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TV merger: FCC’s Pai has ‘serious concerns’ over merger

By BRIAN FUNG
The Washington Post

July 16. 2018 9:50PM
Chairman Ajit Pai speaks ahead of the vote on the repeal of so called net neutrality rules at the Federal Communications Commission in Washington on Dec. 14, 2017. (REUTERS/Aaron P. Bernstein/File Photo)



WASHINGTON — Sinclair Broadcasting’s proposed $3.9 billion acquisition of Tribune Media has raised “serious concerns” at the Federal Communications Commission about the amount of control the combined company would have over the U.S. television market, said Ajit Pai, the agency’s chairman.

Pai said Monday that he intends to send key parts of the deal to review by an administrative law judge, which is typically the first step the FCC takes when it seeks to block a deal.

The merger would consolidate Sinclair’s position as a major conservative broadcasting entity, adding dozens of media stations to its roster. Its original merger proposal, if approved, would have given Sinclair access to 72 percent of television households in America, far surpassing a national ownership cap of 39 percent.

Sinclair had proposed spinning off a number of stations to get beneath the cap. But a number of the new, prospective owners had close ties to Sinclair executives, which critics said would allow Sinclair to stay in control of the stations it sold.

Pai said Monday he found those arguments persuasive.

“The evidence we’ve received,” said Pai, “suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law.”

The announcement is an unusual step for Pai, whose tenure leading the FCC has been marked by multiple efforts to relax regulations on TV broadcasters. In February, Pai reportedly came under investigation by the FCC’s own inspector general seeking to determine whether he inappropriately pushed for rule changes that could help Sinclair’s deal pass regulatory muster.

The FCC’s stance on Sinclair has taken on broader significance amid a wide-ranging debate over free speech rights in a politically volatile time.

“In general, this kind of media ownership concentration is dangerous for our democracy,” said Victor Pickard, a media scholar at the University of Pennsylvania’s Annenberg School for Communication. “Americans are still very reliant on local television news.”

Critics of the deal say it could limit the number of independent voices on the air, after news reports of programming on Sinclair-owned stations being dictated from its Maryland corporate headquarters.

Sinclair has been known to write scripts in the past that local anchors are required to read; in April, an online video of such a performance went viral — showing dozens of TV hosts intoning against the dangers of “fake news” and warning that other members of the media “use their platforms to push their own personal bias and agenda to control exactly what people think.” The company also requires its stations to run conservative commentary by Boris Epshteyn, a former Trump White House official, as often as nine times a week.

Sinclair didn’t immediately respond to a request for comment. In the past, Sinclair chief executive Chris Ripley has said the deal will create “a leading broadcast platform with local focus and national reach.”

To satisfy regulators, Sinclair said earlier this year it was willing to sell TV stations in a number of major media markets, including WGN in Chicago and WPIX in New York. Sinclair said it would spin off WGN to Steven Fader, a business associate of Sinclair chairman David Smith. WPIX would go to Cunningham Broadcasting Corp., a media company said to have family ties to Smith. The company later said WPIX would not be spun off, but that Cunningham would still be buying at least two other stations.

“The divestitures are really key to the deal going through,” said Matt Wood, policy director for the advocacy group Free Press. “There’s no way Sinclair can sit under the national ownership cap without them.”

While only those parts of the deal could be sent to the administrative law judge, Wood added, it doesn’t rule out the rest of the merger ultimately getting drawn in.

Pai’s proposal already has the necessary three votes to move foward. Brendan Carr, a Republican FCC commissioner, voted in favor, according to an FCC official, speaking on condition of anonymity to discuss internal agency deliberations. Democratic commissioner Jessica Rosenworcel also said in a statement she intends to support the recommendation.


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