WASHINGTON — During its April open meeting, the Federal Communications Commission under Trump appointee Ajit Pai passed a number of measures favored by large telecommunications and broadcast conglomerates, including a decision to eliminate price caps on broadband services provided to essential community institutions and one to reinstate an outdated broadcast ownership rule favored by station conglomerates seeking to expand their media holdings beyond federally mandated limits.

Business Data Services

The FCC voted, with Commissioner Mignon Clyburn dissenting, to eliminate price caps that make broadband access more affordable for hospitals, schools, libraries and small businesses, and that help to keep down competitive wireless prices for retail users too. The decision, affecting $45 billion market for Business Data Services (BDS) removes caps the agency put in place to protect these essential local institutions from price gouging by powerful internet service providers like AT&T, Comcast and Verizon.

In defense of his action, FCC Chairman Ajit Pai claimed BDS price caps aren't necessary in markets where “sufficient competition” exists. While Pai, like his predecessor former Chairman Tom Wheeler, has made competition a mantra in his public speeches, he defines sufficient competition here to mean markets currently served by just a single broadband provider.

Free Press Deputy Director and Senior Counsel Jessica J. González made the following statement:

“Once again, Chairman Pai is putting his thumb on the scale to favor monopoly ISPs over the interests of internet users and small businesses. Instead of modernizing and strengthening regulations, promoting real broadband competition in the business and wholesale markets, and limiting the monopoly power of incumbents, this order lets them off the leash. Pai claims the market is plenty competitive, but this order defines competition as current service by only one provider as long as another one somewhere nearby might hypothetically offer service one day. It should be obvious that potential competition is not the same as actual competition, and the last decade of waiting for it to emerge in sector prove that painful point. For small businesses trying to connect to the internet, the price of BDS can be the difference between a firm remaining in business or closing its doors -- and Pai just gave BDS providers free reign to squeeze these businesses (and their customers) even tighter.”

Reinstating the UHF Discount

Chairman Pai and Commissioner Mike O'Rielly also voted over Commissioner Clyburn's dissent to reinstate an obsolete rule called the UHF discount that, since the U.S. transition to digital television in 2009, had functioned as nothing more than a loophole allowing broadcast conglomerates to exceed congressionally-mandated national television coverage limits.

Until the loophole was removed by the agency in 2016, the FCC counted a UHF station’s viewership reach as only half as much as a VHF full-power station. It used that UHF discounted figure as a means to determine whether a broadcaster’s nationwide coverage fell under the the agency’s 39 percent national audience reach ownership cap.

The vote came amid press reports that conservative broadcast conglomerate Sinclair Broadcast Group was seeking to buy several local stations owned by Tribune Media Co., a move that would only be possible after reinstating the UHF discount as Pai’s FCC did  today.  

González made the following statement:

“The FCC UHF vote unleashes more media consolidation, undermines viewpoint diversity, and further reduces opportunities for people of color to own broadcast stations. Chairman Pai likes to talk about getting rid of obsolete rules, yet here he is reinstating a rule with no technical justification just because it lets broadcast conglomerates skirt the law and expand their control over the nation’s airwaves. This decision brazenly favors Trump and Pai's big broadcaster friends at Sinclair, Fox and other white-owned media conglomerates, to the detriment of broadcast owners of color. The few broadcast licensees who are women or people of color tend overwhelmingly to own single stations or smaller station groups and find it harder to complete with massive media conglomerates. In the same order, Pai inexplicably suggests that the Commission might even loosen further the generous 39 percent limit, despite the fact that this is bad public policy and explicitly outside of the FCC's jurisdiction.”