Nexstar/Tegna Opponents Blast Waiver Request, Argue That Deal Is 'Novel'
MVPDs, public interest and civil rights groups said in filings posted Wednesday that the FCC shouldn’t grant waivers to green-light Nexstar’s proposed $6.2 billion purchase of Tegna while it has open proceedings on the quadrennial review and national cap. They also argued that allowing the deal would be a novel decision that can’t be approved at the bureau level.
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Altafiber said Nexstar and Tegna’s push for waivers is an “attempt to sidestep” two open proceedings, “blunting the deliberative notice and comment rulemaking process required by Congress.”
While the FCC is considering rolling back local TV limits and the national TV ownership cap for all broadcasters, waiving those rules for only Nexstar and Tegna would be “especially premature and unwarranted,” said a joint filing from six state broadband associations. “What the Applicants call a waiver request ‘is nothing less than a shameless request for ... near-total obliteration’ of the Commission’s ownership rules.” Altafiber said Nexstar’s “speculation of doom and gloom, assuming it would come to fruition, would be of equal concern to all broadcasters (and presumably would have a far greater negative impact on smaller broadcasters).”
Nearly all the commenters reiterated arguments that Congress hasn’t given the FCC authority to alter or waive the national cap. “Congress’s intent is clear: the Commission lacks authority to alter or waive the 39 percent cap and must deny the proposed transaction,” said Newsmax.
But the Digital First Project and Center for American Rights pushed back on those arguments. “Objectors are again looking to stitch together ‘signals’ of ‘Congress’s intent’ from various bits of text and scraps of legislative history, like Roman priests judging the auguries of bird entrails,” CAR said. “Respectfully, that’s not how we do law.”
U.S. Supreme Court precedent shows that agencies “must reassess legacy rules when market conditions change,” said Digital First. “Failure to do so -- especially where speech and competition are implicated -- creates serious litigation risk under both the First Amendment and the [Administrative Procedure Act].”
Digital First also said Newsmax’s opposition to the deal is purely based on concerns about competition from the combined company. Newsmax’s filings “amount to a request for regulatory shelter -- an effort to preserve a competitive advantage by freezing rivals under outdated rules,” the group said. “The FCC exists to protect the public interest, not to referee private business rivalries.”
Waiving the national cap would be an unprecedented move that is outside the authority of the Media Bureau’s delegated authority, said the state broadband associations. “The Commission -- not the Media Bureau -- must deal with the Transaction and address these weighty legal and policy issues head on.” CAR disagreed. “This is not a novel legal question for the Commission,” it said, pointing to actions by previous FCCs on the cap, including the 2016 vote on ending the UHF discount.
Several opponents of the deal pushed back on arguments from Nexstar and Tegna that concerns about rising retransmission consent prices and job cuts are speculative. Nexstar’s history shows that workforce reductions are likely if consolidation is allowed, said a joint filing from Public Knowledge, Free Press, the United Church of Christ and the Communications Workers of America. Nexstar reported 16,193 total employees shortly after its 2019 purchase of Tribune, but one year later, it reported having 12,412, the filing said. “Petitioners are not speculating about what is likely to follow this merger, we are simply paying attention to reality.”
If the deal is approved, the FCC needs to “craft a flexible but effective framework” to ensure that it doesn’t lead to skyrocketing retrans rates, said altafiber. The MVPD pushed for the FCC to institute a “social contract” rather than merger conditions, which would include provisions to allow the agency to roll back the transaction if Nexstar doesn’t follow through. “If Nexstar’s train is allowed to leave the station, there is no practical way for the commission to call it back,” altafiber said.
The likely jump in retrans rates after the deal’s approval will drive more rural providers to cease offering video services, argued NTCA. “Rural operators lack negotiating leverage to secure reasonable programming fees from large broadcast corporations.”
Nexstar and Tegna also haven’t responded to evidence submitted by DirecTV that the deal will harm competition, the latter company said. “The very fact that Applicants implore the Commission to jettison the traditional tools that regulators and the courts use to determine whether a transaction would harm the public interest only confirms that this transaction would do exactly that,” DirecTV said. “Under no variety of standard, evidence-based transaction review could this Application be approved. The Commission should deny it. If it does not, we are confident a reviewing court will.”