The Senate Commerce Committee is placing the spotlight on a massive lobbying fight just days after President Donald Trump shook up the debate.
The panel is holding a hearing this morning on the national media ownership cap that prohibits broadcasters from reaching more than 39% of U.S. households. Taking center stage in this debate is the Nexstar-Tegna merger that would blow through that threshold and has been endorsed by both Trump and Federal Communications Commission Chair Brendan Carr.
Any changes to the decades-old cap would have wide repercussions for the media industry and consumers, allowing for greater consolidation in the broadcasting business. Whether that’s good or bad is what this lobbying brawl has been about.
“Broadcasters are fighting to stay competitive against media and tech companies with national, and often global, reach,” Senate Commerce Committee Chair Ted Cruz (R-Texas) will say in his opening statement today. “Ownership rules were written in a vastly different technological age.”
Yet, Cruz won’t go as far as supporting lifting the threshold. Rather, he’ll say he wants to hear the different “perspectives” on the issue.
Trump factor. The hearing comes days after Trump said the Nexstar-Tegna deal would bring “more competition” against national networks.
Trump’s comments were a big blow to supporters of the 39% cap. That includes conservative outlets like Newsmax and One America News Network, which could be forced to go up against more powerful rivals with wider reach. It also includes programming distributors in the cable and satellite businesses that may face higher retransmission rates.
Trump wasn’t “fully informed on this matter, and as more information comes along, we hope that he would reconsider and change his position on it,” Newsmax CEO Christopher Ruddy, one of the hearing’s witnesses, said in an interview.
Carr said the president was “right” about the merger and that the FCC would “get it done.” Carr could issue a one-time waiver for the companies or change the cap altogether. Either move would likely create a fight in the courts.
Ruddy and Democrats on the panel are expected to argue that only lawmakers can change the cap since the level was established by Congress in 2004.
Local media angle. Meanwhile, National Association of Broadcasters President Curtis LeGeyt will argue in the hearing that the affiliate groups are the ones who can keep local journalism going.
In an interview, LeGeyt said the industry has been dealing with fierce competition from Big Tech, which has dominated the advertising market for over two decades.
