WASHINGTON (TNND) — Lawmakers and regulators are reconsidering long-standing ownership limits on broadcast companies as the industry pushes for mergers and consolidation to give it more leverage to compete against major tech platforms and social media companies.
The Senate Commerce Committee held a hearing on Tuesday focused on an 85-year-old provision limiting how many households individual broadcasters can reach. The cap, currently set at 39%, hasn’t been changed in more than two decades despite consolidation of the media industry amid struggles to maintain revenue and profitability in the internet era.
The news industry has struggled since its business model was upended with the proliferation of the internet and social media platforms that are increasingly the top supplier of news for Americans. Congress has previously considered legislation to force tech companies to compensate news organizations for their content, an issue that is replaying with the growing popularity of artificial intelligence.
“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,” said Sen. Ted Cruz, the committee’s chairman.
Broadcast industry leaders have argued that lifting the limitations on ownership would help local news operations stay in business and hire more journalists.
National Association of Broadcasters CEO Curtis LeGeyt told lawmakers it is “past time to level the playing field and eliminate this antiquated restriction” as Big Tech companies like Google, Meta and TikTok have upended the advertising models that were the primary driver for journalism revenue for decades.
“Ownership restrictions that apply only to broadcasters are no longer rational or sustainable. They prevent broadcasters from achieving the scale necessary to compete,” LeGeyt said. “As a result, your local stations remain hobbled by rules designed for the analog era.”
Advocates of removing the cap argue that the proliferation of cable television and social media have made it impossible for broadcasters to compete with digital platforms that are not subject to caps on their reach. LeGeyt argued that it will also keep sports more accessible to viewers as broadcasters are facing more competition from deep-pocketed streaming services and tech companies for increasingly expensive sports rights.
“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 pay walls,” LeGeyt said.
The hearing comes as President Donald Trump threw his support to a proposed merger between local television operator Nexstar Media and Tegna, which would require lifting the ownership cap. Sinclair Broadcast Group, the operator of this station, is pursuing a merger with E.W. Scripps in a push the company said would help it compete effectively.
Trump had previously opposed raising the ownership cap but has not weighed in on it publicly since approving of the proposed Nexstar-Tegna merger.
FCC chair Brendan Carr backed Trump’s position in a post on X, arguing national media companies had amassed too much power. Carr has advocated for years to remove the cap and argued the FCC doesn’t need congressional approval to lift it.
“Let’s get it done and bring real competition to them,” he wrote.
Critics of lifting the restrictions on local ownership argue it would lead to less independent voices and shrinking the number of local newsrooms across the country, compounding a problem that industry has dealt with over the last 10 years.
“We’re facing a real crisis in local journalism. Newsrooms are shrinking, reporters are losing their jobs. Entire communities are becoming news deserts, and at 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,” said Sen. Ed Markey, D-Mass. “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.”
Newsmax CEO Chris Ruddy, who has been a forceful opponent of lifting the cap, said it would squeeze independent media companies who would be forced to compete with larger conglomerates that would have an unfair advantage in negotiations. Ruddy told senators the cap is “one of the last meaningful protections for competition and diversity” in the broadcast industry.
“Raising the cap means that two or three corporations will eventually own most stations in the nation and control almost all local news,” he said. “We know that station groups cut costs by consolidating newsrooms and they and reduce competition at the local level allows them to raise advertising rates.”
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