spent, and how
residents stay informed.
There are financial impacts. Communities with less local news had
lower bond ratings, higher financing costs, and higher taxes.\5\ They
have more government corruption and more government waste.\6\ \7\
Communities that suffer from a loss of local news are also linked to
increased regulatory violations and organizational wrongdoing.\8\
---------------------------------------------------------------------------
\5\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in
Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal
of Financial Economics 135, no. 2 (February 2020): 445-467, https://
doi.org/10.1016/j.jfineco.2019.06.003.
\6\ Matherly, T., & Greenwood, B. N. (2024). No news is bad news:
The internet, corruption, and the decline of the Fourth Estate. MIS
Quarterly, 48(2), 699-714. https://doi.org/10.25300/MISQ/2023/17869;
Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital Cities,
Accountability, and Corruption: Evidence from U.S. States,'' American
Economic Review 104, no. 8 (August 2014): 2456-81, https://doi.org/
10.1257/aer.104.8.2456.
\7\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in
Darkness?''.
\8\ Heese, Jonas & Perez-Cavazos, Gerardo & Peter, Caspar David,
2022. ``When The Local Newspaper Leaves Town: The Effects Of Local
Newspaper Closures On Corporate Misconduct,'' Journal of Financial
Economics, Elsevier, vol. 145(2), pages 445-463.
---------------------------------------------------------------------------
The civic life of communities is undermined. The contraction has
contributed to a significant drop in local civic knowledge and
participation in the United States. Those who follow local news closely
are more likely to engage in activities with civic organizations such
as sports leagues, church groups or charity organizations' civic
activities.\9\ Evidence also suggests that the decline of local news is
linked to higher loneliness, especially in rural communities.\10\
---------------------------------------------------------------------------
\9\ Michael Barthel et al., ``Civic Engagement Strongly Tied to
Local News Habits,''.
\10\ Hayes, Danny and Trivedi, Anusha, Loneliness and the Local
News Environment (February 05, 2026). Available at SSRN: https://
papers.ssrn.com/sol3/papers.cfm?abstract_id=6183182
---------------------------------------------------------------------------
The basic health of the political system declines. Declines in
local news result in less knowledge about public officials and less
civic knowledge\11\, voters are less likely to have an opinion about
their member of Congress,\12\ less likely to be able to name things
they like or dislike about their representative.\13\ In 1966, 70
percent of voters could name their mayor. In 2016 only 40 percent of
voters could.\14\ Communities with less local news have lower voting
rates, and those that do regularly vote are more likely to follow local
news.\15\ \16\ The members of Congress who get less coverage in the
local press are less likely to appear as a witness before a
congressional committee to advocate for their district.\17\
---------------------------------------------------------------------------
\11\ Danny Hayes and Jennifer L. Lawless, ``As Local News Goes, so
Goes Citizen Engagement: Media, Knowledge, and Participation in U.S.
House Elections,'' The Journal of Politics 77, no. 2 (April 2015): 447-
62, https://doi.org/10.1086/679749.
\12\ Danny Hayes and Jennifer L. Lawless, ``The Decline of Local
News and Its Effects: New Evidence from Longitudinal Data,'' The
Journal of Politics 80, no. 1 (October 18, 2017): 332-36, https://
doi.org/10.1086/694105.
\13\ James Snyder Jr. and David Stromberg, ``Press Coverage and
Political Accountability,'' Journal of Political Economy 118, no. 2
(April 2010): 355-408, https://doi.org/10.1086/652903.
\14\ Hayes and Lawless, News Hole, 2.
\15\ Jessica Bruder, ``Is the Death of Newspapers the End of Good
Citizenship?,'' Christian Science Monitor, November 11, 2012, https://
www.csmonitor.com/USA/Society/2012/1111/Is-the-death-of-newspapers-the-
end-of-good-citizenship.; Michael Ewens, Arpit Gupta, and Sabrina T.
Howell, ``Local Journalism under Private Equity Ownership,'' SSRN, Oct.
11, 2021, https://ssrn.com/abstract=3939316.
\16\ Michael Barthel et al., ``Civic Engagement Strongly Tied to
Local News Habits,'' Pewresearch.org (Pew Research Center, November 1,
2016), https://www.pewresearch.org/journalism/wp-content/uploads/sites/
8/2016/11/PJ_2016.11.02_Civic-Engagement_FINAL.pdf.
\17\ Snyder, Stromberg, ``Press Coverage and Political
Accountability,'' 355-408.
---------------------------------------------------------------------------
Just as important, studies have also shown that this contraction
has exacerbated polarization and the nationalization of all news and
disputes. The vacuum created by the loss of local news tends to be
filled by national media and social media (which fuels polarization and
is more polarizing and prone to spreading inaccuracies.) In communities
with less local news, voters are more likely to vote on a party line
basis\18\ and have more polarized views.\19\ As Senator Moran recently
said, in speaking movingly about its recently-merged local newspaper,
the Plainville Times, ``I saw first-hand how the newspaper supported
the community and brought neighbors, friends and even strangers
together. Community journalism pulls us together. National journalism
has the habit of tearing us apart.''
---------------------------------------------------------------------------
\18\ Daniel J. Moskowitz, ``Local News, Information, and the
Nationalization of U.S. Elections,'' American Political Science Review
115, no. 1 (February 2021): 114-29, https://doi.org/10.1017/
s0003055420000829; Joshua P Darr, Matthew P Hitt, and Johanna L
Dunaway, ``Newspaper Closures Polarize Voting Behavior,'' Journal of
Communication 68, no. 6 (November 5, 2018): 1007-28, https://doi.org/
10.1093/joc/jqy051.
\19\ Darr JP, Hitt MP, Dunaway JL. Home Style Opinion: How Local
Newspapers Can Slow Polarization. Cambridge University Press; 2021.
---------------------------------------------------------------------------
There are multiple causes to the contraction. Some of it was self-
inflicted by the news industry. As local papers were bought up by hedge
funds or private equity firms based in New York, they cut reporters out
in the rest of the country.\20\ Mega mergers financed with massive
amounts of debt contributed, too, as news organizations used profits to
pay off loans instead of investing in digital transformation or local
coverage. We have even seen the rise of local newspapers that have no
local reporters at all.\21\ In the case of both newspapers and local
TV,\22\ consolidation and nationalization in many cases has aggravated
the local news crisis, leading to fewer reporters in communities and
less, or more superficial, coverage of school boards, economic
development, elections, social problems and civic activity.\23\ Indeed,
the revival and reformation of local news will require not just new
business and editorial approaches--but new ownership models. We have
seen that family-owned news organizations, smaller chains and
nonprofits tend to do better on the local level.\24\ It appears that
local news often does better when it is in local hands.
---------------------------------------------------------------------------
\20\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local
Journalism under Private Equity Ownership,'' NBER Working Paper 29743
(2022), https://doi.org/10.3386/w29743; Steven Waldman, ``The local
news crisis illustrates the inadequacy of the current antitrust
approach,'' Rebuild Local News, May 8, 2024, https://
www.rebuildlocalnews.org/the-local-news-crisis-illustrates-the-
inadequacy-of-the-current-antitrust-approach/
\21\ Abernathy, ``News Deserts and Ghost Newspapers: Will Local
News Survive?,'' 34, www.usnewsdeserts.com (Chapel Hill: University of
North Carolina, June 2020), https://www.usnewsdeserts.com/wp-content/
uploads/2020/06/2020_News_Deserts_and_Ghost_Newspapers.pdf; Jessica
Garrison, ``As the Salinas Californian withers, a city yearns to know
its stories,'' Los Angeles Times, March 27, 2023, https://
www.latimes.com/california/story/2023-03-27/as-the-salinas-californian-
withers-a-city-yearns-to-know-its-stories.
\22\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''
(PDF), https://www.free
press.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed
Feb. 6, 2026).
\23\ Free Press, ``Comments of Free Press: In the Matter of 2022
Quadrennial Regulatory Review,'' Mar. 3, 2023, https://
www.freepress.net/download/free-press-2022-quadrennial-review-comments-
pdf.
\24\ Ewens, Gupta, and Howell, ``Local Journalism under Private
Equity Ownership.''
---------------------------------------------------------------------------
But the primary reason for the collapse of local news business
models is the rise of the internet. Local and regional advertisers
shifted from local media to Google, Facebook and other tech platforms.
Some 85 percent of local advertising now goes to non-local companies,
Google, Meta and Amazon.\25\ Not all Big Tech behavior was malicious.
Some of these trends happened because the tech companies provided
better services to local businesses. But it is also true that they then
used that market clout to squelch competition and provide less revenue
to local publishers.\26\
---------------------------------------------------------------------------
\25\ Borrell Associates, ``2025 Annual Report: Benchmarking Local
Digital Media,'' May 2025, https://borrellassociates.com/ip_releases/
2025-annual-report/.
\26\ U.S. Department of Justice. (2025, April 17). Department of
Justice prevails in landmark antitrust case against Google https://
www.justice.gov/opa/pr/department-justice-prevails-landmark-antitrust-
case-against-google
---------------------------------------------------------------------------
And blame aside, the reality remains that the digital disruption
had many great benefits and also some serious downsides--one of which
is the tragic undermining of community news. It's only fair that the
big winners of the digital revolution help repair the damage, whether
it was intended or unintended.
Unfortunately and amazingly, the local news business models are
once again feeling another body blow--this time from artificial
intelligence.
To be clear, AI will provide many truly amazing opportunities for
publishers who use it ethically and creatively. Right now newsrooms
across the country are experimenting with how to reinvent themselves--
providing more coverage for less money, thanks to AI. We applaud and
support that innovation.
But when it comes to AI and local news, there are also several
overriding--and ominous--trends.
The first order economic impact is likely to be further erosion of the
local news business models--yet another blow to community
information and news.
Americans are indeed using AI search to get information about their
communities. Last week, OpenAI reported that ``the demand for reliable
local news is already visible inside ChatGPT at a rate of about 1
million prompts per week.'' \27\
---------------------------------------------------------------------------
\27\ OpenAI Global Affairs, ``A Different Path on Local News,''
(2026, February 3) https://openaiglobalaffairs.substack.com/p/a-
different-path-on-local-news.
---------------------------------------------------------------------------
Unfortunately, under the current system, local news outlets will
again end up financially wounded. AI companies hoover up content
created by local news outlets--content that came about as a result of
paying a human being journalist. The AI companies use that to train and
ground their models. The AI assistants can replace referral traffic by
providing summaries instead of links--so users don't have to click
through to some other website. That's the key difference. In the olden
days--like, a year ago--even though there was a clear power imbalance
in favor of big tech, they did also at least give a prominent link, so
the user might sometimes click through to the news site. That provided
traffic that the news outlets could convert to revenue.
AI will grievously wound, if not kill, the click-through.\28\ In
announcing its layoffs, the Washington Post editors noted that their
search traffic had dropped by one-half in just three years.\29\
---------------------------------------------------------------------------
\28\ Pew Research Center, ``Google users are less likely to click
on links when an AI summary appears in the results,'' July 22, 2025,
https://www.pewresearch.org/short-reads/2025/07/22/google-users-are-
less-likely-to-click-on-links-when-an-ai-summary-appears-in-the-
results/.
\29\ Bauder, D. (2026, February 4). Washington Post cuts a third of
its staff in a blow to a legendary news brand. Associated Press.
https://apnews.com/article/washington-post-staff-reduction-layoffs-
cuts-923f87d4bd319c8a64b278165d0a6e27
---------------------------------------------------------------------------
And, by the way, this phenomenon is nonpartisan: conservative sites
are seeing major traffic declines too.\30\
---------------------------------------------------------------------------
\30\ Analysis of the top 50 U.S. news websites reveals that 37
sites experienced year-over-year traffic declines in May 2025, with
only 13 showing growth. Press Gazette. (2025). Most popular news
websites in the US--monthly ranking Retrieved December 19, 2025, from
https://pressgazette.co.uk/media-audience-and-business-data/
media_metrics/most-popular-websites-news-us-monthly-3/
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Whatever the ultimate outcomes in the courts on questions of fair
use, the fact will remain that the AI companies extract tremendous
value from local news providers without giving much back to newsrooms--
at a time when local news is already in an existential crisis.
If unaddressed, the collapse of local news will actually make AI lower
quality and ultimately spread more misinformation.
AI struggles when there's a dearth of information on a topic.\31\
It is more likely to be inaccurate and spread misinformation. The local
news ecosystems in many communities suffer from this ``information
scarcity.'' We've invented whole new terms--``news deserts'' and
``ghost newspapers''--to capture how barren some of these areas are.
Not surprisingly, AI has struggled to get local information right.
Studies have found that AI assistants often flubbed\32\ local
elections\33\ including information about how to register, where to
vote,\34\ the positions of candidates,\35\ and how disabled people\36\
could vote. In another study about elections in Switzerland and
Germany, one-third of answers included ``wrong election dates, outdated
candidates, or even invented controversies concerning candidates.\37\
Chatbots are generally not well suited to adapt to the local context or
language.'' In Australia, a mayor sued OpenAI when ChatGPT declared,
falsely, that he had been convicted of bribery.\38\ The fact-checking
and data analytics firm NewsGuard\39\ reported that the error rate for
AI search had actually gone up in the past year, and regularly picked
up material from fake local sites created by Russia.\40\
---------------------------------------------------------------------------
\31\ Philip M. Napoli, ``AI Needs Us More Than We Need It,''
Washington Monthly, Oct. 29, 2024, https://washingtonmonthly.com/2024/
10/29/ai-needs-us-more-than-we-need-it/
\32\ Democracy Reporting International, ``Are Chatbots Misinforming
Us About the European Elections? Yes,'' by Austin Davis, Michael Meyer-
Resende, Duncan Allen and Ognjan Denkovski, March 2024, https://
democracyreporting.s3.eu-central-1.amazonaws.com/pdf/6628b70e0b124
.pdf.
\33\ David Ingram, ``AI chatbots got questions about the 2024
election wrong 27 percent of the time, study finds,'' NBC News, June 5,
2024, https://www.nbcnews.com/tech/tech-news/ai-chatbots-got-questions-
2024-election-wrong-27-time-study-finds-rcna155640.
\34\ Matt O'Brien and Ali Swenson, ``AI chatbots provide many wrong
answers about elections, report says,'' Associated Press, Feb. 27,
2024, https://apnews.com/article/ai-chatbots-elections-artificial-
intelligence-chatgpt-falsehoods-cc50dd0f3f4e7cc322c7235220fc4c69
\35\ Felix M. Simon, Sacha Altay, and Richard Fletcher, ``The role
and reliability of AI chatbots during the 2024 UK general election,''
Reuters Institute for the Study of Journalism, Sept. 2024, https://
reutersinstitute.politics.ox.ac.uk/sites/default/files/2024-09/
Simon%20et%20al%20Chat
bots%20and%20UK%20Elections.pdf.
\36\ Benjamin Freed, ``Chatbots often give wrong voting info for
people with disabilities, research finds,'' StateScoop, July 18, 2024,
https://statescoop.com/chatbots-voting-disabilities-information-wrong-
research-2024/
\37\ Salvatore Romano, Natalia Stanusch, Miazia Schuler, Riccardo
Angius, Raziye Buse Cetin, Sonia Tabti, and Marc Faddoul, ``Bing: It's
Not You, It's Me,'' AI Forensics, Dec. 15, 2023, https://
aiforensics.org/work/bing-chat-elections.
\38\ Pranshu Verma, ``An AI chatbot said a mayor was a felon. Now
he's threatening to sue OpenAI,'' The Washington Post, April 6, 2023,
https://www.washingtonpost.com/technology/2023/04/06/chatgpt-australia-
mayor-lawsuit-lies/.
\39\ NewsGuard, ``NewsGuard's One-Year AI Audit Progress Report
finds that AI models spread falsehoods in the news 35 percent of the
time,'' March 5, 2024, https://www.newsguardtech
.com/press/newsguard-one-year-ai-audit-progress-report-finds-that-ai-
models-spread-falsehoods-in-the-news-35-of-the-time/.
\40\ NewsGuard, ``August 2025 One-Year Progress Report: AI False
Information Rate Nearly Doubles in One Year,'' Sept. 4, 2025, https://
www.newsguardtech.com/wp-content/uploads/2025/09/August-2025-One-Year-
Progress-Report-3.pdf.
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Without local reporters, the deepfakes and malicious uses of AI on the
local level will be much harder to combat.
A survey of thousands of AI researchers found that 86 percent had a
``substantial'' or ``extreme'' concern about the ``spread of false
information e.g., deepfakes,'' and 79 percent worried about
``manipulation of large-scale public opinion trends.'' \41\ We've seen
how easy it is to concoct videos or stories that seem real. At the
national level, on big stories, news organizations may be able to catch
them. But on the local level, if there are no watchdogs, deepfakes will
run rampant.\42\ In addition, AI will accelerate the rise of ``pink
slime'' local news websites, misleading sites that have been created to
look like legacy local news outlets\43\ while sneakily promoting
bought-and-paid-for content by partisan activists. Newsguard has
already identified 631 ``unreliable AI-generated news'' sites.\44\
---------------------------------------------------------------------------
\41\ Katja Grace, Johnathan Sandamirskaya, Zach Stein-Perelman,
Beth Barnes and Jasmine Wang, ``Thousands of AI Authors on the Future
of AI,'' AI Impacts, Jan. 4, 2024, https://aiimpacts.org/wp-content/
uploads/2023/04/Thousands_of_AI_authors_on_the_future_of_AI.pdf.
\42\ National Association of Broadcasters, ``NAB Applauds Senate
Committee Passage of Journalism Competition and Preservation Act,''
June 15, 2023, https://www.nab.org/documents/newsroom/
pressRelease.asp?id=6913
\43\ Priyanjana Bengani, ``As election looms, a network of
mysterious `pink slime' local news outlets nearly triples in size,''
Columbia Journalism Review, June 11, 2024, https://www.cjr.org/
analysis/as-election-looms-a-network-of-mysterious-pink-slime-local-
news-outlets-nearly-triples-in-size.php.
\44\ NewsGuard, ``AI Tracking Center,'' Feb. 5, 2026, https://
www.newsguardtech.com/special-reports/ai-tracking-center/.
---------------------------------------------------------------------------
We have a vicious cycle. AI undermines local news; the lack of
local news, in turn, makes AI's quality worse.
Fortunately, a virtuous circle can be created: if AI helps revive
local news, it will make its results higher quality. The AI industry
ought to view itself as having a stake in reviving local news.
Some companies are working with news organizations to help them use
the technology to better equip their reporters.\45\ For instance,
OpenAI is working with the American Journalism Project to train
newsrooms to better use AI to reach new audiences. \46\
---------------------------------------------------------------------------
\45\ Local Media Association, ``Paris Brown--The Baltimore Times
Has Been Named Digital Innovator of the Year by Local Media
Association,'' Local Media Association, May 2025, https://
localmedia.org/2025/05/paris-brown-the-baltimore-times-has-been-named-
digital-innovator-of-the-year-by-local-media-association/ (accessed 02/
06/2026).
\46\ The Beacon, ``The Beacon's illuminating experience in AJP's
Product and AI Studio,'' Jan. 8, 2026, https://thebeaconnews.org/
stories/2026/01/08/the-beacons-illuminating-experience-in-aj
ps-product-and-ai-studio/
---------------------------------------------------------------------------
But the AI industry needs to go far beyond providing journalists
with training on how to better use their products. It needs help to
reverse the financial crisis.
First, they need to compensate local news organizations--including
medium-and small-sized outlets--for the use of the content that
they use to craft their answers to consumers.
Some major publishers have made deals with AI companies for the use
of the content\47\ but notably these companies have not made deals with
the thousands of small and independent media, especially on the local
level.\48\ We're concerned that medium and small sized players will be
once again left out.\49\ Policymakers could consider ideas like those
proposed by the Center for Journalism and Liberty such as allowing
small publishers to bargain collectively and requiring AI companies to
provide detailed summaries of training data sources.\50\
---------------------------------------------------------------------------
\47\ Sara Fischer, ``The state of AI licensing,'' Axios Media
Trends, September 9, 2025, https://www.axios.com/newsletters/axios-
media-trends-a73658e0-8d8c-11f0-840d-2fc12eb558cf.html?chunk=4#sto
ry4;Sara Guaglione, ``Here are the biggest moments in AI for publishers
in 2025,'' Digiday, Dec. 26, 2025, https://digiday.com/media/here-are-
the-biggest-moments-in-ai-for-publishers-in-2025/.
\48\ Journalism & Liberty, ``The Value of Journalism to AI,'' May
2024, https://www
.journalismliberty.org/publications/value-of-journalism-to-ai.
\49\ David Buttle, ``Publishers with AI licensing deals have seven
times the clickthrough rate,'' Press Gazette, Oct. 1, 2025, https://
pressgazette.co.uk/comment-analysis/publishers-with-ai-licensing-deals-
have-seven-times-the-clickthrough-rate/.
\50\ Courtney C. Radsch, ``Frenemies: Global approaches to
rebalance the Big Tech v journalism relationship,'' Brookings
(TechTank), August 29, 2022, https://www.brookings.edu/articles/
frenemies-global-approaches-to-rebalance-the-big-tech-v-journalism-
relations hip/ (accessed 02/06/2026) and Gordon Institute of Business
Science (GIBS), ``Big Tech and Journalism--Principles for Fair
Compensation,'' GIBS, adopted July 14, 2023, https://www.gibs.co.za/
news/big-tech-and-journalism--principles-for-fair-compensation
(accessed 02/06/2026)
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Second, local efforts around the construction of data centers should
include the health of local information and journalism in the
discussions.
Communities are understandably concerned about the impacts of data
centers on electricity prices, water use and other impacts. Some\51\
are trying to block data centers entirely, which is their right.\52\
For those communities that want data centers--but only if certain
benefits are guaranteed--here's a modest proposal. In addition to
remediating the effects on those other major issues, ask for something
simple: the money to hire a couple of local reporters. The reporters
can help ensure that the commitments from the tech companies are met,
and in general make communities better functioning--covering everything
from small businesses to city hall to high school sports.
---------------------------------------------------------------------------
\51\ NAACP, ``Advocacy in Action: Artificial Intelligence Data
Centers in Our Communities,'' May 2025, https://naacp.org/sites/
default/files/documents/Advocacy%20in%20Action%20AI%
20Data%20Centers%20.pdf; MediaJustice, ``The People Say No: Resisting
Data Centers in the South,'' September 2025, https://mediajustice.org/
wp-content/uploads/2025/09/MediaJustice-Data-Centers-Report.pdf
\52\ Mijin Cha, ``The real race for an AI moratorium: stopping data
centers,'' Tech Policy Press, April 4, 2024, https://
www.techpolicy.press/the-real-race-for-an-ai-moratorium-stopping-data-
centers/
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This can be done in a way that preserves editorial independence.
Each data center would provide a one-time donation to create a
perpetual endowment at a local community foundation. The independent
community foundation would place two reporters in a local news area
newsroom. Some companies have pledged special efforts to help the areas
where data centers are based.\53\ But if the AI companies don't do this
themselves, communities should consider requiring that these be
included in the Community Benefit Agreements.
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\53\ Brad Smith, ``Building Community-First AI Infrastructure,''
Microsoft On the Issues, Jan. 13, 2026, https://blogs.microsoft.com/on-
the-issues/2026/01/13/community-first-ai-infrastructure/.
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Third, we should ask AI companies and other social media platforms to
pay mitigation fees to help pay for the revival of community
news.
A few years ago, Sen. Cantwell sponsored an excellent bill that
provided tax relief for news outlets that hired local reporters. A
similar bill was proposed by Republican Rep. Claudia Tenney in the
House of Representatives.
Since then, state legislatures have been experimenting. Illinois
and New York passed employment credits. The one in Illinois is off to
an excellent start, having provided help for 120 newsrooms in the
state. Two thirds of them have 6 or few employees.\54\
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\54\ Rebuild Local News, ``Supporting local reporting in Illinois:
early lessons and opportunities,'' May 22, 2024, https://
www.rebuildlocalnews.org/supporting-local-reporting-in-illinois-early-
lessons-and-opportunities/
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Sen. Cantwell and Rep. Tenney also proposed tax relief for small
businesses that advertise in local news--a way of helping both
restaurants, hardware stores and local papers. Recently, Republican
lawmakers in Kansas and New Hampshire have proposed state versions of
that plan.\55\
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\55\ Kansas State Legislature, ``House Bill 2276: Establishing the
local news advertising tax credit act,'' Feb. 5, 2025, https://
kslegislature.gov/li/b2025_26/measures/hb2276; New Hampshire State
Legislature, ``House Bill 1420: relative to a tax credit for local news
advertising,'' Jan. 14, 2026, https://legiscan.com/NH/text/HB1420/id/
3288555
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In other states, including Washington, the local governments have
helped support fellowship programs, managed by the state universities,
that place journalists into local newsrooms.
These are all approaches that don't involve the government creating
a board of people who give out discretionary grants. They use objective
standards, without consideration of editorial direction--they are
relentlessly focused on local coverage.
To pay for these, we suggest Congress and state legislatures
consider applying a mitigation fee on the biggest technology and AI
companies. Several bills have proposed assessing fees on advertising,
which makes sense, but the advent of AI requires some new thinking,
possibly a mitigation fee based on the number of active unique users
too.
In general, we have entered a world in which national media, big
tech and local news are all becoming more concentrated in a smaller
number of very powerful companies. In terms of the ownership of TV
channels, the main topic of this hearing, our coalition has not taken a
formal position about the appropriate levels of ownership caps but we
would urge this: seek policies that will definitively maintain or
increase the number of local reporters in a community. Don't just look
at the number of stations or the hours of coverage. More hours of
coverage with fewer local reporters is a recipe for more superficial
news. Look at the actual investment in reporting capacity.
Senator Cruz once wisely said ``big tech exercises a concentration
of power that I believe is unknown in the history of mankind and that
concentration of power is regularly used to trample on the little guy.
To trample on companies they do business with and this instance to
trample on local media organizations, whether you are talking about
small town newspapers, whether you're talking about local broadcasters,
anyone in the journalism spaces that is producing content . . . the
idea that we would see monopoly control of public discussion in America
to three or four billionaires in Silicon Valley, modern day American
oligarchs, is profoundly dangerous.'' \56\
---------------------------------------------------------------------------
\56\ U.S. Senate Committee on the Judiciary, ``Executive Business
Meeting,'' Sept. 22, 2022, https://www.judiciary.senate.gov/meetings/
09/22/2022/executive-business-meeting.
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When it comes to local news, our hope is that local news will be in
local hands, as much as possible. Public policies should gravitate
toward that philosophy--a media system in which local news ownership
and control is diffuse, fragmented and local.
Despite all of the destruction, we have also seen a tremendous
amount of innovation--hundreds of new local news startups.\57\ They
don't yet come close to filling the voids in information. But they do
give some hope that if we can continue to improve the business and
editorial models, draw in more money from philanthropy--and have smart
public policy, we can construct a better local news system than we've
had before.
---------------------------------------------------------------------------
\57\ More than 300 over the past five years, according to Medill
School of Journalism, State of Local News/News Desert Project. See
Institute for Nonprofit News, https://inn.org/about/who-we-are/; LION
Publishers, https://lionpublishers.com/about/; and American Journalism
Project, https://www.theajp.org/about/; Local Media Association. ``2024
Digital Innovation Award winners: Honoring excellence in local media.''
May 26, 2025. https://localmedia.org/2025/05/2024-digital-innovation-
award-winners-honoring-excellence-in-local-media/
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Technology can help. But we also need actual human beings, living
in their communities, accountable to and listening to their neighbors.
To have that kind of revival of community news, the biggest technology
companies will need to play a much bigger role in reversing this local
news crisis.
The Chairman. Thank you. Mr. Ruddy, let's start with you.
You said in your testimony that NewsNation has more than 5
times fewer viewers than Newsmax does, but that Newsmax
nonetheless has paid substantially less for its content, even
though it is producing 5 times more viewers. Those are striking
numbers. What's the cause of that?
Mr. Ruddy. Market leverage and market power. NewsNation is
owned by Nexstar, and Nexstar owns today about 200 TV stations,
and they go in with the cable operators to negotiate their
agreements for those TV stations. They have incredible leverage
because they have so many stations. So, imagine if they're
negotiating with Spectrum. Charter goes by the name of
Spectrum, and they have 50 stations in the various markets and
they want a certain retrans fee. So, when they're in
negotiations, they say to Spectrum you better pay us the rate,
otherwise we're going to take the stations off your cable
system, and that could be devastating for a company like
Spectrum. And then they also say we have a cable channel and we
want you to pay us a certain amount, and if you don't pay us,
we can go dark on our broadcast stations.
Nexstar is not the only company that does this. ABC-Disney
has ESPN and a whole number of channels, Fox has a whole number
of channels, and they all use and wield the leverage of their
broadcast stations to get high fees for their cable channels.
I'm an independent media company. I don't have the leverage
that these broadcast companies. So, one of the reasons we had
the cap was to reduce the leverage so that they couldn't
overpower the cable operators. And this is why cable bills are
up over a hundred percent in recent years because of the
immense power that these companies have.
The Chairman. Mr. LeGeyt, do you agree with Mr. Ruddy? Do
you agree that it is market power that is resulting in higher
fees being paid?
Mr. LeGeyt. Absolutely not. I represent at the National
Association of Broadcasters, Nexstar's broadcast interests, so
I can't speak to NewsNation, but what I can say is this. When
you look at the media landscape, we are distant stars in the
solar system that is Meta, Google, Apple, Amazon, Netflix.
Right now, this administration is reviewing a deal that would
merge two streaming behemoths, right--Netflix, Warner
Brothers--and I point that out----
The Chairman. Mr. LeGeyt--Mr. LeGeyt, let me focus you on
the specific question that I'm asking----
Mr. LeGeyt. Sure.
The Chairman.--which is, do you agree that the numbers Mr.
Ruddy provided are accurate, namely that Newsmax has roughly 5
times as many viewers as NewsNation, and that NewsNation is
paid more money than Newsmax is? Are those numbers accurate in
your understanding?
Mr. LeGeyt. So, I don't have the viewership numbers in
front of me, but I will--I will stipulate to that if he's
documenting those, and I don't have any visibility into
NewsNation's programming fees. That's not publicly available
information.
The Chairman. Yes. Then let me ask, assuming those data are
correct, do you have any explanation for why that would be the
case other than market power? That explanation seems plausible
to me. Is there another one other than leveraging the market
power to extract those higher fees?
Mr. LeGeyt. I'm focused on ensuring that Nexstar actually
has the market power it needs to compete with Big Tech, which
has siphoned away from Nexstar and other broadcasters----
The Chairman. You, you don't want to answer that question.
That's OK. Let's move on to a different question. This is a
question for both Mr. LeGeyt and Mr. Ruddy. There has been a
lot of discussion about local news. I believe--I agree local
news is critically important. In both of your views, would
eliminating or raising the media ownership cap strengthen or
weaken local news, and would it increase or decrease diversity
of views on air? Mr. LeGeyt.
Mr. LeGeyt. It would both increase competition for and
production of local news, and it would increase diversity of
voices, and the reason is simple: that right now, broadcasters
are simply stifled in their ability to compete in this
landscape. You have rules premised on the notion that
broadcasters only compete against other broadcasters for
advertising dollars, for audience, and for programming, and we
know that that is not the case.
Over the course of the last 20 years, 70 percent of the
local advertising marketplace has been siphoned away from
traditional media by Big Tech. We are competing for
programming, NFL games with Netflix and Amazon, and we're
competing with--for audience with all of these streaming
services. According to Nielsen, in December, streaming
viewership was more--was nearly half of all television
viewership. Broadcast, just 20 percent. So, we are competing
against behemoths. The only way to invest in local news is to
reverse this trend, gain some scale, and, and bring that
revenue back to local broadcasting, and that is going to
benefit local communities.
The Chairman. Mr. Ruddy, same question.
Mr. Ruddy. Well, I almost feel like I'm in a different
universe than my respected guest member here, but let's go
through that. TV is doing well. Nobody's denying they made
almost $2 billion in 2024. They're projecting even bigger
profits once this merger goes through. So, what is the aid that
they need to do to upend the congressional law? Why are they
going--running around using the bureaucracy rather than going
to Congress? Because they know they have no support in
Congress, and the public opinion polls show they have no
support.
He said two things. One is, Nexstar, we know when they did
the Tribune merger, ended up with 15--I think they're currently
about 15 duopolies. In every case, they combined the two
stations/newsrooms into one. That's the only way they make
money. In their projections on the merger, they're saying
because of the consolidation, they're going to have $300
million in savings, and a hundred--almost half of it, $135
million, comes from local programming consolidation. The only
local programming local TV stations do is local news. That's
pretty much the whole thing, so that's where this is all going.
They can make fortunes, and it's local news that suffers, and--
--
The Chairman. Final question. In 2023, I criticized then
FCC Chairwoman, Jessica Rosenworcel, for delegating to the
media bureau and to an administrative law judge a decision on
the standard general acquisition of TEGNA. At the time, I wrote
with my House counterpart, Congresswoman Cathy McMorris Rogers,
``First, to keep the Commission accountable to Congress and the
public, a full Commission vote is required for certain matters,
particularly those involving significant legal or policy
consequences. Designating a multibillion-dollar transaction,
such as the standard general TEGNA transaction for an ALJ
hearing is precisely the type of serious decision for which
Commissioners must take responsibility.'' This is a question
for all four of you. Do you believe the FCC should have a
Commission-level vote on the Nexstar-TEGNA merger? Mr. Ruddy.
Mr. Ruddy. Well, especially because they're subverting what
Congress said, and it was a congressional issue. You know, Mr.
Johnson worked for Ajit Pai when he was Chairman. Ajit said--he
was Trump's Chairman at the time. He said several times it was
congressional law. He didn't like the law, but he said we had
to--his words, ``The law must be obeyed.'' Chairwoman
Rosenworcel, under, under the recent administration, nixed a
Nexstar deal, saying that it violated the congressional law of
the 39-percent cap. Brendan Carr was the ranking Republican at
the time, and he offered a concurring opinion that did not
dispute that.
The Chairman. OK. Mr. LeGeyt.
Mr. LeGeyt. The NAB doesn't advocate on any specific
transaction, but we certainly support the full Commission
voting to raise the national ownership cap.
The Chairman. Mr. Johnson.
Mr. Johnson. Under the Communications Act, Senator, the
Commission has discretion to decide whether--with very limited
exceptions, whether to decide something at the bureau or
Commission level. Even when something is decided at the bureau
level, there are mechanisms for review before the full
Commission as well as ultimately in court.
The Chairman. Mr. Waldman.
Mr. Waldman. We haven't taken a position on that, but, in
general, issues of this import should be at the Commission
level.
The Chairman. Thank you. Ranking Member Cantwell.
Senator Cantwell. Well, Mr. Chairman, I want to weigh in on
that particular point before I start my questioning. I
definitely believe the FCC should have a Commission level--if
they are going to take action. I'm not making a statement as to
whether they have that power or not. I'm simply saying if they
do, it should be at a Commission level, and I think that
Chairman Carr has practically prejudiced himself in an
information process that's supposed to be independent if he's
already made a decision. So, I don't--I don't like that. I
don't like that.
But let's start with something maybe we can agree on. Do
the witnesses think that right now--I mean, because I look at
these viewpoints, I'm kind of--last week I was where Mr.
Waldman was. I was like on this hand/on that hand, and what is
it we really want to provide? And so, you know, I'm for
elevating this larger context that Big Tech just has too much
power, but I don't know. Do they have too much power in this
marketplace, Mr. Ruddy?
Mr. Ruddy. Well, I think that consolidated Big Tech is a
danger to the public interest. I think there should be more
competition in Big Tech across the board, and there should be--
--
Senator Cantwell. I just meant as it relates to now
preserving local journalism and how much of the business
model--I mean, I think, here, you have a cord-cutting problem.
Mr. LeGeyt basically has a--has a, you know, a big moneymaker
for himself right now, which I'm for. I am for broadcast
sports, not because the Seahawks won.
[Laughter.]
Senator Cantwell. I'm for broadcast sports because I do not
want my consuming public to have to pay to see content they can
just watch advertising to see. I want it to be cheaper. So, I'm
for not allowing these people to put so much content behind a
paywall and making consumers pay out the nose for it, so--but
anyway. So, I just--on this point, do we need to do something
here so that we have more level playing field? Are they the
bigger issue here?
Mr. Ruddy. No, I think that local news is almost entirely
by broadcast TV. Big Tech creates almost no original local
news.
Senator Cantwell. But Mr. LeGeyt----
Mr. Ruddy. So, we need to protect the diversity and
competition in that field.
Senator Cantwell. Right, but Mr. LeGeyt is telling you this
is his moneymaker right now and is getting--he's getting eaten
alive on this because of what's happening because of the
digital advertising revenue, and the----
Mr. Ruddy. They haven't made the case. I'm sorry to say,
Senator, they have not made the case that Big Tech has hurt
their businesses. Their businesses have grown 500----
Senator Cantwell. I know----
Mr. Ruddy.--500 percent in the past decade. How do you--how
do you explain that? That's all during the Big Tech period.
Senator Cantwell. Believe it or not, I'm going to agree
with you in a minute, but on this point I don't, OK?
Mr. Ruddy. Yes.
Senator Cantwell. And so, I think the point is--OK. Does
anybody else want to comment on this quickly because I have
another question?
Mr. LeGeyt. Big Tech has entirely undermined the
advertising model for local broadcasting.
Senator Cantwell. OK. Mr. Johnson.
Mr. Johnson. I think by eliminating some of these
prescriptive rules, Senators, what you do is you give the
affiliates better bargaining power negotiating at the table, so
they can--in their discussion with MVPDs, with Big Tech, they
can say we want more local control over programming.
Senator Cantwell. Mr. Waldman.
Mr. Waldman. Yes, absolutely. Big Tech is a big part of the
reason for the undermining of the local news business model for
TV and local news, and it's about to happen again with AI.
Senator Cantwell. Right. So, Mr. LeGeyt's key point,
though, is that he--and, look, I've helped the broadcasters on
good faith protections for broadcasters. I've actually sided
with the broadcasters, you know, on these issues that now, you
know, we're hearing complaints about. But again, in this world
where the cord-cutting and streaming media is leading to this,
I'm not sure that I believe that consolidating people so that
you could then own three TV stations in one media market and
then basically decimate that media market without competition,
is the way to go.
And so, I have a concern, Mr. Waldman, that that is where--
to your question which is you're asking me--us a question to
consider, but I'm asking it back. Why would I want to support--
now I'm not saying you have to have three TV stations in every
media market, but I do want diversity, and why would I allow
for more consolidation when our biggest problem has been
concentration? Why would I go for that? Why would I go for this
merger if, in fact, you're going to, basically, hand over more
concentration, less diversity?
And if that means somebody's going to do general
programming and give me less--and, Mr. LeGeyt, you made a good
point about the number of eyeballs, power of growing because,
like, digital did grow even with broadcasters, but that doesn't
mean that we had all the local content or the diversity of
voices. So, isn't this the crux of the issue that, basically,
you're going to be able to own more media markets and
concentrate three--own three TV stations and then, basically,
decide how to blow them up and give me general programming from
New York which I don't want?
Mr. Waldman. Which we are seeing more of, and, you know,
Senator Cruz quoted President Reagan a while ago. I would quote
President Reagan on another point which is, ``Trust but
verify.'' Yes, in some cases mergers might lead to more local
news, but the evidence is that in many, many cases it goes the
other way, that it cuts local news. So, if you're going to be--
if Congress considers loosening these caps at all, it should be
contingent on commitments that they maintain or increase the
number of local reporters.
Senator Cantwell. OK, interesting. I mean, this is the crux
here. We can't be for a merger just to get bigger, to fight Big
Tech on their eating up sports revenue, which they're putting
behind a paywall that makes consumers pay more. I can't--you
know, I can't be for that, but I do think that we have to also,
you know, point out, Mr. Ruddy, that, like, I really don't want
so much concentration of this marketplace by 80 percent, or
whatever it is, ownership by these big corporations who then
just generalize content out to my news stations. That's not
even healthy for any of us in the ecosystem.
Mr. Ruddy. The National Hispanic Coalition did a poll in
December, Democratic pollster, that found over 70 percent
oppose the Nexstar merger and the consolidation. Only about--
less than 7 percent supported it. A recent Republican poll,
Public Opinion Strategies, found, again, 75 percent opposition
to consolidation, only 7 percent. So, this is a bipartisan----
Senator Cantwell. Well, I definitely support more diversity
in voices. I'm not--we have to figure out how we're going to
get there, so, but anyway, I appreciate. Mr. Chairman, thank
you.
The Chairman. Thank you. Senator Capito.
STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM WEST VIRGINIA
Senator Capito. Mr. Chairman. Thank all of you all for
being here. I'm around the corner here. I've been listening to
the debate. Very interestingly, obviously, diverse opinions.
I'm trying to think of my constituents listening to the same
debate. I live in a small state, West Virginia, that has
Nexstar stations and others, and I'm going back to the storm
that we just had two weeks ago. What is everybody watching?
They're watching their local broadcaster. They want to find out
what roads are closed, what schools are closed, what can we
anticipate coming forward.
And, you know, we all laugh about, you know, when you get
older like I am, you know, you're all watching the Weather
Channel all the time or the weather--the weather of your local
weather. This is really important for local broadcasting. I
agree with Senator Cantwell. The sports aspect of it is a huge
aspect for a small state because we can't access--you know,
sometimes if you don't buy the Big 12 Network, you can't watch
West Virginia University play, which is like our pro team.
We're not like the Chairman that has all kinds of teams in his
state so--or Super Bowl winners, like the--like the Ranking.
I'm trying to get in good with both of them, if you can tell.
[Laughter.]
Senator Capito. So, if I'm sitting there and I've just
experienced--and I'm watching this hearing, I'm going to give
it to all four of you because I'm interested to see how you
would--how would your position help those people that
desperately need to have that local programming in times of
emergency, weather, outages, you know, and, and all other
political news and everything? How would--and then we'll start
with Mr. Ruddy.
Mr. Ruddy. OK. Well, let's imagine in one of those markets
in your state, Senator, Nexstar owned two to four of these
major highly rated stations, because in 30 markets across the
country, they will have that type of dominance, and we know
that in 15 already they just merged the newsrooms. So, if you
go to channel--to the NBC channel, for instance, which they
might have as an affiliate, and you see that they're covering
the hospital and what's happening at the hospital as a result
of the tragedy or the natural disaster, and then you watch the
CBS station, which they also own, and they have the same
reporter at the hospital, but they don't have the resources
because they combined newsrooms, they're not at the school,
which some kids were injured, let's say. So, they save money,
but you have less content, less diversity of news, and that's
the danger of both local consolidation and national
consolidation.
Senator Capito. OK. Let me ask Mr. LeGeyt to answer that.
Mr. LeGeyt. Thank you, Senator.
Senator Capito. Mm-hmm.
Mr. LeGeyt. Mr. Ruddy's narrative is a compelling one, but
it's a fiction because that is not what is happening in local
communities. You know this well. WOWK, which Nexstar owns, is
as committed a local station as exists in the country.
Senator Capito. True.
Mr. LeGeyt. And some of the combinations that we're talking
about in local markets, they're the equivalent of one printing
press being able to produce two newspapers. What we are--what
we have shown over the course of the last decade in those
markets where consolidation has occurred, is that it means more
local news, and it means more local journalists. Now, certainly
scale can mean some efficiencies when it comes to corporate
overhead, but we as local broadcasters don't win if we're not
producing the best local news in communities across the
country. If we just become another nationalized media, we're
losing that battle with Apple Plus, with Amazon Prime. That's
not where Nexstar or any other local broadcast group is going
to win in this media landscape. And the data shows that as we
are able to get more revenue, whether it's from advertising or
whether it's from retransmission consent, that that's being
plowed back into local journalism, and it's also ensuring that
we can provide expensive sports on broadcast television.
Senator Capito. All right. Mr. Johnson.
Mr. Johnson. Well, thank you for the question, Senator.
Having spent a year out in West Virginia working for General
Morrissey back in the 2017, I think it's very important that
West Virginia communities get represented in these debates over
media ownership. I think there are two ways in which removing
some of these prescriptive ownership rules will help West
Virginia communities. First of all, with respect to local news
stories, as you say, the economies of scale that you introduce
when you have larger station groups, that allows local
affiliates to be more nimble. If there's a natural disaster, a
pressing local news issue, they can often redirect resources to
make sure that there's 24/7 coverage----
Senator Capito. Mm-hmm.
Mr. Johnson.--of whatever it is that's going on in a way
that smaller independent stations sometimes cannot. The other
thing is, it gives affiliates more leverage at the bargaining
table, both with the national networks and with streamers and
online platforms, or oftentimes right now, the networks really
have the biggest seat at the table. So, that you're asking
questions like can we have more local programming in West
Virginia? Can we have more control over programming? That's
going to ensure that those stations represent West Virginia
values and not just California values.
Senator Capito. All right. Thank you, and then, Mr.
Waldman, you want to take a swing at that?
Mr. Waldman. You know, I think in addition to what others
have said, I would say--I know the topic of this hearing is the
broadcast consolidation rules, but that's not the only factor
that's going to affect whether you have local news in West
Virginia.
Senator Capito. Mm-hmm.
Mr. Waldman. And so, we do also need to look at the bigger
picture here, which is Big Tech and what's about to happen
with--or it is starting to happen with AI and all the other
ways that we can strengthen the local news environment. You
know, we see around the country a flowering of new startups and
efforts to help with local news, improving their business
models, more philanthropy helping. But at the end of the day, I
don't think we're going to get to what we need without Big Tech
playing a role and public policy playing a role with creative
solutions that will strengthen news in West Virginia and other
places.
Senator Capito. Yes, I mean, I think that local
broadcasting is absolutely essential to retain. When I see
what's happened to our state's newspaper, we're down to 5 day,
without being too critical of the newspaper, a lot of its
national stories that are two days old. And so, I don't want to
see that happen to our local affiliates, and I want to--I want
to protect that the best way that I can. So, I appreciate the
hearing. Thank you, Mr. Chairman.
The Chairman. Thank you. Senator Kim.
STATEMENT OF HON. ANDY KIM,
U.S. SENATOR FROM NEW JERSEY
Senator Kim. Yes, thank you all for coming on out here. Mr.
Ruddy, I wanted to follow up on something you had talked about.
You had talked about the retransmission fees, and talking about
the challenges there in terms of costs. I'm trying to think
about this in terms of my constituents, in terms of the
consumers, and what is raising their costs. I wanted to ask
you, when you're talking about the retransmission fees, how
much of that do you believe is being pushed on to the consumers
in terms of the cost going up?
Mr. Ruddy. I think, ultimately, almost all of it goes
because they have to pay--the cable operators have to pay that
to the TV broadcast groups. And so, they need to make a profit,
so they're going to have to pass those--most of those costs
over. And we're seeing it in the cable bills, which are--have
gone up enormously and the reduction of content in cable.
There's been a removal of channels.
Again, there are so few independent media voices because
they'll tell me, the cable operators we don't--we like Newsmax.
We don't have any money left for you because we have to pay the
retrans fees, or they have to pay companies like NewsNation
that have very little ratings, high fees because of their
market leverage of their broadcast outlets. So, it's not good
for consumers.
Senator Kim. So, you're saying that media--like, I'm trying
to think through how do we articulate, you know, the--what is
happening to the consumer. So, the media consolidation is
leading to these retrans fees increasing due to the leverage
that these companies now have, and that's being passed on to
the consumer. Is that the argument that you're putting together
here?
Mr. Ruddy. A little bit more than that. What we find is,
the bigger the station, group or network, the more leverage
they have, the higher fees. So, when Nexstar went above the cap
several years ago and went to 70 percent, it was like a boon to
the company, and that's where they went up from $300 million in
EBITDA to almost $2 billion. And they're so greedy, they now
want to go to 80 percent because they'll know they have even
more market leverage. And now you're seeing other companies in
the broadcasting industry wants everyone to have this
opportunity. Ultimately, who gets screwed, frankly, is the
consumer, right? We have to pay those bills, and it's market
manipulation, market abuses that are causing this.
Senator Kim. Mr. LeGeyt, I wanted to bring you in on this.
I wanted to ask you about, you know, another thing that Mr.
Ruddy said, and then I'll go back to what we just talked about.
He was talking about how if this consolidation does go forward,
that he believes that there'll be really just, you know, two or
three companies that really just dominate the space nationally.
I understand what you're saying about the competition with the
tech companies, but at least in terms of just what happens if
we sort of game out what happens if we lift up this cap, do you
agree that we're going to see sort of two to three companies
kind of dominating nationally?
Mr. LeGeyt. I can't see the future in that regard----
Senator Kim. Yes.
Mr. LeGeyt.--but I can tell you that the status quo is
untenable. And I think it's important to acknowledge here the--
that these restrictions on the 39-percent cap, those are--
that's an ex ante restriction, meaning before you can even get
to the merits at the FCC or the Justice Department of making
the case for your transaction, you're not at the table if you
are proposing a transaction that violates these restrictions.
So, what the NAB is advocating for is for those ex ante
restrictions to be removed. I also think it's important to
acknowledge here that over the last 3 years, industry wide,
retransmission consent revenues have actually decreased year
over year. Local news is funded by two----
Senator Kim. Can you say that one more time just so I get
it right?
Mr. LeGeyt. Across the----
Senator Kim. Yes.
Mr. LeGeyt.--broadcast industry, the retransmission consent
fees that is being represented we have this enormous market
power to extract, have actually decreased year over year over
the last 3 years, and the reason is simple. We're competing
with Google, Apple, Netflix, Amazon for audiences. Our
audiences have fragmented. Local broadcasters are competing
against Google and Facebook for advertising dollars.
So, this narrative--and Chairman Cruz asked me the question
directly earlier, and so I want to state my answer
unequivocally, no, Nexstar does not have market power. They are
competing against global behemoths for both audience,
advertising, for programming rights. No broadcaster has market
power in this media landscape.
Senator Kim. Yes. No, thank you. Look, I know my time's
running out--but, Mr. Waldman, I'll just ask you a question for
the record, if you can get back to me later, but just about,
yes, what we talked about earlier about, you know, my state of
New Jersey, the news deserts that we're continuing to have, the
difficulties. I'm really just trying to get a sense of painting
the picture of what would happen to my state, to the market
that already is struggling to be able to find local news and to
be able to have people in New Jersey understand what's going on
in our community. So, if you don't mind, we can follow up with
that later.
Mr. Waldman. Yes, thank you.
Senator Kim. With that, I'll yield back, Mr. Chair.
The Chairman. Thank you. Senator Moran.
STATEMENT OF HON. JERRY MORAN,
U.S. SENATOR FROM KANSAS
Senator Moran. Chairman, thank you. Thank you to you and
the Ranking Member for holding this hearing.
Mr. LeGeyt, let me start with what you just indicated in
your response to the senator. So, this--what we're talking
about is the threshold. The actual determination, there are
still other factors that come into play that would allow for an
acquisition or a merger to occur if it--but it first has to be
allowed by this standard, this threshold.
Mr. LeGeyt. That's absolutely correct, Senator. The----
Senator Moran. And those items would then protect
competition, would be among other--it and other things that
would be considered.
Mr. LeGeyt. The FCC still maintains the authority to review
every transaction and assess whether it is in the public
interest on a case-by-case basis. The Justice Department will
examine the pro-competitive and anti-competitive impact of any
proposed transaction. Nothing that we are advocating for in
terms of eliminating these decades-old restrictions will change
that authority to review transactions on a case-by-case basis.
Senator Moran. Mr. Johnson, call on you as you're--in your
previous capacity. Would you expand on the history of the FCC's
actions in updating the national cap? Where does the FCC derive
its authority to change the cap and why elimination of the
national cap is necessary for continued health of local
broadcasters?
Mr. Johnson. Thank you very much, Senator. I appreciate the
question. So, the FCC has been adopting ownership rules and
some version of the national cap since the FDR era pursuant to
its general rulemaking authority to adopt rules to carry out
the purposes of the Communications Act in the public interest,
and Congress has never disputed that it has that general
authority to adopt ownership caps. In fact, on two occasions,
by directing the Commission to modify its rules to set a
different cap level, the Commission--excuse me--Congress
essentially ratified, yes, FCC, you have this authority to
adopt these kind of rules. And here we think, based on the
current marketplace realities, that the rule should be set at a
different level.
So, Congress made that determination in 1996. The D.C.
Circuit, as I said, it took a look at the text of that statute,
and it said--based on an argument the FCC came in and said we
don't have to make any adjustments or we can't make any
adjustments to it, the Court said no. In fact, this language
retains your discretion to modify the cap to a different rule--
to a different amount. Two years later, only two years later,
in 2004, Congress again changes the statute but keeps that key
formulation, modify its rules in place, showing that Congress,
in fact, did not intend to take off the table future FCC
changes to the rules. In fact, there was a House bill and a
Senate bill. Both of them would've expressed expressly
enshrined the cap into law, as the D.C. Circuit suggested.
There was another statute 4 years before 2004 in which Congress
explicitly told the Commission you cannot change the minimum
separation distance between broadcast channels unless and until
Congress further acts.
So, Congress knows how to take away FCC discretion when it
wants to, to use that clear language, but it didn't do so here.
And so, in my view, the FCC retains that discretion.
Senator Moran. Thank you. Mr. Waldman, tell me what the
world looks like with a cap being increased, and tell me what
the world looks like in--if a cap isn't increased?
Mr. Waldman. Well, you know, we've heard testimony that
said in the past, when you've had consolidation, it's led to
more local news, and we've heard testimony saying that in the
past when we've had more consolidation, it's led to less local
news. The reality is both things could happen, and so when
we're talking about what the FCC's authority is there, it's not
just about the cap. It's also about the very definition of
``localism.'' We can't keep paying lip service to localism,
that----
Senator Moran. Let me--let me interrupt you and say that
that goes back to the point that Mr. LeGeyt was making about
there's more to come regardless of what the cap is. The FCC
determines--makes the determination about whether a merger or
an acquisition is in the best interest of----
Mr. Waldman. Yes, that's true. And I would just say that I
would feel more comfortable if the FCC, in making those
determinations, was centering local news, the fate of it, and
how many local reporters there are in a community because if
mergers were really looking at that, I think we'd be pointing
in a much better direction.
Senator Moran. So, that is a task that perhaps Members of
Congress who care about local news can make that case to the
FCC, which is really an issue perhaps somewhat separate from
the topic of whether or not to increase the cap?
Mr. Waldman. Or Congress itself can declare statutorily
that the health of local news is part of the core definition of
``localism'' that should be at the heart of any merger
discussion.
Senator Moran. Nice to know that there's someone who thinks
that Congress can still legislate. Thank you.
Senator Cantwell [presiding]. Senator Rosen.
STATEMENT OF HON. JACKY ROSEN,
U.S. SENATOR FROM NEVADA
Senator Rosen. Well, thank you, Ranking Member Cantwell,
and I want to thank Chairman Cruz for holding the hearing, all
of you for being here. And as one person who loves our local
news, I will say this is a really important issue and at the
heart of each and every one of our communities, right,
because--and I just want to say the media environment has
changed dramatically since media ownership caps were first
established and since Congress last changed them in 2004. While
the ownership cap may need to be revisited to better align with
today's media market, I want to be crystal clear: just because
large corporations like Nexstar and TEGNA want to merge, it
doesn't mean they can simply ignore the laws that Congress has
put in place. In order for there to be a merger that results in
ownership above the 39-percent cap, Congress would have to
change the law.
So, I'm going to give my first question to you, Mr.
Waldman. This isn't the first large media merger or media
merger attempt that we've seen in recent years, right? So, when
massive mergers like Nexstar-TEGNA have happened, what has been
the impact on local jobs, consumer prices, our local newsrooms,
and what happens if there are no other--well, if there aren't--
if there aren't multiple newsrooms in one market? What happens
to our local news? What happens to the flavor of our
communities and our--not just our jobs, our union jobs, or jobs
around the, again, the fabric of our communities?
Mr. Waldman. Well, you know, you see, in certain
circumstances, you'll have two TV stations, and to a consumer,
it looks like there are two different operations and there's--
they may be even competitors, when it's actually they're using
the same news broadcast. They're using the same content. So,
part of what happens with consolidation is you have the mirage
of lots of diverse voices but the reality of less and less
original reporting.
Senator Rosen. Mm-hmm.
Mr. Waldman. And, you know, whether--on the question of
whether or not removing the caps would lead to more situations
like that or less, you know, the evidence is more in the--in
the category that it's going to lead to less. You give someone
money, it doesn't determine what they're going to spend it on,
and if local news stations or station groups have more clout
and more scale, there might be some that would use that for
local news, but there's certainly no guarantee of that. And the
evidence is actually in the other--in the other direction. And
so, you end up in places like Nevada where, if you look at the
whole local news ecosystem, you have the repetition of the--of
the local TV, you have the newspapers declining, and the result
is, like, a 75-percent drop in the number of reporters in
Nevada.
Senator Rosen. I think it's very sad for our communities
and for our--everybody who lives there. I want to move my next
question to you, Mr. LeGeyt, because I want to mitigate the
negative impact of the rules changes because the FCC and
Congress established media ownership caps to protect consumer
prices, to protect media diversity, protect jobs in journalism.
It is, again, I believe, really important foundationally to our
democracy, and I recognize that as the media landscape changes,
Congress should, of course, reevaluate whether the rules need
to be updated. Things are always changing.
So, my question to you again, Mr. LeGeyt, is if Congress
changes or removes the ownership cap, how can we ensure that we
keep media affordable for consumers, protect our local
newsrooms, our journalists' jobs, give them that independence
to focus on stories that matter to the neighborhoods, to the
local community, right, and just improve media diversity and
those independent voices that really focus on what matters? And
if the current rules in place aren't working today, how do we
protect the values? What's our alternative?
Mr. LeGeyt. Senator, thank you for the great question. I
think, first, we need to level set with where we are today----
Senator Rosen. Mm-hmm.
Mr. LeGeyt.--in local broadcast. If they are measured as a
standalone, meaning local stations independently in each
market, irrespective of who owns them, more than half of local
broadcast newsrooms in this country are currently is a
standalone, not profitable, and that number is worsening every
day.
Senator Rosen. Mm-hmm.
Mr. LeGeyt. So, the only way to ensure that communities
across this country, many markets where individual stations
would not be viable in terms of their own providing the local
news, is to give those owners some scale so that they can take
those efficiencies and plow them into local newsrooms.
Senator Rosen. Mm-hmm.
Mr. LeGeyt. I also think we're being prejudiced here in
this debate by what's happened in the newspaper industry----
Senator Rosen. Mm-hmm.
Mr. LeGeyt.--and certainly, that is a cautionary tale. But
in broadcast, the data shows the exact opposite, where over the
last 10 years where broadcast groups have been able to gain
more scale, it has actually resulted in more local news. And as
Mr. Waldman alludes to, if you don't want to measure that
success by hours of local news, let's look at our newsrooms--
the employment in our newsrooms themselves.
Senator Rosen. Mm-hmm.
Mr. LeGeyt. You know, we're employing more than 27,000
people in broadcast newsrooms.
Senator Rosen. Mm-hmm.
Mr. LeGeyt. That's more than our print counterparts, our
digital news counterparts. Broadcasters truly are the last
bastion of local journalism. Those numbers actually increased
after the FCC in the first Trump administration took some
actions to relax those cross-ownership rules. So, those
broadcast newsrooms, even following the scale, some of the
transactions that were done in the wake of those rule changes
seven years ago, we continued to grow our newsrooms. It has
only been over the last 3 years that the numbers have flattened
out a little bit. I'm looking forward to more scale that
eliminating this cap will allow so that we can continue to grow
those newsroom numbers.
Senator Rosen. Thank you. Finding that balance, it's going
to be up to all of us. So, thank you all for being here. Madam
Chair.
Senator Cantwell. Senator Young.
STATEMENT OF HON. TODD YOUNG,
U.S. SENATOR FROM INDIANA
Senator Young. Thank you, Madam Chair. I thank our
witnesses for being here today. There are a number of reasons
why I regard this hearing as important. If members of my
community don't have access to their local news, it can be an
impediment to useful information and the decisions they make,
the actions they take. Our sense of community can be undermined
if we don't have access to information or our sense of
solidarity with our neighbors, but I actually think what's most
at stake is our democracy. If I don't know what's happening in
the local planning meeting, if I don't know what's happening in
the school board, if I don't know where monies are being
invested locally as it relates to road projects, it's hard for
me to cast informed votes at the ballot box. It's hard for me
to meaningfully engage in, in democracy at the local level. Mr.
Waldman, you've spoken to this issue of localism. Could you
just take the predicate I've laid and unpack a bit more, say in
the next 30 seconds or so, why this hearing is so important to
you and should be important to my constituents?
Mr. Waldman. Well, you put it very eloquently. On some
level, there are really concrete harms--literally more
government waste and corruption--there's less knowledge about
things, but it is also about community and cohesion of
community. What we are seeing now as local--as local news has
contracted, it's actually led to more polarization, and that's
because you don't have the news about the things that bind us
together.
Senator Young. Right.
Mr. Waldman. Whether it's the high school sports team, or
the new theater experience, or that inspiring teacher that just
passed away that you learned about, these are things where--
make people, instead of looking at their neighbors as cartoon
characters----
Senator Young. Yes.
Mr. Waldman.--or caricatures as actual neighbors.
Senator Young. And we have this twisted phenomenon--it
strikes me as twisted--others have, I think, come to regard it
as just the way things are--where even local news is becoming
nationalized----
Mr. Waldman. Exactly.
Senator Young.--fitting into a national narrative,
completely unhealthy, superficial I should add, in terms of how
we look at some local issues, and it sells short our citizens.
As we try and provide them the feedstock to be engaged members
of the community, they don't have access, we don't have
access--I'll personalize it oftentimes--to engage in local
issues.
Mr. Waldman. There was a study that came out just yesterday
that pointed to exactly this paradox, which is that people
actually feel like it's easy to get information about national
news and harder to get news about their own neighborhood.
Senator Young. So, this is--I just--I thought it was really
important to cover that for my constituents and for others,
because I think we make a mistake if we just regard this as an
issue for business people and investors. It is that, it's a
very important consideration, but we also need to be able to
debate the merits and demerits of ownership decisions and caps
within the context of community.
Mr. Waldman. Exactly.
Senator Young. So, Mr. LeGeyt, if the status quo as it
relates to the ownership cap, something we've discussed at some
length here, were to remain the same, what would be the impact
to local broadcasters 10 years down the road, and what would
that mean to my constituents in the state of Indiana?
Mr. LeGeyt. Thank you, Senator. And just to follow on from
your initial remarks, what local stations are doing--what local
broadcast stations are doing in your community throughout
Indiana is providing that local trusted news, bringing
communities together when other forms of media are monetizing
division. We are combating mis- and disinformation. That's what
local broadcasters do best, and we don't have a business if we
are not exceptional in the service we're providing in local
communities.
If you were to look market-by-market across the country,
the number one station in those markets is the station that is
most devoted to those community services. So, that is what we
are fighting for today is that trusted local journalism, but it
needs scale, right? I alluded to it previously and in my
testimony, but today, as a standalone, more than half of local
broadcast newsrooms in this country are not profitable. We are
competing for advertising dollars with Google and Facebook,
global behemoths. We're competing for eyeballs with Netflix and
Amazon. We need scale in order to better compete, and that
scale is going to pay for that localism, that investment in
communities that is expensive. No one else in media has boots
on the ground when that storm rolls through, both in
anticipation, during the storm, and then in the aftermath to
help the communities rebuild, and we need scale to compete with
these nationwide pay TV providers. Otherwise, we can't fund
that journalism, and we certainly can't pay for premier sports
like the Super Bowl and keep them on broadcast.
Senator Young. I regret I'm already over my time, but I
would love to ask all of you questions in this forum. Thank
you, Madam Chair.
Senator Cantwell. Thank you, Senator Young. Senator
Klobuchar, are you ready?
Senator Klobuchar. Yes.
Senator Cantwell. OK, great. Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you all. I'm sorry I missed some
of it. I'll catch up. I was at--a ranking member on a hearing
in Judiciary, so I guess I'll start with you, Mr. LeGeyt. As
you know, I lead the Journalism Competition and Preservation
Act to ensure that broadcasters and news publishers can
negotiate for fair compensation with the Big Tech platforms,
including some generative AI platforms. So, it's becoming to me
more and more important we go forward with this, and we know
there has been profiting off of news content across the board.
The National Association of Broadcasters has said that this
legislation would level the playing field by enabling fair
negotiations and increased investment in local newsrooms. Why
is it so critical for local news to empower news creators to
negotiate their fair share of advertising revenue with Big Tech
platforms? As you know, I lead that bill with--in the past with
Senator Kennedy.
Mr. LeGeyt. Thank you, Senator, for the question. Over the
course of the last two decades--and I--and I think this is an
item that everyone on this panel can agree with--the Big Tech
platforms have siphoned billions of dollars out of--out of
local communities. More than 70 percent of the ad marketplace
has gone from traditional media over to Big Tech, and that's
undermining our ability to fulfill that local obligation that
has been the topic of today's hearing. The JCPA is an extremely
meaningful way to allow for leveling that playing field, allow
us to negotiate fair compensation when our content is accessed
through those platforms and increasingly through the generative
AI platforms. But that lack of scale is also a symptom of what
we are talking about here today, which is that broadcasters
lack that scale to compete with these global behemoths in every
context. And an important first step is for the FCC to update
these broadcast ownership rules which would allow us to better
compete with the tech platforms as well.
Senator Klobuchar. OK. Thank you. Sort of along these
lines, as you know, Senator Cruz and I passed the--passed our
bill, the Take It Down Act regarding nonconsensual porn, both
AI created and actual. We've seen so many suicides of kids over
this, and we passed it and the President signed it into law
this last year. The next step to me is the deepfakes bill that
Senators Coons, Blackburn, Tillis, and I have put forward that
would establish rules of the road to give artists, musicians,
anyone control over their own voice. In a previous hearing you
told about--story about how people had created deepfakes of
local news broadcasters. Could you talk--while I know this is a
little off the focus, but not actually because all of this
stuff is making it harder for the real news to get out there--
the effect of this and the need for some rules on AI?
Mr. LeGeyt. Thank you, Senator. I'm happy to talk about it
because it's existential. You know, a local broadcaster is only
as good as the trust that we have in our local communities, and
these deepfakes, especially of local news anchors on our radio
stations, local voices risk undermining that trust. So, we are
significant supporters of your NO FAKES legislation, look
forward to working very, very closely together and advocating
to get that over the finish line because it is--it is
absolutely essential to ensure maintaining that trust on local
stations as opposed to what's going on online.
Senator Klobuchar. Thank you. Mr. Waldman, we've seen AI
developers enter into licensing agreements with some of the
largest publishers: New York Times, Associated Press, Wall
Street Journal. I'm concerned, however, that smaller papers,
which we still have a number of them in Minnesota----
Mr. Waldman. Yes.
Senator Klobuchar.--that lack resources to protect their
intellectual property are not benefiting from similar deals.
What role should companies that profit from AI models that use
news content play in ensuring journalists and newspapers are
fairly compensated?
Mr. Waldman. I share that concern. There have been deals
with big corporate media, but medium- and small-sized players
have been left out----
Senator Klobuchar. Well, didn't----
Mr. Waldman.--and the AI companies have said they're too
small.
Senator Klobuchar. Didn't USA Today do some study that--you
know, going off script here, always trouble--but just showing
that it's some of the smaller markets that were getting things
stolen more because there's no way for them to access that, so
instead of making agreements with them, they're taking the
content?
Mr. Waldman. It's easy. The papers and the TV stations
don't have the resources to fight it. They don't know how to
track it. And so, yes, they're being----
Senator Klobuchar. And the AI companies don't have that
data on some of the smaller stuff. I know this from checking.
Like, you go in an area, small town, where there's a flood and
they have tons of stuff wrong all the time.
Mr. Waldman. Well, that's the----
Senator Klobuchar. Yes.
Mr. Waldman.--great riddle here is that local news is
degrading. AI is making it worse potentially, and that will
make AI worse, you know, because AI needs to have accurate
local information.
Senator Klobuchar. So how can we ensure--last question--
that smaller newspapers are paid for their content by AI
companies?
Mr. Waldman. Well, one is bills like yours or other efforts
to require that local folks are treated evenly and that they
have the ability to organize collectively. I would also say
that you would want to look at things like mitigation fees
placed on Big Tech companies that could be used to finance
legislation and support local media.
Senator Klobuchar. Did you put your thumb up, Mr. Ruddy, or
your hand up?
[Laughter.]
Mr. Ruddy. No, I'm sorry. I was just--somebody waved to
me,----
[Laughter.]
Mr. Ruddy.--one of the photographers. I figured I'd wave
back.
Senator Klobuchar. OK. That's a very good move. All right.
Very good. Well, I just--I mostly just think we need to think
of this. There have been a bunch of Republicans and Democrats
willing to talk about this. There has been a bunch of more
conservative news organizations that we've been able to work on
on this. And just to sit there, to me, the potential of--
outside of this merger issue, that the AI potential here, too,
if we do legislation that we make sure we're evening the
playing field. I believe Senator Fischer's up for questions.
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Senator Klobuchar, and thank
you, too, to our witnesses who are here today. The hearing's
trying to explore what's needed from Congress in its oversight
of the FCC to update the video marketplace. What I see are
clear competitive imbalances, especially between the
broadcasters and Big Tech streaming services. Congress and the
Commission must also be mindful of the big picture ripple
effects of modernizing the outdated regulations.
Mr. LeGeyt, broadcast ownership caps were originally
adopted to promote viewpoint diversity and localism. And I know
that the Chairman touched on this topic as well, but I'd like
to add a little Nebraska color in here.
Senator Klobuchar. Whoa.
Senator Fischer. Whoa?
Senator Klobuchar. Yes.
[Laughter.]
Senator Fischer. I get extra time now.
Senator Klobuchar. [Off mic.]
Senator Fischer. Oh, no. It's like 67 in Nebraska today,
so, but----
Mr. LeGeyt. We should've done a field hearing.
Senator Fischer. Yes, we should have. We should have. But
we had a large broadcast group and they closed, closed off the
Scotts Bluff news station, KNEP, and that happened in early
2024. And it was one of the very few broadcast stations--TV
stations that we have in the panhandle of Nebraska. Looking at
small location stations like KNEP, would lifting the broadcast
ownership cap raise or lower their chances of survival?
Mr. LeGeyt. It would increase their chances of survival
very simply, and there are markets all across the country. We
have local broadcasters in 210 different media markets. Not all
of them are Washington, D.C. or even Omaha. You are talking
about very, very small markets where the economics as a
standalone just don't necessarily exist to support a local
newsroom. And what we have seen is that in those instances
where broadcast owners have been able to gain some scale, you
are seeing more journalism happening in those communities, more
production of local news, and it benefits your constituents.
Senator Fischer. Thank you. Today, the policies of
broadcast ownership caps and retransmission consent, I think
they're very entangled in practice, that we see. We know that
ownership caps limit how large a broadcast group can get. We
also know that retransmission consent gives value to scale. Mr.
Ruddy, should Congress view those two policies as operating in
tension, and if so, what guardrails, if any, would be
necessary, do you think, to prevent any unintended consequences
if the ownership limits were lifted?
Mr. Ruddy. Well, Senator, the--it's pretty clear we've
talked about Nexstar having--already they've bypassed the cap.
They're at 70 percent reach, and they're making a fortune,
right? They're getting it--they get among the highest retrans
fees of anyone in the industry, I'm told, and they're doing
about $2 billion in profit. And again, it's all these big
groups, and there's not--they're not alone, right? We have
TEGNA has made $893 million in EBITDA profits, Sinclair $800
million in 2024, Scripps almost $600 million.
There's this discussion here by the broadcast industry,
they keep saying this untenable situation. What's the--they
have given no data that they are being hurt in these markets
and that the licenses are not worth anything. And the other
thing that we keep hearing on the Big Tech issue, which I'm
very concerned about Big Tech consolidation, but I don't
understand why Brendan Carr at the FCC says, well, we should
help the TV industry to fight the Big Tech, create more
consolidation. As free market people, we shouldn't be, as I
believe, trying to bolster one industry against the other. We
should be holding Big Tech accountable and more competition.
Senator Fischer. Mr. LeGeyt, you look like you want to
answer.
Mr. LeGeyt. What we're asking for at the FCC is not to help
one industry versus another. This is to allow us to compete.
You know, these are artificial restrictions on a broadcaster's
ability to gain national scale and to gain some local scale
that don't exist on any of our other competitors in the media
landscape. This is about creating broadcasters viable so that
we can invest in that local news and so that we can invest in
that must-have sports programming.
Senator Fischer. And, Mr. Johnson, if these limits were
relaxed, how do you think that's going to affect consumer
prices, local station autonomy, and do you have any evidence
that would guide how you're assessing this?
Mr. Johnson. Sure. Well, in my view, I mean, I think it's
going to be good for local station autonomy and, ultimately,
for consumer prices. I mean, the evidence shows, and the FCC
has actually looked at this on multiple occasions--at least
three occasions of which I'm aware, that economies of scale
brought by larger station groups tend to benefit the values
that the Commission looks at in its public interest analysis,
including competition, including localism. What I would like to
see is affiliates having a larger role at the bargaining table
in their negotiations with major networks or in negotiations
with streamers, which, right now, those negotiations are
dominated by the major networks. I'd like them to be able to
bargain for more ability to preempt national programming that
might not reflect the values of people in different communities
across the country, right? I'd like them to be able to reflect
for more ability to choose what syndicated programming are we
airing.
So, I think that you open up those possibilities more when
you remove some of these artificial restrictive limits. I mean,
the--kind of one of the questions raised by this back-and-forth
is when you have this old ossified 39-percent ownership cap, do
you regulate up or regulate down? I don't think the answer is
you impose a 39-percent cap on the streamers that's pegged to
decades-old market realities based on a snapshot in time back
in the 1990s or early 2000s. It's let's put everyone on the
same playing field. Continue to have competition review at the
DOJ. You're going to still have public interest review at the
FCC. That's going to give these broadcasters and these local
stations a chance to survive and to thrive.
Senator Fischer. Mr. LeGeyt, if I could just get a--
hopefully a short answer from you back to the retransmission
consent fees that are there. Do you believe that the increased
broadcast consolidation would have no material effect on the
consent fees, or do you think that such effects would probably
exist but should be tolerated? Where are you on that?
Mr. LeGeyt. I'm focused on the value that retransmission
consent provides to local communities and local viewers. It is
those dollars that are being plowed into local journalism.
Without retransmission consent, there is no business model for
local journalism, so that is my focus.
Senator Fischer [presiding]. Thank you very much. We've
been joined by Senator Merkley. You are recognized.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. And you've been joined by Senator Markey as
well.
[Laughter.]
Senator Markey. There's no--this Merkley-Markey thing is
very confusing, you know?
Senator Fischer. We have been joined by Senator Markey, who
is----
Senator Markey. No problem.
Senator Fischer.--who is a good friend and colleague.
Senator Markey. No, I had--I had----
Senator Fischer. I am so thrilled you are today.
Senator Markey.--Congressman Merkley-Markey for years, and
I thought I escaped it when I came over to the Senate. So,
thank you.
So, I'm glad that the Senate Commerce Committee is holding
today's hearing on media consolidation because throughout my
career, I have been very skeptical of media consolidation
because I believe localism is essential to our democracy, and
when ownership is local, journalism is local. When
decisionmaking moves further away, communities lose coverage,
accountability, and trust, and that was true decades ago when I
was opposing consolidation, and it's still true today.
And right now, we're facing a real crisis in local
journalism. Newsrooms are shrinking, reporters are losing their
jobs, entire communities are becoming news deserts, and the
same time, we're hearing calls to solve this crisis by
eliminating the Federal Communication Commission's national
ownership rule and allowing even more consolidation at the
national level. That would be a mistake. We need a much broader
conversation about this because just as eliminating the
national ownership cap won't solve the local journalism crisis,
neither will protecting the status quo, especially as new
technologies, such as artificial intelligence, continue to
undermine the news industry's business model. So, today I want
to focus on one core question: how do we actually fix the local
news crisis, not grow national media empires, but revive local
journalism?
So, Mr. Waldman, you and your organization have been
working on this issue for years. Do you agree that local
journalism is strongest when news outlets are deeply rooted in
the communities they serve with reporters physically present
and accountable to local audiences?
Mr. Waldman. Absolutely. Local news in local hands works
best. It builds trust. It's more accurate. It's more fair.
Senator Markey. When policymakers are consolidating--are
considering different approaches to the local news crisis,
including enabling greater media consolidation, do you agree
that those policies should focus on getting more journalists on
the ground covering local communities?
Mr. Waldman. Exactly. That should be at the center of the
debate is whether or not there are enough journalists in those
communities.
Senator Markey. And I completely agree with that, and I
think we need to start considering ideas for how the government
can invest in local journalism. The states are ahead of the
Federal Government here, and I know that you have examples from
Illinois and Kansas to demonstrate that. Unfortunately, the
roll call is on right now, and I'm going to have to run over.
But for those of us who care about local papers and broadcast
stations, the responsibility is clear: we have to pursue
solutions that actually rebuild local reporting capacity. And
that means that as people are talking about media
consolidation, we also have to ensure that it's not going to
accelerate the disappearance of local journalism jobs, and it
means identifying and advancing new ideas to solve the local
journalism crisis.
And that's why I've been working on legislation to invest
in local journalism with a strong role for the states as the
laboratories of democracy, to distribute these funds to local
news organizations to hire local journalists because if we are
serious about saving local news, then the money needs to go to
journalists who do the shoe-leather reporting and aren't scared
to ask tough questions, rather than simply increasing the size
or reach of large media companies.
So, I look forward, Mr. Chairman, to working with you on
these issues. I think this is a very important discussion for
us to have, and with that, I yield back because I really have
to run over and make the roll call on the floor. Thank you.
The Chairman [presiding]. Thank you. Senator Moreno.
STATEMENT OF HON. BERNIE MORENO,
U.S. SENATOR FROM OHIO
Senator Moreno. Thank you, Mr. Chairman, for acknowledging
you saved the best for last. I appreciate that, right? Is
that--that was what you said?
[Laughter.]
The Chairman. You may extend your remarks at your leisure.
[Laughter.]
Senator Moreno. Perfect. All of you are in the media,
entertainment, and broadcast business, whether directly or
indirectly. So, as we approach the end of this hearing, give me
the 20- to 30-second reason why the cap should or should not be
increased, starting with you, Mr. Waldman.
Mr. Waldman. Well, I think--our group actually hasn't taken
a position on whether or not they have the authority to do
that.
Senator Moreno. You can--feel free to.
Mr. Waldman. But I would say this, that if you look at
liberalizing the cap, don't just assume that scale will lead to
more local news. If you believe that's a possibility, then
require it. Require that liberalization is tied to guarantees
that it will lead to more hiring of local reporters.
Senator Moreno. Thank you. Mr. Johnson.
Mr. Johnson. Senator, I dealt with a very similar issue
when I was General Counsel of the FCC under Chairman Pai. We
repealed these prescriptive net-neutrality rules that were,
industry-wide, applied to everyone, every Internet service
provider of every shape and size. The problem with prescriptive
rules like these media ownership rules is that they quickly
become outpaced by technological change. This 39-percent number
is pegged at what networks look like, broadcast groups look
like 20, 25 years ago before this whole explosion of online
streaming content. In order to have a prescriptive rule like
that, you need to have pervasive evidence of market failure. We
don't have that here. You need a scalpel instead of a
sledgehammer. If there are competition concerns, let's handle
that through the Department of Justice, through the FCC's
existing public interest review, not through these outdated
prescriptive rules.
Senator Moreno. Thank you. Mr. LeGeyt.
Mr. LeGeyt. Modernizing these ownership rules, including
elimination of the national cap, is existential for the future
of local broadcasting. Our industry is competing for
advertising dollars with Google and Facebook, global behemoths.
We are competing for audience and for programming with Netflix
and Amazon and simply put, we are doing it with one hand tied
behind our back because we can't even gain scale nationally to
allow us to compete in those markets.
Senator Moreno. Mr. Ruddy.
Mr. Ruddy. Well, Senator, I think there are several
reasons. One is Congress set the mandate. Michael O'Rielly, the
former commissioner, just said overwhelming number of
commissioners said it's law. Ajit Pai had said it's law.
Brendan Carr had signed a concurring opinion saying it was law.
They don't cite any legal experts that I'm hearing from that
are saying that you could just change it by a bureaucratic act
of the FCC. We've been sold a bill of goods. The FCC was
mandated to do these public TV licenses to serve the local
communities. In my mind, there has to be a tremendous emergency
for this to all be waived so that big--three or four big
companies can own all of these licenses. And so far, the
broadcast industry has not told the Senate one--any data that
provides that they're in crisis. In fact, Nexstar made $2
billion.
If you look at all the other--the top seven TV station
groups all made pretty much in excess of $500 million in EBITDA
in 2024. There is no crisis. They're inventing this because
they know they can make billions of dollars by waiving the
rule, and it doesn't serve the public interest, competition, or
the diversity of voices that the public would like, especially
with local news.
Senator Moreno. All right. Well, thank you. I'll turn it
back over to Mr. Chairman. Thank you.
The Chairman. Thank you, Senator Moreno, and I will
recognize Senator Lujan. And I will point out that Senator
Moreno made the observation that this committee was leaving the
very best for last. Senator Lujan.
[Laughter.]
STATEMENT OF HON. BEN RAY LUJAN,
U.S. SENATOR FROM NEW MEXICO
Senator Lujan. Mr. Chairman--I don't know what you're up to
today, Mr. Chairman, but----
[Laughter.]
Senator Lujan.--Bernie, I appreciate that, sir.
Senator Moreno. I knew you were coming in.
[Laughter.]
Senator Lujan. Thank you, Mr. Chairman. Mr. Ruddy, when
Chair Carr appeared before this committee, I asked if the
Federal Communication Commission was an independent Agency, and
he responded, ``It is not formally independent.'' Now, frankly,
his answer isn't surprising given his willingness to do the
President's bidding, I would say. As a matter of fact, the
FCC's website stated that it was an independent agency until I
asked him the question. And while I thought Chairman Carr was
the decisionmaker at the FCC, clearly he's not because someone
that was over there, they changed the website. That aside, a
few days ago, the President posted on Truth Social regarding
the Nexstar-TEGNA proposed merger, ``Get that deal done,'' and
Chairman Carr responded on X, ``President Trump is exactly
right. The national networks like Comcast and Disney have
amassed too much power. For years, they've been pushing this
Hollywood and New York programming all over the country with no
real checks. Let's get it done and bring real competition to
them.''
Now, my question is, are you concerned about Chair Carr's
willingness to rubber stamp this merger? And let me just go on
to say that I certainly agree that I think in your filed
testimony that Congress is the one that's established the 39-
percent threshold here, but my question is, are you concerned
about Chair Carr's willingness to rubber stamp this merger?
Mr. Ruddy. Well, you make a lot of good points. I do
believe it's an independent agency. And even as an independent
agency, they should be listening to the President, Members of
Congress, and others, and they certainly should take that into
account in their decision-making. He is not alone at the
Commission. As you know, there's another member, and hopefully
there'll be a--another Democratic member soon and another
Republican member. I think Chairman Carr has not given the
President good advice. I mean, on the face of it, he says that
he wants to increase competition by allowing massive
consolidation, so we move from seven TV companies to two or
three? How does that increase competition? The purpose of
competition and deregulation is to lower prices, but what we're
seeing is when you--in a closed market--there are only four
major licenses in every market--that they increase prices
because they have so much market dominance and power. It makes
common sense.
I believe that the Chairman has been inconsistent. For
example, I think he was right to criticize Jimmy Kimmel. I
don't believe in the censorship on Jimmy Kimmel, but I think
that, you know, he'll say that I'm involved in this. He's
calling for him to be fired because he says it's in the public
interest, these are public licenses, but at the same time, he's
saying the public interest doesn't matter. We should just allow
three or four companies to own all the licenses.
I think there should be a consistency. I think he should
encourage all of these major networks that, when it comes to
politicized comedians, they should show balance, and I think
it's unfair that we've had several that have just bashed
President Trump for the 15 years without response. But I think
the answer, again, is not censorship, and it's a balanced
interest for the public interest. That's what these licenses
are all about, and I think the merger of Nexstar has already
proven it's bad for consumers. The prices have gone up, passed
on the cable fees. It's led to the decimation of newsrooms in
markets where they own more than one--two stations.
You know, when--before they did the merger with Tribune
back a few years ago, they had 16,000 employees. Within one
year, they went down to 12,000 employees. If you're a
journalist working for Nexstar, you should be starting to post
your resume if this merger goes through. It's going to be
thousands of jobs, but, ultimately, again, it's the local
communities that get hurt because of the lack of news
diversity.
Senator Lujan. Well, to your point on that, sir, the
President recently expressed his support for the Nexstar-TEGNA
deal, yet was silent on the ownership cap. Have you talked to
President Trump about the TV ownership cap?
Mr. Ruddy. I have talked to him in the past. I have not
talked to him since he made that post, but----
Senator Lujan. Can you share what he said?
Mr. Ruddy. But let's go back. He was very emphatic. Back in
November, he posted to Truth Social that bigger media is not
good, that less media--less bigger networks is better, and that
he supported, essentially, the ownership cap. In the Nexstar
deal, he makes no reference to the--to the ownership cap. I
believe that Nexstar is already in violation of the ownership
cap. They're at 70-percent reach. They want to go to 80
percent. I think the President--I think the President makes a
lot of good decisions, and he does when he's fully informed. I
think Chairman Carr has not informed him and advised him well
on this issue. And I have a disagreement with Chairman Carr
very significantly, and I think he's not--he's not playing by
commonsense rules, which is, more diversity of companies leads
to more competition and lower prices.
Senator Lujan. I appreciate that, sir. Mr. Chairman, I have
other questions. I'll submit them into the record because of
time.
The one thing that I'll share based on your response, Mr.
Ruddy, that I didn't get a chance to share with Chairman Carr
is, if you watched that hearing, you saw how Chairman Carr was
very critical of President Biden. He said President Biden made
one bad decision after another. Well, if I had Chairman Carr in
front of me again, I would remind him that one of the worst
decisions he made was nominating Brendan Carr to the FCC. Thank
you for the time.
The Chairman. Thank you. Since there is apparently a virtue
in being last----
[Laughter.]
The Chairman.--I will take the Chairman's prerogative to do
so. I want to go back to a question that I opened with, and I
want to ask a specific yes/no. We talked about whether the FCC
should make this decision at a Commission-level vote or at a
bureau-level vote, and several of the answers said any decision
to change the ownership cap should be at the Commission-level
vote. I want to ask each of you, yes or no, should the FCC have
a Commission-level vote on the Nexstar-TEGNA merger? Mr. Ruddy.
Mr. Ruddy. It should be a Commission-level vote with the
full public process.
The Chairman. Mr. LeGeyt.
Mr. LeGeyt. I don't have a position on that.
The Chairman. Mr. Johnson.
Mr. Johnson. So, in transparency, Mr. Chairman, my firm
represents Nexstar in this deal. I just want to say that for
the record. I'm not speaking for the client. From my personal
view, my answer is the same, that it's a matter of Commission
discretion under the Communications Act.
The Chairman. Mr. Waldman.
Mr. Waldman. Yes.
The Chairman. Two yeses, two dodges. OK.
[Laughter.]
The Chairman. Let's get to the substance of the law. There
is a disagreement about whether the FCC can change the 39-
percent cap. Let's review what Section 629 of the 2004
Consolidated Appropriations Act did to the Telecommunications
Act broadcast ownership rules. It changed the national
television cap in the statute from 35 percent to 39 percent. It
gave businesses two years to come into compliance with the 39-
percent limit. It barred the FCC from using its forbearance
authority to waive the cap, and it expressly excluded the 39-
percent cap from being part of the FCC's established regulatory
review process.
This is a question for both Mr. Ruddy and Mr. LeGeyt. Yes
or no, on the day after the enactment of this 2004 law, did the
FCC have the statutory authority to adopt rules that set the
national television audience cap to say, 42 percent or 50
percent, or was the FCC instead bound to follow the 39-percent
cap fixed by statute? Mr. Ruddy.
Mr. Ruddy. The reason Congress set it at 39 was that the
FCC, after the 1996 Act, tried to raise it 45 percent by fiat,
and they said, wait a minute, you can't do this. And they--
there was a--basically bipartisan support for the 39 percent.
So, I don't believe they have the authority, and several legal
scholars have said they don't. And so, I'm not a legal expert,
but it appears pretty black and white that they said it, and it
should be--remain law.
The Chairman. Mr. LeGeyt, the day after the 2024 law was
passed, could the FCC have set the cap at some number
substantially higher than 39 percent?
Mr. LeGeyt. Legally, possibly, but as a matter of
practicality, given that it was an appropriations directive
from Congress, no, but importantly----
The Chairman. Well, you say ``legally possibly.'' How
legally possibly?
Mr. LeGeyt. Because the--because Congress didn't set the
39-percent cap in statute. They directed the FCC to adjust
their regulations from a 35- to 39-percent cap. It is not
codified in statute.
The Chairman. How did they direct them to make it 39
percent?
Mr. LeGeyt. Through that appropriations act that you just
referred to in 2004.
The Chairman. And an appropriations act is not statute?
Mr. LeGeyt. What the language of the Act did was that it
directed a modification of the regulation.
The Chairman. But did it say any modification, or did it
say modify it to 39 percent?
Mr. LeGeyt. Modify to 39 percent, but, importantly, it did
not remove the FCC's authority, which had previously been
upheld by the D.C. Circuit, to modify that number on an ongoing
basis.
The Chairman. Well, it did explicitly exclude the 39-
percent cap from being part of the established regulation
review process.
Mr. LeGeyt. It did. It modified the requirement that the
FCC review the cap, but it did not remove the affirmative
authority on an ongoing basis to review it.
The Chairman. All right.
Mr. LeGeyt. It's a distinction with an important
difference.
The Chairman. Next question. The NAB's position is now the
FCC could use other authorities to get around that cap, which
presumably are the same authorities the FCC had and could have
used in 2004/2005 to change the cap. Put another way, the NAB's
position on the 39-percent ownership cap is that, that which is
not prohibited is permitted. This is a question for both Mr.
Ruddy and Mr. LeGeyt. If we assume that Congress did not
clearly bar the FCC from using its general authority to change
the statutory cap, is there any legal limit to what the FCC can
do with the cap? Mr. LeGeyt.
Mr. LeGeyt. No, there's not.
The Chairman. Mr. Ruddy.
Mr. Ruddy. Well, again, I'm not a lawyer, but if the--if
you--if a court were to rule that the FCC was not bound by the
2004 law, I'm assuming that it could create a new cap number as
it had in the past, but I do believe the 2004 law is binding
and a matter of legal statute.
The Chairman. Mr. LeGeyt, could the FCC, the day after the
law was adopted, decide that the ownership cap could be 100
percent of U.S. households? Could it choose zero percent?
Mr. LeGeyt. The FCC as an administrative agency obviously
needs to go through a period of notice and comment and
appropriate administrative procedures, but nothing in the Act
would prohibit the FCC from doing so.
The Chairman. So, it is--it is NAB's position the day after
the statute passed that said change it to 39 percent, the FCC
could have come in and said we're changing it to 100 percent?
Mr. LeGeyt. I think it's unrealistic that that APA process
could take place in a single day, but again----
The Chairman. They initiate the process and it takes the
time it does, and they could immediately then raise it to a
hundred. Is that your position?
Mr. LeGeyt. Senator, I'd like to follow up on the question
because I do think in the context of an appropriations
directive, obviously you are talking about a Fiscal Year--a
directive to the FCC. So, realistically, whether they had that
authority on the next day, I'd like to dig into that a little
bit more, but there's no question that the FCC maintained the
authority to review the cap on an ongoing basis following the
passage of that law.
The Chairman. Well, you'll certainly have an opportunity to
follow up on that. And we're going to have written questions
for the record, and I would welcome a more fulsome response.
These are important and difficult questions.
Mr. Ruddy, same question. Could the FCC have decided right
after the 2004 law was passed that the ownership cap should not
be 39 percent, but rather, it should be 100 percent?
Mr. Ruddy. It sounds like it would be rather ridiculous if
they just flouted what Congress voted and put into statute, and
again, you have commissioner after commissioner, chairman after
chairman. I mentioned earlier Ajit Pai, who was President
Trump's first Chairman, repeatedly said that the cap was law, a
matter of law, that he didn't like it, but he couldn't change
it, and that, his words, ``We had to obey the law.'' Chairwoman
Rosenworcel, made a opinion against Nexstar and one of their
transactions saying they violated a congressional law and that
the Congress only could change it, and Brendan Carr, who was
the Ranking Member at the time, offered a concurring opinion
and did not disagree with that.
So, I think you have a consistent trail here where logic--
and I would really encourage the broadcast industry, if they
really want this change, it's so important for them, go to the
People's House, go to the Congress and the Senate, make their
argument that they should do this, but they don't want to do
this. They want to use the bureau level, the bureaucrats, and
they don't even want to respond. Why can't we have an open
process? Why are the broadcasters so afraid for the full
Commission to look at this, and they want to have no opinion on
it? Have transparency on this matter.
The Chairman. OK. Final question. If the FCC decides that
it has the authority to set aside the statutory cap of 39
percent and to raise it substantially above what the statute
says, what is the likelihood that that decision will be
challenged in litigation, and what is a reasonable estimate for
how long that litigation will take and what the consequences of
that litigation will be? Mr. Ruddy and then Mr. Legeyt.
Mr. Ruddy. I am prepared to litigate the matter. I believe
that it's just a blatant violation of congressional law, and I
think it's a very dangerous thing that the--that they--that a,
basically, industry group that stands to make billions of
dollars can just circumvent what Congress has said, that the
public overwhelmingly supports my position and the current law,
that they would like less consolidation, and they want more
diversity in media.
The Chairman. And, Mr. LeGeyt, you get the final word,
which I guess, given the Committee's rule, means you're the
best that is here.
Mr. LeGeyt. Thank you, Mr. Chairman. I think if history is
a guide here, every modification that the FCC has made to its
ownership restrictions has been challenged in court on one side
or the other, so I would certainly expect that here as well.
But we would certainly ask that that judicial review be
expedited because this is an existential crisis for local
broadcasters. Our competitive landscape is one in which
broadcasters are competing with one hand tied behind our back
because of the scale of these global tech companies: Netflix,
Amazon, Google, Facebook. They are siphoning away our
advertising revenue. They are pulling away our viewers, and the
only way we can invest in local communities like yours, and
continue to do the invaluable work being done across the many
markets in your state, is with more scale.
I mean, I made the point separately, but I want to leave
the Committee with this: that if judged on an independent,
standalone basis, more than half of the broadcast newsrooms in
this country are not profitable. They would not exist as
standalone businesses. The only way that we can continue to
serve communities in the 210 markets in this country is to have
some scale to do so and elimination of these rules, which are
not--you know, nine decades old, last reviewed more than 20
years ago. This media landscape's been completely reshaped, and
we need to compete.
The Chairman. OK. I want to thank all the witnesses for
their testimony today. This hearing, I think, was quite helpful
to the Committee.
Senators will have until the close of business on February
17 to submit questions for the record. The witnesses will have
until the close of business on March 3 to respond to those
questions.
This concludes today's hearing. The Committee stands
adjourned.
[Whereupon, at 12:21 p.m., the Committee was adjourned.]
A P P E N D I X
Consumer Technology Association
Arlington, VA, February 9, 2026
Hon. Ted Cruz,
Chairman,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
Hon. Maria Cantwell,
Ranking Member
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
Dear Chairman Cruz, Ranking Member Cantwell, and Members of the
Committee:
In advance of tomorrow's hearing to examine broadcaster
consolidation, the Consumer Technology Association (CTA), urges the
Committee to approach any relaxation of broadcast ownership limits with
significant caution. CTA represents the U.S. consumer technology
industry and is North America's largest technology trade association.
Broadcast television uses exclusive access to publicly owned
spectrum, a finite resource the Federal government must manage in the
public interest. Changes to ownership rules that further consolidate
control of local broadcast licenses should not occur without a
corresponding reassessment of whether broadcast spectrum is being used
efficiently and in a manner that best serves American consumers and the
broader economy.
As a recently released study by the National Association of
Broadcasters (NAB) reveals, just 9 percent of consumers surveyed say
they use an antenna to access live television, including local
broadcast TV stations, a big drop from when the Federal Communications
Commission's (FCC) ownership rules were first put in place in the
1940s.\1\
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\1\ See National Association of Broadcasters (NAB), New National
Survey: Voters Say Outdated Broadcast Ownership Cap is Unfair to Local
Stations (February 2, 2026), available at: https://www.nab.org/
documents/newsRoom/pressRelease.asp?id=7389.
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CTA market research also shows that approximately 8 percent of
video content viewers rely on a TV antenna as the only source of video
content.\2\ Ironically, while these findings confirm the reality of how
most consumers choose to access local TV stations, the questions posed
in NAB's recent survey on public support for relaxing ownership caps
are so contrived, they stand in stark contrast to other reputable
studies which show the opposite: consumers want to preserve the
localism that comes from local TV stations.\3\
---------------------------------------------------------------------------
\2\ See CTA 2025 U.S. Consumer Technology Ownership & Market
Potential Study (May 2025), available at: https://www.cta.tech/
research/2025-us-consumer-technology-ownership-market-potential-study/.
\3\ See TVB Television Bureau of Advertising, Survey Finds that 95
percent of Respondents Believe Accessing Local News on Their Local TV
Station is Important (September 29, 2025), available at: https://
www.tvb.org/wp-content/uploads/2025/10/Survey-Finds-that-95-of-
Respondents-Believe-Accessing-Local-News-on-Their-Local-TV-Station-is-
Important-.pdf; Pew Research Center, Views of local news (May 7, 2024),
available at: https://www.pewresearch.org/journalism/2024/05/07/views-
of-local-news/ (``most U.S. adults (85 percent) believe local news
outlets are at least somewhat important to the well-being of their
local community, including 44 percent who say they are extremely or
very important.'').
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We ask this Committee to consider the obvious: local broadcast TV
spectrum remains increasingly underused in many markets, as consumer
viewing habits continue to migrate toward streaming, mobile, and on-
demand platforms. Yet, demand for licensed and unlicensed spectrum to
support next-generation wireless services, innovation, and economic
growth is growing. Allowing greater consolidation of broadcast
ownership without addressing this imbalance risks entrenching
inefficient spectrum use while foreclosing opportunities for higher-
value applications.
The NAB's push for loosened ownership restrictions and new mandates
requiring the inclusion of a NEXTGEN TV tuner in all televisions and a
mandate of AM radios in cars reveals a misuse of valuable public
spectrum and a reliance on Washington largesse at the expense of
consumers. If the spectrum broadcasters are using were being put to its
best use in 2026, broadcasters would not be seeking government action
to force consumers to buy receivers they do not want.
CTA believes that if Congress or the FCC considers relaxing the
broadcast ownership rules, such action should be paired with meaningful
measures to return underused broadcast spectrum to the Federal
government and should not include mandates that force consumers to buy
features they do not want. This would help ensure that the public
receives fair value for the use of the airwaves and that spectrum
policy keeps pace with modern consumer and economic needs.
Ownership rules were created to promote localism, competition, and
diversity. Relaxing those rules without securing tangible public
interest benefits--particularly improved spectrum efficiency--risks
hurting those objectives while delivering limited consumer benefit.
CTA stands ready to work with the Committee to advance a forward-
looking spectrum policy that balances the needs of broadcasters with
the urgent demand for spectrum to support wireless innovation, economic
competitiveness, and consumer choice.
We appreciate your attention to this important issue.
Respectfully submitted,
Gary Shapiro,
Executive Chair and CEO,
Consumer Technology Association.
______
Free Press Action
Washington, DC, February 10, 2026
Chairman Ted Cruz,
Ranking Member Maria Cantwell,
U.S. Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
Re: Free Press Action Submission for the Record for Full Committee
Hearing Entitled ``We Interrupt This Program: Media
Ownership in the Digital Age''
Chairman Cruz, Ranking Member Cantwell, and Members of the Committee:
Free Press Action submits the attached comments, filed by Free
Press in August 2025 with the Federal Communications Commission, for
your consideration as a submission for the record of today's hearing.
We filed these comments when the agency sought to refresh the
record in its proceeding on the National Television Multiple Ownership
Rule, better known as the broadcast television national audience reach
limit or the ``national cap.'' In announcing today's hearing, Chairman
Cruz explained that it would focus ``particularly'' on ``one rule
limiting a single broadcaster from reaching beyond 39 percent of U.S.
television households nationwide.'' He also noted that many
stakeholders ``contend . . . that the current 39 percent cap is
statutory, meaning it can only be changed by an act of Congress and not
through regulation'' at the FCC.
What the Chairman referred to as an expert contention is in fact
the obvious reading of the law at issue today. When Congress set this
limit in 2004, it instructed the FCC to adopt a rule to this effect
instead of placing the limit in the body of the Communications Act.
Based on nothing more than this slender difference in the manner of
Congress's unmistakable pronouncement, some suggest that the agency can
choose to ignore it. This is a remarkable and untenable position,
especially when there is no ambiguity whatsoever in the figure Congress
set. Should industry advocates have their way, it would beg the
question: what is the expiration date on congressional enactments? And
when do agencies (especially after Loper Bright) get to ignore the
plain meaning of legislation? The answer is clear: they do not.
As the attached comments explain in great detail, it is not merely
Free Press that holds this position. Several broadcasters themselves
have argued that the Commission has no power to waive or eliminate the
congressionally set national cap, as has former Republican FCC
Commissioner Michael O'Rielly (who worked as congressional staff on the
2004 law that set it).
Any brazen attempt by the FCC to ignore this law would be an
affront to congressional authority. As our comments explain, it also
would have devastating consequences. Nothing about the march of media
technology into the Internet and streaming era has diminished the
importance of local broadcasting. The national cap is an important
structural tool that mitigates large ownership groups' market
incentives to abandon localism. This is not mere conjecture. There is
ample evidence demonstrating the harms to localism that follow
consolidation.
Most notably, despite rising revenues, the number of broadcast TV
stations producing original local news has declined since 1996.
Furthermore, research demonstrates how national consolidation
diminishes competition, localism, and viewpoint diversity. One study
our comments cite shows that large national chains achieve their post-
consolidation synergies by replacing original local news with
duplicated and out-of-market programming. Another survey of local TV
newsroom managers demonstrates how consolidation undermines the public
interest, depletes journalism and working journalists, and creates a
race to the bottom.
Broadcasters' statements to Wall Street show that their companies
are in great financial health, regardless of the different tune they
sing inside the Beltway. While they lament supposed competition with
``Big Tech,'' all available evidence--including broadcasters' own
comments--shows local TV firms are not in the same product market as
online companies like Google, Meta, Amazon, or Netflix. None of those
tech firms produce local news. Eliminating the national cap would harm
localism but not mediate the issues created by large tech firms'
practices.
Finally, as our attached filing documents in copious detail,
broadcast representatives have repeatedly told investment analysts how
resilient their live sports and local news programming are even in the
face of changing viewing patterns. Broadcasters' premise that national
consolidation begets more local news is completely unfounded. Local
broadcast revenues rose far faster than the rate of general inflation
during the Internet era. But employment in local TV newsrooms did not
grow with owners' increasing fortunes.
Broadcast firms have in many cases outperformed the broader market
and other advertising-supported companies on metrics like return on
capital, profit margins, and stock price. The national cap is not a
barrier to continued financial prosperity. Broadcast executives have
told Wall Street analysts and their own investors to expect continued
healthy local advertising and retransmission consent payment growth
thanks to strong viewer demand, new technologies, and what Nexstar's
CEO labeled the ``unparalleled local moat'' broadcasters enjoy.
We thus submit the attached FCC filing to counter broadcast
representatives' unfounded claims regarding the supposed justifications
for changing the national cap that Congress set, as well as the
fanciful suggestion that this change is within the FCC's authority.
Sincerely,
Matthew F. Wood,
VP of Policy & General Counsel,
Free Press Action.
______
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
EXECUTIVE SUMMARY
The law is clear: Congress fixed the maximum reach of broadcast
television license holders at 39 percent of TV households nationwide,
and it specifically removed this national cap from the Commission's
congressionally-mandated quadrennial review of all other broadcast
ownership policies. But despite this clarity, the new Commission is
requesting a refresh of the record in an eight-year-old proceeding, in
which any changing external market conditions are simply not germane to
the law, and in which any fair analysis of the television broadcasters'
own economic data shows them in no need of the relief they seek.
But as Chairman Carr's tenure so far demonstrates, his Commission
is not going to let little things like the law, settled precedent, or
even the First Amendment get in the way of its partisan and ideological
aims. Chief among these is following the Trump administration's dictate
to use the Commission's licensing authority to exert total control over
the media. Media consolidation and deal approvals are now explicitly a
way for President Trump to further consolidate his dictatorial power,
through explicit loyalty tests and pledges to use the public airwaves
as a propaganda tool against the American public. Chairman Carr has
made it known that every FCC-licensed firm's continued existence will
now be contingent upon that company's editorial and internal personnel
decisions aligning with the White House's wishes.
As the saying goes, ``all politics is local,'' and though media
markets are changing, local broadcast TV news stations (and their
websites) remain the dominant source that Americans use to inform
themselves about electoral politics. This is why this proceeding--one
whose very initiation ignores the congressionally-set national cap--
threatens democracy and freedom. Chairman Carr is placing a ``for-
sale'' sign on the public's airwaves, and inviting media companies to
monopolize the local news markets as long as they agree to pay the
price of political fealty to Donald Trump and the MAGA movement.
Though the law that binds the Commission in this proceeding does
not turn on contemporaneous policy arguments, in these comments we
demonstrate how the national cap remains good policy today. It
continues to promote competition, localism, and diversity. This greater
competition and diversity of sources remains critical, in part because
local TV news broadcasts continue to have a disproportionate impact on
public opinion and voting behavior.
Promoting the public interest, as the Communications Act requires,
and fostering a vibrant marketplace of ideas at the local level
requires a jurisprudence standard beyond antitrust analyses alone.
Public airwaves remain a scarce resource, and those privileged enough
to hold a broadcast TV license have an outsized impact on many facets
of life including voting and democracy itself. The national cap and
policies that limit how much local broadcast media one owner can
control are therefore necessary to promote the public interest, and
help the Commission to strike a balance between private profits and
democracy's needs.
Nothing about the march of media technology into the Internet and
streaming era has diminished the importance of local broadcasting. And
the national cap is an important structural tool that mitigates large
ownership groups' market incentives to abandon localism. This is not
mere conjecture. There is ample evidence demonstrating the harms to
localism that follow consolidation. Most notably, despite rising
revenues, the number of broadcast TV stations producing original local
news declined since 1996. Furthermore, other research demonstrates how
national consolidation diminishes competition, localism, and viewpoint
diversity. A recent study shows that large national chains achieve
their post-consolidation synergies by replacing original local news
with duplicated and out-of-market programming. A separate recent survey
of local TV newsroom managers further demonstrates how consolidation
undermines the public interest, depletes journalism and working
journalists, and creates a race to the bottom.
Though the continued application of the national cap is not tied to
television licensees' balance sheets, their own evidence and statements
show that broadcast television companies are in great financial health.
The push for national consolidation has nothing to do with enriching
viewers' lives--only shareholders' wallets. Despite the Commission and
the broadcast industry lamenting the existence of ``Big Tech,'' all
available evidence--including comments from broadcasters themselves--
shows that local TV firms are not in the same relevant product market
as online companies like Google, Meta, and Amazon.
Nor are local TV broadcasters in the same relevant product market
as online video distributors like Netflix. None of those tech firms
produce local news. Eliminating the national cap will only serve to
harm localism, and will do nothing to mediate the myriad issues created
by the various large tech firms' behavior and practices. While
viewership of linear television on the whole is in decline, this trend
is not observed equally among all linear television sectors. Online
television continues to take a larger share of viewing time, but
virtually all at the expense of time previously spent watching linear
cable networks. Indeed, broadcast companies representatives have
repeatedly told investment analysts in the past year how resilient
their live sports and local news programming are in the face of
changing viewing patterns.
And the broadcasters' central premise--that national consolidation
is in the public interest because it begets more local news--is
completely unfounded. The local broadcast TV industry's revenues have
risen far faster than the rate of general inflation during the Internet
era. But unlike the local newspaper sector, employment in local TV
newsrooms did not grow with the owners' increasing fortunes. RTDNA
published data indicating that TV newsroom employment has been
essentially flat since the industry rebounded from the Great Recession,
at approximately 28,000 jobs both in 2012 and in 2024, as their
revenues grew much faster.
The fact is that while under the national ownership cap, broadcast
TV firms have in many cases outperformed the broader market and other
advertising-supported companies on metrics like return on capital,
profit margins, and stock price. This historical financial performance
shows that the national cap is not a barrier to continued financial
prosperity. That is especially true looking ahead, as local TV
companies have many new revenue-generating opportunities to pursue
outside of national consolidation. Broadcast TV executives have told
Wall Street analysts and their own investors to expect continued
healthy local advertising and retransmission consent payment growth
thanks to strong viewer demand for live sports and local news. And
broadcasters expect the new ATSC 3.0 transmission technology to further
enhance their bottom line.
In sum, the Commission has no authority to increase or eliminate
the national cap. Doing so would be a disaster for localism.
______
TABLE OF CONTENTS
Executive Summary
______
I. Introduction
______
II. The Commission Does Not Have Authority to Increase or Eliminate
the National Audience Reach Cap
A. Congress Set a Specific 39 Percent National Audience Reach
Limit in the Consolidated Appropriations Act of 2004. Only
Congress Can Change this Number
B. Though the Law Bars the Commission from Altering the 39
Percent National Audience Reach Value It Retains the Authority
to Determine How That Reach Is Calculated
III. Limiting Broadcast Television Licensees' National Reach Remains
Critical to Promoting Competition, Localism, and Diversity
A. Local TV News Stations Have a Disproportionate Impact on
Public Opinion and Voting Behavior
B. The National Cap and Local Broadcast Ownership Limits
Remain Vital Policies that Promote the Public Interest and
Strike a Balance Between Private Profits and Democracy's Needs
C. Promoting a Vibrant Marketplace of Ideas at the Local Level
Requires a Jurisprudence Standard Beyond Antitrust
D. The National Cap Is an Important Structural Tool that
Mitigates Large Ownership Groups' Market Incentives to Abandon
Localism
E. Broadcast TV Consolidation Has Harmed Localism
a. The Number of Stations Producing Original Local
News Has Declined Since 1996
b. Research Demonstrates How National Consolidation
Diminishes Competition, Localism, and Viewpoint
Diversity. Large National Chains Achieve Their Post-
Consolidation Synergies by Replacing Original Local
News with Duplicated and Out-of-Market Programming
c. Evidence from Inside Local TV Newsrooms
Demonstrates How Consolidation Undermines the Public
Interest and Creates a Race to the Bottom
IV. Broadcast Television Companies Are in Great Financial Health and
Further Consolidation Will Only Benefit Wealthy Shareholders
A. Local TV Broadcasters Are Not in the Same Relevant Product
Market as Online Tech Giants Like Google, Meta, and Amazon, Nor
Are They in the Same Relevant Product Market as Online Video
Distributors Like Netflix. Eliminating the National Cap Will
Harm Localism and Will Not ``Rein in'' Big Tech Companies
B. The Rise of Online Video Does Not Lessen the Need for the
National Cap. Local TV Broadcasters Do Not Compete Directly
Against National Online Video Providers, Including the Online
Services of the Big 4 Networks
C. The Decline in Linear TV Viewing Has Disproportionately
Impacted Cable Networks, Not Local Broadcast Television
D. Local TV Broadcast Revenue Growth During The Previous Two
Decades Did Not Result in Newsroom Staffing Increases
E. Broadcast TV Chains' Healthy Financial Performance During
the Streaming Media Era Demonstrates that the National Cap is
Not a Barrier to Continued Financial Prosperity
F. Local TV Broadcasters Have Many New Revenue-Generating
Opportunities to Pursue Outside of National Consolidation
a. Broadcasters Expect to See Continued Healthy Local
Advertising and Retransmission Consent Payment Growth
Thanks to Strong Viewer Demand for Live Local Sports
and News Programming
b. Continued Advances in Digital Broadcast
Transmission Technology Create New Revenue
Opportunities for Broadcasters
V. Conclusion
______
I. Introduction
On June 18, 2025,\1\ the Federal Communications Commission
requested updates to the record in a proceeding it did not have any
legal basis to conduct in the first place. The law is unambiguous:
Congress fixed the maximum reach of broadcast television license
holders at 39 percent of TV households nationwide, and it specifically
removed this policy from the Commission's congressionally-mandated
quadrennial review of all other broadcast ownership policies.\2\
---------------------------------------------------------------------------
\1\ Media Bureau Seeks to Refresh the Record in the National
Television Multiple Ownership Rule Proceeding, MB Docket No. 17-318,
Public Notice, DA 25-530 (rel. June 18, 2025) (``Public Notice'' or
``Notice.'').
\2\ See infra Section II (complete discussion of the legal history
of the national cap); see also Dana A. Scherer, ``Federal
Communications Commission (FCC) Media Ownership Rules,'' Congressional
Research Service, R45338 (June 1, 2021) (``[In 2004] Congress enacts
the 2004 Consolidated Appropriations Act, 2004 (P.L. 108-199), which
directs the FCC to increase its national TV ownership cap to 39 percent
of national audience, thereby preempting FCC's rule that would have
raised the cap to 45 percent. The act also directs the FCC to review
its media ownership rules every four years (instead of every two
years), exempting rules related to the ownership cap from the review.
[In 2003 the] U.S. Court of Appeals, 3rd Circuit, finds that new law
makes challenges to the FCC's UHF discount moot. Court finds that
barring congressional intervention, the FCC may decide the scope of its
authority to modify or eliminate the UHF discount outside the context
of its quadrennial media ownership review.''). As we detail in Section
II, infra, the Third Circuit delineated the Commission's authority to
consider the UHF discount policy outside of the Quadrennial Review, but
not the percentage itself.
---------------------------------------------------------------------------
But as Chairman Carr's tenure so far demonstrates, his Commission
is not going to let little things like the law, settled precedent, or
even the First Amendment get in the way of the Trump administration's
plan to use the Commission's licensing authority as a tool to exert
total control over the media.\3\ Media consolidation and deal approvals
are now explicitly a way for President Trump to further consolidate his
dictatorial power, through explicit loyalty tests and pledges to use
the public airwaves for propaganda against the American public.\4\
---------------------------------------------------------------------------
\3\ See Comments of Free Press at 33-35, MB Docket No. 25-73 (filed
Mar. 7, 2025).
\4\ See, e.g., Office of Commissioner Anna M. Gomez, Commissioner
Gomez on Unprecedented FCC Approval of Paramount Transaction, FCC (July
24, 2025) (``In an unprecedented move, this once-independent FCC used
its vast power to pressure Paramount to broker a private legal
settlement and further erode press freedom. Once again, this agency is
undermining legitimate efforts to combat discrimination and expand
opportunity by overstepping its authority and intervening in employment
matters reserved for other government entities with proper jurisdiction
on these issues. Even more alarming, it is now imposing never-before-
seen controls over newsroom decisions and editorial judgment, in direct
violation of the First Amendment and the law The Paramount payout and
this reckless approval have emboldened those who believe the government
can--and should--abuse its power to extract financial and ideological
concessions, demand favored treatment, and secure positive media
coverage. It is a dark chapter in a long and growing record of abuse
that threatens press freedom in this country.'').
---------------------------------------------------------------------------
This proceeding is a farce. Chairman Carr long ago made up his mind
to dismantle what's left of the Commission's ownership rules, and made
it abundantly clear both before the Media Bureau issued this Notice\5\
and before the November 2024 election in his political campaigning
benefitting then-candidate Trump.\6\
---------------------------------------------------------------------------
\5\ See, e.g., George Winslow, ``FCC's Carr Calls Station Ownership
Caps `Arcane' and `Artificial,' '' TV News Check (May 7, 2025) (quoting
Carr in an interview stating, ``we have these arcane, artificial limits
on how many TV stations any one company can own. But of course, that
doesn't apply to big tech. So you have, you know, relatively small TV
station groups that are competing with Google and Facebook and others
in the advertising part. So I want to ultimately empower those local
stations and, frankly, constrain some of the power of those national
programmers.''). As we discuss below, the notion that local TV chains
compete in the same economic product market as online search and social
media firms is both wrong as a matter of basic economics, and also
unmoored from the Communications Act's public interest policy framework
applied to firms that are given government-sanctioned monopoly control
over this portion of the public airwaves.
\6\ See, e.g., Joshua Benton, ``What would Project 2025 do for (or
to) journalism? From defunding NPR and PBS to kicking reporters out of
the White House, it's an array of conservative priorities and Trumpian
retreads,'' Nieman Lab (Sept. 25, 2024).
---------------------------------------------------------------------------
Large broadcast TV firms are already moving ahead with deals,\7\
knowing this Commission will grant waivers of its remaining ownership
rules,\8\ which--because of the roadblock to autocracy known as legal
due process--cannot be immediately dismantled,\9\ even as the Chairman
strains to find more and more streamlined ways to ``delete, delete''
important public safeguards.
---------------------------------------------------------------------------
\7\ Though the Commission's local multiple ownership rule still
nominally prohibits top-four co-ownerships, TV station groups are
banking on waivers and ploughing ahead with the formation of new
duopolies. See, e.g., Michael Johnson, Justin Nielson & Mike Reynolds,
``Gray Media and Scripps TV station swaps could be a precursor to more
dealmaking,'' S&P Glob. Market Intel. (July 11, 2025) (``In a deal that
could set the stage for similar transactions, Gray Media Inc. and The
E.W. Scripps Co. intend to swap stations in five small and mid-sized
markets. The moves will bolster the companies' strategic positions in
these markets and create duopolies at a time when the broadcast
industry is pushing for relaxation or changes to decades-old rules that
have limited ownership and reach. . .With this pending transaction,
Scripps President and CEO Adan Smyson has indicated that deal approval
will likely occur through a waiver.'').
\8\ See Comments of Perry A. Sook, Founder, Chairman & CEO, Nexstar
Media Group, Inc., Nexstar Q1 2025 Investor Call (May 8, 2025) (Sook Q1
2025 Comments) (``Obviously, any action that Congress would take would
put whatever those rule changes were out of reach of judicial review,
which would be nice as well. But I also think that the Chairman has
indicated his willingness to consider waivers during either the
pendency of rule-making or waivers just in general. So I think you'll
see all of those levers be pushed as time goes on this year, and I do
think you'll see M&A activity come into focus as the year goes on.'').
Sook was then asked, ``are you comfortable sort of putting pen to paper
and beginning to transact when the process is at that phase, but maybe
does still face some challenges in the courts?''--to which he answered,
``as it relates to your question, would we be willing to put pen to
paper during the pendency of an NPRM, I think, again, depends on the
circumstances and having a willing counterparty that was willing to do
so as well. But I think you've seen this company take risk, acceptable
risk, calculated risk for an opportunity. So I don't think you'd see
any change in our behavior as we move through this year and the
deregulation of our industry.'' Id.
\9\ See, e.g., Johnson et al., supra note 7; Comments of
Christopher S. Ripley, President & CEO, Sinclair, Inc., Q1 2025
Investor Call (May 7, 2025) (``That said, in terms of M&A in the
meantime, just the rules that we have on the books today. Which include
things like the UHF discount, which include ownership of two big fours
subject to a big four waiver, but it's--the rules as they exist today
do actually afford most players, including Sinclair, a significant
amount of flexibility for M&A. So I think that, at least from our
perspective, you're going to see more activity from us. You've already
seen some, right? We announced a sale of five markets, a station swap--
but you're going to start seeing more in the weeks to come, we will
start filing for some of the JSA buy-ins that I've been talking about
before, and that's a very accretive trade that should add tens of
millions of dollars to our bottom line with very little cash out the
door. I think station swaps are going to happen in the meantime, while
we wait for some of these rules to change and even large-scale M&A or
mergers, are on the to-do list, I think, for many broadcasters and I
don't think many and depending on the situation, I just don't
necessarily have to wait for the rules to change.'') (emphasis added).
---------------------------------------------------------------------------
The only price for consolidation is bending the knee, and the line
starts outside of the FCC Chairman's office. Trump's vanity and
autocratic demands seemingly have no bounds, and Carr apparently has no
qualms about satisfying them. Carr's grossly partisan and deeply
hypocritical water-carrying for Trump have forever stained the agency,
making it clear that the Commission is no longer independent, impartial
or fair. Carr once suggested of elected Democrats' actions that their
alleged questioning regarding ``a private entity's decision about what
news to carry cannot be reconciled with bedrock principles of free
speech and journalistic freedom.'' \10\ He said their inquiry was ``a
chilling transgression of the free speech rights that every media
outlet in this country enjoys,'' because ``[a] newsroom's decision
about what stories to cover and how to frame them should be beyond the
reach of any government official, not targeted by them.'' \11\ My how
times have changed, now that Carr is the one doing the targeting at
this president's bidding.
---------------------------------------------------------------------------
\10\ Office of Commissioner Brendan Carr, FCC Commissioner Carr
Responds to Democrats' Efforts to Censor Newsrooms, FCC (Feb. 22,
2021).
\11\ Id.
---------------------------------------------------------------------------
Chairman Carr has made it known that every FCC-licensed firm's
continued existence will now be contingent upon that company's
editorial and internal personnel decisions aligning with the White
House's wishes.\12\ Carr's actions disregard the First Amendment and
the Communications Act.\13\ Mob-style government is back, and this time
without the need to face the electorate again unless a ``Trump 2028''
run defies yet another constitutional provision, the administration is
unshackled from any pretense of respect for the laws and institutions
like the First Amendment that actually make America unique.\14\
---------------------------------------------------------------------------
\12\ See Michael J. Socolow, ``ABC and CBS settlements with Trump
are a dangerous step toward the commander in chief becoming the editor-
in-chief,'' Nieman Lab (July 15, 2025) (``It's not certain what the ABC
and CBS settlements portend, but many are predicting they will produce
a `chilling effect' within the network news divisions. Such an outcome
would arise from fear of new litigation, and it would install a form of
internal self-censorship that would influence network journalists when
deciding whether the pursuit of investigative stories involving the
Trump administration would be worth the risk.''). This article was
written shortly before the Commission's final approval of the Skydance-
Paramount merger, an order that desecrates the First Amendment by
conditioning the government's approval of the license transfer on
Skydance's installation of an ombudsman to monitor CBS's news content
to ensure it doesn't anger Donald Trump, even though there's a lengthy
history of basic facts upsetting his fragile narcissistic ego. See
Ashley Belanger, ``Skydance deal allows Trump's FCC to `censor speech'
and `silence dissent' on CBS,'' Ars Technica (July 25, 2025); see also
Comments of The Foundation for Individual Rights and Free Expression at
7-8, MB Docket No. 25-73 (filed Mar. 7, 2025) (``[T]he Commission's
request for public comment lacks any legitimate regulatory rationale,
but its realpolitik purpose is sadly transparent. This proceeding is
designed to exert maximum political leverage on the CBS network at a
time when President Trump is engaged in frivolous litigation against it
over the same 60 Minutes broadcast, with the FCC using other regulatory
approvals the network needs to exert added pressure. This is not just
unseemly, it is precisely the sort of unconstitutional abuse of
regulatory authority the Supreme Court unanimously condemned in NRA v.
Vullo There is a name for this kind of thing--it is called a show
trial. When proceedings become a performative exercise conducted to
further a political purpose, they forfeit any claim to legitimacy. Show
trials tend to be retributive rather than corrective and are designed
to send a message, not just to their unfortunate victims, but as a
warning to other would-be transgressors. There is a dark and deadly
history of such showcase proceedings in authoritarian regimes around
the world, ranging from Stalin's purges of perceived political
opponents to China's trials of `rioters and counterrevolutionaries'
after the 1989 Tiananmen Square protests. In our own country, similar
tactics were employed during the Red Scare with investigations and
hearings aptly described by the Chairman of the House Committee on Un-
American Activities as `the best show the committee has had yet.' Those
who staged the proceedings `were not seeking justice but staging a show
trial to accuse, indict, and punish.' And while the stakes of a sham
FCC proceeding obviously differ, the perversion of the rule of law is
the same.'') (internal citations omitted).
\13\ Chairman Carr's actions in his baseless CBS 60 Minutes ``news
distortion'' investigation, which was launched during the review of the
Skydance-Paramount merger, along with the final deal approval amount to
a backdoor violation of Section 326. See 47 U.S.C. Sec. 326 (``Nothing
in this Act shall be understood or construed to give the Commission the
power of censorship over the radio communications or signals
transmitted by any radio station, and no regulation or condition shall
be promulgated or fixed by the Commission which shall interfere with
the right of free speech by means of radio communication.''); see also
Comments of Free Press, MB Docket No. 25-73, at 32-33 (filed Mar. 7,
2025).
\14\ Of course, Trump's first term also posed threats to press
freedom and open Internet policies as well, along with a slew of other
harms. Amidst a flurry of open corruption and norms violations in this
second Trump term, it is all but forgotten that the Trump
administration already secured a deal with one of the largest U.S.
local TV chains ahead of his first term. See, e.g., Josh Dawsey & Hadas
Gold, ``Kushner: We struck deal with Sinclair for straighter
coverage,'' Politico (Dec. 16, 2016).
---------------------------------------------------------------------------
Chairman Carr insists that his quid pro quo exercise of power and
intrusion into the First-Amendment-protected editorial decisions of the
news media is simply required to restore ``trust'' in the media, even
as he ominously notes that ``we will be watching.'' \15\ But it is not
the greater public who express a decline in trust of the media; this
distrust is heavily partisan. It is a view widely held by Republican
Party voters who have had their minds poisoned against journalists,
scientists, civic institutions, people of color, LGBTQ+ persons,
Democrats, any Republicans who investigated the January 6, 2021
insurrection, sexual assault victims, and any other groups or
individuals that Fox News deems worthy of hating (see Figure 1).
---------------------------------------------------------------------------
\15\ See Ted Johnson, `` `Trump Transaction Tax': Skydance's FCC
Saga Raises Fears That It's The Template For Future Media Merger
Reviews,'' Deadline (July 25, 2025).
---------------------------------------------------------------------------
Figure 1: Distrust in the Media by Political Party ID \16\
---------------------------------------------------------------------------
\16\ See Megan Brenan & Lydia Saad, ``Five Key Insights Into
Americans' Views of the News Media,'' Gallup (Feb. 27, 2025).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman's intrusion into CBS News' editorial decisions, his
hassling of public media stations, and his thuggish ``investigation''
of NBC are not going to restore anyone's trust in the news media.\17\
But query whether that is truly his goal. Much of the right-wing media
``entertainment'' ecosystem (left untouched by Carr) amounts to
propaganda and demonstrable falsehood,\18\ and constantly feeds viewers
a distorted version of reality they wouldn't readily find from
legitimate journalism operations.\19\ Though now with the Commission's
Skydance-Paramount ``deal,'' there is legitimate reason to question
whether other established outlets have crafted their news coverage to
curry favor with Trump as well, or to not run afoul of the president
and his FCC henchman.
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\17\ See, e.g., Austin Fuller, ``FCC chair requests investigation
into NPR, PBS underwriting,'' Current (Jan. 30, 2025); see also ``FCC
Chairman Opens Inquiry Into Comcast-NBC Affiliate Practices With Local
Broadcasters,'' Newsmax (July 29, 2025).
\18\ See, e.g., Dan Froomkin, ``Fox News isn't news: A new study
suggests Fox News viewers aren't just manipulated and misinformed--they
are literally being made ignorant by their consumption habits,'' NBC
News (Apr. 9, 2022).
\19\ See, e.g., David Folkenflik, ``You Literally Can't Believe The
Facts Tucker Carlson Tell You. So Say Fox's Lawyers,'' NPR (Sept. 29,
2020); David Bauder, Randall Chase & Geoff Mulvihill, ``Fox, Dominion
reach $787M settlement over election claims,'' Associated Press (Apr.
18, 2023) (``Dominion set out to prove in the lawsuit that Fox acted
with malice in airing allegations that it knew to be false, or with
`reckless disregard' for the truth. It presented volumes of internal e-
mails and text messages that showed Fox executives and personalities
saying they knew the accusations were untrue, even as the falsehoods
were aired on programs hosted by Maria Bartiromo, Lou Dobbs and
Jeannine Pirro. Records released as part of the lawsuit showed that Fox
aired the claims in part to win back viewers who were fleeing the
network after it correctly called hotly contested Arizona for Democrat
Joe Biden on election night. One Fox Corp. vice president called them
`MIND BLOWINGLY NUTS.' During a deposition, Murdoch testified that he
believed the 2020 election was fair and had not been stolen from
Trump.'').
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The late Speaker of the House Tip O'Neill famously quipped that
``all politics is local.'' Whatever the ultimate truth of that
statement, it is certainly the case that local broadcast TV news
stations (and their websites) \20\ are the dominant source that
Americans use to inform themselves about electoral politics.\21\
Certainly all broadcast television is local, and the privilege to use
these portions of the public airwaves for constitutionally protected
speech is limited to very few speakers because broadcast spectrum
remains scarce.
---------------------------------------------------------------------------
\20\ ``2024 Local Broadcast TV News Study,'' TVB (2025) (``There is
duplication between local broadcast TV news viewers and those who
access local broadcast TV station news websites/apps. 76 percent of TV
station news website/app users also view local TV news on TV. 46
percent of TV station news viewers also access websites/apps. Local
broadcast TV news is the #1 source for news, not only for local news,
but for all news in general.'') (emphasis added).
\21\ See, e.g., Elisa Shearer et al., ``Americans Changing
Relationship with Local News,'' Pew Rsch. Ctr. (May 7, 2024); Elisa
Shearer et al., ``Americans Views of 2024 Election News,'' Pew Rsch.
Ctr. (Oct. 10, 2025); Danilo Yanich & Benjamin E. Bagozzi, ``Reusing
the News: Duplication of Local Content'' at 6-7, University of
Delaware, (May 2025) (``Yanich 2025 Study'') (``Americans use several
sources for local news. Still, almost two-thirds (64 percent) get local
news from TV news stations, more than online forums (52 percent); radio
(52 percent) or daily newspapers (33 percent). However, those data
obscure an important reality: the stories that are consumed online are
overwhelmingly produced by legacy mass media sources. For example,
almost one-quarter of the public who viewed local TV news in 2019 did
so online. For daily newspapers, that proportion was even higher, at 43
percent. In 2024, the proportion of online use by local television
consumers rose to 38 percent. That pattern is evident in the prominence
of newspapers and local television websites in television markets. The
size of the market affects the prominence of newspapers and television
as the main sources of local news. In the largest 22 markets in the
country (excluding New York and Washington, DC, with their national
newspapers), local newspaper websites were the most popular in 14 of
them; local TV websites led in the remaining 8 markets. Further, that
dominance extended to a sample of 37 smaller television markets
(between #25 and #150), where local television led in 23 and local
newspapers led in 13 markets.'') (internal citations omitted).
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This is why this proceeding--one that ignores the congressionally-
set national cap limit--threatens democracy and freedom. Chairman Carr
is placing a ``for-sale'' sign on the public's airwaves, and inviting
media companies to monopolize the local news markets as long as they
agree to display political fealty to Donald Trump and the MAGA
movement. These and other Trump administration actions have landed the
U.S. ``on a watchlist for urgent concern over the health of its civic
society, alongside Turkey, Serbia, El Salvador, Indonesia and Kenya.''
\22\
---------------------------------------------------------------------------
\22\ See Betsy Reed, ``US placed on rights watchlist over health of
its civil society under Trump,'' The Guardian (July 30, 2025) (`` `The
United States appears to be sliding deeper into the quicksands of
authoritarianism. Peaceful protests are confronted with military force,
critics are treated as criminals, journalists are targeted, and support
for civil society and international cooperation have been cut back,'
Mandeep Tiwana, Civicus's secretary general, said in a statement. . . .
Tiwana also pointed to the Trump administration's latest attacks
against media networks, including funding restrictions on public
broadcast stations including PBS and NPR.'').
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Perhaps Chairman Carr believes this despicable use of executive
power by his own party won't one day be turned around, and used by
other partisans against Trump and his ideological brethren. However, by
opening the door to broadcast TV monopolization, Carr will have
unleashed a force that is near impossible to control. Billionaires have
recently gone on a spree of buying local media outlets. Most of those
billionaires have largely expressed fealty towards Donald Trump and
MAGA, but not all (much to the Chairman's disdain).\23\ But as Elon
Musk's more recent actions show, oligarchs answer to no one.\24\
Handing even more media control to a handful of conglomerates and
billionaires already so dominant in the space is a wildly dangerous
idea no matter who holds the presidency, even as Trump and his captured
FCC have tightened their grip on what those media moguls do and say for
now.\25\ And as we explain in the section below, doing so by increasing
or eliminating the broadcast TV national audience reach cap set by
Congress is outside of this Chairman's authority.
---------------------------------------------------------------------------
\23\ In a comment made during an appearance on Fox News last fall,
Carr played to his audience's predispositions, stating that ``for too
long in this government, particularly over the last couple of years,
your last name dictated how the government treated you If your last
name was Soros, well, the Commission bent over backwards and gave you a
special, unprecedented Commission-level shortcut to buy 200 radio
stations. If your last name was Musk, then you lost $800 million
contracts that you lawfully got.'' Kristen Altus, ``Trump's pick for
FCC chairman vows to take `very hard look' at broadcast operations,
Soros radio takeover,'' Fox News (Nov. 24, 2024).
\24\ See, e.g., Dave Smith, ``Elon Musk says Trump `is in the
Epstein files. That is the real reason they have not been made public,'
'' Fortune (June 5, 2025).
\25\ See generally Tim Karr, ``A More Perfect Media: Saving
America's Fourth Estate from Billionaires, Broligarchy and Trump,''
Free Press (July 2025).
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II. The Commission Does Not Have Authority to Increase or Eliminate the
National Audience Reach Cap.
A. Congress Set a Specific 39 Percent National Audience Reach Limit in
the Consolidated Appropriations Act of 2004. Only Congress Can
Change this Number.
The law is rarely as clear as it is on the central issue of this
proceeding. Congress specifically set the national audience reach limit
for broadcast television licensees (the ``national cap'') at 39 percent
of U.S. television households.\26\ Contemporaneous reporting suggested
that Congress had definitively set the cap, and precluded the FCC from
altering it\27\--a conclusion with which consumer advocates\28\ and
broadcasters themselves\29\ repeatedly agreed. Following the plain and
uncontroversial meaning of this congressional enactment, as several of
the largest broadcast conglomerates in the country have long
interpreted it, ought to be simple for a Chairman that likes to don the
guise of a humble regulator.
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\26\ See Consolidated Appropriations Act of 2004, Pub. L. No. 108-
199, Sec. 629(1), 118 Stat. 3 (2004) (``CAA'').
\27\ See, e.g., Frank Ahrens, Democrats Decry `Compromise' on FCC
Rule, Wash. Post (Nov. 25, 2003), archived at https://archive.ph/ambG5
(``The new language means that the cap would no longer be set by
regulation but by Federal law, making it more difficult to challenge in
court. Several media companies have already had success in getting
courts to block enforcement of the existing FCC regulations, in part
because the limits are not spelled out in law.'').
\28\ See, e.g., Comments of Free Press at 5-6, MB Docket No. 13-236
(filed Dec. 16, 2013).
\29\ For example, when Sinclair was worried a different FCC might
lower the 39 percent figure, it told the Commission ``[t]he CAA also
stripped the FCC of its authority to modify the 39 percent cap by
explicitly carving out the ownership cap from the FCC's statutorily-
mandated review process.'' Comments of Sinclair Broadcast Group at 6,
MB Docket No. 13-236 (filed Dec. 16, 2013). Likewise, in 2013 ION Media
argued that the national ownership cap was foreclosed from future
revision by the Commission, noting that CAA's Section 629 ``stands as
an ongoing directive to the FCC to maintain the national ownership cap
at 39 percent.'' Comments of Ion Media Networks at 12, MB Docket No.
13-236 (filed Dec. 16, 2013). And at the time, Fox Broadcasting argued
that the CAA ``unequivocally converted the Cap into a statutory
limitation of 39 percent potential audience reach,'' and that ``these
efforts were designed to ensure that the FCC would have no further
independent authority to modify the Cap.'' Comments of 21st Century
Fox, Inc. and Fox Television Holdings, Inc. at 2, MB Docket No. 13-236
(filed Dec. 16, 2013).
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Yet here we are with a request from that same Chairman to refresh
the record of an eight-year-old proceeding, in which the changing
external market conditions are simply not germane to the law. As former
Commissioner Mike O'Rielly noted in 2016, the national ownership cap
``remains one of the few media ownership rules specifically set by
statute and the only one exempted from the Quadrennial Review process
governing the other ownership rules, in order to protect a tenuous
compromise from the whims of the Commission.'' \30\ Rejecting the too-
cute-by-half argument that Congress's action in the Consolidated
Appropriations Act in 2004 (``CAA'') simply removed the cap from the
Quadrennial Review proceeding but not from other Commission revisions,
Commissioner O'Rielly noted that ``such a reading is preposterous as it
would effectively create one of the biggest backdoors in the history of
legislating.'' \31\
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\30\ Amendment of Section 73.3555(e) of the Commission's Rules,
National Television Multiple Ownership Rule, MB Docket No. 13-236,
Report and Order, 31 FCC Rcd 10213 (2016) (``UHF Discount Repeal
Order'') (Dissenting Statement of Commissioner Michael O'Rielly).
\31\ Amendment of Section 73.3555(e) of the Commission's Rules,
National Television Multiple Ownership Rule, MB Docket No. 17-318,
Notice of Proposed Rulemaking, 32 FCC Rcd 10785 (2017) (``2017 UHF
Discount NPRM'') (Statement of Commissioner Michael O'Rielly).
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It may be tempting for some of the broadcasters who argued a few
short years ago that the Commission had no authority to change the
national cap to now change their own tune, because they see an
administration ostensibly willing to raise or eliminate that cap
instead of lowering it. As we discuss below, those regulatory favors
will not be free, as the Trump FCC and Brendan Carr have taken every
opportunity to strain the First and Fourteenth Amendments and exact an
exorbitant political price alongside literal bribes to get deals
approved.
Yet it's remarkable how proponents of lifting the cap now must
contort themselves to make this legal argument. As Commissioner
O'Rielly described last time around, it requires people to believe that
the FCC is free to change any number set by Congress itself unless
Congress also wrote into the law ``and the agency can't change this
figure either.'' That kind of drafting requirement would make a mockery
of almost every clear pronouncement in statute. Congress need not
specify ``and we really mean it'' in the law, by taking the extra step
of explicitly disallowing agency changes to its rules.\32\ Yet that's
essentially what Congress did in this instance, writing a ``no-
backsies'' policy into the admittedly unusual structures of
forbearance, the media ownership rules, and the quadrennial review.
---------------------------------------------------------------------------
\32\ Cf. UHF Discount Repeal Order, 31 FCC Rcd 10213, at 21. The
Wheeler FCC suggested not only that it could modify or eliminate the
UHF discount calculation, but that it even had ``the authority to
modify the national audience reach cap'' more generally, because ``no
statute bars the Commission from revisiting the cap. . .in a rulemaking
proceeding so long as such a review is conducted separately from a
quadrennial review of the broadcast ownership rules pursuant to Section
202(h) of the 1996 Act.'' As we explain below, this view is incorrect
when it comes to the cap figure set by Congress itself as opposed to
the Commission's home-made UHF discount. Contrary to Commissioner
O'Rielly's assertion on this specific point in his 2017 UHF Discount
NPRM statement, Free Press never made any such argument with respect to
the 39 percent national audience reach figure itself. See Comments of
Free Press at 6 n.8, MB Docket No. 17-318 (filed Mar. 19. 2018).
---------------------------------------------------------------------------
Indeed, the manner by which the current national cap came to be is
a rare example of Congress swiftly acting to directly and unambiguously
overrule Commission action. When Congress overhauled the Communications
Act with the Telecommunications Act in 1996, it placed a 35-percent
limit on any broadcast television license holder's national reach.\33\
In 1998, the Commission retained this cap in its first biennial
review,\34\ a decision that the D.C. Circuit remanded in the Fox I case
because the Commission had failed to show that retaining the specific
35-percent limit was in the public interest pursuant to the court's
understanding of the then-biennial review requirements in Section
202(h) of the 1996 Act.\35\ In response to this remand and subsequent
agency review, the Commission then increased the cap to 45 percent in
July 2003.\36\
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\33\ Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.
56, Sec. 202(c)(1)(B) (1996).
\34\ 1998 Biennial Regulatory Review of the Commission's Broadcast
Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, MB Docket No. 18-349, Report and Order,
15 FCC Rcd 11058, 11072-75 25-30 (2000) (``1998 Biennial Review
Order'').
\35\ Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1042-43
(D.C. Cir. 2002) (``Fox I'').
\36\ 2002 Biennial Regulatory Review--Review of the Commission's
Broadcast Ownership Rules, GC Docket No. 02-277, Report and Order, 18
FCC Rcd 13620, 583 (2003) (``2002 Biennial Review Order'').
---------------------------------------------------------------------------
Mere days later, the FCC's action was met by a rapid and stern
Congressional rebuke,\37\ led by Senators Ted Stevens (R-AK), Trent
Lott (R-MS), and Byron Dorgan (D-ND).\38\ After the bicameral
congressional actions and resolution of disapproval that immediately
followed the FCC's 2003 decision, Congress's eventual response\39\ in
the CAA passed in early 2004 consisted of five clear actions. That law
moved the cap to 39 percent,\40\ and set parameters for how firms
exceeding the cap should come into compliance through timely
divestitures;\41\ it barred the Commission from using its Section 10
forbearance authority to allow firms to exceed 39 percent national
reach;\42\ it changed the omnibus biennial media ownership rule review
requirement to a quadrennial review;\43\ and it barred the Commission
from considering the national cap in the quadrennial review, clearly
addressing and routing around the D.C. Circuit's decision in Fox I.\44\
---------------------------------------------------------------------------
\37\ Ahrens, supra note 27 (``Many members of Congress and advocacy
groups said the change would allow the big media companies to grow too
big, potentially at the expense of local broadcasters. Sen. Ted Stevens
(R-Alaska) added a rider to an omnibus spending bill under
consideration that would fix the 35 percent cap in Federal law. In
July, the House passed a spending bill with language identical to
Stevens's.'').
\38\ On September 16, 2003, the Senate adopted a resolution of
disapproval concerning the FCC's 2002 Biennial Review Order on a 55-40
basis. See Roll Call Vote 108th Congress 1st Session, Vote No. 348,
concerning S.J.Res.17, ``A joint resolution disapproving the rule
submitted by the Federal Communications Commission with respect to
broadcast media ownership'' (2003); see also Frank Ahrens, Compromise
Puts TV Ownership Cap at 39 percent, Wash. Post (Nov. 25, 2003),
archived at https://archive.ph/FPaXR.
\39\ The Senate's final compromise on the national cap in the 2004
CAA first appeared in the Conference Report after the Senate adopted
the CAA. See H.R. Rep. No. 108-401, at 98 (2003) (Conf. Rep.).
\40\ CAA Sec. 629(1).
\41\ Id. Sec. 629(2).
\42\ Id.
\43\ Id. Sec. 629(3).
\44\ Id.
---------------------------------------------------------------------------
Despite this clear congressional intent to cement the national cap
at 39 percent and remove it from the congressionally required review of
all other media ownership rules, the current Commission is
contemplating a transparently corrupt attempt to change that national
cap and enable massive consolidation of local news markets by the
Nation's biggest broadcast conglomerates. If it obliterates the
national cap in this fashion, the Commission will be open for business:
Broadcasters who wish to swap, sell, or buy TV licenses will need to
gain approval from the FCC, an agency that is currently led by a
radical ideologue who has repeatedly demonstrated his willingness to
use the deal-approval process as a way to ensure fealty to Donald Trump
and his fascist agenda. That means deal applicants must become
supplicants to a dictatorial president, and show fealty by changing
their corporate diversity policies\45\ as well as their editorial news
coverage.\46\
---------------------------------------------------------------------------
\45\ See, e.g., Karr, supra note 25 at 8.
\46\ Id. at 6, 17.
---------------------------------------------------------------------------
To illustrate the unlawfulness of the big broadcasters' current
push to have the Commission increase or eliminate the national cap,
consider the following hypothetical: It is January 24, 2004, mere hours
after President Bush signed the CAA into law setting the cap at 39
percent. Imagine that Chairman Powell then issued a new NPRM (outside
of the Quadrennial Review) to increase the cap from 39 percent to 40
percent. It would have been the ultimate act of regulatory hubris, even
if Chairman Powell had asked questions in this hypothetical NPRM about
how the market had changed in the intervening months since Congress
acted. No judge worthy of their robe would have blessed such a move.
The hypothetical is no less absurd today if we merely lengthen the
time period between the CAA becoming law and the Commission issuing a
public notice to revisit Congress's decision. It does not matter
whether it is eight months, eight years, or eight decades since
Congress put the ``39 percent'' figure into the law and directed the
FCC to adopt this figure in its rules. Nor does it matter that a future
FCC would take such potential action outside of the quadrennial review.
In light of the Fox I history, the CAA's removal of the national cap
from the quadrennial review was not merely a superfluous step designed
to build just one additional speed bump for agency reconsideration.
Congress set a specific value for national reach, and barred the FCC
from substituting the agency's judgement for Congress's own.
B. Though the Law Bars the Commission from Altering the 39 Percent
National Audience Reach Value, It Retains the Authority to
Determine How That Reach Is Calculated.
In the instant Notice, the Commission asks if it ``retains the cap
in any form, should [the cap] include a UHF discount or any other form
of discount?'' \47\ The premise of this question is off-base, as the
2004 CAA forbids the Commission from deciding not to retain the 39-
percent value chosen by Congress. However, as the courts have affirmed,
Congress left the manner by which a license holder's national reach is
determined to the Commission's reasoned judgement (so long as
alterations to that method are made outside of the quadrennial
review).\48\
---------------------------------------------------------------------------
\47\ Notice at 2.
\48\ Shortly after the CAA became law in 2004, the Third Circuit
held that all objections to the Commission's 2002 action in the
Biennial Review Order to change the national cap from 35 to 45 percent
were rendered moot. However, the Third Circuit further held that the
Commission retained authority to consider regulations defining the UHF
discount outside of the context of the quadrennial review. See
Prometheus Radio Project v. FCC, 373 F.3d 372, 397 (3d Cir. 2004)
(``Prometheus I'') (``Although we find that the UHF discount is
insulated from this and future periodic review requirements, we do not
intend our decision to foreclose the Commission's consideration of its
regulation defining the UHF discount in a rulemaking outside the
context of Section 202(h). The Commission is now considering its
authority going forward to modify or eliminate the UHF discount and
recently accepted public comment on this issue. Barring congressional
intervention, the Commission may decide, in the first instance, the
scope of its authority to modify or eliminate the UHF discount outside
the context of Sec. 202(h).'').
---------------------------------------------------------------------------
When the Commission established the UHF discount in 1985, it did so
based on the physical realities of UHF and VHF analog signal
transmission and reception, and the former's limitations.\49\ In other
words, the UHF discount was the best available method for calculating
for a license holder's actual reach at a time when the overwhelming
majority of U.S. households accessed broadcast stations via an
antenna.\50\ Thus, the Commission's framing in the instant Notice is
inappropriate because the UHF discount was never intended as an
economic modification of the national ownership cap. Other than
impacting how many people a single license actually is capable of
reaching via over-the-air or pay-TV transmission pathways, changing
market realities have nothing to do with the rationale for the
discount; the discount was predicated solely on technological
realities.\51\ And the DTV transition upended this technological
reality, making the current discount an utter anachronism. As the
Commission found in 2016, ``experience since the DTV transition
demonstrates that UHF channels are equal, if not superior, to VHF
channels for the digital transmission of television signals. Thus . .
.the UHF discount can no longer be supported on technical grounds.''
\52\
---------------------------------------------------------------------------
\49\ See Amendment of Section 73.3555 of the Commission's Rules
Relating to Multiple Ownership of AM, FM and Television Broadcast
Stations, GN Docket No. 83-1009, Memorandum Opinion and Order, 100 FCC
2d 74, 88-94, 33-44 (1985) (``1985 UHF Discount Order'').
\50\ In 1985, only approximately 32 million of the 87 million U.S.
households subscribed to cable television service. See Television &
Cable Factbook, Warren Comm'cns News, Inc., archived at https://
archive.ph/z005A; see also Federal Reserve Bank of St. Louis, U.S.
Census Bureau, Total Households (retrieved from FRED, July 11, 2025).
\51\ A licensee's actual reach is impacted by the market realities
of pay-TV adoption (and carriage of a broadcast station on pay-TV
systems). In other words, though the UHF vs. VHF signal disparity issue
remained a technological reality until completion of the DTV
transition, a UHF licensee's actual potential population reach via the
combination of over-the-air and pay-TV distribution was some degree
higher than simply a maximum potential reach of 50 percent of the
television households in a given Designated Market Area (``DMA'').
\52\ UHF Discount Repeal Order, 31 FCC Rcd 10213, at 2.
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We note that when Congress set the national cap at 39 percent (5
years prior to completion of the DTV transition), it was well aware of
the Commission's prior determination that ``the digital transition will
largely eliminate the technical basis for the UHF discount.'' \53\ Thus
there is no hidden meaning to be gleaned from the fact that Congress
did not mention the UHF discount in the 2004 CAA; to Congress, limiting
a single licensee's actual potential reach to 39 percent was the sole
policy objective.\54\ The Commission's ongoing use of the cap some 16
years after completion of the DTV transition is methodologically
indefensible, especially given the technological superiority of UHF
digital signal transmission compared to VHF digital coverage. To
faithfully comply with the law, the Commission should adopt a reach-
calculation methodology that better captures a licensee's actual
potential reach, and enforce the statutorily imposed 39-percent limit
based on that more technologically defensible methodology.
---------------------------------------------------------------------------
\53\ 2002 Biennial Review Order, 18 FCC Rcd 13620, at 591 (``[I]t
is clear that the digital transition will largely eliminate the
technical basis for the UHF discount.'').
\54\ We use the term ``potential'' here to reflect that the 39-
percent national reach value was established without regard to whether
or not a household does tune into a given station, but instead what
broadcast TV signals a given household could tune into.
---------------------------------------------------------------------------
III. Limiting Broadcast Television Licensees' National Reach Remains
Critical to Promoting Competition, Localism, and Diversity.
A. Local TV News Stations Have a Disproportionate Impact on Public
Opinion and Voting Behavior.
As noted in the previous section, only Congress can change the
national ownership cap. Therefore, any discussion of the supposed
rationale for the policy changes the Commission here contemplates is
irrelevant. But the national cap itself remains an incredibly important
policy, and its elimination would further harm the health of our
democracy.
The axiom that ``a well-informed electorate is a prerequisite to
democracy'' is often attributed to Thomas Jefferson,\55\ though the
actual quote is even more salient: ``wherever the people are well
informed they can be trusted with their own government; that whenever
things get so far wrong as to attract their notice, they may be relied
on to set them to rights.'' \56\ A functioning democracy that is
healthy enough to thwart totalitarian forces requires the free flow of
news and information from diverse and independent sources, as well as
representatives who act with integrity and courage to uphold the rights
of all. The public requires this diverse array of high-quality
journalism in order to inform itself on pressing political issues at
both the national and local levels. This principle is the basis of the
First Amendment, and remains as true today as when that amendment was
conceived in the late 18th century.
---------------------------------------------------------------------------
\55\ See, e.g., Moshe Marvit, ``A Well-Informed Electorate Is a
Prerequisite for Democracy,'' Century Found. (May 2, 2013).
\56\ Letter from Thomas Jefferson, to Richard Price (Jan. 8, 1789)
(on file with the Library of Congress).
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In fact, even with the Internet having torn down publishing
barriers, this principle is more important than ever to protect and
promote. Changes in technology and advertising-supported media markets
do not eliminate the need for media ownership limits, especially the
national cap. Despite the prominence of social media and online
streaming, local television stations remain the most important sources
of local news and information.\57\ Indeed, with the secular decline of
the local newspaper industry and dramatic decline in the number of
working print journalists,\58\ local broadcast television stations are
in many places the only well-resourced producers of local news. With
the President and Republican-led Congress's recent callous move to
defund public broadcasting, local commercial television stations will
be even more dominant as a source for local news.\59\
---------------------------------------------------------------------------
\57\ Yanich 2025 Study at 4-5.
\58\ According to Free Press's analysis of the Bureau of Labor
Statistics Occupational Employment Survey, the total number of persons
employed in the occupation category ``news analysts, reporters and
correspondents'' working at newspaper publishers declined from 36,270
in 2002 to 15,250 in 2023. See Bureau of Labor Statistics, Occupational
Employment and Wage Statistics, Occupational Employment Survey.
\59\ See, e.g., Timothy Karr, ``Defunding Public Media Makes
Perfect Sense If Destroying Democracy Is the Goal,'' Free Press (July
18, 2025).
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Nothing about the changes in technology and in Americans' general
media consumption habits has diminished local TV news' impact on
voters. Certainly, the absolute deluge of candidate and Political
Action Committee ads that fills the commercial time around local news
broadcasts before every election is a testament to how local TV impacts
and shapes public opinion.\60\ According to Pew, ``regular voters'
pathway of choice is local TV,'' and local TV was by far the most-used
news source among survey respondents, including people who describe
themselves as ``highly active'' in local politics.\61\ A study by
Gallup and the Knight Foundation reported that ``Americans who
primarily access news online are less likely than those who mostly rely
on newspapers or TV to say they are highly knowledgeable about issues
facing their local community. . . . Differences by media platform are
smaller or nonexistent when people are asked how knowledgeable they are
about issues facing the country as a whole.'' \62\
---------------------------------------------------------------------------
\60\ See, e.g., ``The 2024 Voter Funnel Study,'' TVB (2025),
archived at https://archive.ph/00h1t (``2024 Voter Funnel Study'')
(``80 percent of respondents took some action after seeing/hearing a TV
ad, including word of mouth, online use and even voting!'').
\61\ Michael Barthel, Jesse Holcomb, Jessica Mahone & Amy Mitchell,
``Civic Engagement Strongly Tied to Local News Habits,'' Pew Rsch. Ctr.
(Nov. 1, 2016).
\62\ ``American Views 2020: Trust, Media and Democracy: A Deepening
Divide,'' Gallup & Knight Found (Nov. 9, 2020).
---------------------------------------------------------------------------
The conclusions of these studies still hold today. According to a
TVB survey of voters in nine swing states following the November 2024
election, ``TV was the most important influence throughout the voter
decision process. This was true of all political parties and all age
groups, as well as Hispanic and AA-Black voters. Of those that cited TV
as most important in the awareness stage, seven out of ten picked
broadcast TV over cable, eight out of ten for Democrats and AA-Black
voters. For local news and information, the websites of choice were
local TV stations' sites.'' \63\ Only eight percent of these swing-
state voters cited social media as influencing them to vote for a
candidate.\64\
---------------------------------------------------------------------------
\63\ See 2024 Voter Funnel Study.
\64\ Id.
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We expect broadcasters to file comments in this proceeding with
similar data reflecting the importance of local TV news; but where we
will almost certainly disagree with them is in our assessment of the
financial state of their industry, and of the impact of the national
cap and consolidation on the news itself and the public who watches it.
Broadcast-TV firms routinely lump their business in with local
newspapers in policy discussions on local news (particularly those
involving potential subsidies). But the financial trajectories of local
print and local TV are in opposite directions.
Because print journalism has declined while broadcast revenues and
profits have grown,\65\ local TV stations arguably have even more of a
disproportionate impact on public opinion than they did when Congress
fixed the national cap at 39 percent in 2004. Yet there's no indication
that the Carr Commission even considers the negative impact that
consolidation could have on the health of our democracy. For Chairman
Carr, there apparently is one gigantic media market, and he's going to
help his Republican-friendly broadcast TV chains further consolidate
the airwaves, in order to supposedly help them compete with the big
tech firms that dominate their respective online search and social
media markets. Of course, it is patently ridiculous and economically
ignorant to draw a formal market boundary around every single firm that
generates revenues from advertising (as we discuss below in Section
IV). But discarding the realities and economics of the local
marketplace of ideas like Carr proposes, all to suit the interests of a
small number of politically connected and profitable corporations, is
simply not in the public interest. American communities will pay a
hefty price if the Commission jettisons the national cap. Doing so
would unleash market forces that diminish localism while giving a small
number of for-profit corporations undue influence over the public
through those companies' control over local news sources.
---------------------------------------------------------------------------
\65\ See infra Section IV.
---------------------------------------------------------------------------
B. The National Cap and Local Broadcast Ownership Limits Remain Vital
Policies that Promote the Public Interest and Strike a Balance
Between Private Profits and Democracy's Needs.
Broadcasting is a unique form of media, in part because spectrum
(or more colloquially, ``the public airwaves'') is a finite and scarce
resource. This scarcity justifies government regulation,\66\ as does
broadcasting's pervasiveness.\67\ In Red Lion, the Court held that
``differences in the characteristics of new media justify differences
in the First Amendment standards applied to them.'' \68\ Scarcity
justified differential treatment for broadcasting because ``[w]here
there are substantially more individuals who want to broadcast than
there are frequencies to allocate, it is idle to posit an unabridgeable
First Amendment right to broadcast comparable to the right of every
individual to speak, write, or publish.'' \69\
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\66\ See Nat'l Broad. Co., Inc. v. United States, 319 U.S. 190, 226
(1943).
\67\ In Pacifica, the Supreme Court noted that broadcast regulation
is justified because of the medium's two distinct features:
broadcasting is ``uniquely pervasive'' with broadcast signals reaching
into private domiciles; and ``broadcasting is uniquely accessible to
children,'' with broadcasters largely unable to age-gate specific
programs. FCC v. Pacifica Found., 438 U.S. 726, 748-49 (1978).
\68\ Red Lion Broad. Co., Inc. v. FCC, 395 U.S. 367, 386 (1969).
\69\ Id. at 389.
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Nothing about the ongoing march of technology in the half-century
since that case has changed this reality. Broadcast TV licenses remain
incredibly scarce, and broadcast TV continues to have an outsized
impact on democracy, even in the digital content age.\70\ Broadcast
license holders have a unique statutory obligation to serve the public
interest, convenience and necessity. This obligation to serve the
interests of a local community of license implicates quite a bit more
than simply airing a newscast filled with content produced for airing
across multiple localities.\71\ The law--the Communications Act of
1934, along with the 1996 Telecommunications Act and its amendments to
the 1934 Act, and the CAA's further amendments to it in 2004, all--
require the FCC to pursue the goals of competition in broadcasting (not
merely video), and to promote localism, diversity of opinion and
diversity of ownership in broadcasting as well.\72\ In other words,
broadcasting is a fundamentally distinct form of media, in terms of
both the information market in which it resides and in legal terms too.
---------------------------------------------------------------------------
\70\ The different advertising strategies during the 2024 national
election cycle certainly reflect this reality. See, e.g., Shane
Goldmacher & Nicholas Nehamas, ``Harris, With an Online Avalanche,
Outspends Trump by Tens of Millions,'' N.Y. Times (Sept. 20, 2024)
(``Mr. Trump is also being outspent on television--but by smaller
margins. Part of that spending emphasis reflects Mr. Trump's own
worldview. Mr. Trump, who starred in the network television show ``The
Apprentice,'' has said privately that he thinks digital spending is a
waste and has urged his campaign to spend more on TV, according to a
person who has heard him make such remarks and insisted on anonymity to
discuss his private comments.''); Kiara Alfonseca & Soo Rin Kim,
``Trump and allies are pouring millions into anti-trans election ads as
election nears,'' ABC News (Oct. 21, 2024) (``[T]he Trump campaign and
Republican groups have spent more than $21 million on anti-trans and
anti-LGBTQ television ads as of Oct. 9, nearly a third of roughly $66
million television ad spending during that time period, media tracking
agency AdImpact told ABC News. However, transgender issues are among
the least important issues motivating voters to head to the ballot box,
according to a Gallup poll.'').
\71\ See infra Section III.E.b. (discussion of the growing trend of
local broadcast news sharing within and across markets).
\72\ FCC v. Consumers' Rsch., 145 S.Ct. 2482, 2507 (2025) (``For we
have long held that `the words ``public interest'' in a regulatory
statute' do not encompass `the general public welfare' but rather `take
meaning from the purposes of the regulatory legislation.' '' (citing
NAACP v. FPC, 425 U.S. 662, 669 (1976) and N.Y. Cent. Sec. Corp. v.
United States, 287 U.S. 12, 24-25 (1932)).
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C. Promoting a Vibrant Marketplace of Ideas at the Local Level Requires
a Jurisprudence Standard Beyond Antitrust.
Broadcast-TV licenses are a special class of spectrum licenses;\73\
and as with all such licenses, there tend to be far fewer licenses than
potential speakers wishing to access these public airwaves. This
scarcity, and the potential ``tragedy of the commons'' it creates,
serve as the original impetus of the ``public interest, convenience and
necessity'' language in the Act.\74\ The Commission's local multiple-
ownership policies and Congress's statutory limitation on a broadcast-
TV licenseholder's national reach act in conjunction to balance
broadcasters' commercial incentives and the public's interest.
---------------------------------------------------------------------------
\73\ Broadcast license holders are not common carriers, unlike
Commercial Mobile Radio Service spectrum license holders. The latter
transmit the speech of others, and are prohibited by law from unjustly
or unreasonably discriminating against, or giving ``any undue or
unreasonable preference or advantage to any particular person''
accessing these portions of the public airwaves. Thus common carriers
are important mediums that carry the public's speech. In contrast,
broadcasters use the public airwaves to transmit their own First
Amendment-protected speech. When they are granted exclusive access to
this portion of the public airwaves for this purpose, they are
privileged, which comes with the price of acting in the public
interest. This exclusive license distinguishes broadcast TV firms from
both common carriers and other media firms. See, e.g., Written
Testimony of Matthew F. Wood, Policy Director, Free Press and the Free
Press Action Fund, before the Congress of the United States House of
Representatives Committee on Energy and Commerce, Subcommittee on
Communications and Technology, ``From Core to Edge: Perspective on
Internet Prioritization,'' at 29-30 (Apr. 17, 2018).
\74\ See Stuart A. Shorenstein & Lorna Veraldi, ``Defining the
Public Interest in Terms of Regulatory Necessity,'' 17 J. Civ. Rts. &
Econ. Dev. 45, 46 (2003) (recounting a report from Newton Minow
concerning an interview with Sen. Clarence Dill, leading sponsor of the
Radio Act of 1927: ``[Sen. Dill] and his colleagues . . . knew they had
to have some legal standard with which to award licenses to some people
while rejecting others, because there were not enough channels to go
around. `A young man on the committee staff had worked at the
Interstate Commerce Commission for several years,' Dill recalled, `and
he said, ``Well, how about `public interest, convenience and
necessity'? That's what we used there.'' That sounded pretty good, so
we decided we would use it, too.' '').
---------------------------------------------------------------------------
In other words, by preventing monopolization of the public
airwaves, these policies promote the Act's goals of competition,
localism, and diversity. This standard is rightly far more rigorous
than the one at the center of an antitrust inquiry, which is concerned
with price and market power alone. As the court in Prometheus I noted,
``[t]he Commission ensures that license transfers serve public goals of
diversity, competition, and localism, while the antitrust authorities
have a different purpose: ensuring that merging companies do not raise
prices above competitive levels.'' \75\
---------------------------------------------------------------------------
\75\ Prometheus Radio Project v. FCC (``Prometheus I''), 373 F.3d
372, 414 (3d Cir. 2004).
---------------------------------------------------------------------------
The marketplace of ideas is fundamentally different from the
marketplace for goods and services. The local news market that would
result from elimination of the national cap would not be one that
produces journalism in service of democratic values, such as an
informed electorate and robust debate on issues of local and national
importance. What's more, without a national cap, the local television
market would not serve all audiences efficiently and fairly.\76\
Broadcast-TV news firms have a strong incentive to maximize profit,
which in today's media market favors maximizing share of the most
frequent local TV news viewers, doing so at the lowest possible
cost.\77\
---------------------------------------------------------------------------
\76\ See infra Section III.D.
\77\ Recent survey-based research from the Shorenstein Center
illustrates the real-world consequences of these economic incentives.
See Thomas E. Patterson, ``Can They Do Good and Still Do Well? Local TV
Stations and Communities' Information Needs'' 11, Harv. Kennedy Sch.
Shorenstein Ctr. on Media, Pol. & Pub. Pol'y, (June 2025) (Shorenstein
Center Study) (``A second news director worried that they understood
only part of their community. `We have thorough research that provides
clear direction to what television news viewers want to see in our
newscasts,' he said. `But we have very little research focused on
people who have elected not to watch television news. I worry that
we're steering our content to the ``choir'' and not the congregation.'
'').
---------------------------------------------------------------------------
First Amendment jurisprudence for decades has supported the premise
that media policy is about more than economics\78\ and concerns both
the preservation of robust debate\79\ and the airing of a diversity of
views\80\ on a broad swath of issues.\81\ What's more, the uniqueness
and civic importance of local news requires policy makers to consider
both the potential long-term and short-term effects of consolidation.
Long-term effects include the neglect of certain issues, as well as
increased vulnerability to government censorship.\82\ But the short-
term and transitory effects are equally dangerous to democracy. Local
TV news is a critical source of information for voters as they solidify
their opinions in the final weeks of an election.\83\ What stories a
licensee chooses to emphasize and explain at a substantive level, and
what PAC attack ads they choose to accept, reject, or fact-check, can
determine electoral outcomes.\84\ This necessitates a more careful
regulatory approach for broadcast television ownership than a general
antitrust, even if the geographic and economic product markets are
properly defined.
---------------------------------------------------------------------------
\78\ See, e.g., Associated Press v. United States, 326 U.S. 1, 20
(1945) (``The First Amendment, far from providing an argument against
application of the Sherman Act, here provides powerful reasons to the
contrary. That Amendment rests on the assumption that the widest
possible dissemination of information from diverse and antagonistic
sources is essential to the welfare of the public, that a free press is
a condition of a free society. Surely a command that the government
itself shall not impede the free flow of ideas does not afford non-
governmental combinations a refuge if they impose restraints upon that
constitutionally guaranteed freedom.''); Fox Television Stations, Inc.,
v. FCC, 280 F.3d 1027, 1047 (D.C. Cir. 2002) (``An industry with a
larger number of owners may well be less efficient than a more
concentrated industry. Both consumer satisfaction and potential
operating cost savings may be sacrificed as a result of the Rule. But
that is not to say the Rule is unreasonable because the Congress may,
in the regulation of broadcasting, constitutionally pursue values other
than efficiency--including in particular diversity in programming, for
which diversity of ownership is perhaps an aspirational but surely not
an irrational proxy.'').
\79\ See, e.g., Red Lion, 395 U.S. at 390 (``It is the purpose of
the First Amendment to preserve an uninhibited marketplace of ideas in
which truth will ultimately prevail, rather than to countenance
monopolization of that market, whether it be by the Government itself
or a private licensee.''); Turner Broad. Sys., Inc. v. FCC, 512 U.S.
622, 638-39 (1994) (``Turner I'').
\80\ See, e.g., Associated Press, 326 U.S. at 20.
\81\ See, e.g., Red Lion, 395 U.S. at 390.
\82\ While the potential for government censorship of private news
media previously seemed like a distant memory from the 1918 Sedition
Act (repealed in 1920), the Carr FCC's intrusion into broadcast
licensees' editorial decisions marks a return to this unthinkable
practice.
\83\ See, e.g., 2024 Voter Funnel Study.
\84\ While it is rare, broadcast stations have rejected PAC ads in
the past. See, e.g., Scott Finn, ``Should TV Stations Refuse To Air
Political Ads That Make False Claims?,'' NPR (Oct. 3, 2012) (noting
several instances of broadcast stations refusing to air PAC ads);
Timothy Karr, ``Left in the Dark: Local Election Coverage in the Age of
Big-Money Politics'' 7, Free Press (Sept. 2012) (``Broadcasters in the
markets that we studied devoted little to no airtime to segments that
fact-checked the claims made in political ads. They spent no time
investigating the organizations that funded the ads.'').
---------------------------------------------------------------------------
Balancing a license holder's economic interest and the public's
interest (while maintaining the critical firewall that keeps government
from interfering with a license holder's editorial choices) requires
structural ownership barriers. Market forces alone in a scarce physical
medium simply will not result in ``the widest possible dissemination of
information from diverse and antagonistic sources [that is] essential
to the welfare of the public.'' \85\ Indeed, the Supreme Court
articulated this ``positive vision'' of the First Amendment\86\ in Red
Lion, where it ruled that ``[i]t is the right of the viewers and
listeners, not the right of the broadcasters, which is paramount. . . .
It is the right of the public to receive suitable access to social,
political, aesthetic, moral and other ideas and experiences which is
crucial here.'' \87\ As the high court said, ``the `public interest' in
broadcasting clearly encompasses the presentation of vigorous debate of
controversial issues of importance and concern to the public.'' \88\
---------------------------------------------------------------------------
\85\ Associated Press, 326 U.S. at 20.
\86\ SAGE Encyclopedia of Journalism 1277-79 (Gregory A. Borchard,
ed., Sage Publications 2d ed. 2022) (``A positive First Amendment
approach insists that the government should have a more active role in
promoting a better speech environment for citizens so that a healthier
democracy can flourish Undergirding the vision of a positive First
Amendment is the belief that media should represent a diversity of
voices and viewpoints--and that government, backed by the First
Amendment, should mandate access and create infrastructure that allows
for multiple voices. From this view, the First Amendment permits the
government to enact policies that ensure public access to important
information and to media systems.'').
\87\ Red Lion, 395 U.S. at 390.
\88\ Id. at 385.
---------------------------------------------------------------------------
Limits on media ownership are therefore based on the notion that
``diversification of mass media ownership serves the public interest by
promoting diversity of program and service viewpoints, as well as by
preventing undue concentration of economic power.'' \89\ Furthermore,
``the greater the diversity of ownership . . . the less chance there is
that a single person or group can have an inordinate effect, in a
political, editorial, or similar programming sense, on public opinion
at the regional level.'' \90\
---------------------------------------------------------------------------
\89\ FCC v. Nat'l Citizens Comm. for Broad., 436 U.S. 775, 780
(1978); Prometheus I, 373 F.3d at 383 (citing Nat'l Citizens Comm. for
Broad., 436 U.S. at 780).
\90\ Sinclair Broad. Grp., Inc. v. FCC, 284 F.3d 148, 160 (D.C.
Cir. 2002) (internal citations omitted).
---------------------------------------------------------------------------
In sum, the Commission's ownership policies are chiefly concerned
with promoting competition, localism, and diversity in
broadcasting.\91\ Economic concentration is only one of several dangers
that the Communications Act as amended and the Commission's rules
intend to avoid.\92\ Excessive influence over public opinion,
diversity, and ensuring high-quality journalism and service to local
communities are additional goals. Economic efficiency, already at the
core of antitrust policy, is--and must be--a secondary concern to these
core precepts of the Communications Act that governs this Commission's
actions.
---------------------------------------------------------------------------
\91\ See 2002 Biennial Regulatory Review--Review of the
Commission's Broadcast Ownership Rules, MB Docket 02-277, Report and
Order, 18 FCC Rcd 13620, 17 (2003) (``2002 Biennial Review Order'')
(``We identified diversity, competition, and localism as longstanding
goals that would continue to be core agency objectives in this
area.'').
\92\ The Commission's concern about economic concentration of
broadcast TV licenses is usually based on concerns about how this
market power would impact the balance between broadcasters and
multichannel video program distributors in their carriage negotiations.
---------------------------------------------------------------------------
D. The National Cap Is an Important Structural Tool that Mitigates
Large Ownership Groups' Market Incentives to Abandon Localism.
The physical realities of over-the-air transmission make
broadcasting a local medium. Because of these physical realities, U.S.
policy has long focused on ensuring that broadcasting serves the
diverse needs of local communities.\93\ The Commission, Congress, and
the Supreme Court have over the years noted the importance of local
broadcast stations serving local communities, ``as an outlet for local
self-expression.'' \94\ As the Court explained in Turner I, ``Congress
designed this system of allocation to afford each community of
appreciable size an over-the-air source of information and an outlet
for exchange on matters of local concern. . . . [T]he importance of
local broadcasting `can scarcely be exaggerated, for broadcasting is
demonstrably a principal source of information and entertainment for a
great part of the Nation's population.' ''\95\
---------------------------------------------------------------------------
\93\ Localism as a core public policy goal has roots in the 1927
Radio Act. See, e.g., Philip Napoli, Foundations of Communications
Policy: Principles and Process in the Regulation of Electronic Media
203 (2001).
\94\ United States v. Sw. Cable Co., 392 U.S. 157, 174 (1968)
(quoting H.R. Rep. No. 1559, 87th Cong., 2d Sess., 3).
\95\ Turner I, 512 U.S. at 663 (quoting U.S. v. Sw. Cable, 392 U.S.
at 177).
---------------------------------------------------------------------------
As we've noted, nothing about the march of media technology into
the Internet and streaming era has diminished the importance of local
broadcasting. Thus it remains true that ``the people as a whole retain
their interest in free speech by radio and their collective right to
have the medium function consistently with the ends and purposes of the
First Amendment.''\96\ And it should be exceedingly clear that national
conglomerates serving more and more television markets have every
incentive to cut back on local coverage, local facilities, and local
reporters, in favor of national and generic coverage they can produce
more cheaply and in centralized fashion.
---------------------------------------------------------------------------
\96\ Red Lion, 395 U.S. at 390.
---------------------------------------------------------------------------
The D.C. Circuit in Sinclair highlighted the necessity of the
Commission's focus on localism in promoting the public interest.\97\
The growth of online media has not made localism any less important; in
fact, America's growing diversity makes localism more important than
ever. The civic issues that are most salient to people living in
smaller metropolitan areas along the southern border are going to be
distinct from those that most concern people living in Great Plains
farming communities or in the dense Northeast I-95 corridor. We elect
our state and Federal representatives on a local basis. And many of the
public policies that impact families and small businesses--such as
education, policing policy, and zoning regulations--are predominantly
made at the local level.
---------------------------------------------------------------------------
\97\ 284 F.3d at 160.
---------------------------------------------------------------------------
Thus, the need for quality local news and civic information goes
well beyond electoral impacts. Localism impacts the criminal and civil
justice systems. Juries are locally selected, and they make impactful
decisions on a variety of civic issues. These decisions involve juries
relying on local standards, which are likely impacted over time by
local broadcast TV media.
While we do not expect the Commission will expressly discard its
past findings on the importance of localism because of changes in the
broader media markets, the Public Notice reflects a dated and over-
simplified understanding of how present market forces and consolidation
work to disincentivize localism.\98\ The Commission seems to believe
(or to espouse, for purely political and partisan purposes) that
broadcast-TV localism is merely a question about the relationship
between national broadcast networks and their news-producing affiliated
stations.\99\
---------------------------------------------------------------------------
\98\ Notice at 2 (``In the [2017] National Cap NPRM, the Commission
discussed economies of scale made possible by expansion of station
ownership that may help broadcast television remain competitive in the
marketplace and deter the migration of expensive over-the-air
programming to other video programming distributors. The Commission
also reasoned that, by placing limits on the expansion of network owned
and operated station groups, a national cap would preserve a balance in
the marketplace between the networks and their local affiliates. Do
these prior conclusions remain accurate in 2025, and can they be
expected to remain valid going forward? If so, and the Commission
retains a national audience reach cap, should common ownership of
stations that are not affiliated with major national broadcast networks
(i.e., ABC, CBS, NBC, or FOX) be excluded from the cap?'').
\99\ Id. at 2, n.7 (``Specifically, the Commission noted its prior
conclusions, dating back to 2003, that a national cap would promote
localism by enabling local affiliates to influence programming
decisions by the networks and to exercise their rights to preempt the
airing of network programming in favor of programming better suited to
their local communities' needs.'').
---------------------------------------------------------------------------
The localism rationale for the national cap articulated in the 2002
Biennial Review Order did indeed incorporate the thesis, as stated by
NAB, that ``the cap is necessary to counteract the networks' strong
financial incentive to promote the widest distribution across the
Nation of network programming irrespective of the tastes of one or more
particular local cities.'' \100\ Yet as those same national networks
shift away from linear programming in all but the sports and news
categories, following viewers' changing demand and consumption
patterns, and the networks thus sink billions of dollars into their
subscription video on demand (SVOD) internet-delievered services, this
analysis is far too simplistic. Because of viewer demand for live
sports (and the cost to for this content, either directly through the
networks' deals with sports leagues, or indirectly through the
affiliates' reverse retransmission fees), both the national networks
and local affiliates have a strong incentive to air that programming
live over local stations. But the networks are less incentivized today
to preempt local programming with other national content, either on
their owned stations or affiliates, because they are better able to
reach and satisfy a wider audience for this entertainment fare by
steering viewers interested in such non-sports and non-news programming
to their SVOD services. Contrary to Chairman Carr's blithe assertions
and saber-rattling, the ``Big 4'' networks may have more incentive
today to forge direct relationships with subscribers and viewers of
their entertainment programming; but they actually have less incentive
and ability to impact (much less dictate) what the local TV affiliates
they do not own may air outside of live sports and national news
blocks.
---------------------------------------------------------------------------
\100\ See 2002 Biennial Review Order 541; NAB/NASA Comments at 9,
33, MB Docket No. 02-277 (filed Jan. 2, 2003).
---------------------------------------------------------------------------
However, the rationale of the 2002 Biennial Review Order about the
incentives of the networks is now apt for the national broadcast chains
such as Nexstar and Sinclair. These and other national chains have a
strong financial incentive to promote the widest distribution of their
own news and vertical network programming irrespective of the tastes of
one or more particular local cities. Sinclair offers a prime example of
how this incentive translates in the increasingly concentrated local TV
market.\101\ And Nexstar, now owner of The CW and NewsNation (formerly
WGN), has also made it abundantly clear that its business model favors
distribution of centrally produced programming to their local stations,
and repurposing already overworked local reporters to spend more time
working for NewsNation.\102\
---------------------------------------------------------------------------
\101\ See, e.g., Jacey Fortin & Jonah Engel Bromwich, ``Sinclair
Made Dozens of Local News Anchors Recite the Same Script,'' N.Y. Times
(Apr. 2, 2018).
\102\ See, e.g., Comments of Perry A. Sook, Founder, Chairman and
CEO, Nexstar Inc., Bank of America 2024 Media, Communications &
Entertainment Conference (Sept. 5, 2024) (``Sook Sept. 2024 Bank of
America Comments'') (When asked about synergies between local news
departments and NewsNation, Sook noted the company had ``built a
facility in Washington, D.C. at 400 North Capitol, which is steps off
of the Hill . . . where . . . a senator can come in and do a national
interview for NewsNation or The Hill, can go sit with a correspondent
for the Hill . . . and we can deliver that to 70 percent of the U.S.''
Sook also emphasized the synergies from putting local reporters to work
for NewsNation, stating ``we have the largest newsgathering
organization collectively in the United States of any company in the
world. And that those 5,500 journalists that are spread across 40
states could augment the coverage of [NewsNetwork] and provide
resources that other folks simply wouldn't have. So it has been
profitable from day one, given that we had embedded distribution
revenue in WGN America that we've substantially improved on. The
advertising is sold at a higher cost per thousand in news than it is in
entertainment programming. And so we've been the beneficiary of
that.'').
---------------------------------------------------------------------------
The broadcasting industry's push to eliminate the national cap is
motivated by potential ``synergies'' achieved from economies of scale.
But the synergies gained from the marginal benefit of further
consolidating the already consolidated back-office functions of local
stations are not material enough to justify the premiums these firms
will have to pay to acquire smaller station groups. The synergies that
have these firms pushing for national consolidation are found in
programming. The evidence strongly suggests that as station groups
become larger, economies of scale favor greater production and
distribution of national content.
As Sinclair grew larger it implemented its so-called ``news
directive,'' and forced its ``News Central'' and later ``National News
Desk'' programming onto its local affiliates.\103\ It also expanded its
programming portfolio by purchasing the Tennis Channel and Fox's former
Regional Sports Networks, and by launching a number of national
broadcasting digital subchannel networks such as Comet, Charge!, Roar,
and The Nest. As Nexstar grew, it took its increased profits and bought
a national broadcast network (The CW) and a national basic cable
network (WGN). This growth not only undermined localism incentives, it
also gave these firms increased market power to impose exponential
increases in retrans rates.\104\
---------------------------------------------------------------------------
\103\ See Fortin & Bromwich, supra note 101; see also Elizabeth
Jensen, ``Sinclair Broadcast Group thrusts itself into the news,'' L.A.
Times (May 8, 2004);Andrew Heyward, ``All news may be local--but more
and more of it is going national,'' Knight Cronkite News Lab (Sept. 2,
2021).
\104\ See, e.g., Justin Nielson, ``Retransmission-per-subscriber
rates continue to climb in Q4 2024,'' S&P Glob. Market Intel. (May 7,
2025) (showing that between the fourth quarter of 2023 and the fourth
quarter of 2024 the weighted average monthly per-subscriber retrans fee
rose 16 percent for the entire industry, but Nexstar led the pack with
a 50 percent increase, with Sinclair's one year increase amounting to
18 percent). These increases are impacted by the timing of retrans
negotiations with cable, satellite and virtual distributors. But the
industry's double-digit gains reflect local TV broadcasters' strong
bargaining position even in the streaming media era. See, e.g.,
Comments of Christopher S. Ripley, President & CEO, Sinclair, Inc.,
Deutsche Bank 32nd Annual Leveraged Finance Conference (Sept. 24 2024)
(``We just reiterated our net retrans guidance over the next couple of
years of mid-single digits. And that's having gone through a very
significant renewal cycle that we currently have completed about 75
percent of all of our Big 4 traditional subscriber renewals and they've
all been either meeting or exceeding our internal expectations. So
again, back to momentum, a lot of operating momentum there on the
advertising side, on the retransmission side.'').
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Therefore today, this ``balance in the marketplace between the
networks and their local affiliates'' has more to do with how these
very profitable companies divide up the growing retransmission consent
fee ``pie'' than it does with the core public interest concern of
localism.\105\ Networks need affiliates to reach sports viewers, and
affiliates need the network's marquee sports programming.
---------------------------------------------------------------------------
\105\ Notice at 2.
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When the FCC concluded in the 2002 Biennial Review Order that ``a
local station maximizes its income by providing programming desired by
its local community irrespective of national programming preferences''
\106\ that was theoretically plausible only under the conditions in
which local broadcasters were statutorily prohibited to grow beyond a
certain size. Indeed, consider the case of ION (then Paxson). Because
of its greater national reach, thanks to the UHF discount, its
financial incentives were heavily tilted towards building its own
national network that aired very little local content.\107\
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\106\ See 2002 Biennial Review Order 392.
\107\ Paxson did eventually make some news sharing agreements in
2000 that involved tape-delayed re-airing of other local station's
broadcasts. But the Commission's elimination of the main studio rule in
2019 was predictably followed by Ion stations closing local studios and
consolidating operations in E.W. Scripps' national facilities. See,
e.g., Brian Lowry, ``Pax TV Is Giving Reruns a Whole New Meaning,''
L.A. Times (Apr. 22, 2000); Jon Ellis, ``FCC/CRTC Monitor: New FM
Signal in Brainerd, New LPTV in Fargo,'' N. Pine (Oct. 31, 2021)
(noting several FCC filings by E.W. Scripps notifying the Commission of
relocations of Ion affiliate studios to the company's Cincinnati
facility).
---------------------------------------------------------------------------
In sum, the dividing line between large national networks and local
station ownership groups does not lie exclusively along the axis
between traditional Big 4 networks' owned and operated (``O&O'')
stations on one side, and other network affiliates owned by
broadcasters other than ABC, CBS, Fox and NBC on the other. Nexstar and
Sinclair--two of the largest U.S. broadcast ownership groups--each have
a history of regularly using their tremendous reach to acquire,
shutter, and consolidate local newsrooms; each have acted in ways
demonstrating that their economic incentives favor centralized content.
Thus the notion raised in the Notice of applying the national cap to
``Big 4'' O&O firms but not other licensees\108\ is completely
unjustifiable, and the Commission cannot find any source of authority
in the law for any such differential application.\109\ Any weakening of
the national cap, whether impermissibly tailored in this fashion or
simply applied to all license holders, would do irreparable harm to
localism.
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\108\ Notice at 2 (``If . . . the Commission retains a national
audience reach cap, should common ownership of stations that are not
affiliated with major national broadcast networks (i.e., ABC, CBS, NBC,
or FOX) be excluded from the cap?'').
\109\ As discussed in Section II, when Congress enacted the CAA in
2004 it removed the Commission's authority to increase the 39 percent
cap. The Commission retains the authority to determine how this reach
is calculated (e.g., with or without the UHF discount), so long as this
change is deliberated and made outside of the Quadrennial Review. See
Prometheus I, 373 F.3d at 396. But it would be completely arbitrary and
capricious for the Commission to calculate reach differently depending
on whether or not a licensee owns one of the Big 4 networks. The text
of the CAA, directing the Commission to adopt the 39 percent cap in its
rules, says nothing about national network owners or local affiliates.
In straightforward fashion, the resulting rule simply forbids grant
transfer, or assignment of a commercial television broadcast station
license to any party if it would result in that party exceeding the 39
percent national audience reach cap. 47 C.F.R. Sec. 73.3555(e)(1). And
there's nothing in the CAA to suggest the Commission retains authority
to use a technical determination when calculating reach in order to
implement an economic policy goal. What's more, the economic arguments
about the cost differential between UHF and VHF that the Commission
relied on in the 2002 Biennial Review Order are not valid for digital
television transmission. See 2002 Biennial Review Order 591.
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E. Broadcast TV Consolidation Has Harmed Localism.
a. The Number of Stations Producing Original Local News Has Declined
Since 1996.
Perhaps the most damning evidence against the national broadcast
ownership groups' push to eliminate the national cap in the name of
``saving local news'' is the fact that the number of broadcast TV
stations producing original local news declined since consolidation
accelerated following the changes to broadcast ownership limits
specified in and precipitated by the Telecommunications Act of 1996.
Dr. Bob Papper, Professor of Broadcast and Digital Journalism at
Syracuse University, on behalf of the Radio and Television Digital News
Association (``RTDNA''), has conducted an annual survey of U.S.
broadcast station news directors since 1995. As a part of this
research, Dr. Papper also conducted an annual census of all U.S.
broadcast television stations to determine if they aired any local
news, and if so, whether it was produced by the station itself or
originated from a different station.
This RTDNA research shows that despite massive increases in
revenues and profits (nominal and inflation-adjusted),\110\ the number
of local TV stations originating news declined from 746 in 1996 down to
695 in 2025.\111\ Meanwhile, the number of stations not originating,
but rather receiving and airing local news originated by another
station, increased from 18 in 1995 to 422 in 2025 (see Figure 2).\112\
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\110\ See infra Section IV for full discussion of the broadcast TV
industry's financial performance during the past three decades.
\111\ See Bob Papper, Michael Gerhard, & Joe Misiewicz, ``Another
Growth Year for News and Staff,'' RTNDA (June 1997); see also Bob
Papper, Keren Henderson, & Tim Mirabito, ``Amount of local news stays
steady--for a change,'' RTDNA (June 21, 2025).
\112\ Free Press compiled these data directly from RTDNA research
and Dr. Papper's archive, available at https://bobpapper.com/clients/.
---------------------------------------------------------------------------
Figure 2:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
These trends clearly reflect that as broadcast TV ownership further
consolidated--with deals promised not only to bolster the bottom line
but to bolster local news production too--original and locally
originated news production declined. The number of original local news-
producing stations declined, while firms simply re-aired existing
production on stations that either never had any local news to begin
with (usually the UPN, WB, MyNetworkTV or CW affiliate in a duopoly
with a Big 4 affiliate) or on stations that formerly produced their own
local news. Stations that previously added to competition, diversity of
opinion, and localism, completely lost original local news. These are
the ``synergies'' that the Commission should expect from its unlawful
exploration of eliminating the national cap in this proceeding, and any
plans to otherwise decimate what remains of its local ownership limits
in other dockets.
b. Research Demonstrates How National Consolidation Diminishes
Competition, Localism, and Viewpoint Diversity. Large National
Chains Achieve Their Post-Consolidation Synergies by Replacing
Original Local News with Duplicated and Out-of-Market
Programming.
The common refrain from the broadcast TV chains and their lobby is
that consolidation is in the public interest because an increase in
local news follows,\113\ or that without consolidation, local news will
decline.\114\ But this is nonsensical. Companies seek to maximize
profit to generate greater returns for shareholders. The trickle-down
notion that more revenues will inexorably lead to more spending is
fanciful and false. Firms maximize returns by minimizing costs and
increasing revenue. Cost-cutting economics at local TV stations favor
practices such as cutting staff, news sharing, greater use of social
media clips in the news instead of original reporting, emphasis on
partisan and sensationalistic content, substitution of local coverage
with national content, and less investment in investigative journalism
or other public interest journalism with high positive externalities
because that is expensive to produce and attracts fewer viewers than
infotainment fare does.\115\
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\113\ See, e.g., Ted Johnson, ``Broadcast TV Lobby Praises FCC
Chairman For Deregulatory Push, Even As He Also Investigates Some Of
Their Members,'' Deadline (July 29, 2025). Broadcasters point to the
increase in hours of local news. But as we discuss below, a closer look
at the actual content of these broadcasts show that these increased
hours are simply repeated stories. What's more, local stations bring in
more advertising revenue during local news day parts than they would
running syndicated programming, because syndicated deals usually
involve a split of ad revenues with the syndicator. See, e.g.,
``Competition in Television and Digital Advertising,'' Transcript of
Proceedings at the Public Workshop Held by the Antitrust Division of
the United States Department of Justice (May 2-3, 2019) (``2019 DOJ
Workshop'') (reporting Gray Media co-CEO Pat LaPlatney explaining that
``there are three types of ad inventory. There's network, like
primetime[;] local news and local programming where the broadcaster
owns and sells all of the inventory. And then, there's syndicated
programs, syndicated inventory where the inventory is divided between
the syndicator and the station.'').
\114\ Broadcast companies often equate their own financial fortunes
with the fortunes of journalism itself, which they claim can only be
saved by blessing their monopolization of all local news markets. See,
e.g., Hank Price, ``The Reality Of Local TV Station Consolidation,'' TV
News Check (June 27, 2025) (``By reducing the number of owners, the
theory is that combined stations will be able to increase advertising
rates, reduce expenses and become much more profitable than single
stations are today.''); Mike Reynolds, ``Nexstar eyes station expansion
amid expected deregulation after U.S. election,'' S&P Glob. Market
Intel. (Nov. 8, 2024) (``Sook also advocated for the preservation of
local journalism, stating the industry needs strong companies that
compete on a level playing field for viewers and advertisers on every
screen in the US, not just some of them. He said that while `Big Tech
has unfettered access,' broadcast is kept to a 39 percent ownership
cap. `We're not allowed to reach every television home in America with
our local station footprint. To preserve that last mile, we think the
Republic has a vested interest in maintaining a free and independent
press,' he said, adding that the company sees `broadcast journalism
remaining or becoming that last bastion of a free and independent press
at the local level.' '').
\115\ See, e.g., Gregory J. Martin & Joshua McCrain, ``Local News
and National Politics,'' 113 Am. Pol. Sci. Rev. 372, 372(2019)(``We
investigate whether this trend is demand-or supply-driven, exploiting a
recent wave of local television station acquisitions by a conglomerate
owner. Using extensive data on local news programming and viewership,
we find that the ownership change led to (1) substantial increases in
coverage of national politics at the expense of local politics, (2) a
significant rightward shift in the ideological slant of coverage, and
(3) a small decrease in viewership, all relative to the changes at
other news programs airing in the same media markets. These results
suggest a substantial supply-side role in the trends toward
nationalization and polarization of politics news, with negative
implications for accountability of local elected officials and mass
polarization.''); Price, supra note 114 (``As we have seen so often,
expense cuts will be the primary goal of most companies. For some
owners, expense cuts may be their only priority. Because payroll is the
largest expense for any television station, eliminating staff will top
the list of cuts News product will, of course, be impacted. As we have
seen in the past, an owner with two major stations in the same market
will likely eliminate the entire staff of whichever station is weaker.
In many cases one newscast will then be simulcast on both stations. . .
. However Top 4 consolidation is achieved, we also know that after
reducing expenses, many companies will then continue to do business as
usual.'').
---------------------------------------------------------------------------
These are the real-world consequences of consolidation, and they
must factor into the Commission's public interest analysis. The gating
factor cannot simply be whether ``consolidation increase[s] profits,''
as that likely outcome is self-evident from the push to do so. The
question that is unique to the Commission's task is: ``will these rule
changes improve incentives that lead to license holder actions serving
the public interest?'' As we discuss below, it is clear from thirty
years of non-stop consolidation that shareholder interests cannot, and
do not, map cleanly onto the public interest. Indeed, in the short term
(which is the horizon of most C-suite executives at publicly-traded
companies),\116\ the corporate interest and the public interest are
orthogonal at best and diametrically opposed all too often.
---------------------------------------------------------------------------
\116\ Dennis Carey, Brian Dumaine, Michael Useem, & Rodney Zemmel,
``Why CEOs Should Push Back Against Short-Termism,'' Harv. Bus. Rev.
(May 31, 2018).
---------------------------------------------------------------------------
The goal of localism is inseparable from the other pillar of
American broadcast policy: diversity. Diversity does not just mean
programming from different corporate producers; it requires diversity
in the content and viewpoint of programming.\117\ Thus, ten or even
twenty newscasts that all serve up the same superficial, if-it-bleeds-
it-leads soundbites do not constitute diversity. Serving local
interests is meaningless if the diverse elements in a community--
cultural, social, and political--are not represented on the airwaves.
---------------------------------------------------------------------------
\117\ Red Lion, 395 U.S. at 389-95.
---------------------------------------------------------------------------
And recent evidence, compiled from surveys of news directors and
from a detailed study of the actual content of local news broadcasts,
demonstrates clearly that large broadcast chains prioritize increasing
their own profits over increasing localism and diversity. A recently
released Shorenstein Center survey of local TV news directors from many
major U.S. broadcast news firms offers a window into how corporate
strategies are harming localism. The survey ``asked respondents to
indicate the degree to which their stations relied on content from
outside sources, such as their network, management group, or other
providers,'' and found that those who indicated that they rely on such
content ``quite a bit'' or ``a lot'' were ``typically part of a large
ownership group.'' \118\ These stations in ``large ownership groups''
were far more likely to rely on third-party content to fill their
newscasts than either network O&O stations or independently owned
stations.\119\
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\118\ Shorenstein Center Study at 13 (``Seventeen percent of
respondents stated that `not much' of their content came from these
sources, while 51 percent said their stations used only `some' outside
content. However, the 28 percent of stations relying `quite a bit' on
externally provided material and the 6 percent relying on it `a lot'
were typically part of a large ownership group.'').
\119\ Id. (``In contrast, only 26 percent of the Network Owned-and-
Operated stations (O&Os) and 19 percent of independently owned stations
claimed to rely `quite a bit' or `a lot' on outside-produced
content.'').
---------------------------------------------------------------------------
A groundbreaking study by University of Delaware Professor Danilo
Yanich and his co-author Benjamin E. Bagozzi provides a detailed look
into the extent of this type of ``news sharing.'' \120\ Yanich and
Bagozzi constructed a database of transcripts from the local news
broadcasts of 861 stations in all 210 U.S. television markets,
encompassing a three-month period in the fall of 2019.\121\ The authors
``employed automated text reuse methods to measure the extent to which
local broadcast station pairs duplicated (exact text reuse) each
other's news content.'' \122\ And their standard for duplication was
very conservative. Duplication required ``50 percent of the broadcast
news content (excluding sports, weather and commercials) of a station
pair'' to be a match.\123\
---------------------------------------------------------------------------
\120\ Yanich 2025 Study.
\121\ Id. at 2. The authors chose a time window ``before the COVID
pandemic so that coverage was not affected by a single overwhelming
story.''
\122\ Id.
\123\ Id.
---------------------------------------------------------------------------
The study first classified stations into those who ``originated
local news'' and those stations which ``only presented news,'' or so-
called ``non-originators,'' based on RTDNA's 2019 census.\124\ Yanich
and Bagozzi's data indicated that ``three quarters of the stations
(n=647) were originators with the remaining one quarter (n=214) being
non-originators.'' \125\ This figure is similar to, though slightly
lower than, RTDNA's census of originators (n=706, 66 percent) compared
to non-originators (n=363, 34 percent) in 2019.\126\ The difference
between the two estimates is explained by the difference in the total
sample size. RTDNA's analysis included all stations that aired news in
early 2019 (n=1,069), while Yanich and Bagozzi's sample (n=861) was
smaller, limited by the availability of transcripts from the firm
TVEyes.
---------------------------------------------------------------------------
\124\ Id. at 10.
\125\ Id.
\126\ Supra Figure 2.
---------------------------------------------------------------------------
After a rigorous analysis of the database transcripts, Yanich and
Bagozzi found ``96 duplicating station pairs involving 182 unique
stations (some stations had multiple arrangements).'' Over half of
these duplicating station pairs (52 percent) were stations in a so-
called ``shared services agreement'' (``SSAs'').\127\ Though the
prevalence of duplication was not linear with market size, overall the
researchers found that ``smaller DMAs had higher proportions of
duplicating station pairs than did larger markets.'' \128\ The
prevalence of duplication was high, with the authors reporting that
``across all station pairs, the average proportion of duplicated
content was 69 percent, with a range of 51 to 96 percent.'' \129\
---------------------------------------------------------------------------
\127\ For a history of the use and prevalence of SSAs and other
operational arrangements that big chains have used to evade the local
multiple ownership rules, see S. Derek Turner, ``Cease to Resist: How
the FCC's Failure to Enforce Its Rules Created a New Wave of Media
Consolidation,'' Free Press (Mar. 2014).
\128\ Yanich 2025 Study at 10, 25 (``The top 100 DMAs . . .
accounted for 40 percent of the duplicating stations with the highest
proportion in DMA Group 1 [markets 1-25] (14 percent) and lowest in DMA
Group 4 [markets 76-100] (7 percent). However, the two DMA Groups that
represent the smallest television markets (DMA Groups 5 [markets 101-
150] and 6 [markets 151-210]) . . . accounted for 60 percent of the
duplicating station pairs (28 percent and 32 percent for DMA Groups 5
and 6, respectively). Clearly, duplicating station pairs were a
substantial feature in the smallest television markets across the
country.'').
\129\ Id. at 26.
---------------------------------------------------------------------------
Notably, the authors found that ``just four station groups
controlled over half (53 percent) of the duplicating station pairs.''
\130\ And the largest U.S. broadcast chain ``Nexstar was the most
active controller of duplicating station pairs (22 percent).'' \131\
---------------------------------------------------------------------------
\130\ Id. at 3.
\131\ Id.
---------------------------------------------------------------------------
Because the most common form of news sharing arrangements involves
duopolies, SSA station pairs, or other connecting agreements for
stations operating in the same DMA, it is not surprising that the study
found that ``in a significant majority of cases, 86 percent (83 out of
96 duplicating pairs), the duplication occurred inside the market. In
the other 14 percent (13/96) there was at least one station whose
duplicating partner was outside the market.'' \132\
---------------------------------------------------------------------------
\132\ Id. at 31.
---------------------------------------------------------------------------
However, that they found any different-market pairs of stations
duplicating content is notable for a study of local TV news. What's
more, the study found that the prevalence of sharing was higher between
out-of-market duplicating pairs than it was for those inside the same
DMA. ``For the outside-of-market station pairs, the average duplication
of content was 80 percent over 83 percent of the rolling 3-day windows.
For markets in which the duplicating pairs were inside the DMA the
average duplication of content was 68 percent on 61 percent of the
rolling 3-day windows.'' \133\
---------------------------------------------------------------------------
\133\ Id. at 33.
---------------------------------------------------------------------------
The finding of a higher level of content duplicated by these out-
of-market pairs is highly germane to this proceeding, as it speaks to
the economic incentives and the balancing act broadcasters strike in
these arrangements. The owners of the stations in these combined
operations are incentivized to air the minimal amount of locally
produced content that makes it seem local (particularly weather and
sports, which were not included in the Yanich study) to attract an
optimal audience size, while keeping costs down by using content
produced outside the market.
The study's authors ended their report noting that ``the
inescapable conclusion that we draw is that ownership--or more
accurately control--matters in the production of local television news.
The control of television stations that is derived from duopolies,
service agreements, and common ownership often results in duplicated
content that serves the calculus of the economies of scale. We should
not be surprised by that finding, because the system is designed that
way. . . . Text reuse--the duplication of the exact same material
across news broadcasts--is a direct and unambiguous form of the
achievement of economies of scale. The station group bears the cost of
production of the story once and sells it to advertisers multiple
times. As fewer station groups control more of the local television
ecosystem, accomplishing that duplication becomes easier. And all the
incentives for it are clear. Our analysis shows that those incentives
are significantly utilized.'' \134\
---------------------------------------------------------------------------
\134\ Id. at 57.
---------------------------------------------------------------------------
c. Evidence from Inside Local TV Newsrooms Demonstrates How
Consolidation Undermines the Public Interest and Creates a Race
to the Bottom.
The 2025 Shorenstein Center survey of local TV news directors and
station general managers referenced in the prior section should serve
as a canary in the coalmine for the Commission, as it contemplates
unleashing another massive wave of media consolidation. Though the
industry's CEOs and lobbyists like to pat themselves on the back,
morale inside newsrooms is bad, and there is a widely held perception
among newsroom staff that the quality of local TV news is in decline.
When asked about their perception of the trend in the quality of news
in their local market area, ``sixty percent said the quality has
declined, with a quarter of them categorizing the decline as very
substantial.'' \135\
---------------------------------------------------------------------------
\135\ Shorenstein Center Study at 7.
---------------------------------------------------------------------------
This is the reality inside newsrooms after two decades of
consolidation--economies of scale make broadcast chain CEOs more
money,\136\ but at the expense of competition, localism, and diversity
in local news and content. And as the Shorenstein Center survey
demonstrates, consolidation exacts a steep personal cost from working
journalists, threatening the future of the profession as younger
generations perceive it as a dead-end. As the study's author Thomas
Patterson notes, ``a widely expressed view among respondents was that
their station's reporting is declining in quality, partly from thinly
stretched staff, partly from the departure of talented journalists, and
partly from inadequately trained entry-level journalists.'' \137\ These
responses center on the connection between adequate staffing and
training, something that station owners might be able to address with
investment. Indeed, when local news directors were asked whether an
``increase in broadcast staff'' would ``improve their `ability to
better serve audiences' information needs,' '' an overwhelming majority
(66 percent) agreed that such an increase in staffing would be
``important'' or ``very important'' to that effort.\138\ But these
local TV news directors aren't counting on their corporate offices to
actually put resources behind their sloganeering. ``When these
respondents were then asked about the likelihood that their station
would be able to increase its broadcast staff, only 8 percent deemed it
`very likely' while 33 percent judged it `somewhat likely.' ''.\139\
---------------------------------------------------------------------------
\136\ See, e.g., Tom Stephenson, ``The Life and Times of a Media
Magnate,'' D Mag. (June 8, 2020) (``The Nexstar CEO is proud to say, `I
want my commission salespeople to be the highest-paid people in town.'
He'd like to be paid more, too. In the last two years, shareholders
have, by the slimmest of margins, rejected multimillion-dollar
compensation packages for the CEO. `I guess if they felt they wanted to
vote with their feet, they wouldn't own the shares. But that doesn't
seem to be what's happening,' Sook says. `So, yes, it's a point of
frustration for me, because the performance has been there.' ''). Sook
eventually got what he wanted. According to SEC filings, his total
annual compensation between 2020 and 2024 ranged from $21 million to
$39.3 million.
\137\ Shorenstein Center Study at 17.
\138\ Id.
\139\ Id.
---------------------------------------------------------------------------
The Shorenstein Center survey also provides evidence that rising
profits do not mean station group owners invest more in their local TV
news stations. Though one assistant news director reported that ``[o]ur
ownership . . . proves that good journalism can be good business,''
others weren't so upbeat. One respondent said ``[w]e are chronically
short-staffed. Ownership groups for decades have been extracting more
output from fewer staff with less money.''\140\ That respondent
lamented how staffing cuts had become untenable, stating ``[w]e're
getting ever closer to the point of simply being unable to get
newscasts on the air because we just don't have the people to do it.''
\141\ Another respondent reflected, ``[o]ur corporate ownership cares
more about making money than serving our community.'' \142\ Echoing
this sentiment, a respondent told Shorenstein Center researchers,
``[o]ur station's primary function has become generating cash for the
corporation.'' \143\ There were many more responses in this vein.\144\
---------------------------------------------------------------------------
\140\ Id. at 27 (emphasis added).
\141\ Id.
\142\ Id.
\143\ Id. at 28.
\144\ Id. at 27-28. Other quotes include: ``Local news needs
investment from ownership, not just to increase content and coverage,
but for staff. The current staff is spread too thin.''; ``Corporate
ownership groups need reasonable profit margins but their response is
always `we need to operate lean' or `the money isn't there this year.'
''; and ``Corporate owners need to prioritize paying news staff higher
salaries. We are losing too many good young journalists to jobs outside
of broadcast news.'' Id.
---------------------------------------------------------------------------
Local TV newsroom staff already perceive their salaries as
abysmally low.\145\ A 2024 RTDNA study found high levels of newsroom
employee burnout, particularly as stations looking to cut costs rely on
journalists to be ``multi-media journalists'' who handle all aspects of
story production.\146\ Any Commission rulings leading to yet another
massive wave of local and national consolidation would only worsen this
situation, as consolidation of the market into the hands of fewer and
fewer owners would increase these firms' monopsony power over labor.
This would reduce the quality and expertise of newsroom labor forces
over time (as staff retire, leave for other careers, or eschew the
career altogether), further harming the public interest. The staff that
remain will become more overworked, forced to take on more duties that
take them away from the core task of reporting.
---------------------------------------------------------------------------
\145\ Id. at 10 (``TV station stations worry about their ability to
attract and retain talented staff. Local TV news has one of the lowest
salary levels for college graduates of any profession, a problem of
growing concern for local stations.'').
\146\ Bob Papper & Keren Henderson, ``Local TV news staffing rises
despite burnout challenges'' 4, RTDNA (May 21, 2024) (``For the second
year in a row, the survey asked whether news directors had seen more
evidence of staff burnout than in the past. Staff burnout continues to
be a growing problem, with nearly two-thirds (62.9 percent) of news
directors agreeing. In the top 25 markets, the percentage is lower at
52 percent, as well as in the smallest markets at 54.5 percent.
Nevertheless, all market sizes are over 50 percent, with markets 26 to
100 surpassing 70 percent.'').
---------------------------------------------------------------------------
When corporate chain owners cut staff to boost profits, it should
not be surprising that this has an impact on the scope and quality of
news coverage. However, consolidation also reduces the market
incentives for local TV news stations to differentiate their product
through editorial decisions too. When station owners face little
competition locally and nationally, they are incentivized to gain
audiences through shock, fear, and sensationalism, as well as through
repetitive emphasis on weather updates and breaking news stories. While
these may be of interest to the public, they do not adequately serve
the public's democratic information needs.\147\
---------------------------------------------------------------------------
\147\ Shorenstein Center Study at 19 (``News is inherently a
construct, shaped by subjective judgments about what is important on
any given day. Certain events virtually command attention, but they are
uncommon. News outlets have choices when deciding on the day's lineup
of stories. News directors will weigh perceived relevance, interest,
and impact in making these choices but there are no objective criteria.
As a result, the `news' is not a mirror of the community but a curated
narrative that amplifies certain topics while downplaying or ignoring
others. Local TV news has traditionally prioritized weather, crime, and
breaking stories, assuming they capture and hold viewer attention.
Crime stories particularly elicit emotional responses like concern for
personal safety, which can strengthen viewer engagement. This focus
has, over time, shaped audience expectations, with viewers now seeking
out this content, thereby reinforcing its demand.'').
---------------------------------------------------------------------------
These economic consequences of consolidation are seen in the
Shorenstein Center study, which found that that only 12 percent of news
directors report their stations have a ``heavy'' emphasis on ``local
government and issues,'' versus 35 percent saying they have a heavy
``emphasis on breaking news (such as crime and accidents).'' \148\ Only
32 percent of respondents said their station had a reporter assigned
full-time to cover local government.\149\ This de-emphasis on local
government reporting is nothing new; it's been the defining trend of
the consolidation era.\150\ But it can continue to decline. Indeed,
there are station directors that would like to use existing staff to do
more ``community'' reporting.\151\ But the study found that ``staff
size was unrelated to the use of community journalism, suggesting it is
less an issue of resources than of editorial interest.'' \152\ In other
words, stations are not investing enough in news, but the market
incentives of consolidation can also impact what type of news they
invest in too.
---------------------------------------------------------------------------
\148\ Id. at 12.
\149\ Id. at 13.
\150\ Id. at 13 (``In general, when examined through the lens of
the priority assigned to specific topics, the emphasis aligns with what
we found when comparing the relative importance of breaking news versus
coverage of local governance and issues. The emphasis also aligns with
a longer-term tendency in local TV news. The movement away from
coverage of local government to breaking news is more than two decades
old, illustrated by the shift away from assigning a full-time reporter
to cover city hall. When we asked respondents whether their station had
a reporter assigned full-time to cover local government, only 32
percent said it did.'').
\151\ Id. at 21-22 (``Among the hallmarks of newspaper reporting at
its peak was a commitment to types of journalism--enterprise,
community, and investigative reporting--that go beyond the
straightforward reports of the day's events. Enterprise journalism
involves stories that reporters pursue independently without relying on
external prompts like press releases or news conferences. Community
journalism focuses on covering local neighborhoods and groups, while
investigative reporting seeks to uncover developments that are not
readily evident. . . . Enterprise reporting and community journalism go
beyond standard news, providing stories and amplifying voices that help
the audience to be more aware and connected to their community. By
emphasizing these forms of journalism, while being mindful of their
community's diversity, TV outlets can ensure that local narratives are
aired. Investigative reporting is equally important but more
challenging, given the substantial reporting resources typically
required to thoroughly investigate alleged wrongdoing.'').
\152\ Id. at 22.
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This survey offers evidence that stations that differentiate
themselves by eschewing the cheaper crime blotter model and moving
towards covering local government issues are likely to find long-term
success. ``Stations that strongly emphasize local government and issues
were most likely to report a gain in audience. Sixty-one percent of
these stations reported an increase in audience share--11 percentage
points higher than the other stations' average.'' \153\ While noting
that ``there is more than one path to attracting and building an
audience,'' the Shorenstein Center survey recounted the experience of
one station news director whose station increased ratings after moving
away from heavy breaking news coverage in favor of community reporting:
---------------------------------------------------------------------------
\153\ Id. at 21.
We addressed this question a couple years ago and decided to
lean into neighborhood news. Rather than all reporters living
and working within a 5-mile radius of the station, we now have
reporters spread throughout our market living and reporting in
communities that only saw a TV reporter when bad news happened.
We have filled a vacuum of news and information in communities
that saw a substantial decrease in local news outlets. We now
report on local government, schools, businesses, and people on
an everyday basis. This is in direct contrast to our
traditional competitors who report heavily on breaking news and
crime.\154\
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\154\ Id. at 20.
Indeed, given the twenty-year decline in the newspaper business,
local TV station groups had an opportunity to fill the void in
community, enterprise, and investigative reporting. But the Shorenstein
Center study confirms what any news consumer knows quite well: local TV
as a whole has not moved to fill this void, with many station groups
choosing to double down on weather and crime.\155\ While the survey
responses and the data above demonstrate that emphasizing truly local
coverage can be profitable for individual local stations, most station
groups freed from the sensible media ownership limits the FCC has
already discarded will chase the quicker and easier profits that come
from ruthless down-sizing and centrally produced, duplicated content.
This trend is especially worrisome as our Nation becomes more diverse,
because when these national, top-down interests prevail, news directors
in all markets will be less likely (and able) to devote coverage to
marginalized communities and other underserved groups. Indeed,
according to the Shorenstein Center study, this is already an ongoing
problem in some newsrooms.\156\
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\155\ Id. at 23 (``In our previous study of local public radio, in
communities where the newspaper had declined, we found a strong
commitment by stations to increase their coverage of local governance
and issues to offset the decline. We did not find the same commitment
among local TV news stations. In areas where the leading newspaper had
scaled back its coverage, two-thirds (64 percent) of our TV respondents
said their station had not made a change to accommodate the loss, while
27 percent claimed a moderate increase in coverage of local governance
and issues, and only 9 percent reported a substantial increase.'').
\156\ Id. at 10-11 (``[W]e asked respondents about the significance
of some of the challenges their stations might face. At the top of
respondents' list of challenges was serving `the community's
information needs.' Eighty-eight percent of respondents identified as
`significant' or `very significant.' A news director explained, `How
can we truly serve our audience to the best of our ability if we do not
know exactly what they need?'. . .Of less concern to stations were the
`information needs of underserved local groups' and the `diversity of
our news staff.' Each was mentioned by two-thirds of respondents as a
``significant'' or ``very significant'' challenge. Here, unlike the
other concerns, the demographic composition of the media market was
related to the responses. TV stations in racially and ethnically
diverse markets were twice as likely as stations in heavily white areas
to say staff diversity and the needs of underserved groups were ``very
significant'' concerns.'').
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IV. Broadcast Television Companies Are in Great Financial Health and
Further Consolidation Will Only Benefit Wealthy Shareholders.
As the prior section illustrated, the national cap remains vital to
protect localism, as market conditions increasingly favor lower-cost,
duplicative, or nationally produced and distributed content. The
American public does not need and does not want more media
consolidation. They want more diverse and independent media sources for
the sake of healthy democratic discourse.\157\ This preference matches
what Congress enacted into law and directed the FCC to implement with
respect to the national cap. The only constituency clamoring for the
Commission to unleash another wave of local media mergers is the
broadcast lobby.
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\157\ See Jessica J. Gonzalez, S. Derek Turner, Matt A. Barreto, &
Henry Fernandez, ``Free Press 2024 Poll: Detailed Analysis of Finding''
25, Free Press, BSP Research & African American Research Collaborative
(May 28, 2024) (showing a majority of American adults agreeing that
``having more independent news outlets is important to stopping
disinformation and is good for the health of our democracy,'' compared
to 32 percent saying ``we already have enough choices in news outlets,
and creating more news outlets won't change anything'').
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The subtext of the Notice's request to refresh the record in this
proceeding is largely an economic pleading: that complete removal of
ownership limitations--including the national cap at issue here--is
necessary to preserve localism, because without further consolidation
the local news business becomes uneconomical. But the evidence strongly
suggests a different conclusion. Despite massive change in the overall
information markets in the Internet era, broadcast TV stations are
doing well financially. FCC Policies that promote competition,
diversity, and localism by preventing broadcast monopolies are not--and
have never been--in conflict with the economic necessities of this for-
profit industry.
Below we analyze the financial state of the local broadcast
television industry over the past two decades, at the sector level and
individual-company level. This analysis indicates that despite ongoing
changes to the broader information markets, the local TV industry's
financial health is good--certainly generating enough cash to support
their local news operations. Unlike other parts of the media business
such as newspapers or linear cable networks, the local TV sector's
future looks bright. Broadcast executives at the same companies likely
to plead the need for consolidation in this docket routinely extol
their financial performance data and forecasts. They also praise and
even brag about the numerous technological and market opportunities on
the horizon that will allow broadcast license holders to continue to
return the level of growth that Wall Street demands (even if that
pursuit of excess profit is harmful to Main Street).
Indeed, to see that consolidation is not necessary for local TV
station groups to continue to thrive, one only needs to examine what
the large national ownership groups were saying a year ago about the
state of their business. Their comments prior to the 2024 election came
at a time when the 39 percent national cap remained a legal certainty
under the prior FCC. On Nexstar's final investor call before that
election, its CEO, Perry Sook, gushed about ``the power of broadcast
television,'' stating that ``at a time when the pay-TV industry
continues to experience subscriber attrition and there is intense
competition for national advertising dollars, Nexstar generated the
highest first and second quarter distribution and total revenue levels
in the company's history.'' \158\ Sook also noted that even after
national media companies sunk billions into their SVOD application
services, linear TV remains ``the only segment that generates profit.''
\159\ Sook's comments echo other analysts' observations that content
companies are rethinking the value proposition of SVOD because of
linear TV's better economics\160\--especially when it comes to live
sports and news,\161\ where linear delivery still reigns supreme.\162\
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\158\ See Comments of Perry A. Sook, Founder, Chairman & CEO,
Nexstar Media Group, Inc., Nexstar Q2 2025 Investor Call (Aug. 8, 2024)
(``Sook Aug. 2024 Comments'') (``Nexstar's strong second quarter
financial results mark another quarter of record total net revenue and
our third consecutive quarter of all-time high quarterly distribution
revenue. We translated this revenue growth into another quarter of
solid adjusted EBITDA and adjusted free cash flow growth, reflecting
our disciplined operating strategies. Just stop and think about that
for a minute. At a time when the pay-TV industry continues to
experience subscriber attrition and there is intense competition for
national advertising dollars, Nexstar generated the highest first and
second quarter distribution and total revenue levels in the company's
history. Why is that? Well, it comes down to the value of our
programming and reach delivered to our audiences, customers and
programming partners. The power of broadcast television was again
validated in a few recent high-profile settings.'') (emphasis added).
\159\ Id. (``Moreover, as more media companies lean back into the
power of linear, the only segment that generates profit, by the way, we
expect the relative value of the pay-TV bundle with all of its premium
sports and local news content to look more and more attractive, leading
to an inflection point in the future in subscriber attrition. . .As a
result, we have delivered outsized long-term returns for our
shareholders.'').
\160\ See, e.g., Tom Wainwright, ``Streaming slows to a trickle in
2025,'' The Economist (Nov. 19, 2024) (``Yet making money from
streaming is proving harder than expected. Netflix, its largest
exponent, is making steady profits. Disney's streaming division broke
even in the second quarter of 2024. But most of Hollywood's older
studios are still losing money on their digital ventures, and
shareholders are jumping ship.''); Adam Rumanek, ``The Future Of
Streaming: Balancing Ads, Subscriptions And Content,'' Forbes (June 23,
2024) (``As a whole, the streaming industry is coming to the
realization that subscriptions don't pay for platforms--advertisers do.
Subscriptions alone can't sustain unlimited growth, and not everyone
has the disposable income to spend an extra $15 per month on streaming
content.''); ``Analysis: As NFL Streaming Viewership Grows, Linear TV
Continues to Dominate,'' VAB Press Release (Feb. 4 2025) (``While
streaming expanded its viewership, broadcast and cable TV continued as
the dominant platforms for primetime games.'').
\161\ See, e.g., Jay Langan, ``Surviving the Streaming Surge: How
Linear TV Still Holds Value,'' Ocean Media Inc. (May 21, 2024)
(``Despite these challenges, one segment of linear TV that continues to
thrive is sports broadcasting. Along with live events such as award
shows, sporting events remain a cornerstone of linear TV. Ratings for
sports have remained robust, and in some cases, have even grown. This
resilience makes sports broadcasting a prime area for investment News
is another segment where linear TV maintains its relevance. In an
election year, for example, news ratings typically see a significant
boost. However, advertisers must navigate the complex landscape of
brand safety, especially when it comes to politically charged content
on channels like Fox News. Despite these challenges, news programming
offers a consistent and reliable audience, making it a viable option
for certain advertisers.'').
\162\ See, e.g., Zaneta Kucerova, ``A Sports League Maximizes
Revenue from Media Rights,'' S&P Glob. Market Intel. (Apr. 4, 2024)
(``Despite these challenges, sports content remains dominant on linear
TV, accounting for over 95 percent of the most-watched programs in 2023
in the U.S. Live sports programming strength grows as networks compete
with streaming services for valuable media rights. Additionally, sports
content continues to be vital for broadcasters as audiences tune in for
live games despite alternative entertainment options. In the U.S.,
local rights are shifting from regional sports networks to local
broadcast stations and new sports-centric streaming services that
target broader audiences.'').
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Helping to fuel this renewed optimism (which, we must note again,
was also expressed last year before the election) is the fact that
cord-cutting appears to be slowing.\163\ The remaining linear
subscribers are customers with high demand for live sports and live
local news.\164\ As broadcast station magnates and TV advertising execs
routinely crow to investors, this is vital programming that broadcast
has ``got a monopoly on.''\165\
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\163\ See, e.g., Comments of Kevin P. Latek, Executive VP, Chief
Legal & Development Officer and Secretary, Gray Media Inc., Q2 2025
Investor Call (Aug. 8, 2024) (``We remain optimistic that the pace of
sub declines will slow going forward. This is a result of the addition
of more streaming apps to MVPD bundles, the proliferation of ads and
price increases in streaming products, more MVPD control over the
carriage and payment for the little watch[ed] cable channel and the
migration of sports to broadcast networks and local stations.''); Mau
Rodriguez & John Fletcher, ``Multichannel video market share Q4 2024:
Turning a corner?,'' S&P Glob. Market Intel. (July 25, 2025) (``[H]ope
exists with some U.S. households warming to streaming bundles,
according to commentary and results from the big three cable
operators.''); Mike Reynolds, ``Charter sees lowest video subscriber
losses since 2021,'' S&P Glob. Market Intel. (July 25, 2025) (``CFO
Jessica Fischer told analysts on the company's July 25 earnings call
that the second quarter represented Charter's best video period since
2021. Fischer attributed the improvement primarily `to better connects
year-over-year, resulting from the new pricing and packaging we
launched last fall and lower churn year-over-year, driven in part by
our programmer app inclusion packaging.' '').
\164\ See, e.g., Logan Jones, ``51 percent of Americans still have
cable TV, here's why,'' CableTV.com (Mar. 28, 2025) (describing a
survey of cable TV subscribers, in which the two top programming types
cited as reasons for continued linear cable TV subscriptions were live
sports and news).
\165\ See MediaTalk,: TVB Chief Shares How Local Broadcast is
Winning the Ad Game (A S&P Global Market Intelligence Podcast Feb. 27,
2025) (Steve Lanzano, President and CEO of TVB noting, ``The world as
it comes from broadcast is, quite frankly, is a sports and news world,
right? We have NFL football, basically almost exclusively, and we're
really the local news game in town, right? Radio's kind of walked away
from local news. Newspapers are non-existent. So we've got a monopoly
on those two things. And as long as that continues, we're going to be
okay.'') (emphasis added).
---------------------------------------------------------------------------
Local broadcast TV companies are largely fiscally optimistic
because of live sports. In particular, local TV broadcasters are
filling the void left by the collapse of the cable Regional Sports
Network (RSN) business, and doing so by striking deals directly with
local sports teams and leagues.\166\ Half of all U.S. TV households
have kept their traditional pay-TV subscriptions,\167\ and they tend to
be more affluent and have a high willingness to pay for live sports and
news. As Sook explained it last August, ``[t]he broadcast television
business model is anchored by loyal pay television subscribers,
including sports and news viewers who subscribe in order to access our
content and which account for the increasingly large percentage of the
pay-TV subscriber universe, and the high net worth audiences aged 45
plus who enjoy the superior interface and experience that payTV
provides.'' \168\ Local TV chains are shifting their mix towards more
live sports,\169\ which they expect will bolster their ability to
continue commanding retransmission payment increases that outpace
inflation.\170\
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\166\ See Sook Aug. 2024 Comments (``For example, the NBA bypassed
the contract renewal on a cable television network in favor of a deal
that included increased distribution on broadcast television, given our
tremendous proven value of the broadcast model that that will bring to
the league. In fact, a recent statement by the NBA said, `Throughout
these negotiations, our primary objective has been to maximize the
reach and accessibility of our games for our fans.' We know that reach
and accessibility is the lifeblood of every sport and there's no
platform that can match the reach of broadcast television. This is a
proven path that has sustained the long-term growth of the NFL and one
we believe the NBA will prosper from as well. To that point, NFL
Commissioner Roger Goodell reiterated his commitment to broadcast
television during an interview just last month, saying, `A lot of our
media is not about the dollars as much as it is about how we reach more
fans. That's the primary objective for us.' He went on to comment that
the NFL's presence on broadcast is `what has led to the great not only
popularity of the league, but obviously, the great ratings.' '')
(emphasis added).
\167\ See, e.g., Mau Rodriguez & John Fletcher, ``Multichannel
video market share Q1 2025: Lowest first-quarter losses since 2019,''
S&P Glob. Market Intel. (May 23, 2025) showing that the number of
residential multichannel subscriptions (including virtual) amounted to
50 percent of U.S. occupied housing units.
\168\ See Sook Aug. 2024 Comments.
\169\ See Sook Sept. 2024 Bank of America Comments (``And so now
we've increased the amount of programming that the network offers by
over 40 percent total hours of network programming, and we went from
100 percent entertainment programming to now 46 percent sports, 54
percent entertainment. And I can imagine over the next 3 years that
those numbers will flip, that will be majority sports versus
entertainment. And again, live sports, it's what people watch and they
watch it live. You can DVR it if you're not going to be home to see the
start of the game, but you'll likely know the outcome if you wait until
the next day to watch it. And advertisers are into it not only because
of the association with the sport. It's a lean forward experience, I'm
alert, paying attention to what's going on as well as the ads. But then
the things we can do with our local assets to tie a bow around it and
do local activation for that particular network sponsor at a local
level in the markets, where they do business and we do business.'').
\170\ See Sook Aug. 2024 Comments (``But again, I think you'll see
the impact on our distribution fees as these sports become part of the
package that our affiliate stations as well as our O&Os are able to
take to market in discussions with distributors. So it's a virtuous
circle going in the right direction.'').
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The reality is that even prior to November 2024, local broadcast TV
conglomerates had been forecasting a bright financial future. Clearly,
they did not view the national cap as a barrier to continued earnings
growth.\171\ These companies were returning value to shareholders, both
through earnings and, in Nexstar's case, by buying back its own stock
to generate a hefty 20-percent embedded return.\172\
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\171\ See, e.g., Comments of Lee Ann Gliha, Executive VP & CFO,
Nexstar Media Group, Inc., Citigroup 2024 Global TMT Conference (Sept.
4, 2024) (``Gliha 2024 Bank of America Comments'') (``I think
historically, the company has a significant return based on M&A--debt-
financed M&A. That's become less a part of our story. Sort of not since
2019 have we done a major M&A deal, because we're at the cap, as Perry
mentioned earlier. So there's less of that to do these days. So that
means that we need to figure out ways to generate great returns for our
shareholders with that excess cash flow. And so we've been doing that
in a variety of ways. We have a dividend now that's north of a 4
percent yield, that's a claim of a little over $200 million on our
cash. We have some mandatory amortization that has to get paid every
year on our debt, and that leaves a significant amount of free cash
flow left to make the decision on what to do. Because our stock trades
at like a 20 percent free cash flow yield, it's very, very accretive on
a free cash flow per share basis to be buying back our stock on a
regular basis.'').
\172\ Id. Prior to the 2024 election, Sook laid out Nexstar's basic
dealmaking calculus, which was only to pursue those ``accretive deals''
that generate better than a 20-percent embedded return, which is the
return the company sees on share repurchases. In other words, the
rationale for its push to kill the national cap is that Nexstar views
national consolidation as highly ``accretive'' to return value to share
holders, not because more consolidation advances some altruistic motive
to improve journalism or fill news deserts. See Sook 2024 Bank of
America Comments (``I always tell people it would have to be an
actionable transaction and highly accretive, more accretive than buying
back our own stock, which is an embedded 20 percent return that Lee Ann
does every day. And so if the profile existed at a risk-adjusted return
and it was an actionable transaction, I think we would certainly lean
into it. But in this regulatory environment, it would be very tough to
get done.'').
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A. Local TV Broadcasters Are Not in the Same Relevant Product Market as
Online Tech Giants Like Google, Meta, and Amazon, Nor Are They
in the Same Relevant Product Market as Online Video
Distributors Like Netflix. Eliminating the National Cap Will
Harm Localism and Will Not ``Rein in'' Big Tech Companies.
The broadcast lobby and its allies argue that elimination of the
national cap and other broadcast regulations are necessary to let them
``compete against `Big Tech.' '' \173\ While it is understandable that
the local TV industry would want to harness for its own financial gain
the bipartisan political frustration with tech giants, local broadcast
television is in a separate formal economic market than online search,
social media, and online retail commerce.\174\ Local broadcast
television stations sell advertising in the ``television spot
advertising market,'' with geographic market boundaries set by the
DMA.\175\
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\173\ See, e.g., George Winslow, ``Broadcasters Urge FCC to Hit the
Delete Button on Antiquated Regs,'' TV Tech (Apr. 21, 2025); John
Eggerton, ``NAB: Deregulating Broadcasters Is Key to Competing with Big
Tech, Broad. & Cable (Jan. 19, 2023).
\174\ Local broadcast television stations sell advertising in the
``television spot advertising'' market. See, e.g., Complaint 2,
United States v. Sinclair Broad. Grp., Inc., No. 1:18-cv-2609 (D.D.C.
Nov. 13, 2018), Dkt. No. 1.
\175\ See, e.g., Competitive Impact Statement at 2 n.1, United
States v. Sinclair Broad. Grp., Inc., e No. 1:18-cv-2609 (D.D.C. Nov.
13, 2018), Dkt. No. 3 (``Spot advertising differs from other types of
television advertising, such as network and syndicated television
advertising, which are sold by television networks and producers of
syndicated programs on a nationwide basis and broadcast in every market
where the network or syndicated program is aired.''); id. at 2-3
(``Broadcast television `spot' advertising, which typically comprises
the majority of a station's revenues, is sold directly by the station
itself or through its sales representatives to advertisers who want to
target viewers in specific geographic areas called Designated Market
Areas.'').
---------------------------------------------------------------------------
As explained above, antitrust alone is not a sufficient barometer
or legal framework for assessing whether broadcasting serves the public
interest; but antitrust law does provide the parameters for assessing
and establishing relevant product markets between alleged competitors.
None of the ``Big 3'' tech giants that bring in significant advertising
revenues (Alphabet, Meta Platforms, and Amazon) compete in the local
television spot advertising market. Google competes in other markets,
chiefly the general search services,\176\ publisher ad servers, ad
exchanges, and advertiser ad network markets.\177\ The FTC is currently
arguing in court that Facebook competes in the ``personal social
networking market,'' and though its parent company Meta disputes that,
neither side is arguing for a product market definition that also
includes local TV stations.\178\ The FTC has also brought an antitrust
case against Amazon (which earns billions from advertisements placed on
its commerce website),\179\ alleging violations in the ``online
marketplace services'' and ``online superstore'' product markets.\180\
Amazon also bundles Amazon Prime Video with its Amazon Prime
subscription service. But that service, like Netflix or Disney+, is not
in the ``television spot advertising market.'' \181\
---------------------------------------------------------------------------
\176\ Complaint 88, United States v. Google LLC, No. 1:20-cv-
03010 (D.D.C. Oct. 20, 2020), Dkt. No. 1.
\177\ Complaint 279, United States v. Google LLC, No. 1:23-cv-
00108 (D.D.C. Jan. 24, 2023), Dkt. No. 1.
\178\ See, e.g., Cecilia Kang, ``Does Meta Have a Social Media
Monopoly? Here's What the U.S. Has Argued,'' N.Y. Times (May 15, 2025).
\179\ See, e.g., Melissa Otto, ``Global Digital Advertising
Revenues--A Look at the Big Three: Alphabet (GOOGL), Meta Platforms
(META), Amazon.com (AMZN),'' S&P Glob Visible Alpha (May 17, 2023).
\180\ Complaint ⁋⁋ 122, 186, FTC v. Amazon Inc., No.
2:23-cv-01495 (W.D. Wash. Sept. 26, 2023), Dkt. No. 1.
\181\ Though Netflix has not been the subject of a DOJ or FTC
antitrust complaint, it has been accused in ongoing litigation of
unlawful activities harming competition in the ``video-streaming
services'' product market. See Complaint, Bracamontes v. Meta
Platforms, Inc., No. 1:24-cv-11839 (N.D. Ill. Nov. 18, 2024), Dkt. No.
1.
---------------------------------------------------------------------------
The broadcasters and the Commission cannot simply draw a circle
around every single firm that sells advertising and call it a relevant
product market. Doing so would throw out decades of precedent based on
rigorous economic analysis. For the purpose of antitrust analysis, the
other agencies that review broadcasting deals and a wider range of
competition issues (i.e., DOJ and FTC) and the courts have consistently
favored a narrower approach to market definition.\182\ Those other
antitrust agencies don't even consider local TV stations as operating
in the same product market as local newspapers, even though both types
of firms sell space for advertising served to local audiences.\183\
While it is true that firms like Alphabet, Meta, Amazon, and local TV
broadcasters all earn revenue from selling audience attention to
advertisers (on one side of a two-sided market) and doing so must
attract a share of the public's attention and time, it is wrong in a
formal and practical economic sense to draw the market boundaries so
broadly. This is why the FTC and DOJ have consistently applied the
``television spot advertising market'' definition when considering
matters involving broadcast television. Indeed, broadcast TV stations
actually have a competitive moat that protects them from competition,
but only if they lean into the localism aspects of their business
(which also happen to be one central public policy purpose of their
exclusive licenses to the public airwaves).\184\
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\182\ See, e.g., Times-Picayune Publ'g Co. v. United States, 345
U.S. 594, 612 n.31 (1953) (``For every product, substitutes exist. But
a relevant market cannot meaningfully encompass that infinite range.
The circle must be drawn narrowly to exclude any other product to
which, within reasonable variations in price, only a limited number of
buyers will turn; in technical terms, products whose `cross-
elasticities of demand' are small. Useful to that determination is,
among other things, the trade's own characterization of the products
involved. The advertising industry and its customers, for example,
markedly differentiate between advertising in newspapers and in other
mass media.'').
\183\ The agencies have consistently defined the product market
that newspapers operate in as ``the sale of daily English-language
local daily newspapers to subscribers and the sale of local advertising
in those newspapers.'' See, e.g., Application for Temporary Restraining
Order and Order to Show Cause at 10, United States v. Tribune Publ'g
Co., No. 2:16-cv-01822, (C.D. Cal. Mar. 17, 2016), Dkt. No. 5.
\184\ See, e.g., Shorenstein Center Study at 24 (``To compete in
this environment, local news outlets need to rely on their competitive
advantage--their focus on local news. It sets them apart, not only from
national outlets but also from other non-news media that increasingly
attract people's attention. Local TV stations should recognize the
power of their brand as a trusted local source and enhance their
ability to provide timely, relevant local content. While other content
types can deepen audience engagement, local stations risk losing
relevance if they fail to deliver consistent, robust local news. For
audiences seeking local stories, the local TV station remains one of
the few trusted sources, whereas when other content is at issue, there
are more attractive alternatives.'').
---------------------------------------------------------------------------
Even setting aside market competition analysis and considering
instead the Chairman's supposed goal of ``reining in big tech,'' \185\
there's no explanation of how local TV consolidation enables those
firms to compete against Google and Meta. Certainly, local TV firms are
not going to lower their advertising rates after consolidating. That's
the opposite of what microeconomics suggests would happen, and not one
single broadcaster has suggested they would lower spot rates following
elimination of the national cap. Carr's ideology and predilections here
thus contradict basic logic, which says that increased competition
tends to make prices lower; it doesn't magically make prices higher so
long as the revenues from those ad sales (theoretically) might trickle
down towards useful outputs like spending on local news production.
---------------------------------------------------------------------------
\185\ See, e.g., Ari Bertenthal, ``FCC's Carr Sends Message to Big
Tech,'' Broadband Breakfast (Nov. 7, 2024).
---------------------------------------------------------------------------
If we consider the narrower, but still too broad, product market of
``video services,'' allowing giant local TV broadcast firms to
monopolize the public airwaves in every U.S. DMA is not going to
materially impact the price of advertising in that broader video market
(but it would result in monopoly pricing in the local television spot
ad market). Advertisers who spend money to reach audiences watching
YouTube, Netflix, Disney+, Apple TV+, Paramount+, Amazon Prime and
other global SVOD providers are accessing a different product market
than local broadcast TV stations offer. Ad-buying firms create
advertising campaigns and access a number of different media
distributors across different product markets to reach their target
audiences.
Broadcasters have made this clear when talking to their investors.
Just last summer, Sinclair's CEO noted that his local stations don't
view online video as a competitive threat, and explained that the
impact from formerly ad-free SVOD providers now including ads ``has not
shown up in our core business . . . [it] hasn't affected our CPMs on
the linear side.'' \186\ In fact,
---------------------------------------------------------------------------
\186\ See, e.g., Comments of Christopher S. Ripley, President &
CEO, Sinclair, Inc., Q2 2024 Investor Call (Aug. 8, 2024) (``Ripley
Aug. 2024 Comments'') (``So we have not--it's an interesting question
in terms of extra ad avails that are coming on to the marketplace from
either FAST channels, AVOD, SVOD, and where you would think you could
see it would be potentially in the pricing on the linear side, and that
has not shown up in our core business. And I believe it hasn't shown up
on the linear side because we are still the kings by a wide margin of
reach, frequency, premium content, you name it, across all the
categories, we're at the top of the heap when it comes to any sort of
comparison. Just to give you an idea, 80 percent of adults on any given
day interact with broadcast; 56 percent cable TV and 43 percent--if I
remember correctly, over 46 percent for paid streaming. And then paid
streaming, you get a dice set up between all the various suppliers. So
we have a significant lead in terms of reach, frequency and the premium
nature of our content and people watching it live, specifically like
news and sports. And so there's a glut of inventory that has come to
the marketplace, hasn't affected our CPMs on the linear side. And what
it has done, interestingly enough, is it improved our audience
extension business. When an advertiser comes to Sinclair, we don't just
sell them a slate of linear spots on our networks, we sell them an
entire campaign, right? It's a 360 one-stop shop experience and that
includes things like AdWords and websites and social and you name it,
we do the entire campaign for you. And a major component of that is
here's your linear plate and here's an audience extension package,
which will reach on to these various connected TV and OTT platforms.
And so that's a pretty significant portion of the digital business. And
because there has been so much inventory made available in that area,
we've been able to push down what we pay for the inventory. So it's
expanded our margins in that business, which affects both STG, which
does a significant amount of business on audience extension, but also
Compulse360 which services our TV sellers but also services other local
media companies and other local ad agencies. The margins there have
increased because they've been able to negotiate and push down pricing
of all the various publishers that are putting out these ad avails and
some of that's translated into the pricing that goes to the ultimate
client, but not all of it. And so margins have been expanding there.'')
(emphasis added).
---------------------------------------------------------------------------
Sinclair's CEO noted that the entry of SVOD providers into the
online video ad business actually improved Sinclair's margin in its
``audience extension business,'' which is the company's ``one-stop shop
experience and that includes things like AdWords and websites and
social,'' in addition to its linear networks and stations.\187\ The
Notice suggests\188\ that competition from online video might require
re-assessing and even eliminating the national cap applicable to
broadcasters. Yet Sinclair proudly proclaimed before Trump's re-
election, with the cap still firmly in place, that broadcast TV is
``still the king[ ] by a wide margin of reach, frequency, premium
content, you name it, across all the categories,'' noting that ``80
percent of adults on any given day interact with broadcast'' versus
``46 percent for paid streaming.'' \189\ Similarly, last September,
Nexstar's CEO told attendees at an investor conference that digital
advertising and linear TV advertising are complements, not substitutes,
with linear broadcast TV advertising remaining critical for branding
purposes.\190\
---------------------------------------------------------------------------
\187\ Id.
\188\ Notice at 2 n.5 (``For example, in the National Cap NPRM, the
Commission noted, among other developments, the growth of video
programming options available to consumers (including online
alternatives to traditional video distribution), reverse compensation
fees paid by affiliates to broadcast networks, common ownership of
broadcast and cable networks, consolidation among both MVPDs and non-
network owned broadcast television station groups, and continuing MVPD
video subscriber losses.'') (internal citation omitted).
\189\ Ripley Aug. 2024 Comments.
\190\ See Sook Sept. 2024 Bank of America Comments (``I mean you
can spend so much time and effort trying to be specific with your
targeting, you can forget to build a brand. And I think of all
purchasing kind of coming through a purchase funnel, right, where you
need to be creating a brand at the top of the purchase funnel, and at
the bottom, you can be very price and item specific. But you need to
use television and digital assets to work in tandem as people work
through their purchase funnel, making those decisions, whether it's for
household goods or appliances or cars. And so I think the two assets
that we concentrate on are TV and digital, and I think they complement
each other very well through the purchase funnel.'') (emphasis added).
---------------------------------------------------------------------------
If this Commission conducts an honest and unbiased analysis of the
continuing need for the national ownership cap, it will recognize that
broadcasters talk out of both sides of their mouth, pleading poverty
before regulators while telling Wall Street that the local TV market is
``not nearly as competitive as the national landscape'' and that
broadcast TV still reigns supreme in these vital and lucrative local
markets.\191\
---------------------------------------------------------------------------
\191\ See Comments of David Lougee, President and CEO, TEGNA Inc.,
Q2 2024 Investor Call (Aug. 7, 2024) (``Lougee Aug. 2024 Comments'')
(When asked about the future outlook for the broadcast TV business,
TEGNA's outgoing CEO said ``we have a tremendous amount of assets.
We've got strong local brands in local communities, which are not
nearly as competitive as the national landscape, that's a valuable
asset. To have valuable local content that is strongly branded is--can
be a jumping off point to source significant new business, whether
organic or inorganic, as Julie and we have said many times.'')
(emphasis added).
---------------------------------------------------------------------------
B. The Rise of Online Video Does Not Lessen the Need for the National
Cap. Local TV Broadcasters Do Not Compete Directly Against
National Online Video Providers, Including the Online Services
of the Big 4 Networks.
In the Notice, the Commission asked, ``how has the national
audience reach cap affected broadcast television's market position in
relation to other video distributors, such as online video providers,
that are not restricted by ownership limits?'' \192\ In doing so, the
Notice referenced the 2017 National Cap NPRM's discussion of
``economies of scale made possible by expansion of station ownership
that may help broadcast television remain competitive in the
marketplace and deter the migration of expensive over-the-air
programming to other video programming distributors.'' \193\
---------------------------------------------------------------------------
\192\ Notice at 2.
\193\ Id.
---------------------------------------------------------------------------
As discussed above, it is fundamentally wrong for the Commission to
treat online video providers as operating in the same relevant product
market as local television broadcasters. The prior Commission
recognized this in the 2018 Quadrennial Review Order, noting that
``non-broadcast sources of video programming do not compete with
broadcasters for retransmission consent fees, network affiliations, or
the provision of local programming, which continue to remain largely
unique to broadcast television.'' \194\ And ``while broadcasters may be
seen as participating in various markets or competing along various
dimensions . . . the provision of local programming remains a hallmark
of broadcast television and an area where viewers directly benefit from
competition among local broadcast television stations.'' \195\ Thus the
Commission concluded that these non-broadcast programming options are
not ``substitutes to broadcast programming.'' \196\
---------------------------------------------------------------------------
\194\ See, e.g., In the Matter of 2018 Quadrennial Regulatory
Review--Report and Order, 38 FCC Rcd. 12782, 12824 (2023) ⁋ 75
(2023) (``2018 Quadrennial Review Order'').
\195\ Id. 75.
\196\ Id. 73.
---------------------------------------------------------------------------
With the instant Notice, the Commission now appears to be
myopically focused on the business of broadcasting in the context of
the larger advertising and video markets, while ignoring the important
fact that broadcast license holders have a monopoly right to a portion
of the public airwaves, and one that comes with legal obligations that
are unique to that spectrum band. This is not only a radical departure
from the agency's prior analytical standard, it is a departure from the
Commission's prior conclusion that even under a ``competition-only''
analytical framework, ``loosening our rules and allowing additional
consolidation (or, under some proposals, unlimited consolidation) would
cause substantial harm to the public interest.'' \197\
---------------------------------------------------------------------------
\197\ Id. 21 n.68.
---------------------------------------------------------------------------
But to be clear, maintaining the national cap has not meaningfully
harmed the broadcast chains in any way; in fact, the national cap has
acted to incentivize localism, and that comes with economic benefits to
broadcasters, not just the detriments they pretend. Online video
distributors do not produce local news. Advertisers have demand for
viewers who watch local news broadcasts, and those advertisers have a
limited number of options to reach that audience in each specific DMA.
This specific demand, with limited supply, gives broadcast TV owners
pricing power within the local television spot advertising market.
Indeed, as the former Trump administration Assistant Attorney General
Makan Delrahim noted that there are ``varying levels of substitution
for ad placement across media'' and that ``even if it means absorbing a
price increase, some of the evidence we have seen suggests that
advertisers are unlikely to look beyond broadcast spots within a given
DMA.'' \198\ Thus, given the limited ad inventory for local affiliates
during national programming blocks and the high demand for that
inventory, it's no surprise that local broadcast TV stations generate
the bulk of their advertising revenues from local spot ads.\199\ What's
more, differential regulatory treatment even within the local news
market has always been the norm (for example, print vs. broadcast).
That decision for differential treatment was made by Congress (and
upheld by the Supreme Court in cases like Red Lion) because of the
limited nature of these airwaves that are a public resource.
---------------------------------------------------------------------------
\198\ See 2019 DOJ Workshop.
\199\ See, e.g., Justin Nielson, ``Complete picture of U.S. TV
station industry revenues, 2009-2030,'' S&P Glob. Market Intel. (July
29, 2025) (``S&P Complete Picture'') (containing data indicating that
core local and political advertising revenues were 90 percent of local
U.S. TV broadcaster's 2024 revenues, with core national ad revenue only
10 percent); 2019 DOJ Workshop (featuring Gray Media co-CEO Pat
LaPlatney noting that ads are ``sold three ways--locally, regionally,
and nationally. And for Gray, in 2018, local and regional was roughly
80 percent of our advertising revenue, excluding political.'').
---------------------------------------------------------------------------
The ``growth of video programming options available to consumers''
\200\ consists almost entirely of non-local subject matter. It's
heavily tilted towards entertainment content, and the growth in news
content is programming covering national topics. If anything, these
programming trends in the broader video markets highlight that market
forces alone would incentivize less localism were there no national
cap.
---------------------------------------------------------------------------
\200\ Notice at 2 n.5.
---------------------------------------------------------------------------
The Notice likewise points to ``online alternatives to video
distribution'' \201\ as a factor that implicates the policy purpose of
the national cap, but concerns about broadcast license consolidation
impacting localism are not germane to how programming is distributed.
They are about the programming itself. Indeed, many local broadcasters
have free online streams of their own programming (i.e., not network
content), and they are reaching audiences via their own websites
(multimedia) and ``FAST'' platforms.\202\ Thus, many local broadcasters
already have national reach when distributing their programming online,
as they always have in the Internet era. What has not changed, and will
not change, is the physical reality that broadcasting is a local
phenomenon, and monopoly spectrum licenses to distribute programming
via broadcast are granted on an eight-year renewable basis, under the
terms defined by the Commission and the Communications Act.
---------------------------------------------------------------------------
\201\ Id.
\202\ FAST is an acronym for free advertiser-supported television,
and includes online services such as Pluto TV (Paramount-owned), Xumo
TV (Comcast-owned), Tubi (Fox-owned), Roku TV, and many others.
Sinclair's NewsON has 285 TV station partners in more than 165 U.S.
markets. See, e.g., ``NewsON Partners with Lilly Broadcasting to Expand
Coverage in NY and PA,'' Press Release, NewsON (Apr. 1, 2025).
---------------------------------------------------------------------------
The Notice also raises the issue of reverse compensation fees paid
by affiliates to broadcast networks,\203\ which are today about half of
the amount that pay-TV distributors pay to those affiliates for
retransmission consent.\204\ National broadcast networks are taking a
growing share of the growing retransmission consent fee pie. But that
is the reality of having to pay for content that attracts audiences.
Local broadcasters may not like this (the same way pay-TV customers
don't like the below-the-line ``broadcast recovery'' fees),\205\ but it
does not harm local stations' positive financial health. Local TV
affiliates have a self-proclaimed ``monopoly'' on airing whatever must-
see national content these rising reverse retrans fees pay for (e.g.,
live sports), which is programming that drives viewers to their
channels. And that ultimately benefits the local broadcasters' bottom
lines, while it also helps maintain audience attention to live local
news--the other compelling, must-have content over which local
broadcasters themselves have a monopoly. The exponential rise in
retrans fees\206\ enriched broadcasters and broadcast networks, and it
also directly contributed to cord-cutting by MVPD customers less
willing to pay those price hikes. Allowing broadcasters to increase
their market scale will enhance their market power to extract even
higher fees from pay-TV distributors, particularly as the remaining
MVPD customers are those who have stuck around for live sports and
local news. Broadcasters are still coming out ahead when considering
the entire retrans picture, and broadcast TV consolidation has only
strengthened their position against pay-TV providers.\207\
---------------------------------------------------------------------------
\203\ Notice at 2 n.5.
\204\ See, e.g., S&P Complete Picture.
\205\ See, e.g., Luke Bouma, ``Comcast Price Hikes Push Monthly
Bills Over $250 for Many Customers With TV & Internet,'' Cord Cutters
News (Jan. 21, 2025) (``Adding to the burden for customers, Comcast has
also significantly increased several add-on fees. The Broadcast TV fee,
a controversial charge levied to recoup the costs of carrying local
broadcast channels, has skyrocketed to $25.25 per month. These fee
increases have long been a source of frustration for consumers, who
feel they are being nickel-and-dimed for essential services. The lack
of transparency surrounding these fees and their substantial increases
contribute to customer dissatisfaction.'').
\206\ See infra Figure 6.
\207\ The Notice asks about the impact of ``consolidation among
both MVPDs and non-network owned broadcast television station groups.''
Notice at 2 n.5. MVPD consolidation doesn't seem to have impacted
broadcasters' negotiating power when it comes to retrans, and the pay-
TV market has expanded since early 2017 with the rise of ``virtual''
MVPDs. And as the rapid growth in retrans revenues shows, consolidation
among non-Big 4 broadcast station groups has contributed to an increase
in broadcasters' negotiating power, largely because local stations
remain the only way MVPDs can get the programming that their most
loyal, traditional viewers want (live sports and news).
---------------------------------------------------------------------------
C. The Decline in Linear TV Viewing Has Disproportionately Impacted
Cable Networks, Not Local Broadcast Television.
While viewership of linear television is in decline, this trend is
not observed equally amongst all linear television sectors. Online
television continues to take a larger share of viewing time, but
virtually all at the expense of time previously spent watching linear
cable networks. We can see this in Figure 3 below, which shows data
from Nielsen's ``The Gauge,'' reflecting the relative shares of viewing
hours for online, linear cable, linear broadcast, and ``other'' viewing
such as watching DVDs.\208\
---------------------------------------------------------------------------
\208\ See ``The Gauge,'' Nielsen (June 2025) (noting that ``other''
includes ``TV usage that does not fall into the broadcast, cable or
streaming categories. This primarily includes all other tuning
(unmeasured sources), unmeasured video on demand (VOD), audio
streaming, gaming and other device (DVD playback) use'').
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
These data show that there is stability in broadcast viewership,
relative to cable. In May 2021, broadcast accounted for 25 percent of
viewing time, while cable captured 40 percent. Four years later in May
2025, cable's share of viewing time had declined to 24 percent, while
broadcast had only fallen to 20 percent. In the four years between May
2021 and May 2025, streaming's share of viewing time increased by 19
percentage points while cable's share dropped 15 percentage points.
Last summer, Nexstar's CEO Sook highlighted the difference between
online video's impact on linear cable networks compared to its impact
on linear broadcasting. ``I think you have to separate linear
television into two buckets. One is broadcast television and the other
is cable television. And there is no question that cable television and
the long-tail cable network, companies that have long-tail cable
portfolios, are under pressure. But I would say broadcast television,
which is where we live primarily with what we do, is--again, we just
put up another record quarter, last quarter of net revenue growth.''
\209\ Sook went on to point out the differences in viewership between
local TV stations and cable networks, noting that because of this
disparity, ``cable nets are overpriced relative to their viewership,
broadcast nets are underpriced relative to their viewership.'' \210\ In
Sook's view, this underpricing gives broadcasters like Nexstar the
ability to command ever-escalating retransmission consent fees from
pay-TV providers. As he noted too, those fees are forecast to grow
faster than the typical rate of general inflation.\211\ Sook's comments
about his company's ``outsized returns,'' which he attributed to that
fact that ``what we're negotiating are for local broadcast stations and
signals,'' reflects the positive financial prospects for the local TV
industry.\212\ That industry does not need further consolidation in
order to continue to thrive.
---------------------------------------------------------------------------
\209\ See Sook Sept. 2024 Bank of America Comments.
\210\ Id.
\211\ Id. (``And so we've been able to kind of improve our position
every single time we've gone back to the well in that regard. And I
think we expect we will continue to be able to do that for some period
of time. I read a piece of research, last night on the plane coming up,
that has a projection of affiliate fees, cable networks, down 5 percent
through the forecast period, which I think went through maybe `26,
retransmission fees, which is broadcast, increasing 5 percent over that
same period of time.'').
\212\ Id. (``And I think it's that divergence that you're seeing,
and obviously, we get outsized returns, again, because of our scale
fact that the predominance of what we're negotiating are for local
broadcast stations and signals. And so I think we do see that
continuing. We're not at parity. We're not at stasis to where we feel
like we're getting our fair share. We're still working our way up.'').
---------------------------------------------------------------------------
D. Local TV Broadcast Revenue Growth During The Previous Two Decades
Did Not Result in Newsroom Staffing Increases.
We now turn to a detailed examination of the operational and
financial state of the local TV industry, both at the sector-level and
at the leading ownership groups. We then conclude with an examination
of the industry and other analysts' forecasts for how the business will
fare in the coming decade.
We begin by looking at local TV newsroom employment. Unlike the
local newspaper sector, employment in local TV newsrooms has held
steady over the past decade. RTDNA published data indicating that TV
newsroom employment has been essentially flat since the industry
rebounded from the Great Recession, at approximately 28,000 jobs both
in 2012 and in 2024.\213\
---------------------------------------------------------------------------
\213\ See Papper, supra note 146 at 2.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Employment holding steady is certainly preferable to a decline. Yet
the most salient fact for present purposes is that this flat employment
trend occurred during a time when local TV revenues were growing faster
than the rate of inflation (see Figure 5). Between 2012 and 2018 (the
latter being the peak year for U.S. broadcast TV station inflation-
adjusted revenues), revenues increased 28 percent on an inflation-
adjusted basis, but U.S. broadcast TV newsroom employment declined even
as revenues soared. Indeed, despite record revenues in 2018, broadcast
TV news employment was at its lowest level of any year between 2012 and
2024. COVID-era financial disruptions, inflation, and slowing retrans
growth flattened the broadcast TV industry's revenue curve. Yet 2024
inflation-adjusted total revenues were still 19 percent higher than
they were in 2012, while newsroom staffing was essentially flat as
noted above.\214\
---------------------------------------------------------------------------
\214\ Based on other historical RTDNA TV newsroom employment data
(via Dr. Papper's archives, supra note 112) the number of local TV
newsroom jobs increased by only 5 percent from 2009 to 2024, while
total local TV industry revenues increased by 49 percent during that
same time-frame even after adjusting for inflation. During this time,
there was considerable industry consolidation. These divergent
trajectories reflect the industry's chief method for improving the
economic bottom line: mergers and cost-cutting, often in the form of
cutting newsroom jobs.
---------------------------------------------------------------------------
And as discussed previously, these revenue increases came at a time
when the number of TV stations producing local news declined.\215\
Consolidation is making broadcasters more money, in large part because
stations save money as the number of TV newsrooms producing news
declines, and the amount of duplicated news aired on other stations
increases. As Dr. Papper put it in a 2018 report, ``the total number of
stations running local news . . . keeps increasing, but it's doing so
because a smaller number of newsrooms are running news on more and more
outlets.'' \216\
---------------------------------------------------------------------------
\215\ Supra Figure 2.
\216\ See Bob Papper, ``Research: 2018 local news by the numbers,''
RTDNA (June 13, 2018).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The local TV industry's economic recovery following the Great
Recession was largely due to massive increases in revenues from
retransmission consent payments and political advertising.\217\ Figure
6 shows local TV stations' annual (inflation-adjusted) retransmission
fee revenues between 2006 and 2024. If we compare two national election
years (2008 and 2024) we see a remarkable inflation-adjusted increase
in retrans revenues of nearly 2,000 percent. While the outsized
inflation following the pandemic put an end to this meteoric rise, this
only appears to be a lull. A recent forecast by S&P Global suggests
retrans revenues (which include carriage payments made not only by
traditional cable and satellite pay-TV but also by virtual MVPD
distributors to local TV stations) will rise at a compound annual
growth rate of 2.2 percent between 2025 and 2030.\218\ Though not the
exponential growth of the late-aughts to early 2010s, this expected
growth is above the Federal Reserve's two-percent inflation target.
---------------------------------------------------------------------------
\217\ Inflation-adjusted political ad revenues for the U.S. local
TV industry increased 437 percent between 2009 and 2024. See S&P
Complete Picture.
\218\ Id.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
It's important to put these revenue data in context with viewership
data. As noted above in the discussion of Nielsen's ``Gauge'' data,
viewing habits have changed in the streaming media era. Though nowhere
near the level seen in cable, cord-cutting and streaming have decreased
broadcast viewership too. Some publicly available ratings data suggest,
however, that local TV news broadcasts are not only outperforming
linear cable TV, they are not even seeing the same size declines as
primetime network programming. Below in Figure 7, we show an excerpt of
ComScore audience data via Pew Research Center. This information
captures the average number of televisions turning into news
programming on the local network affiliates during key news day-parts,
from 2016 through 2022. While there was a 9 percent drop between 2018
and 2022 (even-numbered non-Presidential election years) in the average
local TV news audience,\219\ this drop is far less than the 31 percent
drop in average primetime viewership at the Big 4 broadcast
networks.\220\ Comparing two presidential election years (2016 vs.
2020), we observe a 12 percent drop in the average local TV news
audience compared with a 32 percent drop in the Big 4 networks' average
primetime audience.
---------------------------------------------------------------------------
\219\ This average is calculated based on the number of televisions
tuning into the morning, evening, and late-night local news dayparts.
See ``Local TV News Fact Sheet,'' Pew Rsch. Ctr. (Sept. 14, 2023).
\220\ These figures were calculated based on annual primetime
viewership data reported by Variety. See Michael Schneider, ``Most-
Watched Television Networks: Ranking 2024's Winners and Losers,''
Variety (Dec. 26, 2024).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
While any decline in viewership is not welcome to broadcasting
firms, this particular decline is not a cause for great concern, as
revenues continued to grow. This indicates the pricing power that
broadcasters retain in spite of declining audiences. And it also
indicates that broadcasters adding more news day-parts with repeated
segments is a low-cost method for them to sell more profitable ad slots
than they would have if they stuck with syndicated programming.
Furthermore, the declines in local TV news viewers in terms of the
percentage of all U.S. TV households are not that large. From the
Comscore data presented by Pew, we estimate that about 2.4 percent of
all TV households tuned into local news during 2018, compared to 2.1
percent in 2022.
E. Broadcast TV Chains' Healthy Financial Performance During the
Streaming Media Era Demonstrates that the National Cap is Not a
Barrier to Continued Financial Prosperity.
The historical financial performance of the five largest TV
broadcasting companies, as measured both by their total number of
licensed stations and total number of DMAs served, generally shows
positive results too. These five firms (all publicly traded companies)
are Nexstar, Gray, Sinclair, E.W. Scripps, and TEGNA. We do not include
the Big 4 networks' parent companies, as they are each multimedia
conglomerates that derive a substantial amount of their income from
businesses other than local TV broadcasting.
First, we present these five local TV ownership groups' operating
revenues, advertising revenues, and political advertising revenues,
comparing how these values changed from 2016 to 2024 (adjusted for
inflation). All of the firms acquired new broadcast TV stations and
entered new markets during this time (see Figures 16-21 below). There
are some external factors impacting these results, which are unrelated
to the firms' broadcast TV consolidation or the financial performance
of their core local TV business during this time. For instance,
Sinclair made a costly and ultimately unwise decision to purchase Fox's
Regional Sports Networks in August 2019, which the company later spun
off into a subsidiary that declared Chapter 11 bankruptcy in March
2023. E.W. Scripps divested all of its print assets in April 2016, and
spun-out its broadcast radio business in December 2018. It then
acquired Ion Media in January 2021. And Nexstar purchased the CW
network in a deal that closed in October 2022.
With these caveats in mind, we see that even after adjusting for
inflation, most of the five largest local broadcast TV firms saw
healthy operational revenue growth, ad revenue growth, and political ad
revenue growth (see Figure 8).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
However, as noted, all five firms added stations to their portfolio
after 2016. Accordingly, we present these revenue changes on a per-
station basis (Figure 9) and a per-market basis (Figure 10). These data
are still heavily impacted by each company's entry and exit into and
out of non-local TV businesses. Nexstar's and Gray's performances are
good indicators of the general trajectory of the local broadcast TV
business during this period. Certainly these data capture how much the
local TV political advertising business has grown since 2016. During
the 2024 election cycle, all of these largest five broadcasting chains
saw double-digit or triple-digit percentage growth in their inflation-
adjusted political advertising revenues compared to the 2016 cycle,
even on a per-station and per-market basis.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
We next examine the changes in these five ownership groups'
publicly traded stock prices since the stock market's bottom in March
2009 to the end of 2024 (see Figure 11).\221\ We also include
Entravision, which is the next largest publicly traded local broadcast
TV firm, but which has a station portfolio that contracted slightly
during this period (see Figure 21). During this time, the S&P 500
increased seven-fold (693 percent). The three largest local TV chains
all outperformed the broader market, with Nexstar's share price
increasing 21-fold. Sinclair's performance is notable given the RSN
bankruptcy misstep.
---------------------------------------------------------------------------
\221\ The values presented do not represent total yield during this
period, as dividend payments are not included in the calculation.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Because of all of the various business moves that impacted each of
these firms' revenues during the comparison period, we next examine two
key profitability metrics that enable meaningful comparisons not
greatly impacted by one-off events. First, we examine the local
broadcast firms' Return on Capital (ROC). This is a useful measure as,
over time, successful firms that return value to shareholders should be
earning a return on capital that exceeds their cost of capital.\222\
Below in Figure 12, we show the ROC for the local broadcast firms, for
each firm's entire time as a publicly-traded company. And in Figure 13
that follows, we present ROC values for six other advertising-supported
firms (Alphabet, Meta, Warner Bros. Discovery, IAC Corp., Paramount/
CBS, and Fox Corp).
---------------------------------------------------------------------------
\222\ See Aswath Damodaran, ``Return on Capital (ROC), Return on
Invested Capital (ROIC) and Return on Equity (ROE): Measurement and
Implications'' 5, Stern Sch. of Bus., (July 2007).
---------------------------------------------------------------------------
All of the local broadcast TV firms had average ROC values between
5 and 8 percent during their time as publicly traded companies. These
are reasonable returns that for most time periods would exceed each
firms' cost of capital. These returns are also comparable to, or larger
than, the ROCs observed at Warner Bros. Discovery, IAC Corp.,
Paramount/CBS, and Fox Corp. Alphabet and Meta both had ROCs that were
above all other firms in this comparison. Those two companies are also
widely viewed as some of the most financially successful firms in
history, and their businesses have attracted significant antitrust
attention.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
We next conduct a similar comparison of these companies' EBITDA
margins. EBITDA (Earnings Before Interest, Taxes, Depreciation, and
Amortization) margin is a useful profitability metric that reflects how
much revenue a firm converts into operational earnings, before
considering certain (often one-time, or irregular) expenses.\223\
---------------------------------------------------------------------------
\223\ ``What is EBITDA,'' Money (Feb. 26, 2024).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
As seen above in Figures 14 and 15, the local broadcast TV
companies all have healthy margins, which match or exceed what is
commonly considered a ``good'' EBITDA return.\224\ Most of the local
broadcasters' average historical EBITDA margins are comparable to
Alphabet's, and exceed the historical returns seen at Warner Bros.
Discovery, IAC Corp., Paramount/CBS, and Fox Corp.
---------------------------------------------------------------------------
\224\ See, e.g., Louise Downing, ``Understanding the EBITDA Margin
(With Formula),'' Am. Express (June 3, 2024) (``A good EBITDA margin
may fall between 15 percent and 25 percent, says Simon Thomas, Managing
Director of accountancy firm Ridgefield Consulting. Generally, the
higher the EBITDA margin, the greater the profitability and efficiency
of a company.'').
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
F. Local TV Broadcasters Have Many New Revenue-Generating Opportunities
to Pursue Outside of National Consolidation.
The local television broadcasting industry's financial performance,
while that industry was subject to the 39 percent national cap, was
more than adequate for these companies to return value to shareholders.
And even as they claim the need for more complete deregulation, these
same companies project a bright financial future that local
broadcasters have ahead of them, even if the Commission chooses to
follow the law and declines to eliminate or raise the national caps.
a. Broadcasters Expect to See Continued Healthy Local Advertising and
Retransmission Consent Payment Growth Thanks to Strong Viewer
Demand for Live Local Sports and News Programming.
As we recounted above, leading local broadcast company executives
were ebullient about the future of their industry when speaking to
investment analysts last summer. That came at a time when they could
not know for sure there would be an FCC willing to raise Congress's 39
percent national cap, all to allow broadcasters further power to
monopolize local DMAs. And their optimism was well-founded. Cord-
cutting appears to be slowing instead of accelerating as it did in
recent time periods, and the remaining linear TV subscribers place high
value on live sports and local news. They also are a more affluent
demographic sought out by advertisers.\225\
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\225\ See, e.g., Gliha 2024 Bank of America Comments (``The other
piece that we offer is news and the overlap between what also do[ ]
sports fans like, 90 percent of them also like news. And so it's a
great sort of combination. So if you look at the composition of the pay
TV ecosystem that was sports and news fans in 2019, it was 51 percent.
Now what is that in 2023, it's 68 percent. And the actual quantum of
sports and news subscribers has actually increased. Now if you look at
people that are not interested in sports or news . . . the content is
not really kind of our bread and butter. That's decreased from 14
percent in 2019 to 4 percent in 2023. So a large portion of that
attrition that's been happening has been the folks that are not
interested in sports or news. So we're now at this point where . . .
those people are out of the ecosystem and maybe we have a moderation.
You would look at that data and go, no, that sounds like that could be
a thesis that would make sense. And then that's supplemented by the
second thesis . . . which is the age, the demographics. So if you look,
almost 2/3 of the pay TV ecosystem now is people that are 45-plus. And
if you look 5 years ago, it was 59 percent of the population. So again,
you've seen sort of the people that are the demographic, the younger
demographic that wanted to leave have left. And we think that sort of
will be a very good positive change for our business.'').
---------------------------------------------------------------------------
And though the advertising sector is vulnerable to pull-backs in
times of economic uncertainty, broadcast executives have repeatedly
told Wall Street that their local ad business is faring far better than
the national spot market, because the local ad business tends to be
``much more stable than the national market.'' \226\ There's also no
sign of the political ad machine slowing down, with S&P Global
forecasting compound annual growth rates in this category to exceed the
Federal Reserve's two percent inflation target in the coming
decade.\227\ And we previously discussed the industry's and analysts'
expectations that they will be able to continue to count on
retransmission consent and vMVPD carriage payment growth exceeding
inflation for years to come as well.\228\
---------------------------------------------------------------------------
\226\ Id. (``We generate somewhere--68 percent to 70 percent of our
revenue on the advertising side comes from the local market and the
local market tends to be much more stable than the national market,
because [the] local market is more call to action versus the national
market, which is more branding. And so I would say, we've been seeing a
sequential improvement in the rate of decline for the last few quarters
. . . on the advertising side.''); see also Lougee Aug. 2024 Comments
(``The economy continues to proceed with a sluggish and uncertain pace,
and that's been echoed in national ad spend, which is lower than we
anticipated going into the year. That said, local advertising is faring
well considering the headwinds facing national as small and medium
local businesses show [ ] more willingness to spend.''); Justin
Nielson, ``US TV and radio station ad projections, 2025-2035,'' S&P
Glob. Market Intel. (July 1, 2025) (``S&P Projections'') (``Over the
[2025-2035] forecast, U.S. TV station national core spot ad revenue
should decline at a 5.0 percent CAGR to $3.07 billion in 2034. Local
spot ad revenue is forecast to be more resilient to digital
alternatives and increase at a 1.5 percent CAGR to $14.43 billion in
2034.'').
\227\ See S&P Projections.
\228\ See, e.g., S&P Complete Picture; Comments of Perry A. Sook,
Founder, Chairman & CEO, Nexstar Media Group, Inc., Citigroup 2024
Global TMT Conference (Sept. 4, 2024) (``Nexstar has been collecting
distribution checks from MVPDs since 2005, and we continue to post
linear growth. So the rate of change in unit rate is, has been
sufficient to outrun the decline in the universe, right? And that has
been a part of our thesis. Again, why? Because the bulk of what we're
negotiating for are broadcast stations and not cable networks.'').
---------------------------------------------------------------------------
Much of this optimism is built on the continued high levels of
viewer demand for live sports, and the local broadcasters' recent moves
to strike deals with local teams and sports leagues\229\ to air games
that were once only available on national cable sports networks and
RSNs.\230\ Nexstar in particular has made a conscious effort to shift
the balance of programming towards sports, which it expects will soon
be the majority of the content it airs on the CW network.\231\ And
former TEGNA CEO David Lougee noted last summer, ``a great deal of the
most passionate and consumed local sports content is returning to local
broadcasting.'' \232\ This trend is accelerating, and it will keep
broadcasters' bottom lines growing, even if they are not allowed to
monopolize the public airwaves even more at the national level and
within DMAs too.
---------------------------------------------------------------------------
\229\ See S&P Projections (``An additional catalyst in the local ad
revenue forecast is the influxof TV station owners' local over-the-air
sports rights deals, with sports partnerships from Gray Media Inc., The
E.W. Scripps Co., Nexstar Media Group Inc., Sinclair Inc. and TEGNA
Inc. indicating future upside in overall ratings and local ad revenue
potential in the companies' markets.''); see also Comments of Sandra
Breland McNamara, Executive VP & COO, Gray Television, Inc., Q2 2024
Investor Call (Aug. 8, 2024) (``Our strong local stations proved
themselves over the past year as they demonstrated the power of
television to a large number of local professional sports teams and
fans alike. In the last 2 weeks, as Hilton mentioned, we announced the
launch of Rock Entertainment Sports in partnership with Dan Gilbert's
sports and entertainment properties as well as Palmetto Sports &
Entertainment, a new statewide sports network in South Carolina.
Throughout this year, we have been working aggressively on a number of
other opportunities to bring more sports back to local broadcast
television stations.'').
\230\ See, e.g., Comments of Robert D. Weisbord, COO & President of
Local Media, Sinclair, Inc., Q2 2024 Investor Call (Aug. 7, 2024)
(``One of the most important assets broadcast TV has as an industry are
live sports programming assets, which drive the highest viewing
audiences of the year. As we noted last quarter, 97 of the top 100 most
watched telecasts in 2023 were on broadcast TV, with the other 3 being
college football playoff games. 96 of the top 100 most watched
telecasts were sports programming content, with the National Football
League contributing 93 of the top 100. In addition, we have several
professional franchises begin to shift more and more of their on-air
games to local broadcast stations and away from cable and regional
networks. . . . With limited exposure to near-term league renewals
across the sports landscape, we continue to expect sports programming
to be an important driver of broadcast value proposition to our viewers
for many years to come.'').
\231\ See, e.g., Sook Sept. 2024 Bank of America Comments.
\232\ See Lougee Aug. 2024 Comments (``The recently announced NBA
network deals is a notable milestone that I don't think has been
adequately reported on. Specifically, the deal with NBC signifies a
huge shift away from paid cable to broadcast for the league. As we've
talked about before, that's no accident. [A]t its core, the
implications of this trend are important. A great deal of the most
passionate and consumed local sports content is returning to local
broadcasting.'').
---------------------------------------------------------------------------
b. Continued Advances in Digital Broadcast Transmission Technology
Create New Revenue Opportunities for Broadcasters.
There will likely come a time in the distant future when broadcast
viewership declines to an inflection point--one when station owners are
no longer able to squeeze out ever-increasing retrans payments and
command higher and higher prices for local spot ads. But even if that
time comes sooner than anticipated, it does not mean that broadcasters'
financial fortunes will follow the same trajectory as other industries
that have entered secular decline (such as the local print business).
Broadcasters are already moving their operations more into the
digital realm, taking advantage of so-called ``connected TV''
advertisements and reaching consumers nationwide through FAST
platforms.\233\ Online services like LocalNow, NewsON and Zeam are just
a few of the new ways for local broadcasters to reach cord-cutters, and
generate significant revenues through digital ad targeting.\234\ Social
media companies are increasingly turning to local broadcasters to
license their content.\235\ And local TV broadcasters are even getting
into the sports podcast business.\236\
---------------------------------------------------------------------------
\233\ See, e.g., Comments of Donald Patrick LaPlatney, President,
Co-CEO & Director, Gray Media, Inc., Q2 2024 Investor Call (Aug. 8,
2024) (``Our digital businesses are also continuing to grow audience
and revenues. In the second quarter, we once again set new records for
engagement as well as double-digit growth in the number of digital
advertisers and in total digital revenue which we include in core ad
revenue. Our Connected TV and FAST Channel offerings continue to roll
out finding viewers and attracting advertisers in this important and
growing part of the ecosystem.''); Lougee Aug. 2024 Comments (``We're
especially seeing that at Premion, our industry-leading CTV sales
platform that serves the local marketplace. Our hypothesis continues to
hold true that the local market will continue to adopt CTV advertising
and Premion is well positioned to capitalize on this opportunity. Our
Premion sales footprint reaches almost 80 percent of U.S. households
and there's considerable upside cross-selling to our existing linear
customers as they increasingly adopt CTV. We're confident our recent
acquisition of Octillion, which marries cutting-edge technology with
Premion sales acumen, will further accelerate the combined
businesses.'').
\234\ See, e.g., ``News-Focused Local TV App Zeam Expands To LG,''
Radio and Television Bus. Report (July 8, 2025).
\235\ See, e.g., David Bauder, ``Nextdoor social site, looking for
a revival, pins hopes on partnership with local news providers,''
Associated Press (July 15, 2025).
\236\ See, e.g., Ripley Sept. 24, 2024 Comments (``And our podcast
business, which we don't talk a lot about, but we just launched 2 new
sports-focused podcasts. I encourage you all to check them out, one
called the Triple Option, the other called Throwbacks. This last week,
they were the #1 and #2 sports broadcasts in the country. So having a
lot of success there.'').
---------------------------------------------------------------------------
ATSC 3.0 technology is expected to provide a huge boost to
broadcasters' bottom lines as they use their spectrum to become
important players in the internet-of-things and datacasting
markets.\237\ Broadcasters are already pressuring the Commission to
force a technology transition to ATSC 3.0, which will allow them to
``fully monetize ancillary uses'' of the public airwaves.\238\
Broadcasters view this new transmission standard as a way for them to
do ``what cable did'' and move from one-way video distribution to two-
way datacasting, something that will generate billions in new revenues,
but will likely go towards higher CEO pay tied to company stock prices
rather than towards quality journalism.\239\
---------------------------------------------------------------------------
\237\ See, e.g., S&P Projections (``Digital/online should be the
fastest-growing ad category. . .on the promise of streaming initiatives
and NextGen TV, which enhances capabilities for ultra-high definition
(UHD), high dynamic range (HDR), multicasting, targeted advertising,
spectrum leasing for the Internet of things, and subscription-based
premium content.'').
\238\ See, e.g., Sook Q1 2025 Comments (``In addition to our
deregulatory agenda to level the playing field and to enable
consolidation, we are also seeking to obtain a firm transition date for
ATSC 1.0 standards to ATSC 3.0 standard, which will support and advance
our rollout of high-speed data transmission and other services to allow
us to fully monetize ancillary uses of our spectrum.'').
\239\ See, e.g., Sook Sept. 2024 Bank of America Comments (``I
think our industry, the local broadcast station industry, has the
ability to make a similar pivot to what cable did, which distributed
legacy video through those pipes and are now distributing data through
those same pipes. We have the ability to do the same thing. We still
have video on the air, our television product. But ATSC 3.0, next-gen
TV is an IP-based transmission schema, which is in sync with all the
other devices you have in your hand or your home, but it's also in sync
with the rest of the world that's adopting this technology. So it's a
more efficient use of the spectrum. So I still have the same 6
megahertz to play with, but I can do more things, because it's a more
efficient transmission schema. So we're focused on, first and foremost,
the business applications and think that the follow-on of that will be
the consumer applications, which is a better picture, higher-quality
audio, but we have to retrofit everything we do, like we did when we
transitioned from analog to digital. . . . But the upside is, we see,
in 10 years, the ability to make as much money from ancillary uses of
our spectrum as we do from distribution revenue today, and that would
be for our industry, $15 billion, and for our company, something in the
$2.5 billion range. So if that's all net to equity, you can imagine how
exciting that could be for those of us that own the stock.'').
---------------------------------------------------------------------------
V. Conclusion
The Commission does not have the authority to increase,
differentially apply, or eliminate the national cap explicitly set by
Congress. And even if the Commission did possess this authority,
lifting the cap to allow unchecked national consolidation would cause
irreparable harm to the public interest. Stifling competition and
diversity through national conglomeration would deal a fatal blow to
localism, as national owners follow their economic incentives that lead
them away from adequately serving the information needs of local
communities.
Respectfully Submitted,
S. Derek Turner
Yanni Chen
Matthew F. Wood
Free Press
______
National Action Network
February 10, 2026
Hon. Ted Cruz,
Chairman,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
Hon. Maria Cantwell,
Ranking Member,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
RE: Ownership in the Digital Age'' Defense of Statutory Authority and
Market Competition
Dear Chairman Cruz and Ranking Member Cantwell,
The National Action Network respectfully submits this testimony for
the record regarding the critical matter of broadcast media ownership.
As this Committee evaluates the regulatory framework of the digital
age, we urge a steadfast commitment to the structural protections that
preserve independent local journalism, facilitate market entry for
diverse owners, and protect consumers from anti-competitive pricing. We
state our firm opposition to any effort to weaken the thirty-nine
percent national audience reach cap or to relax local ownership limits
that prevent the monopolization of America's public airwaves.
Our position is rooted in the belief that media pluralism is an
essential requirement for the economic health and civic representation
of all Americans. Whether in urban centers or rural townships, citizens
depend on local broadcast television as their primary window into the
actions of their government. When large corporate TV station groups
consolidate, they create a centralized filter for local news, where
editorial decisions are moved from the community to national corporate
headquarters. This creates a dangerous gatekeeper bias that allows a
few corporate executives to effectively censor local viewpoints that do
not align with a national narrative.
Arguments for the deregulation of the national audience reach cap
frequently ignore the clear statutory requirements established by the
legislative branch. The thirty-nine percent cap is not a discretionary
administrative rule but a statutory mandate.
Considering recent judicial shifts away from agency deference, it
is clearer than ever that Federal agencies have no authority to re-
interpret unambiguous statutory commands. Congress was specific in its
2004 amendments; there is no gap for the Federal Communications
Commission to arbitrarily ``waive'' a Federal statute or substitute the
statute's clear intent with its own policy preferences.
Any attempt by the Commission to circumvent this limit through
regulatory waivers or the continued use of the technologically obsolete
``ultra-high frequency (UHF) discount'' accounting fiction constitutes
a direct infringement upon Congressional authority. We advocate for
strict adherence to the letter of the law to ensure that the American
national discourse is not dominated by a concentrated few.
Beyond the implications for democratic discourse, media
consolidation has triggered a significant market failure that imposes a
regressive economic burden on every American family. As large entities
acquire multiple affiliates within a single market, they gain the
leverage to demand exorbitant retransmission consent fees. These fees
have reached an average of twenty-two dollars and sixty-two cents
($22.62) per subscriber per month, translating to nearly two hundred
and seventy dollars ($270) annually per household.
These costs are passed directly to consumers, functioning as a
monopolistic extraction from working-class families and seniors on
fixed incomes. Furthermore, this consolidation has led to over twenty-
four hundred broadcast blackouts since 2010. We are actively tracking
the industry's most significant transactions and assert the presumptive
illegality of any merger deal that exceeds established antitrust
concentration thresholds. When a merger is presumptively illegal under
Department of Justice standards, the Commission's public interest
review must be at its most skeptical. Allowing a few behemoths to land-
bank broadcast signals across the country inflates acquisition costs
and makes it mathematically impossible for local entrepreneurs to
compete.
The public airwaves are a national resource that must be managed
for the benefit of all citizens. To ensure a competitive, transparent,
and accountable media landscape, the National Action Network recommends
that the Commission maintain strict statutory compliance with the
thirty-nine percent national audience reach cap and permanently
eliminate the UHF discount. We further recommend closing regulatory
loopholes such as shared service agreements that create de facto
monopolies and directing the Federal Communications Commission to
implement incentives that prioritize station ownership for new
entrants. We urge this Committee to choose a path that favors
competition over consolidation and the public interest over corporate
monopoly.
Respectfully submitted,
Ebonie Riley,
SVP,
National Action Network.
Legal Appendix: Notes and References
1 Statutory Supremacy and Agency Deference: Under the
standard established in Loper Bright Enterprises v. Raimondo (2024),
courts no longer defer to agency interpretations of ambiguous statutes.
Because 47 U.S.C. Sec. 533(f)(1)(A) contains an explicit ``shall not
permit'' command, any FCC attempt to modify the 39 percent cap without
a new Act of Congress is legally void.
2 Presumptive Illegality of Market Concentration: The
2023 DOJ/FTC Merger Guidelines and the precedent in United States v.
Philadelphia National Bank establish a structural presumption of
illegality for any merger resulting in a market share greater than 30
percent or a significant increase in the Herfindahl-Hirschman Index
(HHI). Many current ``mega-merger'' proposals in the broadcast space
exceed these thresholds and are therefore presumptively unlawful.
3 Reasoned Decision-Making in Localism: The Eighth
Circuit's decision in Zimmer Radio of Mid-Missouri v. FCC (2025)
emphasizes that while the FCC has discretion in line-drawing, it must
provide a record supported by contemporary evidence. Any expansion of
ownership caps must be justified by more than a desire for corporate
scale; it must prove a benefit to the ``localism'' mandate that
justifies the use of public spectrum.
4 The UHF Discount as ``Arbitrary and Capricious'':
Given that the digital transition has equalized the signal strength of
UHF and VHF channels, the continued application of a 50 percent ``reach
discount'' lacks a rational basis in engineering or economics. Under
the Administrative Procedure Act, the continued use of this discount to
bypass the 39 percent cap is vulnerable to being set aside as arbitrary
and capricious.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Chris Ruddy
Question 1. In your experience, including from witnessing prior
mergers, how has increased consolidation influenced diversity of
editorial voices, localism, and the availability of a broad range of
viewpoints in the media marketplace?
Answer. As the national television ownership cap has increased,
consolidation has increased along with it. At the local level,
consolidation allows major networks and station groups to reduce costs
by cutting local programming in favor of nationally syndicated content.
In these instances, both diversity of voices and localism suffer.
Sinclair Broadcasting, one of the Nation's largest station groups,
famously attempted to ``nationalize'' local news programming by
requiring nationally produced scripts to be aired across its local
stations. Major networks such as ABC, CBS, and NBC also exercise
significant editorial control over their owned-and-operated stations,
particularly with respect to local news content.
It is not surprising that major networks typically own stations in
large, predominantly ``blue'' markets. The editorial viewpoints of
these stations often both reflect and reinforce a liberal perspective.
The merger between Nexstar and Tribune gave Nexstar access to major
markets, including New York and Chicago. Nexstar-owned stations are
widely regarded as having a liberal bias. A review of FEC data from the
2024 presidential election cycle found that approximately 78 percent of
political donations made by Nexstar employees went to Democrat Kamala
Harris.
Question 2. It's been 22 years since Congress last weighed in on
the national ownership cap. Is 39 percent still the right threshold?
And is a national ownership cap the best way to safeguard viewpoint
diversity and competition--or could harmful concentration be better
managed with market-by-market or alternative protections?
Answer. I have not concluded that the current 39 percent national
ownership cap represents the final or definitive standard for ownership
reach. Because the cap was established by Congress, Congress should
carefully examine the effects of any proposed increase, including the
impact on broadcast stations, local businesses affected by television
advertising rates, and community leaders and elected officials
concerned about the preservation of local programming in the face of
national consolidation.
The national ownership cap is not a complete solution for
preserving localism and competition, but it remains an important tool.
Currently, seven or eight television companies control the overwhelming
majority of major TV broadcast licenses in the top 75 U.S. markets.
Without the cap, it is conceivable that four major networks could
ultimately control most of these major licenses.
Equally concerning is the path the FCC appears to be taking in
allowing circumvention of the ``one major station'' rule, which was
designed to prevent a single company from owning multiple top stations
in the same market. If the FCC grants Nexstar additional waivers, it
could own two to four major stations in as many as 25 markets. If the
Commission allows other station groups to follow Nexstar, this creates
the potential for one or two station groups to control a dominant share
of all major television licenses nationwide.
The most effective way to preserve competition is through diverse
ownership. Rules requiring fairness, diversity, and balance can be
easily circumvented. Structural ownership limits are far more durable
and enforceable safeguards.
______
Response to Written Question Submitted by Hon. Maria Cantwell to
Chris Ruddy
Media Consolidation and Journalism. In the last fifteen years, the
five largest station groups have added over 500 stations to their
ownership portfolios. That market concentration could grow even more,
with the Nexstar-Tegna merger and Sinclair's hostile takeover attempt
of Scripps.
Researchers from the University of Chicago looked at how increased
consolidation impacts the content and coverage of local newscasts.
They found that when Sinclair acquired a station, coverage of local
events and local politics declined by about 10 percent. A 2025 study by
the University of Delaware found that in nearly two-fifths of TV
markets, stations controlled by the same company air newscasts that are
word-for-word identical more than 50 percent of the time.
Question 1. Mr. Ruddy, how has media consolidation affected your
news organization?
Answer. I believe that national consolidation and expanded station-
group reach have contributed to a reduction in local programming. Large
television groups have financial incentives to streamline operations,
duplicate content across markets, and centralize control of local news
production at the national level.
Newsmax has not been directly harmed by local news consolidation.
However, consolidation has allowed large station groups to own more
stations in more markets, giving them substantial leverage over cable
and pay-TV operators (MVPDs). With that leverage, station groups can
demand excessive retransmission fees for their broadcast stations.
Additionally, many broadcast groups also own cable networks. These
companies can use their market power to require pay-TV distributors to
carry their affiliated cable channels--even where there is limited
consumer demand. At the same time, they can demand significant carriage
fees for their cable channels that may not be justified by ratings
performance.
As a result, station groups reduce both the available carriage
slots for independent networks and the financial resources that MVPDs
can allocate to such networks like Newsmax. For example, Nexstar's
cable network has approximately 20 percent of Newsmax's ratings, yet it
enjoys broader distribution and commands significantly higher fees.
Notably, among the top 50 cable networks, Newsmax is the only one not
owned or created by a major broadcast group or media conglomerate.
______
Response to Written Question Submitted by Hon. Tammy Baldwin to
Chris Ruddy
Question. In today's diversifying media landscape, Americans are
consuming local news and entertainment across broadcast, cable,
streaming and broadband platforms. Should Congress and the FCC evaluate
each proposed consolidation transaction individually, or is a broader,
cross-platform assessment of cumulative media concentration necessary
to protect competition and consumer access to local news coverage?
Answer. Congress and the FCC should establish clear, industry-wide
ownership parameters and limits. The FCC and the Department of Justice
should review proposed mergers to ensure compliance with those
standards. There must be a consistent and even playing field for all
participants in the broadcast industry.
In setting these standards, regulators may consider the broader
media landscape and its impact on broadcasting. However, the broadcast
industry remains uniquely powerful in its ability to aggregate large
audiences. It is also distinct in that it operates on publicly owned
spectrum licenses granted to private and nonprofit entities to serve
local communities. Local TV stations currently dominate local news.
Several studies show that most American get such news from their local
TV stations.
If Congress, the FCC, or the DOJ were to adopt an overly expansive
``broader market'' definition when evaluating potential monopolies,
they would significantly weaken their ability to enforce antitrust
protections and protect competition--not only in broadcasting but
across multiple industries.
______
Response to Written Questions Submitted by Hon. John Hickenlooper to
Chris Ruddy
Merger Review & Political Influence: Every state values the
importance of independent, diverse, and community-based media.
In every issue for which the FCC has jurisdiction-it is essential
every decision be made solely based on the facts, to benefit the public
interest, and be free of political influence. The President recently
stated:
``We need more competition against THE ENEMY, the Fake News
National TV Networks. Letting Good Deals get done like Nexstar-
Tegna will help knock out the Fake News because there will be
more competition, and at a higher and more sophisticated
level,'' the President wrote. ``Those that are opposed don't
fully understand how good the concept of this Deal is for them,
but they will in the future. GET THAT DEAL DONE! PRESIDENT
DJT.''
Question 1. While the President is free to express his views, does
the President publicly advocating for or against a merger create an
appearance of political influence?
Answer. Yes, but the President is well known for letting his views
be known on many issues. I still expect a serious process at the FCC
and DOJ relating to the merger.
Question 2. Does the term ``Fake News Media'' appear in the
Communications Act? Please answer yes or no.
Answer. I am not aware of that provision appearing in the Act.
______
Response to Written Questions Submitted by Hon. John Fetterman to
Chris Ruddy
Question 1. Mr. Ruddy, while I support the 39 percent cap, and
oppose efforts to raise it or undermine it--like mergers--it is clear
that the cap isn't sufficient to help local and diverse viewpoints'
coverage. How could Congress potentially include new platforms in the
audience calculations to address broadcast companies' concerns over
streaming services? For example, could Congress include streaming
services' viewers in calculating total viewership?
Answer. While I appreciate your support for the ownership cap, it
would be unwise to include streaming service audiences when calculating
a local market's reach or size.
Local television stations are unique because of their over-the-air
broadcast reach, must-carry protections that ensure carriage on local
MVPD systems, and the fact that major digital platforms frequently
amplify their local news reporting. I am not aware of local streaming
services that consistently produce local news and community programming
comparable to that provided by broadcast stations.
Given the importance and influence of local television
broadcasters, they should not be evaluated or regulated as though they
operate on the same footing as national streaming platforms or other
digital technologies.
Question 2. Nexstar claims that lifting the cap so the merger can
proceed will produce millions in ``efficiencies,'' which is just
lawyer-speak for closing stations and laying people off. One report
said ``eliminating staff will top the list of cuts'' and ``a lot of
good people are going to lose their jobs.'' How many journalists and
other broadcast industry workers will lose their jobs if this deal is
approved? How many of those journalists would be from diverse
viewpoints and backgrounds?
Answer. I have not conducted a full analysis of the potential
employment impact of a Nexstar-Tegna merger. However, we do know that
prior to Nexstar's 2019 merger with Tribune, the two companies together
employed approximately 16,000 people. One year after the merger, the
combined company employed roughly 12,000--a 25 percent reduction in
staff within a single year.
Given that the primary function of major station groups is local
news production, it is reasonable to assume that a substantial portion
of those reductions affected journalists and other newsroom personnel.
Based on publicly available information, Nexstar and Tegna
currently employ approximately 18,000 people combined. A hypothetical
25 percent reduction after such a merger would result in approximately
4,500 lost jobs.
______
Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to
Chris Ruddy
Retransmission Leverage and Consumer Protections
Question 1. Mr. Ruddy, you said that bigger station groups can use
their leverage in retransmission talks to raise fees, and that those
costs get passed on to consumers, including through bundling and tying
demands. I want to know what practical consumer protections could
reduce harm during retransmission disputes without Congress setting
prices.
a) What consumer harms should Congress first consider and what data
should companies be required to share so Congress can measure those
harms?
Answer. I have not conducted a detailed study of the specific
mechanisms Congress could use to protect consumers from excessive
retransmission fees. However, allowing station groups to own large
numbers of stations unquestionably increases their leverage over MVPDs,
potentially leading to distorted fee structures.
Congress could consider several options to address this issue:
1. Reevaluate or eliminate must-carry requirements for broadcasters
on MVPD systems.
2. Limit the number of stations that may be negotiated together in
retransmission consent agreements.
3. Prohibit bundling practices and require separate negotiations for
broadcast stations and affiliated cable networks
b) If Congress does not create new consumer protections, what
specific, checkable commitments would you support from large station
groups to reduce consumer harm?
Answer. I believe the FCC and Congress should establish clear
limits on the number of major television stations a single group may
own within a given market. These limits could vary based on market
size.
For example:
In the top 20 markets, a station group could be limited to
owning one major station.
In markets ranked 21-50, ownership could hypothetically be
limited to two stations.
In markets ranked above 50, ownership could potentially be
capped at three stations.
These parameters are only hypothetical to explain one approach. I
believe such tiered limits would better reflect market dynamics while
preserving competition and localism.
Emergency Communications and Consolidated Newsrooms
Question 1. I know that my constituents depend on local
broadcasters for urgent, life-saving information, and the hearing
discussed how consolidation could affect coverage. But I want to know
what specific baseline expectations should apply if ownership limits
are loosened and newsrooms are combined.
a) If one company owns multiple stations in a market and combines
news operations, what specific, checkable expectations should apply to
make sure emergency coverage stays strong?
b) If you don't support new requirements, what measurable items
should Congress require stations to report so communities can confirm
consolidation isn't weakening emergency response?
Answer. I do not believe I am fully qualified to address this
question in detail. However, consolidation tends to reduce local
newsroom staffing and local coverage, which may in turn diminish the
depth and responsiveness of television news coverage during local
emergencies.
Newsmax does not take a formal position on specific regulatory
requirements related to emergency communications.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Curtis LeGeyt
Question 1. Sec. 629 of the 2004 Consolidated Appropriation Act
gave broadcasters two years to divest and come into compliance with the
new 39 percent cap.
a. Yes or No: did the FCC enforce this requirement and did
broadcasters comply with that divestiture directive at that time?
Answer. No, the FCC did not enforce this requirement against any
particular broadcaster because all broadcast TV station groups were
below the 39 percent cap in 2004. Indeed, Congress directed the FCC to
update its rules to reflect a 39 percent cap at that time because it,
along with the UHF discount, was set to ensure that every broadcast
group was below the limit.
b. If Congress truly left the FCC with broad authority to adjust
the cap going forward, why did Congress force companies to incur the
time and expense to meet a limit that the Commission could later change
or undo?
Answer. Congress did not force any companies to incur any time or
expense to meet the 39 percent audience reach cap. When the 39 percent
cap was adopted in 2004, no broadcast TV station group exceeded that
limit. Indeed, Congress directed the FCC to update its rules to reflect
a 39 percent cap at that time because it, along with the UHF discount,
was set to ensure that every broadcast group was below the limit.
Question 2. What would be the practical impact on large broadcast
deals if a court were to rule that the FCC lacks the authority to
change the 39 percent national television cap?
Answer. If a court ruled that the FCC lacked authority to change
the 39 percent cap, and that ruling was upheld, then the FCC's 39
percent national audience reach rule would remain and continue to limit
broadcasters' ability to acquire stations that theoretically are
capable of reaching more than 39 percent of U.S. television households.
Question 3. Given the litigation risk and uncertainty around the
FCC's authority to change the 39 percent cap, why hasn't NAB focused on
getting Congress to clarify or update the statute and provide greater
legal certainty for the major deals that are now pending?
Answer. NAB agrees with the FCC's consistent position that it has
the authority to alter its National Television Ownership Cap Rule and
believes that a reviewing court would uphold FCC action to change or
repeal that rule.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Curtis LeGeyt
AI Investment in Local Journalism. AI companies are training their
models on decades of quality journalism. The New York Times and Wall
Street Journal have the resources to fight back--and they are, in
court. But what about the Yakima Herald-Republic? Or the Spokesman-
Review in Spokane? They don't have the resources for this.
Some licensing deals are getting done--OpenAI and the Associated
Press, for example. But there is far more litigation than there are
agreements, and local outlets are being left out entirely.
Journalists deserve compensation and attribution for the content
they produce. That's why Senator Blackburn and I introduced the
bipartisan COPIED Act to keep AI companies from using journalists'
content without consent.
Local news is the supply chain that AI companies are using to train
their models and improve their products. If they use it all up and
don't replenish it with new local content, there won't be any quality,
local information for their models.
Question 1. Should AI companies contribute to preserving and
rebuilding local journalism?
Answer. Yes.
Broadcasters invest billions of dollars each year in reporters,
meteorologists, producers, engineers and technology to deliver trusted
news and lifesaving information free and over the air.
At the same time, Big Tech platforms and AI developers are
ingesting that content, often without permission, attribution or
compensation. As we have seen repeatedly, these platforms act as
gatekeepers--deciding what content is seen, how it is monetized and how
much revenue is returned to the content creator.
If AI systems are trained on the backs of local journalists while
advertising dollars continue to migrate to global tech platforms that
do not reinvest in local communities, the result will be fewer
reporters and diminished local coverage. That is not a sustainable
model.
Innovation should not come at the expense of the very journalism
that fuels it. Fair compensation, meaningful consent and respect for
intellectual property are essential if we expect local journalism to
survive in the AI era.
Sports Broadcasting. College sports fans today face a nearly
impossible landscape. On a typical Saturday this past fall, fans needed
access to as many as 24 different platforms to watch every college
football game--ESPN, ESPN+, Peacock, Paramount+, Fox, the Big Ten
Network, the SEC Network, the ACC Network, and on and on.
Sports fans are now spending over $100 a month on streaming apps
just to keep up. Meanwhile, the games that air on free, over-the-air
broadcast television consistently draw the biggest audiences.
Texas-Ohio State on Fox drew 16.6 million viewers. When games move
behind paywalls, viewership drops, and fans get shut out--particularly
in rural communities and smaller markets without reliable broadband.
This is a problem for fans. But it is also a problem for colleges.
Less visibility means less fan engagement, less alumni support, and
less exposure for student athletes. That is especially true for mid-
major schools and women's and Olympic sports that are already
struggling for airtime.
My SAFE Act would require football and basketball games to be
available for free in a school's local market on at least one broadcast
outlet. It would also allow colleges to pool their media rights--the
way professional leagues can--so smaller schools aren't left behind.
Question 1. What are the benefits to colleges and to local
communities when games are available on free, over-the-air television
instead of behind a paywall?
Answer. Consumer access to sporting events through free, over-the-
air television has long been a cornerstone of the American sports fan
experience. As distribution becomes more fragmented across streaming
services and paywalls, fans face higher costs and greater confusion
just to follow their teams. Just last week, the FCC requested comment
on how the fragmentation of sports programming across myriad
subscription streaming services has frustrated consumers and affected
TV broadcasters' ability to obtain rights to popular sports programming
and to meet their public interest obligations, including their
production of local news and reporting. Public Notice, FCC's Media
Bureau Seeks Comment on Sports Broadcasting Practices and Marketplace
Developments, MB Docket No. 26-45, DA 26-188 (Feb. 25, 2026).
Local broadcasters provide the widest reach for live events,
bringing fans together to celebrate their favorite teams. Free
broadcast television requires no subscription, no broadband package and
no monthly fee. That universal accessibility ensures that families--
including those in rural communities and those without reliable high-
speed internet--are not shut out of the moments that unite their
communities.
When games remain available over the air, colleges benefit from
broader exposure, stronger alumni engagement and deeper community
connection. Student-athletes gain visibility. Communities gain shared
experiences. And sports remain accessible to the public--not just to
paying subscribers.
Preserving the ability of broadcasters to compete for sports rights
helps ensure that sports remain widely available and continue to serve
as a unifying civic experience rather than a fragmented, paywalled
product.
Question 2. How can increased access to college sports on local
broadcast stations help support women's and Olympic sports programs
that are struggling for visibility?
Answer. When sports are placed on free, over-the-air platforms,
they reach the broadest possible audience. That exposure supports
sponsorship opportunities, strengthens recruiting, and deepens
community engagement.
Expanding access to women's and Olympic sports on broadcast
television ensures these programs are not relegated to inaccessible,
paywalled digital outlets, but are easily accessible for free, over-
the-air.
______
Response to Written Questions Submitted by Hon. John Hickenlooper to
Curtis LeGeyt
Local News Production: Uplifting local voices and independent
journalism is a bipartisan priority that many of us share. However, the
FCC recently eliminated the ``Main Studio Rule'', which allows station
groups to produce broadcast segments far away from the communities they
serve.
For a mountain community in the San Luis Valley or the Western
Slope, `local news' produced in a different media market is not local
at all.
Question 1. How would lifting the national ownership cap bring more
local voices to rural Colorado when the FCC's elimination of the main
studio rule already allows broadcasters to move production hundreds of
miles away from the communities they serve?
Answer. Rural stations operate with far smaller revenue bases than
stations in major markets. In mid-sized and small markets, average
station advertising revenues are only a fraction of those in the
largest markets. At the same time, local news production is expensive--
requiring investment in reporters, meteorologists, equipment,
facilities and technology. Fewer than half of television stations now
report their local news operations as profitable.
Data show that as broadcast groups have achieved greater scale,
total local news output has actually increased. Economies of scale
allow stations to spread fixed costs, invest in newsroom staff, upgrade
equipment, and sustain coverage in communities that otherwise might not
support a standalone operation.
The elimination of the main studio rule did not eliminate
broadcasters' public interest obligations. Stations remain licensed by
the FCC, subject to license renewal review, public file requirements,
political broadcasting requirements, emergency alert compliance and
accountability to their communities. In order to continue to meet those
obligations, broadcasters must be allowed to compete effectively so
they can continue investing in local voices, local news and emergency
service in the communities they are licensed to serve.
Question 2. Does further consolidation not risk turning these local
stations into empty `ghost' newsrooms?
Answer. Local news production is expensive. From 2003 to 2018, news
costs, on average, accounted for about a quarter of local television
stations' total expenses, while news costs often have accounted for
around one-third of many major network affiliated stations' total
expenses. Yet fewer than half of TV stations now report their news
operations as profitable.
Importantly, the data show that scale has not reduced local news
output--it has increased it. Between 2011 and 2023, the number of local
news telecasts actually increased by 41.7 percent and total hours of
local news increased by nearly 50 percent. Economies of scale have
enabled reinvestment in news production, particularly in mid-sized and
smaller markets.
The evidence does not support the notion that scale automatically
produces ``ghost'' newsrooms. What the data show is that allowing
stations to achieve sufficient scale can help sustain--and even
expand--local news output in the face of significant marketplace
disruption.
Colorado Impact: While we all agree our broadcasters serve an
important role in our communities, the best interests of Coloradans are
top of mind.
In the Denver market, a Nexstar and Tegna merger could combine Fox
31 and 9 News stations. This creates a concentrated duopoly with less
competition.
Question 3. Do you believe Coloradans have the necessary assurances
there won't be newsroom layoffs or independent voices drowned out in
Colorado if the FCC allows for additional stations to consolidate? Why
or why not?
Answer. First, I want to be clear that NAB is not advocating for
the approval of any particular merger, including the pending
transaction to which you are referring. The FCC's public interest
standard requires case-by-case review of proposed transactions to
ensure service to local communities is strengthened.
However, the current antiquated broadcast ownership restrictions do
not even allow these case-by-case evaluations to take place, stopping
many potential transactions at the outset, regardless of their merits.
What we know from today's marketplace is that maintaining outdated
restrictions does not guarantee newsroom stability. In fact, it
constrains broadcasters' ability to compete and generate the revenue
needed to sustain reporters, meteorologists and investigative
journalists.
The focus of any evaluation of a transaction should remain on
whether that transaction enhances investment in local services,
including news and emergency reporting, and preserves free access to
trusted programming. Artificial caps that weaken broadcasters'
competitive position against global tech companies and streaming
platforms do not serve those goals.
Merger Review & Political Influence: Every state values the
importance of independent, diverse, and community-based media.
In every issue for which the FCC has jurisdiction-it is essential
every decision be made solely based on the facts, to benefit the public
interest, and be free of political influence. The President recently
stated:
``We need more competition against THE ENEMY, the Fake News
National TV Networks. Letting Good Deals get done like Nexstar-
Tegna will help knock out the Fake News because there will be
more competition, and at a higher and more sophisticated
level,'' the President wrote. ``Those that are opposed don't
fully understand how good the concept of this Deal is for them,
but they will in the future. GET THAT DEAL DONE! PRESIDENT
DJT.''
Question 4. While the President is free to express his views, does
the President publicly advocating for or against a merger create an
appearance of political influence?
Answer. The Communications Act entrusts the FCC with the
responsibility to evaluate transactions under the public interest
standard. Confidence in the regulatory process depends on decisions
grounded in the evidentiary record and the law. It is essential that
merger review remains independent, fact-based, and consistent with
statutory obligations.
Question 5. Does the term ``Fake News Media'' appear in the
Communications Act? Please answer yes or no.
Answer. No.
______
Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to
Curtis LeGeyt
Emergency Communications and Consolidated Newsrooms
Question 1. I know that my constituents depend on local
broadcasters for urgent, life-saving information, and the hearing
discussed how consolidation could affect coverage. But I want to know
what specific baseline expectations should apply if ownership limits
are loosened and newsrooms are combined.
a. If one company owns multiple stations in a market and combines
news operations, what specific, checkable expectations should apply to
make sure emergency coverage stays strong?
b. If you don't support new requirements, what measurable items
should Congress require stations to report so communities can confirm
consolidation isn't weakening emergency response?
Answer. As you note, local broadcasters play a unique and critical
role in keeping communities informed, particularly when faced with
emergencies and natural disasters. When wildfires spread, hurricanes
make landfall, or a child goes missing, viewers turn to their local
stations--free and without a paywall--for verified, lifesaving
information.
Local broadcasters already have unique public interest
obligations--and extensive reporting requirements at the FCC--that no
streaming platform or Big Tech company bears.
Specifically, stations must already:
Maintain and certify operational compliance with the
Emergency Alert System (EAS), including participation in
national and state tests and filing required reports in the
FCC's ETRS system;
Maintain quarterly Issues/Programs Lists in their online
public inspection files demonstrating how they serve community
needs;
Comply with political broadcasting and reporting
requirements under the Communications Act of 1934 and FCC
rules;
Request renewal of their licenses every eight years by
filing license renewal applications certifying compliance with
FCC rules and public interest obligations, which local viewers
may oppose if they believe their stations have failed to serve
their local communities;
Maintain technical operations consistent with FCC
authorization to ensure reliable transmission capability during
emergencies.
The most effective safeguard for emergency coverage is ensuring
that local stations have the economic capacity to sustain these
operations in a marketplace increasingly dominated by global platforms
that bear none of these obligations.
Strong emergency service depends on strong local stations. Policies
that allow broadcasters to compete effectively are essential to
preserving that lifeline.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Thomas Johnson
Question 1. Sec. 629 of the 2004 Consolidated Appropriation Act
gave broadcasters two years to divest and come into compliance with a
new 39 percent cap.
a. Did broadcasters comply with that divestiture directive at that
time?
Answer. I am not personally aware of any instances of a broadcaster
having an audience reach above 39 percent at the time the 2004 CAA was
passed. There was public reporting at the time that Congress selected
39 percent to accommodate then-existing ownership levels at certain
large stations groups. See, e.g., Frank Ahrens, Compromise Puts TV
Ownership Cap at 39 percent, The Washington Post (Nov. 25, 2003),
https://tinyurl.com/4vrz27hs. But I do not have independent knowledge
on whether that was the case.
b. If Congress left the FCC with broad authority to adjust the cap
going forward, why did Congress force companies to incur the time and
expense to meet a limit the Commission would later change or undo?
Answer. As noted above, I am not aware of evidence supporting the
conclusion that existing station groups had to incur time and expense
to come into compliance with the 39 percent ownership cap in 2004.
In my view, the divestiture provision allows any parties that may
exceed the cap through acquisition of additional stations (whether at
the time of enactment or in the future) a two-year grace period to come
into compliance with the cap, without requiring immediate action at the
time of acquisition or impeding the closing of a pending transaction.
That grace period is explicitly tied to the ``39 percent national
audience reach limitation in paragraph (1)(B).'' As I testified at the
hearing, and as the courts have determined, by directing the FCC in
paragraph (1)(B) to ``modify its rules,'' Congress required a one-time
change to the Commission's rules, and did not enact an unchangeable
mandate.
Should the Commission change its rules to eliminate any cap on
national audience reach, the divestiture provision would cease to have
continued operation. But that is nothing unusual. Congress routinely
adopts provisions--such as sunset dates, judicial review channeling
provisions, or directions to conduct rulemakings or submit reports--
that have time-limited application. And the FCC would be free in any
proceeding to modify any of its ownership rules to adopt similar grace
periods, as appropriate, as a matter of its general rulemaking
authority.
Congress, likewise, could choose to modify or eliminate any of the
FCC's ownership rules as it deems appropriate.
Question 2. It's been more than two decades since Congress directed
the FCC to set the national TV ownership cap at 39 percent. Although
the FCC has adjusted inputs such as the ``UHF discount'' and the way
the ``national audience reach'' is calculated, the 39 percent numerical
cap has never changed. Why has the FCC never changed it?
Answer. The FCC has changed aspects of the cap, including by
removing and then reinstating the UHF discount in 2016 and 2017,
respectively. The 2016 removal of the UHF discount had the practical
effect of significantly tightening the cap. I do not have personal
knowledge on why the FCC did not change the numerical cap between 2004
and the present.
Based on my own experience as FCC General Counsel, and as evidenced
by this hearing, I can say that the national television ownership cap
is a highly-contested public policy issue. Thus, the rulemaking dockets
the FCC has opened in this area have invited extensive public
participation with divergent views on issues including whether to keep
the cap at the current level, eliminate the cap entirely, or set the
cap at a different level; various proposals on the appropriate cap
level; whether to keep or eliminate the discount for UHF stations;
whether to adopt a separate discount for VHF stations; and other
issues. The number and complexity of competing proposals and the
frequency with which FCC leadership rotates with changes in
administration may have contributed to the numerical cap remaining at
39 percent.
As I testified, I hope that current FCC leadership will finally
repeal the national television audience reach cap and the remainder of
the FCC's outdated, prescriptive ownership rules.
______
Response to Written Questions Submitted by Hon. John Hickenlooper to
Thomas Johnson
Ownership Cap: Your testimony before the committee argues the FCC
has the authority to issue a waiver around a broadcast ownership cap
established by Congress in law.
While there is no doubt today's media sector continues to rapidly
evolve, it is imperative that Congress works in a bipartisan manner to
address new challenges head-on.
Question 1. If the FCC were to simply ``waive'' a broadcast rule
without input from Congress, what is to stop a station group from
eventually controlling the primary news signal for every household in
the Mountain West?
Answer. There would be several protections against this degree of
media consolidation. First, the FCC's waiver authority is transaction-
specific and requires a showing that good cause supports grant of a
waiver. If the FCC were to waive a rule in the context of a specific
transaction, that is no guarantee it would grant such a waiver in
another context. The effect on the competitive marketplace is a fact-
specific inquiry the FCC could consider in determining whether good
cause for a waiver exists.
Second, as I testified at the hearing, the FCC's public interest
standard includes competition as a core consideration. As a competition
agency, the FCC considers the impact of approving a transaction
involving license transfers on the choices available to consumers in a
given market.
Third, as I also testified, FCC licensees, including broadcasters,
may be unique in having to clear two levels of competition review at
the Federal government--before the FCC and the Department of Justice.
Even without any FCC review of a transaction, the Department of Justice
would still conduct its normal competition review to ensure that any
media transaction complies with the antitrust laws.
Fourth, and finally, government oversight is not the only factor
that influences media consolidation. Market forces and consumer
preferences also play a prominent role. Indeed, as this hearing showed,
competition in the media ecosystem is so fierce and fast developing--
including a dizzying array of cable, satellite, and streaming and other
online options--that broadcasters face existential headwinds. It is
precisely because consumers in areas outside large coastal cities (like
the Mountain West) have so many global and national media behemoths
vying for their attention that Congress and the FCC should remove
unnecessary barriers on local broadcasters to give them a chance to
compete and effectively serve their local communities.
Merger Review & Political Influence: Every state values the
importance of independent, diverse, and community-based media.
In every issue for which the FCC has jurisdiction-it is essential
every decision be made solely based on the facts, to benefit the public
interest, and be free of political influence. The President recently
stated:
``We need more competition against THE ENEMY, the Fake News
National TV Networks. Letting Good Deals get done like
Nexstar--Tegna will help knock out the Fake News because there
will be more competition, and at a higher and more
sophisticated level,'' the president wrote. ``Those that are
opposed don't fully understand how good the concept of this
Deal is for them, but they will in the future. GET THAT DEAL
DONE! PRESIDENT DJT.''
Question 2. While the President is free to express his views, does
the President publicly advocating for or against a merger create an
appearance of political influence?
Answer. I have no opinion on how others may perceive the President
advocating for or against a merger.
As a legal matter, however, the appearance or reality of political
influence is not inherently impermissible under the Communications Act.
Congress contemplated that democratically accountable, political actors
would exercise some degree of oversight over the Commission's
operations and decisionmaking. Congress, for example, sets the limits
on the Commission's authority and supervises the Commission's
activities through appropriations and oversight--including the critical
work of this Committee. Article II of the U.S. Constitution, meanwhile,
vests the President with the Executive Power of the United States, and
the Communications Act provides the President with the authority to
designate a Chair of the FCC and to select Commissioners, by and with
the advice and consent of the Senate. Indeed, there are prominent
recent past examples of Presidential involvement in Commission
decisionmaking.\1\
---------------------------------------------------------------------------
\1\ Ryan Knutson, FCC Chairman Says Obama's Net Neutrality
Statement Influenced Rule, Wall. St. J. (Mar. 17, 2015), https://
tinyurl.com/3ahad58k; John Eggerton, Biden Executive Order Has
Plenty of Advice for FCC, Multichannel News (July 9, 2021), https://
tinyurl.com/9zmzfrub.
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As I testified at the hearing, the Communications Act's ``public
interest'' standard has historically involved the Commission making
public policy determinations about how best to promote competition,
localism, and viewpoint diversity, given the facts of a specific case.
The best way to promote these policies is heavily contested, as this
hearing demonstrates, and benefits from some degree of accountability
to the people's elected representatives in the political branches.
Question 3. Does the term ``Fake News Media'' appear in the
Communications Act? Please answer yes or no.
Answer. No.
______
Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to
Thomas Johnson
Question 1. Mr. Johnson, you warned that AI could take even more
money out of local news by using local reporting to answer questions
without sending readers to the original outlet. You also raised
solutions like compensation and community-benefit approaches, including
contributions tied to data centers and a mitigation fee. But I want to
know specific details on how to design these ideas so smaller local
outlets benefit too, not just the biggest companies.
a. What concrete design choices would make sure AI compensation
reaches small and mid-sized local outlets, and how would you stop the
biggest publishers from taking most of the money?
b. If Congress doesn't pursue mandatory compensation, what
specific, checkable alternative should it require from AI companies and
platforms to support local reporting?
Answer. Respectfully, I believe that Mr. Waldman testified on these
issues. I do not have an opinion on them.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Steve Waldman
Question 1. What have you seen, including from prior mergers, about
how increased consolidation has influenced editorial diversity,
localism, and the availability of a broad range of Viewpoints?
Answer. Prior mergers offer a clear warning about what increased
consolidation can do to editorial diversity, localism, and the range of
viewpoints available to communities.
In both newspapers and local television, consolidation and
nationalization have in many cases aggravated the local news crisis,
leading to fewer reporters in communities and less, or more
superficial, coverage of school boards, economic development,
elections, social problems, and civic life.\1\
---------------------------------------------------------------------------
\1\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''
(PDF), https://www.freepress
.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed Feb.
6, 2026).
---------------------------------------------------------------------------
In the broadcast television space, when a company owns multiple
stations in the same market, the evidence shows that consolidation of
newsroom operations is already occurring at significant scale.
Duplication is already occurring in exactly two-fifths of U.S.
television markets, and the average duplication rate among those
markets is 65 percent.\2\ As a result, many communities are not
receiving local news but the mirage of it--the appearance of diverse
voices delivering less and less original reporting. And that is before
any further consolidation has occurred. A recent DirecTV filing with
the FCC examining all Big Four duopolies and triopolies found that 98.2
percent share news directors and 97.3 percent share news talent,
meaning that in nearly every case where one company owns multiple
stations in a market, those stations are not maintaining separate
reporting staffs.\3\
---------------------------------------------------------------------------
\2\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:
Duplicating Local TV Content,'' Biden School of Public Policy & Public
Administration, University of Delaware, August 2025. https://
udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-
9b317fdbe02b/content
\3\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves
Markets With Less Local News, According to New Study That DirecTV Has
Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/
tv/news/directv-fcc-filing-local-news-station-consolidation-123667
1877/.
---------------------------------------------------------------------------
As for coverage levels, studies have shown that Sinclair
acquisitions were associated with a roughly 10 percent decline in local
and political coverage. On the other hand, while Nexstar acquisitions
were associated with an approximately 8 percent increase (while Gray
acquisitions showed minimal change).
In other words, while consolidation occasionally does help local
news, it often doesn't, and indeed sometimes undermines it. For that
reason, we favor either keeping the caps or loosening them but with
requirements that the merged entities increase the number of local
journalists in a community.\4\
---------------------------------------------------------------------------
\4\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua
McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://
papers.ssrn.com/sol3/papers.cfm?abstract_id=495
1078.
---------------------------------------------------------------------------
The evidence is even more worrisome when it comes to newspapers. As
local papers were bought up by hedge funds or private equity firms,
they cut reporters across the country.\5\ Mega-mergers financed with
massive debt compounded the damage, as news organizations used profits
to service loans rather than invest in digital transformation or local
coverage. We have even seen the rise of local newspapers with no local
reporters at all. In a filing to the Department of Justice and Federal
Trade Commission we outlined the evidence there:
---------------------------------------------------------------------------
\5\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local
Journalism under Private Equity Ownership,'' NBER Working Paper 29743
(2022), https://doi.org/10.3386/w29743
; Steven Waldman, ``The local news crisis illustrates the
inadequacy of the current antitrust approach,'' Rebuild Local News, May
8, 2024, https://www.rebuildlocalnews.org/the-local-news-crisis-
illustrates-the-inadequacy-of-the-current-antitrust-approach/
Media consolidation was not the primary cause of the collapse of
local news--but in many cases it has seriously intensified the harm,
promises to make the situation worse in coming years, and has limited
the ability of communities to address the crisis.
The crisis in local news stems primarily from the Internet
undercutting the traditional business models. Specifically, many
advertisers reduced or eliminated their spending in local newspapers
and instead placed ads on websites, search engines or social platforms.
The combination of factors led to a dramatic drop in revenue in the
newspaper industry--a staggering 81 percent decline in ad revenue from
2000 to 2020.
The nature of newspaper consolidation has changed in the past few
decades as acquisitions by private equity and hedge funds have
increased, and made matters worse. From 2004 to 2016, more than 300
newspapers had been sold or traded. In 2004, the 25 largest chains
owned less than one third of the daily newspapers. By 2020, they owned
70 percent. In the past 15 years, as a result of serial acquisitions,
the number of newspaper owners has dropped from about 4,000 to 2,400.
``Massive consolidation in the newspaper industry has shifted editorial
and business decisions to a few large corporations without strong ties
to the communities where their papers are located,'' concluded the
major study of news deserts completed by Professor Penny Muse
Abernathy, when she was at the University of North Carolina school of
communications.
Many of these transactions involve private equity firms or hedge
funds. ``At their peak in 2016, six of the 10 largest newspaper chains
were owned and operated by private equity firms or other investment
entities,'' the same study found. Since then some of the iconic
newspapers--the Chicago Tribune, the Baltimore Sun, the New York Daily
News and dozens of others--have also been acquired by private equity or
hedge funds. The study also found that more than 1,000 newspapers are
now controlled by ``hybrid'' companies that are both publicly traded
and yet controlled by financial institutions.
These mergers have likely accelerated and intensified harm to
communities. A recent study by Michael Ewens, Arpit Gupta, and Sabrina
T. Howell found that newspapers acquired by private equity firms were
more likely to cut the number of reporters and the amount of local
coverage. ``The composition of news shifts away from local governance,
the number of reporters and editors falls, and participation in local
elections declines,'' they concluded.
The number of reporters fell from 6.2 to 3.8 at newspapers that
were acquired by a private equity firm. By comparison, for other types
of newspapers, the number of reporters fell far more modestly, from 7.3
to 6.1. The number of editors at these papers fell from 9.1 to 6.1,
compared to a drop of just 5.7 to 5.4 at other papers.
The number of articles about local government at newspapers
acquired by private equity firms fell from 5,700 to 2,500 after an
acquisition, ``a significant negative effect.'' For those newspapers
not owned by private equity firms, the drop was smaller, from 5,200 to
4,400. They even found that these changes in coverage led to lower
voting turnout and a greater percentage of residents having no opinion
about their member of Congress.
By contrast, the study showed that family-owned newspapers were
more likely to maintain higher levels of local news coverage and
reporting staff. An increasing number of local news organizations, both
nonprofit and commercial, have been able to achieve financial
sustainability when they don't have the burden of debt payments or high
EBITDA goals required by publicly-traded companies.
The Ewens, Gupta and Howell study did not consider Alden Global
Capital to be a private equity firm. Alden has cut reporting staff more
than other companies. So their inclusion could make the numbers even
more alarming. Abernathy in 2018 found that newspapers owned by Alden
cut staff at roughly twice the rate of the national average.
Another study by Benjamin LeBrun, Kaitlyn Todd and Andrew Piper
looked at 130,000 articles at 31 corporate-owned local newspapers. They
concluded that ``corporate acquisition leads to a significant reduction
in the amount of local news disseminated by affected publications.''
In some cases, a central problem is that the mergers were financed
with large amounts of debt at a time when newspaper revenues were
declining. For instance, the 2019 acquisition of Gannett by Gatehouse,
a smaller company, was financed through $1.8 billion in debt financing.
The firm now owns 479 newspapers. Since 2019, the company has shed
almost half of its staff. During much of that period it was managed by
the private equity firm Fortress, and much of its debt is held by the
private equity firm Apollo Capital Management. Even if managers are
well intentioned, their options are limited. In its 2021 annual 10k
filing with the Securities and Exchange Commission, Gannett declared
that one of its risk factors was that ``we are required to dedicate a
substantial portion of cash flow from operations to fund interest
payments.''
Of course, these are general tendencies. There are exceptions and
nuances. For instance, there may be some instances in which a local
newspaper is on the edge of closing and an acquisition by a private
equity firm is, in the short term, the only way to keep the newsroom
open. The Ewens-Gupta-Howell study found that while newspapers bought
by private equity firms were more likely to cut the number of local
stories, they were less likely to shut down the newspaper. The
McClatchy newspaper chain, now owned by the private equity firm Chatham
Capital, has stated that it is maintaining or growing staffing levels.
It could well be that the problem is not bigness per se but mergers
involving particular types of entities (with particular ROI needs) and/
or involving particular types of financing, especially in an
economically declining sector.
In some cases, the loss of newspaper reporters might be offset by
the growth of robust nonprofit local news organizations. Although this
scenario is currently rare, they could become more common over time,
and should be considered as part of an analysis of whether a merger
would harm a community.
The acquisition of a newspaper by a chain controlled by a financial
institution does not make it more likely that a newspaper will have
local monopoly status, but it does make it more likely that that
newspaper will use its monopoly status in a way that harms the
community and reduces the availability of certain types of
information--local reporting.
Beyond civic and social impacts, communities suffer economic harm.
Research suggests that consolidation-driven reductions in local
business coverage cause measurable declines in local information
search, institutional portfolio investment, and retail trading.
Information asymmetries due to the loss of local news leave corporate
borrowers facing higher costs and stricter lending conditions and
ripple effects go beyond even the community itself spreading through
supply chains to businesses with no direct connection to a closure.\6\
Communities with less local news had higher financing costs and taxes,
more government corruption, secrecy and more government waste.\7\ At
the individual level, residents in news-depleted communities face
higher loan denial rates, elevated mortgage costs, and greater exposure
to discriminatory pricing as well as higher levels of financial advisor
misconduct suggesting that the erosion of local oversight leaves
ordinary borrowers with less protection and less recourse.\8\
---------------------------------------------------------------------------
\6\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and
suppliers' investment efficiency. European Journal of Finance, 31(12),
1529-1550. https://doi.org/10.1080/1351847X.2025.
2513500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank pages,
heavy pockets: The impact of local U.S. daily newspaper closures on
corporate cash holdings. SSRN Working Paper 4690974. https://ssrn.com/
abstract=4690974; Kang, J., & Nam, Y. (2025). Do local newspapers
matter to institutional investors? Contemporary Accounting Research.
https://doi.org/10.1111/1911-3846.13049; Allee, K. D., Cating, R., &
Rawson, C. (2023/2025). No News is Bad News: Local News Intensity and
Firms' Information Environments. Review of Accounting Studies, 30(1),
1-32. URL: https://link.springer.com/article/10.1007/s11142-023-09811-
7; Ma, Z., Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper
Closures and Bank Loan Contracts. Journal of Contemporary Accounting
Research. https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe,
J., & Wulff, A. (2025). Local Newspaper Closures and their Effect on
Lending Discrimination. TRR 266 Accounting for Transparency Working
Paper Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,
T. (2025). Lending in the Dark: Local Newspaper Closures and
Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/
Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-Zhong
Zhang. ``When Spotlights Fade: Local Newspaper Closures and Financial
Advisor Misconduct.'' Journal of Financial and Quantitative Analysis,
2025. https://doi.org/10.1017/S0022109025101749; Chen, Jie, Yang Gao,
and Cheng Zeng. ``Inequality Grows in Silence: The Impact of Newspaper
Closures on CEO-Worker Pay Disparity.'' SSRN, January 2025. https://
ssrn.com/abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media
Conglomeration, Local News, and Capital Market Consequences.''
Management Science, November 12, 2024. https://doi.org/10.1287/
mnsc.2023.02247.
\7\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in
Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal
of Financial Economics 135, no. 2 (February 2020): 445-467, https://
doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun
Oh. ``Media Conglomeration, Local News, and Capital Market
Consequences.'' Management Science, November 12, 2024. https://doi.org/
10.1287/mnsc.2023.02247.Matherly, T., & Greenwood, B. N. (2024). No
news is bad news: The internet, corruption, and the decline of the
Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/
MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital
Cities, Accountability, and Corruption: Evidence from U.S. States,''
American Economic Review 104, no. 8 (August 2014): 2456-81, https://
doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier, D.
(2025). Dark deserts: Newspaper decline and its relation to government
non-compliance with public records laws. News Research Journal, 46(3),
427-445. https://doi.org/10.1177/30497841251357976.
\8\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is
Bad News: Local News Intensity and Firms' Information Environments.
Review of Accounting Studies, 30(1), 1-32. URL: https://
link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z., Stice,
D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and Bank
Loan Contracts. Journal of Contemporary Accounting Research. https://
doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., & Wulff, A.
(2025). Local Newspaper Closures and their Effect on Lending
Discrimination. TRR 266 Accounting for Transparency Working Paper
Series No. 195. SSRN. https://ssrn.com/abstract
=5319025; Huynh, T. (2025). Lending in the Dark: Local Newspaper
Closures and Discrimination in Mortgage Lending. https://oweb.b67.uni-
jena.de/Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-
Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and
Financial Advisor Misconduct.'' Journal of Financial and Quantitative
Analysis, 2025. https://doi.org/10.1017/S0022109025101749.
Question 2. It's been 22 years since Congress last weighed in on
the national ownership cap. Is 39 percent still the right threshold?
And is a national ownership cap the best way to safeguard viewpoint
diversity and competition--or could harmful concentration be better
managed with market-by-market or alternative protections?
Answer. Our coalition has not taken a position on the specific
threshold or on the FCC's statutory authority to modify it. But we do
believe that localism--and specifically the provision of local
reporting and coverage--should be the primary lens through which this
policy and individual mergers should be viewed. We are in the midst of
a dramatic collapse of local news. We've seen a 75 percent drop in the
number of local reporters since 2002. Ill conceived ownership rules
could make the problem worse. We should not just lift the caps and hope
for the best.
Policies could be considered that would put teeth in these
concepts:
For instance, one could keep the 39 percent cap and provide
individualized exemptions if the specific merger met certain
conditions. The conditions could include a net increase in the total
number of local reporters and producers at the combined entities.
More creatively, the FCC could consider allowing stations to ``buy
out'' of that requirement by making a comparable donation to a
community foundation to establish perpetual endowments for the purpose
of adding a comparable number of local reporters within the community
even if it is not at the TV station. If a broadcaster decides that in
the long run, their financial viability requires them to cut the size
of their newsroom by 10 people, then they would write a check to allow
for the permanent hiring of 10 local reporters deployed elsewhere. The
stations get more flexibility to scale, while the community maintains
or grows its local coverage.
Another idea to consider would be requiring that TV set
manufacturers carry local news being provided by local broadcasters on
the main screen. This is akin to the ``AM Radio for Every Vehicle
Act.'' It gives meaning to the repeated desire of Congress to encourage
localism, including the provision of community news.
We do have sympathy for the broadcasters' argument that they work
under regulatory constraints that streamers and other Big Tech
companies do not. One way of dealing with that would be to assess a
mitigation fee against Big Tech companies and use the money for a
politically-neutral, First-Amendment-friendly effort to support local
news. For instance, it could help pay for legislation like that
currently being pushed by Republican lawmakers in New Hampshire to give
tax relief to small businesses that advertise in local news. Or one
could consider legislation like that proposed by Republican Rep.
Claudia Tenney and Sen. Cantwell, an employment credit for local news
outlets that retain or hire local reporters. This can be available for
local TV stations too, providing incentives and resources for them to
invest more in local coverage, as many of the great local stations
would like to do.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Steve Waldman
Media Consolidation and Journalism. In the last fifteen years, the
five largest station groups have added over 500 stations to their
ownership portfolios. That market concentration could grow even more,
with the Nexstar-Tegna merger and Sinclair's hostile takeover attempt
of Scripps.
Researchers from the University of Chicago looked at how increased
consolidation impacts the content and coverage of local newscasts.
They found that when Sinclair acquired a station, coverage of local
events and local politics declined by about 10 percent. A 2025 study by
the University of Delaware found that in nearly two-fifths of TV
markets, stations controlled by the same company air newscasts that are
word-for-word identical more than 50 percent of the time.
Question 1. Mr. Waldman, do you expect further consolidation to
lead to further reductions in local newsroom jobs and locally-produced
content?
Answer. With both newspapers and local television, consolidation
and nationalization have in many cases aggravated the local news
crisis, leading to fewer reporters in communities and less, or more
superficial, coverage of school boards, economic development,
elections, social problems, and civic life.\1\
---------------------------------------------------------------------------
\1\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''
(PDF), https://www.free
press.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed
Feb. 6, 2026).
---------------------------------------------------------------------------
In the broadcast television space, when a company owns multiple
stations in the same market, the evidence shows that consolidation of
newsroom operations is already occurring. Duplication is already
occurring in two-fifths of U.S. television markets, and the average
duplication rate among those markets is 65 percent.\2\ As a result,
many communities are not receiving local news but the mirage of it, the
appearance of diverse voices along with less and less original
reporting. A recent DirecTV filing with the FCC examining all Big Four
duopolies and triopolies found that 98.2 percent share news directors
and 97.3 percent share news talent, meaning that in nearly every case
where one company owns multiple stations in a market, those stations
are not maintaining separate reporting staffs.\3\
---------------------------------------------------------------------------
\2\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:
Duplicating Local TV Content,'' Biden School of Public Policy & Public
Administration, University of Delaware, August 2025. https://
udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-
9b317fdbe02b/content
\3\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves
Markets With Less Local News, According to New Study That DirecTV Has
Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/
tv/news/directv-fcc-filing-local-news-station-consolidation-1236671
877/.
---------------------------------------------------------------------------
As for whether consolidation leads to less local coverage, studies
are mixed. Sinclair acquisitions were associated with a roughly 10
percent decline in local and political coverage. On the other hand,
Nexstar acquisitions were associated with an approximately 8 percent
increase (while, and Gray acquisitions showed minimal change.)
Our takeaway: while consolidation occasionally does help local
news, it often doesn't. For that reason, we favor either keeping the
caps or loosening them but with requirements that the merged entities
increase the number of local journalists in a community.\4\
---------------------------------------------------------------------------
\4\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua
McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://
papers.ssrn.com/sol3/papers.cfm?abstract_id=495
1078.
---------------------------------------------------------------------------
The evidence is even more worrisome when it comes to newspapers. As
local papers were bought up by hedge funds or private equity firms,
they cut reporters across the country.\5\ Mega-mergers financed with
massive debt compounded the damage, as news organizations used profits
to service loans rather than invest in digital transformation or local
coverage. We have even seen the rise of local newspapers with no local
reporters at all.
---------------------------------------------------------------------------
\5\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local
Journalism under Private Equity Ownership,'' NBER Working Paper 29743
(2022), https://doi.org/10.3386/w29743; Steven Waldman, ``The local
news crisis illustrates the inadequacy of the current antitrust
approach,'' Rebuild Local News, May 8, 2024, https://
www.rebuildlocalnews.org/the-local-news-crisis-illustrates-the-
inadequacy-of-the-current-antitrust-approach/
---------------------------------------------------------------------------
In a filing to the Department of Justice and Federal Trade
Commission, we outlined the evidence:
Media consolidation was not the primary cause of the collapse of
local news--but in many cases it has seriously intensified the harm,
promises to make the situation worse in coming years, and has limited
the ability of communities to address the crisis.
The crisis in local news stems primarily from the Internet
undercutting the traditional business models. Specifically, many
advertisers reduced or eliminated their spending in local newspapers
and instead placed ads on websites, search engines or social platforms.
The combination of factors led to a dramatic drop in revenue in the
newspaper industry--a staggering 81 percent decline in ad revenue from
2000 to 2020.
The nature of newspaper consolidation has changed in the past few
decades as acquisitions by private equity and hedge funds have
increased, and made matters worse. From 2004 to 2016, more than 300
newspapers had been sold or traded. In 2004, the 25 largest chains
owned less than one third of the daily newspapers. By 2020, they owned
70 percent. In the past 15 years, as a result of serial acquisitions,
the number of newspaper owners has dropped from about 4,000 to 2,400.
``Massive consolidation in the newspaper industry has shifted editorial
and business decisions to a few large corporations without strong ties
to the communities where their papers are located,'' concluded the
major study of news deserts completed by Professor Penny Muse
Abernathy, when she was at the University of North Carolina school of
communications.
Many of these transactions involve private equity firms or hedge
funds. ``At their peak in 2016, six of the 10 largest newspaper chains
were owned and operated by private equity firms or other investment
entities,'' the same study found. Since then some of the iconic
newspapers--the Chicago Tribune, the Baltimore Sun, the New York Daily
News and dozens of others--have also been acquired by private equity or
hedge funds. The study also found that more than 1,000 newspapers are
now controlled by ``hybrid'' companies that are both publicly traded
and yet controlled by financial institutions.
These mergers have likely accelerated and intensified harm to
communities. A recent study by Michael Ewens, Arpit Gupta, and Sabrina
T. Howell found that newspapers acquired by private equity firms were
more likely to cut the number of reporters and the amount of local
coverage. ``The composition of news shifts away from local governance,
the number of reporters and editors falls, and participation in local
elections declines,'' they concluded.
The number of reporters fell from 6.2 to 3.8 at newspapers that
were acquired by a private equity firm. By comparison, for other types
of newspapers, the number of reporters fell far more modestly, from 7.3
to 6.1. The number of editors at these papers fell from 9.1 to 6.1,
compared to a drop of just 5.7 to 5.4 at other papers.
The number of articles about local government at newspapers
acquired by private equity firms fell from 5,700 to 2,500 after an
acquisition, ``a significant negative effect.'' For those newspapers
not owned by private equity firms, the drop was smaller, from 5,200 to
4,400. They even found that these changes in coverage led to lower
voting turnout and a greater percentage of residents having no opinion
about their member of Congress.
By contrast, the study showed that family-owned newspapers were
more likely to maintain higher levels of local news coverage and
reporting staff. An increasing number of local news organizations, both
nonprofit and commercial, have been able to achieve financial
sustainability when they don't have the burden of debt payments or high
EBITDA goals required by publicly-traded companies.
The Ewens, Gupta and Howell study did not consider Alden Global
Capital to be a private equity firm. Alden has cut reporting staff more
than other companies. So their inclusion could make the numbers even
more alarming. Abernathy in 2018 found that newspapers owned by Alden
cut staff at roughly twice the rate of the national average.
Another study by Benjamin LeBrun, Kaitlyn Todd and Andrew Piper
looked at 130,000 articles at 31 corporate-owned local newspapers. They
concluded that ``corporate acquisition leads to a significant reduction
in the amount of local news disseminated by affected publications.''
In some cases, a central problem is that the mergers were financed
with large amounts of debt at a time when newspaper revenues were
declining. For instance, the 2019 acquisition of Gannett by Gatehouse,
a smaller company, was financed through $1.8 billion in debt financing.
The firm now owns 479 newspapers. Since 2019, the company has shed
almost half of its staff. During much of that period it was managed by
the private equity firm Fortress, and much of its debt is held by the
private equity firm Apollo Capital Management. Even if managers are
well intentioned, their options are limited. In its 2021 annual 10k
filing with the Securities and Exchange Commission, Gannett declared
that one of its risk factors was that ``we are required to dedicate a
substantial portion of cash flow from operations to fund interest
payments.''
Of course, these are general tendencies. There are exceptions and
nuances. For instance, there may be some instances in which a local
newspaper is on the edge of closing and an acquisition by a private
equity firm is, in the short term, the only way to keep the newsroom
open. The Ewens-Gupta-Howell study found that while newspapers bought
by private equity firms were more likely to cut the number of local
stories, they were less likely to shut down the newspaper. The
McClatchy newspaper chain, now owned by the private equity firm Chatham
Capital, has stated that it is maintaining or growing staffing levels.
It could well be that the problem is not bigness per se but mergers
involving particular types of entities (with particular ROI needs) and/
or involving particular types of financing, especially in an
economically declining sector..
In some cases, the loss of newspaper reporters might be offset by
the growth of robust nonprofit local news organizations. Although this
scenario is currently rare, they could become more common over time,
and should be considered as part of an analysis of whether a merger
would harm a community.
The acquisition of a newspaper by a chain controlled by a financial
institution does not make it more likely that a newspaper will have
local monopoly status, but it does make it more likely that that
newspaper will use its monopoly status in a way that harms the
community and reduces the availability of certain types of
information--local reporting.
Beyond civic and social impacts, communities suffer economic harm.
Research suggests that consolidation-driven reductions in local
business coverage cause measurable declines in local information
search, institutional portfolio investment, and retail trading.
Information asymmetries due to the loss of local news leave corporate
borrowers facing higher costs and stricter lending conditions and
ripple effects go beyond even the community itself spreading through
supply chains to businesses with no direct connection to a closure.\6\
Communities with less local news had higher financing costs and taxes,
more government corruption, secrecy and more government waste.\7\ At
the individual level, residents in news-depleted communities face
higher loan denial rates, elevated mortgage costs, and greater exposure
to discriminatory pricing as well as higher levels of financial advisor
misconduct, suggesting that the erosion of local oversight leaves
ordinary borrowers with less protection and less recourse.\8\
---------------------------------------------------------------------------
\6\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and
suppliers' investment efficiency. European Journal of Finance, 31(12),
1529-1550. https://doi.org/10.1080/1351847X.2025.2513
500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank pages, heavy
pockets: The impact of local U.S. daily newspaper closures on corporate
cash holdings. SSRN Working Paper 4690974. https://ssrn.com/
abstract=4690974; Kang, J., & Nam, Y. (2025). Do local newspapers
matter to institutional investors? Contemporary Accounting Research.
https://doi.org/10.1111/1911-3846.13049; Allee, K. D., Cating, R., &
Rawson, C. (2023/2025). No News is Bad News: Local News Intensity and
Firms' Information Environments. Review of Accounting Studies, 30(1),
1-32. URL: https://link.springer.com/article/10.1007/s11142-023-09811-
7; Ma, Z., Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper
Closures and Bank Loan Contracts. Journal of Contemporary Accounting
Research. https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe,
J., & Wulff, A. (2025). Local Newspaper Closures and their Effect on
Lending Discrimination. TRR 266 Accounting for Transparency Working
Paper Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,
T. (2025). Lending in the Dark: Local Newspaper Closures and
Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/
Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-Zhong
Zhang. ``When Spotlights Fade: Local Newspaper Closures and Financial
Advisor Misconduct.'' Journal of Financial and Quantitative Analysis,
2025. https://doi.org/10.1017/S0022109025101749; Chen, Jie, Yang Gao,
and Cheng Zeng. ``Inequality Grows in Silence: The Impact of Newspaper
Closures on CEO-Worker Pay Disparity.'' SSRN, January 2025. https://
ssrn.com/abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media
Conglomeration, Local News, and Capital Market Consequences.''
Management Science, November 12, 2024. https://doi.org/10.1287/
mnsc.2023.02247.
\7\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in
Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal
of Financial Economics 135, no. 2 (February 2020): 445-467, https://
doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun
Oh. ``Media Conglomeration, Local News, and Capital Market
Consequences.'' Management Science, November 12, 2024. https://doi.org/
10.1287/mnsc.2023.02247. Matherly, T., & Greenwood, B. N. (2024). No
news is bad news: The internet, corruption, and the decline of the
Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/
MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital
Cities, Accountability, and Corruption: Evidence from U.S. States,''
American Economic Review 104, no. 8 (August 2014): 2456-81, https://
doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier, D.
(2025). Dark deserts: Newspaper decline and its relation to government
non-compliance with public records laws. News Research Journal, 46(3),
427-445. https://doi.org/10.1177/30497841251357976.
\8\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is
Bad News: Local News Intensity and Firms' Information Environments.
Review of Accounting Studies, 30(1), 1-32. URL: https://
link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z., Stice,
D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and Bank
Loan Contracts. Journal of Contemporary Accounting Research. https://
doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., & Wulff, A.
(2025). Local Newspaper Closures and their Effect on Lending
Discrimination. TRR 266 Accounting for Transparency Working Paper
Series No. 195. SSRN. https://ssrn.com/abstract=
5319025; Huynh, T. (2025). Lending in the Dark: Local Newspaper
Closures and Discrimination in Mortgage Lending. https://oweb.b67.uni-
jena.de/Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-
Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and
Financial Advisor Misconduct.'' Journal of Financial and Quantitative
Analysis, 2025. https://doi.org/10.1017/S0022109025101749
---------------------------------------------------------------------------
AI Investment in Local Journalism. AI companies are training their
models on decades of quality journalism. The New York Times and Wall
Street Journal have the resources to fight back--and they are, in
court. But what about the Yakima Herald-Republic? Or the Spokesman-
Review in Spokane? They don't have the resources for this.
Some licensing deals are getting done--OpenAI and the Associated
Press, for example. But there is far more litigation than there are
agreements, and local outlets are being left out entirely.
Journalists deserve compensation and attribution for the content
they produce. That's why Senator Blackburn and I introduced the
bipartisan COPIED Act to keep AI companies from using journalists'
content without consent.
Local news is the supply chain that AI companies are using to train
their models and improve their products. If they use it all up and
don't replenish it with new local content, there won't be any quality,
local information for their models.
Question 1. Should AI companies contribute to preserving and
rebuilding local journalism?
Answer. Yes. The framing in your question that local news is the
supply chain AI companies are using to train their models is exactly
right, and it points to what I described in my written testimony as a
vicious cycle. AI undermines local news; the lack of local news, in
turn, makes AI's quality worse. Fortunately, a virtuous circle can be
created: if AI helps revive local news, it will make AI results higher
quality. The AI industry ought to view itself as having a stake in
reviving local news.
We know AI struggles when there's a dearth of information on a
topic.\9\ It is more likely to be inaccurate and spread misinformation.
Many communities similarly suffer from this ``information scarcity.''
We've invented whole new terms--``news deserts'' and ``ghost
newspapers''--to capture how barren the local news ecosystems in some
of these areas are. Not surprisingly, AI has struggled to get local
information right. Studies have found that AI assistants often
flubbed\10\ information about local elections,\11\ including how to
register, where to vote,\12\ the positions of candidates,\13\ and how
disabled people\14\ could vote.
---------------------------------------------------------------------------
\9\ Philip M. Napoli, ``AI Needs Us More Than We Need It,''
Washington Monthly, Oct. 29, 2024, https://washingtonmonthly.com/2024/
10/29/ai-needs-us-more-than-we-need-it/
\10\ Democracy Reporting International, ``Are Chatbots Misinforming
Us About the European Elections? Yes,'' by Austin Davis, Michael Meyer-
Resende, Duncan Allen and Ognjan Denkovski, March 2024, https://
democracyreporting.s3.eu-central-1.amazonaws.com/pdf/6628b70e0b124
.pdf.
\11\ David Ingram, ``AI chatbots got questions about the 2024
election wrong 27 percent of the time, study finds,'' NBC News, June 5,
2024, https://www.nbcnews.com/tech/tech-news/ai-chatbots-got-questions-
2024-election-wrong-27-time-study-finds-rcna155640.
\12\ Matt O'Brien and Ali Swenson, ``AI chatbots provide many wrong
answers about elections, report says,'' Associated Press, Feb. 27,
2024, https://apnews.com/article/ai-chatbots-elections-artificial-
intelligence-chatgpt-falsehoods-cc50dd0f3f4e7cc322c7235220fc4c69
\13\ Felix M. Simon, Sacha Altay, and Richard Fletcher, ``The role
and reliability of AI chatbots during the 2024 UK general election,''
Reuters Institute for the Study of Journalism, Sept. 2024, https://
reutersinstitute.politics.ox.ac.uk/sites/default/files/2024-09/
Simon%20et%20al%20Chatbots%20and%20UK%20Elections.pdf.
\14\ Benjamin Freed, ``Chatbots often give wrong voting info for
people with disabilities, research finds,'' StateScoop, July 18, 2024,
https://statescoop.com/chatbots-voting-disabilities-information-wrong-
research-2024/
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At the same time, AI companies extract tremendous value from local
news content to train and ground their models. Their AI assistants then
provide full answers to users rather than linking prominently to the
original publisher websites. That kills the referral traffic that local
news outlets depend on for revenue. Weakened local newsrooms produce
less original reporting. And that information scarcity, in turn, makes
AI systems less accurate and more prone to error on local matters,
which studies have already documented extensively with respect to local
elections, candidates, and civic information.
The AI companies are, in effect, depleting the very resource they
depend upon. That is not a sustainable model for them or for
communities. We support the COPIED Act's core principle that consent
and agreements for compensation must precede use. Beyond that
legislative framework, I would suggest additional mechanisms.
First, consider ideas like those proposed by the Center for
Journalism and Liberty such as allowing small publishers to bargain
collectively and requiring AI companies to provide detailed summaries
of training data sources.\15\
---------------------------------------------------------------------------
\15\ Courtney C. Radsch, ``Frenemies: Global approaches to
rebalance the Big Tech v journalism relationship,'' Brookings
(TechTank), August 29, 2022, https://www.brookings.edu/articles/
frenemies-global-approaches-to-rebalance-the-big-tech-v-journalism-
relations hip/ (accessed 02/06/2026) and Gordon Institute of Business
Science (GIBS), ``Big Tech and Journalism--Principles for Fair
Compensation,'' GIBS, adopted July 14, 2023, https://www.gibs.co.za/
news/big-tech-and-journalism--principles-for-fair-compensation
(accessed 02/06/2026)
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Second, local efforts around the construction of data centers
should include the health of local information and journalism in the
discussions, one option could be to consider setting up an endowment to
fund reporters, see my response below for additional information. For
instance, we have proposed that as part of Community Benefit
Agreements, each data center could make a lump-sum donation to a
community foundation to establish an endowment that would support the
hiring of two local journalists. Those journalists would help with the
information shortages in general, and also make sure that the data
centers kept the commitments they made about electricity costs, water
usage, housing and other areas of concern.
Lastly, applying a mitigation fee on the largest AI and technology
platforms could fund journalism support programs. For instance, it
could fund a version of the refundable employment tax credit that Sen.
Cantwell proposed earlier. These approaches have already proved
effective at the state level, including the employment tax credits
pioneered in Illinois that have now reached 120 newsrooms, two-thirds
of which have six or fewer employees.
Those credits can be made available to local TV stations too, so
they would have extra incentives and resources to invest in
communities, as many in the local TV industry are eager to do.
Or, it could finance tax relief for small businesses that advertise
in local news, an approach being advocated by New Hampshire Republicans
right now.
The AI industry should want to be part of solving this problem.
Higher quality local journalism means higher quality AI outputs on
local matters. The virtuous circle is available to them if they choose
to pursue it.
It is true that regulatory policies that only try to squeeze more
local news out of one sector--broadcast--would not achieve the goals of
a more robust community news system. Big technology firms that benefit
from this new system--and which have no localism requirements--should
pay a mitigation fee or tax to pay for efforts to underwrite the hiring
of more reporters in communities and other programs that revive
community news.
Question 2. Mr. Waldman, do you see a role for AI and data center
companies to play in funding local journalism?
Answer. Yes, communities across the country are currently
negotiating with AI and technology companies over data center siting.
Some\16\ are trying to block data centers entirely, which is their
right.\17\ For those that want to welcome them but want something
meaningful in return, local journalism belongs in that negotiation.
Specifically, each data center could make a one-time contribution to an
endowment at a local community foundation, which would fund reporters
placed in local newsrooms with full editorial independence. There is a
logic to it: the reporters funded through this mechanism could cover
whether the technology company is actually delivering on its
commitments to hire locally and manage its infrastructure impacts
responsibly. The accountability function and the funding mechanism
reinforce each other.
---------------------------------------------------------------------------
\16\ NAACP, ``Advocacy in Action: Artificial Intelligence Data
Centers in Our Communities,'' May 2025, https://naacp.org/sites/
default/files/documents/Advocacy%20in%20Action%20AI%
20Data%20Centers%20.pdf; MediaJustice, ``The People Say No: Resisting
Data Centers in the South,'' September 2025, https://mediajustice.org/
wp-content/uploads/2025/09/MediaJustice-Data-Centers-Report.pdf
\17\ Mijin Cha, ``The real race for an AI moratorium: stopping data
centers,'' Tech Policy Press, April 4, 2024, https://
www.techpolicy.press/the-real-race-for-an-ai-moratorium-stopping-data-
centers/
Declining Local Journalism. We've heard about AI companies training
on journalism produced by newsrooms that are barely surviving. Let me
put that in context. In my state of Washington, the Daily Herald in
Everett laid off half its news staff last year after an out-of-state
chain bought the paper. The press corps in Olympia has gone from 19
full-time reporters to eight.
KWSU-TV in Pullman went dark after Federal funding was cut.
Nationally, more than 130 newspapers closed last year. One in three
counties doesn't have the equivalent of a single full-time local
reporter. As newspapers disappear, local television is increasingly the
last professional news source standing.
Congress understood broadcasting was special--we gave broadcasters
the public airwaves, and in return, we expected them to serve their
communities with news and information.
Mr. Waldman, you wrote the FCC's landmark report on communities'
information needs, you founded Report for America, and you now lead the
Rebuild Local News coalition.
Your research documents what happens when local news disappears--
more corruption, higher taxes, lower civic engagement.
You've also proposed concrete solutions: payroll tax credits for
newsrooms, tax incentives for small businesses to advertise locally,
and redirecting government advertising toward community news.
Question 1. Given what your research shows about the consequences
of losing local news, what is at stake if we allow broadcast newsrooms
to be hollowed out through consolidation?
Answer. Nearly two-thirds of Americans, 64 percent, say they at
least sometimes get local news from a TV station, making it the most
common institutional source of local news in the country. For the
communities that have already lost their local newspapers, and there
are thousands of them, broadcast television is often the last
professional news source that remains.\18\
---------------------------------------------------------------------------
\18\ Shearer, Elisa, et al., ``Americans' Changing Relationship
With Local News.'' Pew Research Center, May 7, 2024. https://
www.pewresearch.org/journalism/2024/05/07/americans-changing-
relationship-with-local-news/.
---------------------------------------------------------------------------
Communities with less local news had higher financing costs and
taxes, more government corruption, secrecy and more government
waste.\19\ Communities that suffer from a loss of local news are also
linked to increased regulatory violations and organizational wrongdoing
violations including measurable increases in toxic chemical emissions;
although these effects are moderated by the degree of community social
connectedness.\20\ The damage does not stay local: consolidation-driven
reductions in local business coverage cause measurable declines in
local information search, institutional portfolio investment, and
retail trading with the sharpest effects on small firms and spread
through supply chains to businesses with no direct connection to a
closure, leaving corporate borrowers facing higher costs and stricter
lending conditions.\21\ At the individual level, residents in news-
depleted communities face higher loan denial rates, elevated mortgage
costs, and greater exposure to discriminatory pricing as well as higher
levels of financial advisor misconduct suggesting that the erosion of
local oversight leaves ordinary borrowers with less protection and less
recourse.\22\
---------------------------------------------------------------------------
\19\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in
Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal
of Financial Economics 135, no. 2 (February 2020): 445-467, https://
doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun
Oh. ``Media Conglomeration, Local News, and Capital Market
Consequences.'' Management Science, November 12, 2024. https://doi.org/
10.1287/mnsc.2023.02247.Matherly, T., & Greenwood, B. N. (2024). No
news is bad news: The internet, corruption, and the decline of the
Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/
MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital
Cities, Accountability, and Corruption: Evidence from U.S. States,''
American Economic Review 104, no. 8 (August 2014): 2456-81, https://
doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier, D.
(2025). Dark deserts: Newspaper decline and its relation to government
non-compliance with public records laws. News Research Journal, 46(3),
427-445. https://doi.org/10.1177/30497841251357976.
\20\ Heese, Jonas & Perez-Cavazos, Gerardo & Peter, Caspar David,
2022. ``When The Local Newspaper Leaves Town: The Effects Of Local
Newspaper Closures On Corporate Misconduct,'' Journal of Financial
Economics, Elsevier, vol. 145(2), pages 445-463. Choi, T. J., &
Valente, M. (2022). The crisis in local newspapers and organizational
wrongdoing: The role of community social connectedness. Management
Science. https://pubsonline.informs.org/doi/10.1287/orsc.2022.1644
Jiang, J. X., & Kong, J. (2024). Green dies in darkness? Environmental
externalities of newspaper closures. Review of Accounting Studies,
29(4), 3564-3599. https://doi.org/10.1007/s11142-023-09786-5
\21\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and
suppliers' investment efficiency. European Journal of Finance, 31(12),
1529-1550. https://doi.org/10.1080/1351847X.2025
.2513500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank pages,
heavy pockets: The impact of local U.S. daily newspaper closures on
corporate cash holdings. SSRN Working Paper 4690974. https://ssrn.com/
abstract=4690974; Kang, J., & Nam, Y. (2025). Do local newspapers
matter to institutional investors? Contemporary Accounting Research.
https://doi.org/10.1111/1911-3846.13049; Allee, K. D., Cating, R., &
Rawson, C. (2023/2025). No News is Bad News: Local News Intensity and
Firms' Information Environments. Review of Accounting Studies, 30(1),
1-32. URL: https://link.springer.com/article/10.1007/s11142-023-09811-
7; Ma, Z., Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper
Closures and Bank Loan Contracts. Journal of Contemporary Accounting
Research. https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe,
J., & Wulff, A. (2025). Local Newspaper Closures and their Effect on
Lending Discrimination. TRR 266 Accounting for Transparency Working
Paper Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,
T. (2025). Lending in the Dark: Local Newspaper Closures and
Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/
Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-Zhong
Zhang. ``When Spotlights Fade: Local Newspaper Closures and Financial
Advisor Misconduct.'' Journal of Financial and Quantitative Analysis,
2025. https://doi.org/10.1017/S0022109025101749; Chen, Jie, Yang Gao,
and Cheng Zeng. ``Inequality Grows in Silence: The Impact of Newspaper
Closures on CEO-Worker Pay Disparity.'' SSRN, January 2025. https://
ssrn.com/abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media
Conglomeration, Local News, and Capital Market Consequences.''
Management Science, November 12, 2024. https://doi.org/10.1287/
mnsc.2023.02247.
\22\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is
Bad News: Local News Intensity and Firms' Information Environments.
Review of Accounting Studies, 30(1), 1-32. URL: https://
link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z., Stice,
D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and Bank
Loan Contracts. Journal of Contemporary Accounting Research. https://
doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., & Wulff, A.
(2025). Local Newspaper Closures and their Effect on Lending
Discrimination. TRR 266 Accounting for Transparency Working Paper
Series No. 195. SSRN. https://ssrn.com/abstract
=5319025; Huynh, T. (2025). Lending in the Dark: Local Newspaper
Closures and Discrimination in Mortgage Lending. https://oweb.b67.uni-
jena.de/Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-
Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and
Financial Advisor Misconduct.'' Journal of Financial and Quantitative
Analysis, 2025. https://doi.org/10.1017/S0022109025101749
---------------------------------------------------------------------------
Beyond the clear economic harm, there are civic and social effects.
Those who follow local news closely are more likely to engage in
activities with civic organizations such as sports leagues, church
groups or charity organizations' civic activities.\23\ Evidence also
suggests that the decline of local news is linked to higher loneliness,
especially in rural communities.\24\ The basic health of the political
system declines. Declines in local news result in less knowledge about
public officials and less civic knowledge,\25\ voters are less likely
to have an opinion about their member of Congress,\26\ less likely to
be able to name things they like or dislike about their
representative.\27\ In 1966, 70 percent of voters could name their
mayor. In 2016 only 40 percent of voters could.\28\ Communities with
less local news have lower voting rates, and those that do regularly
vote are more likely to follow local news.\29\ The members of Congress
who get less coverage in the local press are less likely to appear as a
witness before a congressional committee to advocate for their
district.\30\ In communities with less local news, voters are more
likely to vote on a party line basis.\31\
---------------------------------------------------------------------------
\23\ Michael Barthel et al., ``Civic Engagement Strongly Tied to
Local News Habits,''.
\24\ Hayes, Danny and Trivedi, Anusha, Loneliness and the Local
News Environment (February 05, 2026). Available at SSRN: https://
papers.ssrn.com/sol3/papers.cfm?abstract_id=6183182
\25\ Danny Hayes and Jennifer L. Lawless, ``As Local News Goes, so
Goes Citizen Engagement: Media, Knowledge, and Participation in U.S.
House Elections,'' The Journal of Politics 77, no. 2 (April 2015): 447-
62, https://doi.org/10.1086/679749.
\26\ Danny Hayes and Jennifer L. Lawless, ``The Decline of Local
News and Its Effects: New Evidence from Longitudinal Data,'' The
Journal of Politics 80, no. 1 (October 18, 2017): 332-36, https://
doi.org/10.1086/694105.
\27\ James Snyder Jr. and David Stromberg, ``Press Coverage and
Political Accountability,'' Journal of Political Economy 118, no. 2
(April 2010): 355-408, https://doi.org/10.1086/652903.
\28\ Hayes and Lawless, News Hole, 2.
\29\ Jessica Bruder, ``Is the Death of Newspapers the End of Good
Citizenship?,'' Christian Science Monitor, November 11, 2012, https://
www.csmonitor.com/USA/Society/2012/1111/Is-the-death-of-newspapers-the-
end-of-good-citizenship.; Michael Ewens, Arpit Gupta, and Sabrina T.
Howell, ``Local Journalism under Private Equity Ownership,'' SSRN, Oct.
11, 2021, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3939405.
Michael Barthel et al., ``Civic Engagement Strongly Tied to Local News
Habits,'' Pewresearch.org (Pew Research Center, November 1, 2016),
https://www.pewresearch.org/journalism/wp-content/uploads/sites/8/2016/
11/PJ_20
16.11.02_Civic-Engagement_FINAL.pdf.
\30\ Snyder, Stromberg, ``Press Coverage and Political
Accountability,'' 355-408.
\31\ Daniel J. Moskowitz, ``Local News, Information, and the
Nationalization of U.S. Elections,'' American Political Science Review
115, no. 1 (February 2021): 114-29, https://doi.org/10.1017/
s0003055420000829; Joshua P Darr, Matthew P Hitt, and Johanna L
Dunaway, ``Newspaper Closures Polarize Voting Behavior,'' Journal of
Communication 68, no. 6 (November 5, 2018): 1007-28, https://doi.org/
10.1093/joc/jqy051.
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Finally, communities with less local news are more polarized.\32\
The vacuum created by the contraction is filled by social media and
national media, which is more divisive. As Senator Moran recently said,
in speaking movingly about its recently-merged local newspaper, the
Plainville Times, ``I saw first-hand how the newspaper supported the
community and brought neighbors, friends and even strangers together.
Community journalism pulls us together. National journalism has the
habit of tearing us apart.''
---------------------------------------------------------------------------
\32\ Darr JP, Hitt MP, Dunaway JL. Home Style Opinion: How Local
Newspapers Can Slow Polarization. Cambridge University Press; 2021.
Question 2. What can Congress do to turn the tide and rebuild local
news?
Answer. The evidence base for effective intervention is now well
established. States have piloted concrete approaches that can serve as
models for Federal action. We have seen a variety of approaches work:
Tax subsidies for employing local journalists. Illinois enacted
such a credit, which has reached 120 newsrooms, two-thirds with six or
fewer employees. New York has followed, and Republican legislators in
Kansas and New Hampshire are advancing comparable measures. Senator
Cantwell and Representative Tenney have each proposed Federal versions
that would scale this impact nationally. This could be made available
for local TV newscasts too, providing incentives and resources for them
to invest more in community coverage.
Tax relief for small businesses that advertise locally. This was
also proposed by Rep. Tenney and Sen. Cantwell and is now being pushed
by Republican legislators in New Hampshire and Illinois.
Push more government advertising toward community media. New York
City has shifted $72 million toward community news by requiring that
half its spending go to local organizations rather than national media
or social media.
Fellowships for local reporting. In Washington, New Mexico and
California, the state is helping to support the salaries for fellowship
programs run by the journalism programs at state universities.
Other possibilities include the state providing funding through
independent 501c3 (e.g., New Jersey's Civic Information Consortium);
tax credits for buying subscriptions or making donations to local news;
loan guarantees for banks or other lending institutions to support
local news outlets.
Broadcast Triopolies and Duopolies. The Nexstar-Tegna merger would
create unprecedented consolidation in broadcast TV.
Nationally, Nexstar stations would reach 80 percent of U.S.
households. Nexstar and Tegna overlap in 35 markets.
Nexstar is seeking local ownership waivers in those markets to form
new duopolies and triopolies. We have already seen what happens. When
Nexstar acquired two stations in Indianapolis, it laid off newsroom
staff, moved the remaining reporters into a single newsroom producing
content for both stations under the same news director.
They have said their plan is to ``repeat that time and again across
the 35 overlap markets.''
And they can because in 2017, the FCC eliminated the main studio
rule--the requirement that every station maintain a physical studio in
or near the community it serves. That rule had been on the books since
1940.
Without it, a station group can own multiple stations in a market
and not have a single journalist on the ground.
Question 1. When a company owns two or three stations in the same
market, what happens to the individual newsrooms? Are they maintaining
separate reporting staffs, or are we seeing consolidation of those
operations?
Answer. When a company owns multiple stations in the same market,
consolidation of newsroom operations does occur at a significant scale.
Duplication is already occurring in two-fifths of U.S. television
markets, and the average duplication rate among those markets is 65
percent.\33\ As a result, many communities have the appearance of
diverse voices while delivering less and less original reporting. A
recent DirecTV filing with the FCC examining all Big Four duopolies and
triopolies found that 98.2 percent share news directors and 97.3
percent share news talent, meaning that in nearly every case where one
company owns multiple stations in a market, those stations are not
maintaining separate reporting staffs.\34\
---------------------------------------------------------------------------
\33\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:
Duplicating Local TV Content,'' Biden School of Public Policy & Public
Administration, University of Delaware, August 2025. https://
udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-
9b317fdbe
02b/content
\34\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves
Markets With Less Local News, According to New Study That DirecTV Has
Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/
tv/news/directv-fcc-filing-local-news-station-consolidation-12366718
77/.
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The evidence about the effect of consolidation on local Tv coverage
is mixed. Sinclair acquisitions were associated with a roughly 10
percent decline in local and political coverage, while Nexstar
acquisitions were associated with an approximately 8 percent increase,
and Gray acquisitions showed minimal change.\35\
---------------------------------------------------------------------------
\35\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua
McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://
papers.ssrn.com/sol3/papers.cfm?abstract_id=
4951078.
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That is why it cannot be left to chance. Our attention should
remain focused on ensuring enforceable commitments to maintain or
increase the number of journalists working in affected communities.
The same pattern has played out in print. As local papers were
bought up by hedge funds or private equity firms, they cut reporters
across the country.\36\ Mega-mergers financed with massive debt
compounded the damage, as news organizations used profits to service
loans rather than invest in digital transformation or local coverage.
We have even seen the rise of local newspapers with no local reporters
at all. In both newspapers and local television, consolidation and
nationalization have in many cases aggravated the local news crisis,
leading to fewer reporters in communities and less, or more
superficial, coverage of school boards, economic development,
elections, social problems, and civic life.\37\
---------------------------------------------------------------------------
\36\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local
Journalism under Private Equity Ownership,'' NBER Working Paper 29743
(2022), https://doi.org/10.3386/w29743; Steven Waldman, ``The local
news crisis illustrates the inadequacy of the current antitrust
approach,'' Rebuild Local News, May 8, 2024, https://
www.rebuildlocalnews.org/the-local-news-crisis-illustrates-the-
inadequacy-of-the-current-antitrust-approach/
\37\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''
(PDF), https://www.free
press.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed
Feb. 6, 2026).
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In the long run, Congress should pass a version of the legislation
sponsored by Republican Claudia Tenney and Sen.Cantwell--refundable
employment credits tied to the number of local reporters, including at
local TV news broadcasts. That would give extra incentives for the
local station groups to increase local reporting rather than cutting
back.
There is another potential risk to TV consolidation: an undermining
of the freedom of the press. When most of the local TV stations are
owned by a few companies, that gives tremendous power to whatever party
is in the White House at that moment. They can leverage the FCC's
authority to advance their political goals, and the station groups are
extremely vulnerable to such pressure. Right now, it is the Democrats
who are ringing this alarm, because Sinclair and Nexstar deferred to
the Trump White House during the Jimmy Kimmel controversy. But this
vulnerability would apply under any administration. When Democrats take
over the White House and the FCC, they would have the same power to
pressure most of the local TV stations by using the merger review and
licensing powers to influence a small number of companies. In that
sense, consolidation increases this type of First Amendment risk.
Question 2. The FCC eliminated the main studio rule in 2017. What
has been the impact on local news production, particularly in smaller
markets?
Answer. The elimination of the main studio rule in 2017 removed a
structural safeguard requiring physical presence in a community.
Without it, a company can consolidate all news operations into a single
facility and present the result as independent local coverage.
______
Response to Written Questions Submitted by Hon. Tammy Baldwin to
Steve Waldman
Question 1. During your testimony, you noted approximately 3,500
newspapers have closed in the past 20 years, warning that increased
consolidation of newsrooms reduces staffing and coverage of local news.
a. How would lifting the national ownership cap impact communities'
ability to receive local news coverage?
Answer. Consolidation of newsroom operations is already occurring
at a significant scale. Duplication is occurs in two-fifths of U.S.
television markets, and the average duplication rate among those
markets is 65 percent.\38\ As a result, many communities have the
appearance of diverse voices delivering less and less original
reporting. A recent DirecTV filing with the FCC examining all Big Four
duopolies and triopolies found that 98.2 percent share news directors
and 97.3 percent share news talent, meaning that in nearly every case
where one company owns multiple stations in a market, those stations
are not maintaining separate reporting staffs.\39\
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\38\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:
Duplicating Local TV Content,'' Biden School of Public Policy & Public
Administration, University of Delaware, August 2025. https://
udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-
9b317fdbe
02b/content
\39\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves
Markets With Less Local News, According to New Study That DirecTV Has
Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/
tv/news/directv-fcc-filing-local-news-station-consolidation-
1236671877/.
---------------------------------------------------------------------------
As for coverage levels, studies have shown that Sinclair
acquisitions were associated with a roughly 10 percent decline in local
and political coverage.
On the other hand, Nexstar acquisitions were associated with an
approximately 8 percent increase (while, and Gray acquisitions showed
minimal change.)
In other words, while consolidation occasionally does help local
news, it often doesn't. For that reason, we favor either keeping the
caps or loosening them but with requirements that the merged entities
increase the number of local journalists in a community.\40\
---------------------------------------------------------------------------
\40\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua
McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://
papers.ssrn.com/sol3/papers.cfm?abstract
_id=4951078.
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The evidence is even more worrisome when it comes to newspapers. As
local papers were bought up by hedge funds or private equity firms,
they cut reporters across the country.\41\ Mega-mergers financed with
massive debt compounded the damage, as news organizations used profits
to service loans rather than invest in digital transformation or local
coverage. We have even seen the rise of local newspapers with no local
reporters at all.
---------------------------------------------------------------------------
\41\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local
Journalism under Private Equity Ownership,'' NBER Working Paper 29743
(2022), https://doi.org/10.3386/w29743&
#x003B; Steven Waldman, ``The local news crisis illustrates the
inadequacy of the current antitrust approach,'' Rebuild Local News, May
8, 2024, https://www.rebuildlocalnews.org/the-local-news-crisis-
illustrates-the-inadequacy-of-the-current-antitrust-approach/
---------------------------------------------------------------------------
In a filing to the Department of Justice and Federal Trade
Commission, Rebuild Local News outlined the evidence:
Media consolidation was not the primary cause of the collapse of
local news--but in many cases it has seriously intensified the harm,
promises to make the situation worse in coming years, and has limited
the ability of communities to address the crisis.
The crisis in local news stems primarily from the Internet
undercutting the traditional business models. Specifically, many
advertisers reduced or eliminated their spending in local newspapers
and instead placed ads on websites, search engines or social platforms.
The combination of factors led to a dramatic drop in revenue in the
newspaper industry--a staggering 81 percent decline in ad revenue from
2000 to 2020.
The nature of newspaper consolidation has changed in the past few
decades as acquisitions by private equity and hedge funds have
increased, and made matters worse. From 2004 to 2016, more than 300
newspapers had been sold or traded. In 2004, the 25 largest chains
owned less than one third of the daily newspapers. By 2020, they owned
70 percent. In the past 15 years, as a result of serial acquisitions,
the number of newspaper owners has dropped from about 4,000 to 2,400.
``Massive consolidation in the newspaper industry has shifted editorial
and business decisions to a few large corporations without strong ties
to the communities where their papers are located,'' concluded the
major study of news deserts completed by Professor Penny Muse
Abernathy, when she was at the University of North Carolina school of
communications.
Many of these transactions involve private equity firms or hedge
funds. ``At their peak in 2016, six of the 10 largest newspaper chains
were owned and operated by private equity firms or other investment
entities,'' the same study found. Since then some of the iconic
newspapers--the Chicago Tribune, the Baltimore Sun, the New York Daily
News and dozens of others--have also been acquired by private equity or
hedge funds. The study also found that more than 1,000 newspapers are
now controlled by ``hybrid'' companies that are both publicly traded
and yet controlled by financial institutions.
These mergers have likely accelerated and intensified harm to
communities. A recent study by Michael Ewens, Arpit Gupta, and Sabrina
T. Howell found that newspapers acquired by private equity firms were
more likely to cut the number of reporters and the amount of local
coverage. ``The composition of news shifts away from local governance,
the number of reporters and editors falls, and participation in local
elections declines,'' they concluded.
The number of reporters fell from 6.2 to 3.8 at newspapers that
were acquired by a private equity firm. By comparison, for other types
of newspapers, the number of reporters fell far more modestly, from 7.3
to 6.1. The number of editors at these papers fell from 9.1 to 6.1,
compared to a drop of just 5.7 to 5.4 at other papers.
The number of articles about local government at newspapers
acquired by private equity firms fell from 5,700 to 2,500 after an
acquisition, ``a significant negative effect.'' For those newspapers
not owned by private equity firms, the drop was smaller, from 5,200 to
4,400. They even found that these changes in coverage led to lower
voting turnout and a greater percentage of residents having no opinion
about their member of Congress.
By contrast, the study showed that family-owned newspapers were
more likely to maintain higher levels of local news coverage and
reporting staff. An increasing number of local news organizations, both
nonprofit and commercial, have been able to achieve financial
sustainability when they don't have the burden of debt payments or high
EBITDA goals required by publicly-traded companies.
The Ewens, Gupta and Howell study did not consider Alden Global
Capital to be a private equity firm. Alden has cut reporting staff more
than other companies. So their inclusion could make the numbers even
more alarming. Abernathy in 2018 found that newspapers owned by Alden
cut staff at roughly twice the rate of the national average.
Another study by Benjamin LeBrun, Kaitlyn Todd and Andrew Piper
looked at 130,000 articles at 31 corporate-owned local newspapers. They
concluded that ``corporate acquisition leads to a significant reduction
in the amount of local news disseminated by affected publications.''
In some cases, a central problem is that the mergers were financed
with large amounts of debt at a time when newspaper revenues were
declining. For instance, the 2019 acquisition of Gannett by Gatehouse,
a smaller company, was financed through $1.8 billion in debt financing.
The firm now owns 479 newspapers. Since 2019, the company has shed
almost half of its staff. During much of that period it was managed by
the private equity firm Fortress, and much of its debt is held by the
private equity firm Apollo Capital Management. Even if managers are
well intentioned, their options are limited. In its 2021 annual 10k
filing with the Securities and Exchange Commission, Gannett declared
that one of its risk factors was that ``we are required to dedicate a
substantial portion of cash flow from operations to fund interest
payments.''
Of course, these are general tendencies. There are exceptions and
nuances. For instance, there may be some instances in which a local
newspaper is on the edge of closing and an acquisition by a private
equity firm is, in the short term, the only way to keep the newsroom
open. The Ewens-Gupta-Howell study found that while newspapers bought
by private equity firms were more likely to cut the number of local
stories, they were less likely to shut down the newspaper. The
McClatchy newspaper chain, now owned by the private equity firm Chatham
Capital, has stated that it is maintaining or growing staffing levels.
It could well be that the problem is not bigness per se but mergers
involving particular types of entities (with particular ROI needs) and/
or involving particular types of financing, especially in an
economically declining sector..
In some cases, the loss of newspaper reporters might be offset by
the growth of robust nonprofit local news organizations. Although this
scenario is currently rare, they could become more common over time,
and should be considered as part of an analysis of whether a merger
would harm a community.
The acquisition of a newspaper by a chain controlled by a financial
institution does not make it more likely that a newspaper will have
local monopoly status, but it does make it more likely that that
newspaper will use its monopoly status in a way that harms the
community and reduces the availability of certain types of
information--local reporting.
Beyond civic and social impacts, communities suffer economic harm.
Research suggests that consolidation-driven reductions in local
business coverage cause measurable declines in local information
search, institutional portfolio investment, and retail trading.
Information asymmetries due to the loss of local news leave corporate
borrowers facing higher costs and stricter lending conditions and
ripple effects go beyond even the community itself spreading through
supply chains to businesses with no direct connection to a closure.\42\
Communities with less local news had higher financing costs and taxes,
more government corruption, secrecy and more government waste.\43\ The
absence of local journalism raises the cost of doing business: without
press scrutiny, CEO-to-worker pay disparities widen, managers engage in
financial behavior that would otherwise be checked, information
asymmetry grows, and markets become less efficient. At the individual
level, residents in news-depleted communities face higher loan denial
rates, elevated mortgage costs, and greater exposure to discriminatory
pricing as well as higher levels of financial advisor misconduct
suggesting that the erosion of local oversight leaves ordinary
borrowers with less protection and less recourse.\44\
---------------------------------------------------------------------------
\42\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and
suppliers' investment efficiency. European Journal of Finance, 31(12),
1529-1550. https://doi.org/10.1080/1351847X.2025.251
3500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank
pages, heavy pockets: The impact of local U.S. daily newspaper closures
on corporate cash holdings. SSRN Working Paper 4690974. https://
ssrn.com/abstract=4690974; Kang, J., & Nam, Y. (2025). Do local
newspapers matter to institutional investors? Contemporary Accounting
Research. https://doi.org/10.1111/1911-3846.13049; Allee, K. D.,
Cating, R., & Rawson, C. (2023/2025). No News is Bad News: Local News
Intensity and Firms' Information Environments. Review of Accounting
Studies, 30(1), 1-32. URL: https://link.springer.com/article/10.1007/
s11142-023-09811-7; Ma, Z., Stice, D., Stice, H., & Zhang, Y.
(2025). Local Newspaper Closures and Bank Loan Contracts. Journal of
Contemporary Accounting Research. https://doi.org/10.1111/1911-
3846.13046; Baker, A., Riepe, J., & Wulff, A. (2025). Local
Newspaper Closures and their Effect on Lending Discrimination. TRR 266
Accounting for Transparency Working Paper Series No. 195. SSRN. https:/
/ssrn.com/abstract=5319025; Huynh, T. (2025). Lending in the
Dark: Local Newspaper Closures and Discrimination in Mortgage Lending.
https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2025_002.pdf;
Li, Zhi, Qiyuan Peng and Rui-Zhong Zhang. ``When Spotlights Fade: Local
Newspaper Closures and Financial Advisor Misconduct.'' Journal of
Financial and Quantitative Analysis, 2025. https://doi.org/10.1017/
S0022109025101749; Chen, Jie, Yang Gao, and Cheng Zeng.
``Inequality Grows in Silence: The Impact of Newspaper Closures on CEO-
Worker Pay Disparity.'' SSRN, January 2025. https://ssrn.com/
abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media
Conglomeration, Local News, and Capital Market Consequences.''
Management Science, November 12, 2024. https://doi.org/10.1287/
mnsc.2023.02247.
\43\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in
Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal
of Financial Economics 135, no. 2 (February 2020): 445-467, https://
doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun
Oh. ``Media Conglomeration, Local News, and Capital Market
Consequences.'' Management Science, November 12, 2024. https://doi.org/
10.1287/mnsc.2023.02247. Matherly, T., & Greenwood, B. N. (2024). No
news is bad news: The internet, corruption, and the decline of the
Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/
MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated
Capital Cities, Accountability, and Corruption: Evidence from U.S.
States,'' American Economic Review 104, no. 8 (August 2014): 2456-81,
https://doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier,
D. (2025). Dark deserts: Newspaper decline and its relation to
government non-compliance with public records laws. News Research
Journal, 46(3), 427-445. https://doi.org/10.1177/30497841251357976.
\44\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is
Bad News: Local News Intensity and Firms' Information Environments.
Review of Accounting Studies, 30(1), 1-32. URL: https://
link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z.,
Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and
Bank Loan Contracts. Journal of Contemporary Accounting Research.
https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., &
Wulff, A. (2025). Local Newspaper Closures and their Effect on Lending
Discrimination. TRR 266 Accounting for Transparency Working Paper
Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,
T. (2025). Lending in the Dark: Local Newspaper Closures and
Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/
Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-
Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and
Financial Advisor Misconduct.'' Journal of Financial and Quantitative
Analysis, 2025. https://doi.org/10.1017/S0022109025101749
Question 2: In today's diversifying media landscape, Americans are
consuming local news and entertainment across broadcast, cable,
streaming and broadband platforms. Should Congress and the FCC evaluate
each proposed consolidation transaction individually, or is a broader,
cross-platform assessment of cumulative media concentration necessary
to protect competition and consumer access to local news coverage?
Answer. Our coalition has not taken a position on the specific
threshold or on the FCC's statutory authority to modify it. But we do
believe that localism--and specifically the provision of local
reporting and coverage--should be the primary lens through which this
policy and individual mergers should be viewed. We are in the midst of
a dramatic collapse of local news. We've seen a 75 percent drop in the
number of local reporters since 2002. Ill-conceived policies could make
that worse. We should not just lift the caps and hope for the best.
Policies could be considered that would put teeth in these
concepts:
For instance, one could keep the 39 percent cap and provide
individualized exemptions if the specific merger met certain
conditions. The conditions could include a net increase in the total
number of local reporters and producers at the combined entities.
More creatively, the FCC could consider allowing stations to ``buy
out'' of that requirement by making a comparable donation to a
community foundation to establish perpetual endowments for the purpose
of adding a comparable number of local reporters within the community
even if it is not at the TV station.
The reason we emphasize the number of reporters rather than the
number of hours is that longer news shows with fewer reporters often
means more superficial news, or more newscasts that copy reports from
other stations in the market.
In the long run, Congress should pass a version of the legislation
sponsored by Republican Claudia Tenney and Sen.Cantwell--refundable
employment credits tied to the number of local reporters, including at
local TV news broadcasts. That would give extra incentives for the
local station groups to increase local reporting rather than cutting
back.
Policies that only try to squeeze more local news out of one
sector--broadcast--would not achieve the goals of a more robust
community news system. Big technology firms that benefit from this new
system--and which have no localism requirements--should pay a
mitigation fee or tax to pay for efforts to underwrite the hiring of
more reporters in communities.
______
Response to Written Questions Submitted by Hon. John Hickenlooper to
Steve Waldman
News Deserts: Vibrant journalism ecosystem engrained in our First
Amendment's rights to freedom of speech and the freedom of the press.
However, in Colorado, we have seen a tragic decline in the amount of
local newspapers covering stories in their communities. Since 2005,
Colorado has lost at least 52 local newspapers and more than half of
Colorado's counties only have 1 local newspaper. 3 counties in Colorado
-Cheyenne, Mineral, and Conejos-don't have a single local newspaper.
Question 1. For communities in news deserts that are no longer
served by local newspapers, what impact would additional local
broadcast tv stations merging have on their ability to get local news
coverage?
Answer. For communities that have already lost their local
newspapers, local broadcast television is often the last professional
news source standing. That makes the stakes of further broadcast
consolidation particularly acute since there is no remaining backstop.
In many cases, lifting the national ownership cap will deleteriously
impact local news coverage. When a company owns multiple stations in
the same market, the evidence shows that consolidation of newsroom
operations occurs at significant scale. Duplication is already
occurring in two-fifths of U.S. television markets, and the average
duplication rate among those markets is 65 percent.\45\ A recent
DirecTV filing with the FCC examining all Big Four duopolies and
triopolies found that 98.2 percent share news directors and 97.3
percent share news talent, meaning that in nearly every case where one
company owns multiple stations in a market, those stations are not
maintaining separate reporting staffs.\46\
---------------------------------------------------------------------------
\45\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:
Duplicating Local TV Content,'' Biden School of Public Policy & Public
Administration, University of Delaware, August 2025. https://
udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-
9b317fdb
e02b/content
\46\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves
Markets With Less Local News, According to New Study That DirecTV Has
Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/
tv/news/directv-fcc-filing-local-news-station-consolidation-123667
1877/.
---------------------------------------------------------------------------
The evidence about consolidation and coverage levels is mixed.
Sinclair acquisitions were associated with a roughly 10 percent decline
in local and political coverage, while Nexstar acquisitions were
associated with an approximately 8 percent increase, and Gray
acquisitions showed minimal change. This is why we believe that caps
should either be maintained or liberalized only when accompanied by
rock-solid commitments that the combined entities would increase the
investment in community coverage (as measured by number of reporters
and producers, not in the number of hours).
Merger Review/Political Influence: Every state values the
importance of independent, diverse, and community-based media. In every
issue for which the FCC has jurisdiction--it is essential every
decision be made solely based on the facts, to benefit the public
interest, and be free of political influence.
The President recently stated:
``We need more competition against THE ENEMY, the Fake News
National TV Networks Letting Good Deals get done like Nexstar--
Tegna will help knock out the Fake News because there will be
more competition, and at a higher and more sophisticated
level,'' the president wrote. ``Those that are opposed don't
fully understand how good the concept of this Deal is for them,
but they will in the future. GET THAT DEAL DONE! PRESIDENT
DJT.''
Question 2. While the President is free to express his views, does
the President publicly advocating for or against a merger creates an
appearance of political influence?
Answer. The integrity of the FCC's merger review process depends on
decisions being made through a transparent, public process based solely
on the facts and the public interest standard established by Congress.
That principle applies regardless of administration or the specific
transaction under review. The Communications Act establishes a clear
framework for how transactions of this magnitude are to be evaluated--
their impact on localism, viewpoint diversity, competition, and the
communities affected. That framework has value only when it is applied
consistently and visibly through proper process. This is why I stated
at the hearing that decisions of this import should be made at the
commission level, through full public process and a transparent record.
A bureau-level determination on a transaction of this scale and
consequence would be difficult for the public, affected communities,
and Congress to evaluate and trust, regardless of the outcome.
Question 3. Does the term ``Fake News Media'' appear in the
Communications Act? Please answer yes or no.
Answer. No.
______
Response to Written Questions Submitted by Hon. John Fetterman to
Steve Waldman
Question 1. Mr. Waldman, thank you for your work promoting local
journalism. I started my public service career as a mayor, so I know
how important local coverage is. I appreciate your testimony and
recommendations on improving local journalism. Within FCC jurisdiction,
how could the Commission consider local journalism impacts when
reviewing mergers? What would this mean for local journalism?
Answer. The FCC already has authority to consider localism in its
public interest review which states that the FCC should consider the
``public interest, convenience, and necessity'' \47\; what has been
missing is a concrete definition of what localism actually requires--
especially when it comes to the provision of local news.
---------------------------------------------------------------------------
\47\ Sections 303, 309 and 310 of the Communications Act of 1934
(47 U.S.C. 303, 309, 310)
---------------------------------------------------------------------------
The Commission could center its analysis on a specific, measurable
standard: whether a proposed transaction maintains or increases the
number of journalists working in affected communities. Not station
count, not hours of airtime, but professional reporters living in and
accountable to the communities they cover. Congress could reinforce
this by directing the FCC statutorily to include local journalism
capacity as a core component of the localism standard, ensuring it is
applied consistently across transactions and administrations.
Question 2. Lifting the ownership cap and allowing the deal to
proceed will put more than 265 stations reaching 80 percent of
Americans in the hands of a single company--a major blow to local
control of news. How does it serve Americans and the public interest at
large to have their news media run by a distant corporate conglomerate
instead of locally owned families and companies with a stake in the
community?
Answer. In most cases, it does not, and the evidence bears that
out. A locally owned news organization has its reputation and economic
future tied to the community it covers, its owners live there, know the
local officials, and are accountable to their neighbors. When ownership
moves to a distant corporate headquarters, editorial and staffing
decisions often get made through a financial lens rather than a
community lens, and that shift shows up in reduced reporting capacity
and eroded public trust. Research on both newspaper and broadcast
consolidation consistently confirms this pattern. Our coalition's view
is that local news in local hands usually works best, and that whenever
possible public policy should gravitate toward ownership structures
that are diffuse, independent, and rooted in the communities being
served rather than concentrated in a small number of national
companies.
We accept that there might be some instances when mergers might
provide more local news. We believe there are mechanisms to allow
mergers in those cases, when accompanied by rock-solid commitments to
maintain local reporting staffs.
For instance, one could keep the 39 percent cap and provide
individualized exemptions if the specific merger met certain
conditions. The conditions could include a net increase in the total
number of local reporters and producers at the local entity being
acquired, maintained for at least ten years.
More creatively, the FCC could consider allowing stations to ``buy
out'' of that requirement by making a comparable donation to a
community foundation to establish perpetual endowments for the purpose
of adding a comparable number of local reporters within the community
even if it is not at the TV station.
In the long run, Congress should pass a version of the legislation
sponsored by Republican Claudia Tenney and Sen.Cantwell--refundable
employment credits tied to the number of local reporters, including at
local TV news broadcasts. That would give extra incentives for the
local station groups to increase local reporting rather than cutting
back.
The reason we emphasize the number of reporters rather than the
number of hours is that longer news shows with fewer reporters often
means more superficial news, or more newscasts that copy reports from
other stations in the market.
______
Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to
Steve Waldman
Congressional Intent
Question 1. When Congress enacted the 39 percent national ownership
cap, it sought a limit that would protect consumers, ensure
affordability, and promote a fair, unbiased media market.
a) What is the significance of a congressional directive
establishing this cap and maintaining it rather than deferring changes
to the FCC?
b) In addition to enacting the cap, Congress intentionally excluded
it from consideration in the FCC's broadcast ownership rule review
process. Does the FCC have the authority to lift the cap unilaterally,
or is it violating the congressional directive as it appears to be?
c) The current administration has continued to challenge regulatory
norms, especially at the FCC. In this regulatory environment, what are
the broader implications of the FCC acting outside of the authority it
was explicitly granted by Congress?
Answer. We have not taken a position on whether the FCC has the
authority to make these moves without Congressional approval. However,
we do believe that any consideration--by the FCC or Congress--should
place localism, and specifically the health of local news--at the
center of the decision making process. We are in the midst of a
dramatic collapse of local news. We've seen a 75 percent drop in the
number of local reporters since 2002.
So policies should be focused on reversing that catastrophe. That
means that any merger exceptions should be contingent on rock-solid
commitments that the combined entities would increase the number of
local news reporters and producers (not just the number of hours).
For instance, one could keep the 39 percent cap and provide
individualized exemptions if the specific merger met certain
conditions. The conditions could include a net increase in the total
number of local reporters and producers at the combined entities,
maintained for 10 years.
More creatively, the FCC could consider allowing stations to ``buy
out'' of that requirement by making a comparable donation to a
community foundation to establish perpetual endowments for the purpose
of adding a comparable number of local reporters within the community
even if it is not at the TV station.
The reason we emphasize the number of reporters rather than the
number of hours is that longer news shows with fewer reporters often
means more superficial news, or more newscasts that copy reports from
other stations in the market.
In the long run, we need something like the legislation proposed by
Sen. Cantwell and Republican Rep. Claudia Tenney to provide tax
subsidies to local news outlets that retain or hire local reporters.
This could be available to local TV news stations too, providing both
incentives and resources for them to invest in more local coverage. Or,
Congress could consider legislation to provide tax relief to small
businesses that advertise in local news. These could be paid for by
fees assessed against Big Tech.
Defining ``Localism'' in Law and Making It Enforceable
Question 2. Mr. Waldman, at the hearing, you said the debate can't
just be about the national cap, because the real issue is whether the
FCC is truly centering local news and the number of local reporters
when it reviews mergers. You also suggested Congress could write into
law that the health of local news is part of ``localism'' and should be
at the core of merger review.
a) If Congress were to put this into statute, what specific, plain-
English definition of ``localism'' would you recommend that clearly
includes local newsroom capacity, and what minimum metrics should the
FCC be required to measure in every merger review?
b) If Congress does not act and the FCC keeps using its current
approach, what is the most likely real-world outcome for local
newsrooms over the next 3-5 years, and what ``red flags'' should
Congress watch for that show merger review is missing the localism
problem?
Answer. Localism should include the demonstrated capacity of a
licensee to produce original news and information about the community
it is licensed to serve, generated by journalists who live and work
within that community. In plain English: are there enough professional
reporters on the ground, close enough to actually know the place they
are covering, to hold local institutions accountable?
The FCC could consider measuring at minimum: the number of full-
time journalists employed in each affected market before and after a
transaction; the percentage of news content that is locally originated
versus centrally produced; and whether journalists are physically based
within a reasonable proximity to the communities they cover, for
example, the 50-mile standard embedded in Rebuild Local News's model
local journalism tax credit legislation. Commitments on these metrics
could be enforceable conditions of approval, not aspirational
statements in a merger application.
Congress needs to take action not only on the broadcast issue but
the local news crisis in general. We need legislation like those
proposed by Republican Claudia Tenney and Sen. Cantwell that would
provide refundable employment credits to local news outlets that hire
or retain local reporters. This could be available for local TV
stations, too, providing incentives for them to invest in community
news.
They also proposed tax relief for small businesses that advertise
in local news, an approach now being considered in New Hampshire
Congress could require that a greater percentage of Federal government
advertising go through local media rather than social media or search.
It could help fund fellowships that place reporters into local
newsrooms, administered by state university journalism school programs.
That is happening in California, New Mexico and Washington.
Emergency Communications and Consolidated Newsrooms
Question 1. I know that my constituents depend on local
broadcasters for urgent, life-saving information, and the hearing
discussed how consolidation could affect coverage. But I want to know
what specific baseline expectations should apply if ownership limits
are loosened and newsrooms are combined.
a) If one company owns multiple stations in a market and combines
news operations, what specific, checkable expectations should apply to
make sure emergency coverage stays strong?
b) If you don't support new requirements, what measurable items
should Congress require stations to report so communities can confirm
consolidation isn't weakening emergency response?
Answer.
a) Any consolidation that results in combined news operations
should be subject to enforceable baseline requirements. The public
demand is clear and unmet: a recent survey found that 44 percent of
Americans report difficulty getting information about their own
neighborhood compared to just 26 percent for national news. On risks
and emergencies specifically, 95 percent of Americans said local
information on this topic is important to them, yet only 58 percent
reported being satisfied with what is available, a gap of 37 percentage
points.\48\ That unmet need will not be addressed by consolidated
newsrooms producing identical content across commonly-owned stations.
Each market should be required to maintain a minimum number of
journalists physically based within the community, consistent with the
50-mile proximity standard in Rebuild Local News's model legislation,
with sufficient staffing to deploy reporters to multiple locations
simultaneously during declared emergencies. These commitments should be
filed publicly, verified annually, and tied to license renewal.
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\48\ Civic Information Needs Census, National Survey (Wave 2),
February 2026. infocensus.org
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b) Congress should require consolidated station groups to publicly
report: the number of full-time journalists employed in each market
before and after a transaction; the percentage of locally originated
versus centrally produced content; the physical location of reporting
staff relative to the communities they serve; and documented response
capacity during declared local emergencies. These disclosures should be
standardized, publicly accessible, and submitted to the FCC annually.
Without that transparency, neither Congress nor affected communities
can assess whether consolidation is weakening the emergency coverage
function that broadcast licenses exist to provide or whether the
stations are fulfilling the commitments they should make toward growing
local coverage.
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