Legal Issues

by Karl Bode


Filed Under:
ajit pai, fcc, investigations, media ownership

Companies:
sinclair



Ajit Pai Rushes To Weaken Media Ownership Cap To Aid Sinclair... While Under Investigation For Being Too Cozy With Sinclair

from the ill-communication dept

We've discussed for a while now how FCC boss Ajit Pai is busy gutting decades old media consolidation rules simply to help Sinclair Broadcast Group complete its $4 billion acquisition of Tribune. Many of these rules traditionally enjoy bipartisan support, since they protect local news organizations and free speech from being crushed by any one, major broadcaster. And Sinclair's merger, which would allow it to reach nearly 72% of the country with its facts-optional and monolithic programming (as that recent viral Deadspin video attests), has been routinely under fire by groups on both sides of the partisan aisle.

As Sinclair moved to acquire Tribune, it kept running into FCC rules. Rules Ajit Pai was more than happy to systematically remove at every step in perfect synchronicity with Sinclair's ambition. And while Pai's allies on the commission claim this timing is all just quirky happenstance, the allegations have resulted in the FCC's nonpartisan inspector general launching an investigation into possible corruption and coordination between the FCC and the broadcaster. Pai's fellow Commissioners like Jessica Rosenworcel have publicly stated the Trump FCC is little more than a rubber stamp for Sinclair:

To specifically help Sinclair's merger squeeze in under the media ownership cap, Pai's FCC restored an irrelevant bit of 1980's regulatory guidance known as the UHF Discount. Built in the 1980's as a mechanism to adjust for the lesser quality and reach of UHF stations, the rule was eliminated a few years ago for being the sort of outdated regulatory red tape Pai's FCC routinely pretends to be waging war against. But Pai's FCC suddenly and quickly restored the rule just a few weeks before Sinclair announced its merger, conveniently allowing Sinclair to under-state the company's real ownership reach.

That, in turn, has resulted in a looming legal challenge driven largely by consumer groups (but again enjoying bipartisan support from Conservatives like Newsmax CEO and Trump ally Chris Ruddy):

"A panel of appellate judges questioned why the FCC reinstated a rule that allows media companies to amass a greater number of stations and still fall within ownership limits...The three judges on the DC Circuit Court of Appeals panel raised some concerns about the rationale behind the FCC’s decision in April, 2017, to reinstate the UHF discount after abolishing it a year earlier...

Chris Ruddy, the CEO of Newsmax, who has been highly critical of the FCC’s action, as well as of the Sinclair-Tribune merger, said in a statement that “the judges on the DC Circuit reviewing the FCC’s UHF discount were left scratching their heads wondering why the rule was re-instated when everyone — Republicans and Democrats alike — agree that the discount is an analog relic and makes no sense in a digital world.

Undaunted by an ongoing corruption investigation, Pai is rushing forward with a July 12 vote to further erode a rule prohibiting any one broadcaster from reaching more than 39% of the national audience. The hope, clearly, is to formalize a higher overall ownership cap before the courts can challenge the FCC's previous rule changes. However, there's ample question as to whether the FCC has the authority to modify this cap (even some of Pai's allied Commissioners have acknowledged they may not), and such a ruling will absolutely be quickly appealed.

Sinclair, meanwhile, is busy trying to burrow over and under what media ownership rules remain, in part by promising to offload some stations to shell companies or companies that still have a relationship with Sinclair.

All told, it's just another example of how Trump's "populist" rhetoric is about as deep as a mud-puddle and authentic as a wild west movie set. Between efforts to hamstring competition, neuter regulatory oversight, and gut net neutrality and rubber stamp major media mergers (from Sinclair to the looming tie up between Sprint and T-Mobile), Ajit Pai's FCC is pursuing a very specific idea of what they want the future of the internet and media to look like, with healthy competition, consumers and small business welfare being a very, very distant afterthought.


Reader Comments

The First Word

Subscribe: RSS

View by: Time | Thread


  • identicon
    Anonymous Coward, 22 Jun 2018 @ 6:44am

    I hope Sinclair is allowed to buy Tribune, only to have the next FCC change the rules again, forcing them to sell off stations for pennies on the dollar.

    reply to this | link to this | view in chronology ]

    • icon
      Madd the Sane (profile), 22 Jun 2018 @ 7:09am

      Re:

      Only problem I see is Sinclair declaring the new FCC as "capricious" because of the reinstating of the rules.

      They'd do this by paid-off senators, of course.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 24 Jun 2018 @ 1:36pm

        Re: Re:

        Or those Senators that go against them suddenly start having "accidents" "strokes" and "heart attacks".

        Wouldn't be the first time Sinclair was on the wrong end of a politicians suspicious death investigation.
        or the tenth.

        reply to this | link to this | view in chronology ]

  • icon
    ShadowNinja (profile), 22 Jun 2018 @ 7:13am

    Sinclair is the very definition of a propaganda network.

    The danger Sinclair could do to our nation long term with a bigger reach is scary. A number of countries that once had democracies that were hijacked by dictators first had what were essentially propaganda networks backing up said dictator's party before they took control.

    reply to this | link to this | view in chronology ]

  • icon
    PaulT (profile), 22 Jun 2018 @ 7:39am

    My main gripe about all this is that it's making people associate the name Sinclair with negative things, rather than Sir Clive, inventor of my generation's introduction to the computing world. Between that and the failed Indiegogo reboot of the ZX Spectrum, it's a sad time.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Jun 2018 @ 9:20am

      Re: as a British serf, you're must "Sir" him; to me he's "Clive"

      I had a ZX81, found it was crap not worth even the 80 bucks, returned it. That was same period all British cars leaked oil -- wherever they quit running.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 24 Jun 2018 @ 1:37pm

        Re: Re: as a British serf, you're must "Sir" him; to me he's "Clive"

        ALL of them?

        So you're saying Bentleys, Rolls Royce, Rover, Aston Martin etc were crap?

        reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 25 Jun 2018 @ 1:44am

        Re: Re:

        "I had a ZX81, found it was crap"

        Good for you. Most people didn't, and Sinclair was a great influence on many. Especially once the 48K ZX Spectrum came along to supersede it. With the Spectrum, that was the basis for a huge number of the people currently working in the industry to gain an interest in the subject. For some, it was the most important device in their lives, and thus hugely important for the industry as a whole ever since.

        But, you don't come across as someone with enough intelligence to have operated the ZX81 back in 1981 - after all, that would place you at least in your early 40s and you still act like an ignorant child. Imagine how you must have been when you were actually one! My guess is that either you couldn't work out how to use it because you lacked the required intellect, or you're lying, yet again.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Jun 2018 @ 10:08am

      Re:

      It was difficult to type on that little membrane keyboard!

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jun 2018 @ 8:09am

    Pais end-game

    You have to be wondering what Pais end-game is. He is getting investigated left and right for acting contra-factual and shady in a lot of circumstanses. Like Trump, his actions seem to be rushed to an extend that seems to indicate an end-game before long and certainly beforee the term is up.

    Sinclair is now hiring expanding the "must run"-segment with former Trump adviser Epsteyn to attack the stupid liberals for not letting Trump use children as leverage to turn people away. "Don't the liberal propagandists understand that it is a war on immigration and everyone deported person counts?".

    Welcome to demagoguery and the slippery slope away from democracy Turkey is on...

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 22 Jun 2018 @ 4:07pm

      'You were VERY good for us in office, now it's our turn.'

      You have to be wondering what Pais end-game is.

      Ensuring that his 'resume' is sterling enough for certain companies that he'll have no problem whatsoever finding a job after he leaves the FCC. At this point I imagine he could walk into any of the major ISP's offices and be (officially) 'hired' on the spot, given how blatantly he's been favoring them.

      He probably figures that worst case scenario he'd be forced to resign from his position, wait a few months, then land in a cushy do-nothing job where the ISP's throw money at him for all he did for them.

      reply to this | link to this | view in chronology ]

  • icon
    Gary (profile), 22 Jun 2018 @ 8:11am

    Trust

    Mergers and monopolies are the natural result of unfettered markets. De-regulation means more monopolies, not more competition. Trust-busting just isn't a thing as long as our elected reps on on corporate payroll.

    reply to this | link to this | view in chronology ]

    • This comment has been flagged by the community. Click here to show it
      identicon
      Anonymous Coward, 22 Jun 2018 @ 9:28am

      Re: Trust -- Define "monopoly": Techdirt says GOOGLE isn't!

      Do you even READ here? Or just so new that haven't caught on to Techdirt's (most fanboy's) actual positions?

      I still firmly believe that one of these days, you're going to notice that your impression of Techdirt is just simply not accurate.

      Masnick talks up corporatism every day, isn't worried about the vast mega-corporations, only slants writing enough to fit onto the edges of your assumptions.

      reply to this | link to this | view in chronology ]

      • icon
        Gary (profile), 22 Jun 2018 @ 9:35am

        Re: Re: Trust -- Define "monopoly"

        I'm not sure if you were replying to me or if you just start screaming and hitting the keyboard when you see your trigger words?
        What, praytell, is my impression of TD? And how does my opinion of free-market fallacies reflect on Mike?

        reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 25 Jun 2018 @ 3:26am

          Re: Re: Re: Trust -- Define "monopoly"

          "What, praytell, is my impression of TD?"

          Whatever he wants to imagine it is, in order to most vehemently attack you. It doesn't have to be true, only something that makes him imagine he's right.

          reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 22 Jun 2018 @ 8:25am

    Undaunted by an ongoing corruption investigation, Pai is rushing forward with a July 12 vote to further erode a rule prohibiting any one broadcaster from reaching more than 39% of the national audience.

    Does this whole thing seem a bit strange to anyone else, just on general principle? I mean, if one broadcaster can't reach more than 39% of the national audience, this means that if John Q. Public were to get a new job in another state and have to move across the country, there's a greater than 60% odds that he won't have his favorite broadcaster available to watch on local TV.

    Sinclair is awful, I won't deny that, but aren't we kind of going about it in exactly the wrong way? Under the principles of free speech, freedom of the press, and "the best counter to bad speech is not to suppress speech but to encourage even more speech," why not throw out that rule entirely, and make it so every broadcaster has the right to reach 100% of the audience? Then Sinclair could reach everyone, sure, but so could all the alternatives to Sinclair who are broadcasting more sane messages. Doesn't that sound like a better state of affairs overall?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Jun 2018 @ 9:11am

      Re:

      The problem is whoever owns the means to get the message out can control the message..

      reply to this | link to this | view in chronology ]

    • icon
      Ninja (profile), 22 Jun 2018 @ 2:30pm

      Re:

      I'd go further: make it easier for new entrants so established players woouldn't misbehave.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Jun 2018 @ 4:38pm

      Re:

      The issue and reason for the restriction, is that when it comes to spectrum, there is a finite amount of it. It's not like the internet where you can always add more connections, once a company has 40% of the spectrum, it means that 40% of it is not available to anyone else. The reason for the market restriction is to prevent one company from completely hijacking the airwaves of the entire nation.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jun 2018 @ 8:39am

    Then Sinclair could reach everyone, sure, but so could all the alternatives to Sinclair who are broadcasting more sane messages.

    The easiest way for Sinclair to get to 100% would be to buy those "alternatives to Sinclair". Then what? There's not necessarily an unused TV channel sitting around in each market, even if someone else does obtain the money to get the FCC license and run the station. I agree with your premise but don't have a solution to this problem.

    Pai was born in 1973, so probably remembers having to assume Fox viewing positions. ("Alluding to the fact that Fox was on UHF and UHF channels were sometimes hard to tune in with antenna.")

    reply to this | link to this | view in chronology ]

    • icon
      Mason Wheeler (profile), 22 Jun 2018 @ 10:04am

      Re:

      The easiest way for Sinclair to get to 100% would be to buy those "alternatives to Sinclair". Then what?

      Then antitrust.

      reply to this | link to this | view in chronology ]

      • identicon
        NewEraNewLaws, 22 Jun 2018 @ 10:56am

        Re: Re:

        I think we need new laws. We need modern laws that take on mergers and acquisitions and the relationship with investors behind the books.

        How many television stations should be owned by one player in one media market? My answer - ONE!

        How many newspapers can be owned by one player? My answer - ONE!

        We need new laws for this era of technology and social investment that break up the relationship between holding companies and the lower level businesses, that are 100% transparent and publicly list ALL investors - then tear apart the relationships between the merger and acquisition investors who hide behind the scenes.

        It's not just about Sinclair's editorials, that's a symptom of bigger issues.
        How many national ads do we see every election cycle? Those need to go away... Local politics should be local and international corporations should NOT have a larger say because they can pay more. One vote, one voice in elections and advertising/marketing needs to be held liable for taking in more voices (aka more money) than local voices can compete with.

        reply to this | link to this | view in chronology ]

        • icon
          Mason Wheeler (profile), 22 Jun 2018 @ 1:00pm

          Re: Re: Re:

          We need new laws for this era of technology and social investment that break up the relationship between holding companies and the lower level businesses, that are 100% transparent and publicly list ALL investors - then tear apart the relationships between the merger and acquisition investors who hide behind the scenes.

          Publicly listing all investors could get very tricky depending on how you define "all investors."

          For example, if it's a company large enough to be listed on the S&P 500, and I own shares of a S&P 500 index fund, (this is an incredibly common thing BTW, for those unfamiliar with modern investing practices,) that technically makes me an investor in that company. Should I be on the list? Or what if the company that my employer engaged to manage my 401K purchased that company's stock (or an index fund that contains it) on behalf of my retirement fund?

          I do agree that transparency is important, but unless you're very careful with your definitions, you'll end up with a "solution" where the signal-to-noise ratio is so low as to be useless.

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 22 Jun 2018 @ 6:46pm

          Re: Re: Re:

          How many newspapers can be owned by one player? My answer - ONE!

          Absolutely not. You can justify limiting ownership of broadcast TV stations because there's a finite number of frequencies (and some stations are only allowed to broadcast at reduced power to avoid interference, so the number of good stations are even more limited.) You can't justify doing the same thing with newspapers - literally anyone can start a newspaper if they wish; there's no government-granted monopoly.

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jun 2018 @ 8:55am

    Under investigation? Pah. I'm actually expecting this fucker to finish it up with a skit posted to YouTube about how he dodged the investigation and the Internet is still technically alive so he clearly must not be at fault.

    Bennett's putting some work in, it seems. Somebody must be supplying him with kneepads...

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 22 Jun 2018 @ 9:02am

    IF you were consistent, you'd apply same worries to GOOGLE!

    healthy competition, consumers and small business welfare being a very, very distant afterthought

    FOUR BILLION IS A MINOR PLAYER THESE DAYS! SHOULD be helped! -- YES, I think that a serious point. Compared to Google and Facebook, Techdirt is as usual worrying about one Orc Chief while at best actively ignoring Sauron.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Jun 2018 @ 12:50pm

      Re: IF you were consistent, you'd apply same worries to GOOGLE!

      one Orc Chief while at best actively ignoring Sauron.

      Stop trying to be hip and cool, you obviously don't understand the culture and as such have completely failed at using it in an analogy.

      You fail much in the same way Pai failed in his garbage skit video and subsequently had his ass handed to him by Mark Hamill about his wielding a lightsaber. Gondor was one of, if not the, richest kingdom in Middle Earth, with multiple sea trading ports, trading partners, merchant businesses, etc... Meanwhile, Sauron wasn't interested in wealth at all, he just wanted to watch the world burn.

      Finally, your English and grammar sucks.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Jun 2018 @ 2:35am

      Re:

      Four billion is a minor player?

      Fuck me, then what the hell has the RIAA been doing all these years? If four billion is minor, they're going after citizens for subatomic particles at best.

      out_of_the_blue's heroes, ladies and gentlemen! Bending over backwards just to appear quasi-legit.

      reply to this | link to this | view in chronology ]

  • identicon
    Iggy, 22 Jun 2018 @ 9:58am

    I find it surreal that we know the names and contact information for all the criminals and yet they likely won't spend a day in jail

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jun 2018 @ 10:10am

    Incredible how blatant the corruption is. Pai's kids must be so proud of their daddy screwing over the pions.

    reply to this | link to this | view in chronology ]

  • identicon
    SinclairIsMurdochOnSteriods, 22 Jun 2018 @ 10:39am

    Here's What It Looks Like

    Was talking to my father the other day. He lives in Eugene Oregon. Told me that all the local stations there are owned by Sinclair.

    Looked it up, 9 stations in the area are Sinclair. Bleedover from other localities do impact what they receive so include Portland and other larger stations for the region.

    This has to end.
    Now that Fox Entertainment is moving into Disney entertainment that means changed rules under Michael Powell that allowed Rupert Murdoch his media empire are way way outdated.

    The supreme court now allows all states to Tax internet sales, the rules on Powell and these new slackened rules should be next on the supreme court docket and reversed.

    We need local news, local stations, local ownership over the air. This national or even regional stuff is good for the big players but stifles innovation and actual local discourse.

    reply to this | link to this | view in chronology ]

  • icon
    jupiterkansas (profile), 22 Jun 2018 @ 2:41pm

    Unfortunately, some members of the media use their platforms to push their own personal bias and agenda to control exactly what people think. This is extremely dangerous to our democracy.

    reply to this | link to this | view in chronology ]

  • identicon
    Gary Mont, 23 Jun 2018 @ 10:25am

    The right man for the job.

    Looks to me like Mister Pai has been promised an end-game reward - a chalet in the Urals sort of thing, or a massive payment placed in a special off-shore account - if he can pull off the political-commercial desires of a couple of very friendly corporations, before a certain date. It also appears that he has been offered a "Get Out Of Jail Free" card, should he have to break any laws to get the task done.

    But of course, as all Americans know, that sort of thing simply can't happen here in the land of Milk and Honey.

    So... never mind. :)

    ---

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Shop Now: Copying Is Not Theft
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories

Close

Email This

This feature is only available to registered users. Register or sign in to use it.