S.Hrg.119-498

1[Senate Hearing 119-498]2[From the U.S. Government Publishing Office]34                                                        S. Hrg. 119-49856                    WE INTERRUPT THIS PROGRAM: MEDIA7                      OWNERSHIP IN THE DIGITAL AGE89=======================================================================1011                                HEARING1213                               before the1415                         COMMITTEE ON COMMERCE,16                      SCIENCE, AND TRANSPORTATION17                          UNITED STATES SENATE1819                    ONE HUNDRED NINETEENTH CONGRESS2021                             SECOND SESSION2223                               __________2425                           FEBRUARY 10, 20262627                               __________2829    Printed for the use of the Committee on Commerce, Science, and30                             Transportation3132                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3334                Available online: http://www.govinfo.gov3536                               ______3738                 U.S. GOVERNMENT PUBLISHING OFFICE394064-348 PDF                WASHINGTON : 20264142       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION4344                    ONE HUNDRED NINETEENTH CONGRESS4546                             SECOND SESSION4748                       TED CRUZ, Texas, Chairman4950JOHN THUNE, South Dakota             MARIA CANTWELL, Washington,51ROGER WICKER, Mississippi                Ranking52DEB FISCHER, Nebraska                AMY KLOBUCHAR, Minnesota53JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii54DAN SULLIVAN, Alaska                 EDWARD MARKEY, Massachusetts55MARSHA BLACKBURN, Tennessee          GARY PETERS, Michigan56TODD YOUNG, Indiana                  TAMMY BALDWIN, Wisconsin57TED BUDD, North Carolina             TAMMY DUCKWORTH, Illinois58ERIC SCHMITT, Missouri               JACKY ROSEN, Nevada59JOHN CURTIS, Utah                    BEN RAY LUJAN, New Mexico60BERNIE MORENO, Ohio                  JOHN HICKENLOOPER, Colorado61TIM SHEEHY, Montana                  JOHN FETTERMAN, Pennsylvania62SHELLEY MOORE CAPITO, West Virginia  ANDY KIM, New Jersey63CYNTHIA LUMMIS, Wyoming              LISA BLUNT ROCHESTER, Delaware6465                 Brad Grantz, Republican Staff Director66           Nicole Christus, Republican Deputy Staff Director67                   Lila Harper Helms, Staff Director68                 Melissa Porter, Deputy Staff Director6970                            C O N T E N T S7172                              ----------73                                                                   Page74Hearing held on February 10, 2026................................     175Statement of Senator Cruz........................................     176Statement of Senator Cantwell....................................     277Statement of Senator Capito......................................    6678Statement of Senator Kim.........................................    6879Statement of Senator Moran.......................................    7080Statement of Senator Rosen.......................................    7181Statement of Senator Young.......................................    7382Statement of Senator Klobuchar...................................    7583Statement of Senator Fischer.....................................    7784Statement of Senator Markey......................................    7985Statement of Senator Moreno......................................    8186Statement of Senator Lujan.......................................    828788                               Witnesses8990Chris Ruddy, Chief Executive Officer, Newsmax Media..............     491    Prepared statement...........................................     692Curtis LeGeyt, President and Chief Executive Officer, National93  Association of Broadcasters....................................    3894    Prepared statement...........................................    3995Thomas Johnson, Partner and Co-Chair of Issues and Appeals, Wiley96  Rein LLP.......................................................    4797    Prepared statement...........................................    4998Steve Waldman, President, Rebuild Local News.....................    5399    Prepared statement...........................................    55100101                                Appendix102103Letter dated February 9, 2026 to Hon. Ted Cruz and Hon. Maria104  Cantwell from Gary Shapiro, Executive Chair and CEO, Consumer105  Technology Association.........................................    89106Letter dated February 10, 2026 to Chairman Ted Cruz and Ranking107  Member Maria Cantwell from Matthew F. Wood, VP of Policy &108  General Counsel, Free Press Action.............................    90109Letter dated February 10, 2026 to Hon. Ted Cruz and Hon. Maria110  Cantwell from Ebonie Riley, SVP, National Action Network.......   141111Response to written questions submitted to Chris Ruddy by:112    Hon. Ted Cruz................................................   143113    Hon. Maria Cantwell..........................................   143114    Hon. Tammy Baldwin...........................................   144115    Hon. John Hickenlooper.......................................   144116    Hon. John Fetterman..........................................   145117    Hon. Lisa Blunt Rochester....................................   145118Response to written questions submitted to Curtis LeGeyt by:119    Hon. Ted Cruz................................................   146120    Hon. Maria Cantwell..........................................   147121    Hon. John Hickenlooper.......................................   148122    Hon. Lisa Blunt Rochester....................................   150123Response to written questions submitted to Thomas Johnson by:124    Hon. Ted Cruz................................................   150125    Hon. John Hickenlooper.......................................   151126    Hon. Lisa Blunt Rochester....................................   152127Response to written questions submitted to Steve Waldman by:128    Hon. Ted Cruz................................................   153129    Hon. Maria Cantwell..........................................   156130    Hon. Tammy Baldwin...........................................   165131    Hon. John Hickenlooper.......................................   169132    Hon. John Fetterman..........................................   170133    Hon. Lisa Blunt Rochester....................................   171134135                   WE INTERRUPT THIS PROGRAM: MEDIA136                     OWNERSHIP IN THE DIGITAL AGE137138                              ----------139140                       TUESDAY, FEBRUARY 10, 2026141142                                       U.S. Senate,143        Committee on Commerce, Science, and Transportation,144                                                    Washington, DC.145    The Committee met, pursuant to notice, at 10:20 a.m., in146room SR-253, Russell Senate Office Building, Hon. Ted Cruz,147Chairman of the Committee, presiding.148    Present: Senators Cruz [presiding], Fischer, Moran, Young,149Moreno, Capito, Cantwell, Klobuchar, Markey, Rosen, Lujan, and150Kim.151152              OPENING STATEMENT OF HON. TED CRUZ,153                    U.S. SENATOR FROM TEXAS154155    The Chairman. Good morning. We interrupt this program for a156Senate Commerce Committee hearing on media ownership in the157digital age.158    For over a century, broadcast media stood at the epicenter159of America historical and cultural life. It brought the Nation160classics like ``I Love Lucy'' and shaped the music landscape161with Elvis or The Beatles on ``The Ed Sullivan Show.'' Twitter162being what it is, I watched The Beatles on ``The Ed Sullivan163Show'' yesterday, and, wow, they were young. It showed164Americans the realities of war, the wonder of the Apollo 11165moon landing, and the defining political moments of their time,166from the Nixon-JFK debate to President Reagan's clarion call to167``tear down this wall.'' Through these shared viewing168experiences, broadcasters helped to embed iconic moments in the169collective American consciousness.170    The media's power to frame events and shape public171perception is substantial. So, it is understandable why172Congress placed limits on broadcast media ownership intended to173prevent a monopoly on programming and viewpoints. Indeed, for174much of the last century, holding a broadcast license was often175called a license to print money. With limited competition,176station owners commanded massive audiences and steady profits,177but that era has passed. Cable and satellite ushered in 24/7178news, while the Internet and mobile technologies unleashed a179wave of streaming services, news and entertainment sites, and180social media flooding Americans' screens with endless content181and fragmenting what were previously universal audiences.182    Today, broadcasters are fighting to stay competitive183against media and tech company with national and often global184reach. This raises an important question: are longstanding185broadcast media ownership rules still relevant in the digital186age, and if so, to what extent? In recent years some of these187rules have been rolled back or eliminated. Whether more reform188is needed or if today's status quo remains sound policy is what189we will explore today.190    In the Telecommunications Act of 1996, Congress anticipated191the rise of today's competitive market by directing the FCC to192periodically review its broadcast ownership rules with an eye193toward deregulation. That's what statute says right now. Every1944 years, the FCC was to decide whether to repeal or modify any195regulation that no longer served the public interest. One rule,196however, was deliberately set out: the national TV audience197reach cap. In 2004, Congress specifically directed the FCC to198set this cap at 39 percent of U.S. television households, and199it has remained at the same level for 22 years.200    Now, as several major mergers loom, the FCC is considering201lifting or eliminating this cap. Some argue that lifting the202cap will allow broadcasters to scale, to invest more in local203news outlets across the country, and to better compete with204deep-pocketed tech companies. Others say lifting the cap will205consolidate viewpoints and hand control over to newsrooms in206New York and Hollywood, choking out local views, but more207fundamental than the optimal policy is the law. It may be the208case that the FCC cannot modify the 39-percent cap because209Congress set that number in statute. I look forward to hearing210these perspectives and more today.211    If there's one thing that's clear, it's this: current media212ownership rules were written in a vastly different213technological age. The days when broadcasters built a uniform214global village across America's living rooms is over as media215has splintered into thousands of websites, TikTok accounts,216podcasts, and other form of content, each catering to its own217niche audience. Yet even in this fragmented landscape, the218media's ability to shape national discourse remains incredibly219powerful, making questions about market concentration as220important as ever. This hearing is designed to inform Congress221in answering these questions: should Congress revisit222underlying statutes, and does the FCC have appropriate223authority or flexibility to address today's evolving media224landscape? I'm grateful to our witnesses for being here today225to help us in this effort, and I now turn to Ranking Member226Cantwell.227228               STATEMENT OF HON. MARIA CANTWELL,229                  U.S. SENATOR FROM WASHINGTON230231    Senator Cantwell. Thank you, Mr. Chairman, and thank you232for calling the hearing and the witnesses to be here today.233This is a subject that, generally, I would say I care a lot234about, and I do think that today we'll get into a pretty big235debate about the amount of digital content now in advertising236and controlling that market. I also think we'll hear a lot237about why it's not a good idea for consumers to have so much238content behind paywalls and them not being able to access it. I239think the first two witnesses will agree on that. I'm not sure240they're going to agree on other things, but they are going to241agree there.242    This past Sunday, more than 100 million Americans watched243the Super Bowl. Obviously, I'm very happy about my state of244Washington and the Seattle Seahawks bringing home a second245Lombardi Trophy. Right now millions----246    The Chairman. On the over-under on whether you'd make it a247minute before saying that. I had it--I had the under.248    [Laughter.]249    The Chairman. Congratulations.250    [Laughter.]251    Senator Cantwell. Thank you.252    Senator Klobuchar. And you did it with the former Vikings253quarterback to add to our pain. To add to our pain.254    [Laughter.]255    Senator Cantwell. I want to say there was a lot of people256helping the Seahawks----257    [Laughter.]258    Senator Cantwell.--a lot of Texans, a lot of--great job by259your former quarterback, yes.260    So, but right now, millions are also turning to the261Olympics and watching that, and this brings communities262together, this brings fans together, it brings our country263together. But, Mr. Chairman, as the media landscapes become264more fragmented every year, those shared experiences are265becoming rarer. And as I said earlier, my concern about how266much is being eaten up by tech companies in the broadcast model267and how much is being put behind a paywall is very concerning.268    That is why several years ago, as Ranking Member of the269Committee, we put out a Local Journalism Report, basically,270America's most trusted news source, and that is why my focus is271what are we going to do to help keep that? From the report, it272says modern economic literature views this through the lens of,273``information economics'' or asymmetrical information, which is274now recognized as the basic tenet of economics. Basically, what275we're saying is if you don't have a lot of competition on276information, you're not going to get perfect information.277You're going to get distorted information. So, as the report278says, in terms of economists across the political spectrum279agree that increased reporting on local conditions leads to280fairer prices for goods, a decline in local journalism, and281ensuring decreases in available information result in market282inefficiencies. So, today I'm here to fight for local283journalism.284    If the Nexstar-TEGNA deal goes through, a single company285will control 265 stations, capable of reaching 80 percent of286all the television households, more than double the current287cap. And for nearly half of their audience, 100 million people,288Nexstar would own two or more stations in a media market. Now,289that concerns me. To me, that is not more local voices, that is290fewer, so I want to see how we are going to deal with this kind291of situation. We've invited Mr. Waldman, who in his testimony292says that roughly 40 local journalists for every 100,000293Americans. Today, that number is eight. That was in 2002. That294number is now down to eight.295    So, the decline is not just limited to small outlets. Just296this week, we saw a massive layoff at The Washington Post. This297includes cutting over half the journalists covering local D.C.298news. So, if flagship national institutions are struggling,299imagine the pressure on small local stations and newspapers, so300creating, in my opinion, the need for more stability and301accountability, not less competition. So, the important thing302that we are here today to talk about is that local news is303quite literally, in my opinion, the seed--corn seed, if you304will, for AI. You can't have perfect information if journalists305aren't creating it, but yet we know that AI is consolidating306that data and all of that information. And if before they307weren't compensating for that, now they certainly are308perpetrating a business model that will make that even less309clear.310    Mr. Waldman describes we are in a vicious cycle. Less local311news makes AI less accurate, and it makes local news less312viable, so we have to fix this. So, that is why I introduced313the bipartisan COPIED Act with Senator Blackburn to stop AI314companies from using journalist content without their consent,315why we support--and Mr. Waldman and I were just discussing--tax316credit where states are using tax credits for local journalism317as we have proposed. And AI companies should want a format318where you are creating content and that that content is319accurate and competitive in a nature that makes U.S. stack AI320information more accurate than other countries. That, to me,321seems the goal.322    So, changes to the cap do not address the real structural323problem, and they risk reducing the diversity of local voices324without solving the underlying problems of economics. So, I325look forward to hearing from our witnesses about the solutions326that will help us grow local journalism for the future. Thank327you, Mr. Chairman.328    The Chairman. Thank you. Now I'd like to introduce our329witnesses for today. Our first witness is my friend Chris330Ruddy, Chief Executive Officer of Newsmax, an American331conservative news media organization. Our second witness is332Curtis LeGeyt, President and Chief Executive Officer of the333National Association of Broadcasters, where he advocates on334behalf of America's television and radio broadcasters. Our335third witness is Thomas Johnson, Partner and Co-Chair of the336Issues and Appeals Practice at Wiley Rein LLP. He previously337served as General Counsel at the Federal Communications338Commission. Our final witness is Steve Waldman, Founder and339President of Rebuild Local News, a nonprofit focused on340vitalizing local news across America.341    Mr. Ruddy, we'll start with you.342343      STATEMENT OF CHRIS RUDDY, CHIEF EXECUTIVE OFFICER,344                         NEWSMAX MEDIA345346    Mr. Ruddy. Mr. Chairman, Ranking Member Cantwell, and the347members of the Committee, my name is Chris Ruddy. I'm the CEO348of Newsmax Media. Thank you for inviting me to testify about349the important issue of broadcast media ownership.350    Newsmax reaches more than 50 million Americans regularly.351We're a significant player in cable TV with the Nation's fourth352highest rated cable news channel. Forbes has described us as a353``news powerhouse.'' Our success is remarkable because the354regulatory framework of the FCC favors media conglomerates and355effectively blocks independent voices both from the right and356the left. There are 50 top cable channels in America. Newsmax357is the only one operated by an independent media company. Every358other channel is owned or created by a conglomerate. Newsmax's359success proves the system is broken and that this poses risks360to competition, consumers, and even our democracy. We need more361independent media. We need more competition, not less.362    Newsmax does not hold any broadcast licenses, but we are363directly affected by TV consolidation. Large station groups364hold enormous leverage over paid TV operators through365retransmission fees, better known as retrans fees. These366station groups can dictate prices and even determine what367networks cable operators must carry. Nexstar provides a clear368example. It owns about 200 stations today, many ABC-, CBS-, and369NBC-affiliated ones. If cable operators want to carry those370stations, they have to pay Nexstar very high retrans fees. If371they refuse, Nexstar can pull the plug, go dark, leaving372viewers without the programming. Nexstar also insists that373operators carry its cable channel, NewsNation. Last year,374Newsmax delivered 5 times the rating of NewsNation, yet375operators were forced not only to carry NewsNation, but to pay376license fees higher than that paid to Newsmax.377    Clearly, Nexstar's market leverage--you talked, Senator378Cantwell, about the 80-percent reach they have--suppresses379competition and harms consumers. The national television380ownership cap was meant to protect against such abuses. In3811996, Congress established this cap into law, and, later, the382cap was moved up to 39 percent. Only Congress may change the383cap. Nevertheless, the FCC subverted the law by using the so-384called UHF discount. Today, UFA--UHF stations reach a hundred385percent of households, and no discount should be applied. Yet386Nexstar used the discount to acquire Tribune and expand its387national reach to 70 percent of U.S. households a few years388ago, way above the 39-percent cap. They're not satisfied with389that, and now they want 80-percent reach, and the industry--390broadcast industry wants to replicate Nexstar's model in the391pursuit of power and money to the detriment of the public392interest.393    President Reagan first adopted the cap because it was394dangerous to allow big networks to own stations in every market395across the country. At that time, he set it at 25 percent, but396since then, a bipartisan consensus developed that the public is397best served by limiting TV ownership and preserving398competition. This is why so many from both the left and the399right oppose lifting the cap. CPAC, the National Religious400Broadcasters, OAN, ZOA, and others have urged the FCC and401Congress to keep the cap at 39 percent.402    Local TV is critical in providing community news. With the403collapse of newspapers, television stands alone as the primary404source of local reporting. Big Tech does hardly any local news405reporting. The TVB, Pew, and Knight studies all found that406local broadcast news is the number one source for Americans407seeking local news. Raising the cap means that two or three408corporations will eventually own most stations in the Nation409and control almost all local news. This is why consolidation410and the Nexstar deal is so dangerous.411    Consolidation is also about big money. Today, a broadcast412license, as the senator said, is a license to mint money. It's413still true. Owning more licenses means more leverage over cable414operators, more retrans fees, and bigger profits. We know that415station groups cut costs by consolidating newsrooms and they--416and reduced competition at the local level allows them to raise417advertising rates. Retrans fees are significant, and they418account for more than 50 percent of broadcast revenues. Since4192010, retrans fees have risen more than 2,000 percent. Two420thousand percent. If milk prices had risen at the same rate, a421half a gallon of milk today would cost almost $40.422    Consolidation has been unbelievably profitable for Nexstar.423Its EBITDA grew from $300 million in 2015 to close to $2424billion in 2024, almost a 500-percent increase. Sinclair,425Scripps, and TEGNA show similarly strong profits. It is426undeniable the FCC has already given Nexstar an excessive427concentration of broadcast licenses. Now they want even more?428The next year--the Nexstar deal works for Wall Street, but it429doesn't work for Main Street. We see this as consumers pay for430consolidation as their cable bills skyrocket. The affordability431crisis, this is a contributor. National and local consolidation432is not good. Just look at radio consolidation which the FCC and433Congress passed in the--supported in the past.434    Today, three companies control all major radio licenses,435they've gutted local program, and they're all in financial436trouble. I am told the FCC is racing to approve the Nexstar437deal and will attempt to bypass the public process with a438stealth approval at the bureau level. I urge Congress to insist439that that consolidation decisions of this importance be voted440on by the full Commission, not by bureaucrats in secret. The TV441industry is too important to be handed over to a small number442of conglomerates. Congress set the cap. Only Congress should443change it after careful review. Newsmax stands ready to444participate in that process. Thank you.445    [The prepared statement of Mr. Ruddy follows:]446447      Prepared Statement of Chris Ruddy, Chief Executive Officer,448                             Newsmax Media449    Mr. Chairman, Ranking Member Cantwell, and Members of the450Committee:451452    My name is Chris Ruddy. I am the founder and Chief Executive453Officer of Newsmax Media, Inc. Thank you for inviting me to testify454today on the important issue of broadcast media ownership.455    Newsmax reaches more than 50 million Americans on a regular basis456through our television channels, websites, social media, and other457platforms. Forbes has described Newsmax as a ``news powerhouse,'' and458the Reuters Institute recently ranked Newsmax among the top 12 news459brands in the United States.460    We have also become a significant--and to many, surprising--player461in cable television. When we launched the Newsmax cable channel in4622014, few predicted our success, and many predicted our failure.463    Yet today, I appear before you as the CEO of the Nation's fourth-464highest-rated cable news channel. In 2025, Newsmax ranked # 7 among all465cable channels, according to Nielsen.466    Our success is remarkable precisely because the current regulatory467framework at the FCC and across the Federal Government overwhelmingly468favors large media conglomerates and effectively blocks independent469media voices--whether from the right or the left.470    Of the top 50 cable channels, Newsmax is the only one that is owned471and operated by an independent media company. Every other channel in472the top 50 is owned by, created by, or affiliated with a major media473conglomerate or broadcast network.474    Think about that. In the greatest country in the world, there is475only one independently owned media company in the top 50 cable476channels--and that company is Newsmax.477    Newsmax's singular success does not prove the system works. It478proves the system is broken--and that this broken system poses serious479risks to free enterprise, competition, and ultimately our democracy.480    Newsmax owns a cable network and does not hold any broadcast481television licenses. Yet we are directly affected by broadcast482ownership consolidation because large station groups wield enormous483leverage over cable and pay-TV operators through retransmission consent484fees--commonly known as retrans fees. These station groups have the485power to dictate what cable channels are carried on cable systems.486    We see this clearly with Nexstar, which owns an enormous number of487ABC, CBS, and NBC stations. If cable operators want access to those488local stations, they must pay Nexstar high retrans fees. If they489refuse, Nexstar can--and does--pull its stations, leaving viewers in490the dark.491    Nexstar also insists that cable operators carry its little-watched492cable news channel, NewsNation. Last year, Newsmax delivered at least493five times the ratings of NewsNation, yet cable operators were forced494not only to carry NewsNation, but to pay license fees significantly495higher than those paid to Newsmax.496    We hear a great deal about the free market. But this is not the497free market. This is market leverage and manipulation used to harm498consumers and suppress competition--specifically competition from499independent voices like Newsmax.500    The Committee is now reviewing the national television ownership501cap, a rule that remains one of the last meaningful protections for502competition and diversity in the broadcast and cable ecosystem.503    Congress established the national ownership cap in Section504202(c)(1)(B) of the Telecommunications Act of 1996. When the FCC later505attempted to raise that cap, Congress responded decisively. In the506Consolidated Appropriations Act of 2004, Congress set the cap at 39507percent and explicitly stripped the FCC of any authority to alter the508cap. Only Congress--not the FCC--has the authority to change509it.i ii510---------------------------------------------------------------------------511    \i\ https://acrobat.adobe.com/id/urn:aaid:sc:US:ae417844-f51a-4992-512a4f8-4f84f51347c5513    \ii\ https://www.fcc.gov/ecfs/document/1103066222175/1514---------------------------------------------------------------------------515    Nevertheless, the FCC subverted congressional intent by reviving516the so-called UHF discount, claiming UHF stations reach only half the517households in a market. In reality, UHF stations today reach 100518percent of households.519    This regulatory sleight of hand allowed Nexstar, in 2019, to520acquire Tribune Media's stations and expand its national reach to521approximately 70 percent of the U.S. television market--in clear522violation of the law.523    The broadcast industry has watched Nexstar's success and now seeks524to replicate it in a relentless pursuit of power and profit, to the525detriment of the public interest.526    The national ownership cap was first instituted at the FCC under527President Ronald Reagan, who understood the danger of allowing major528networks--ABC, CBS, and NBC--to own stations in every market. At that529time, the cap was set at 25 percent.530    Over the years, under pressure from the broadcast industry--not the531public--the cap was gradually raised to 39 percent, where it remains532today.533    President Reagan intuitively understood that if major networks534controlled stations in every market--especially in swing states--they535could easily influence political outcomes. That would not be good for536the country, and it certainly would not be good for Republicans.537    Over time, Democrats and Republicans alike reached a bipartisan538consensus that the public interest is best served by limiting national539ownership and preserving competitive, locally owned television markets.540    That principle remains valid today. Despite the rise of Big Tech541and other media platforms, local television stations continue to play a542critical role in providing community news.543    With the collapse of local newspapers and the gutting of local544radio due to prior consolidation, television now stands largely alone545as the primary source of local news.546    Multiple studies confirm this reality:547548   A TVB study found that local broadcast news is the number-549        one source of news overall, with 9 out of 10 Americans watching550        at least once a week.551552   A Knight Foundation study reached the same conclusion.553554   A Pew Research study found that 66 percent of Americans555        closely follow local television news.556557    Some argue that Big Tech fills the local news void. It does not.558Big Tech does not generally produce original local reporting. Most of559the local news stories appearing in my online news feeds originate with560local television stations.561    When you raise the national ownership cap, you are effectively562saying that two or three corporations should eventually own most or all563television stations in America--and by extension, control local news.564That is what consolidation truly means.565    Lifting the cap is also about big money.566    No one on Main Street walks up to a Senator and says, ``Please lift567the cap so ABC can make a few more billion dollars this year.''568    Make no mistake: a single broadcast television license is a license569to mint money. Even today, stations can be enormously valuable without570airing much programming at all, because businesses will pay fortunes571simply to acquire the license.572    It is understandable that license holders want to own more573licenses. More licenses mean more leverage, more retrans fees, and574higher profits.575    By cutting costs--especially local news operations--and syndicating576programming across multiple markets, large station groups can further577boost profits. Less competition also allows them to raise advertising578rates, both locally and nationally.579    Then there is the real windfall: retransmission fees. Today,580retrans fees account for more than 50 percent of broadcast television581revenues on average, and for some large groups, as much as 70 percent.582    The more highly-rated network affiliates a company owns, the more583leverage it has to demand higher retrans fees from cable operators.584    Nexstar is again instructive. In 2010, it was a modest Texas-based585station group. After the FCC opened the door to consolidation through586waivers and the UHF discount, Nexstar embarked on a massive acquisition587spree. Today, it owns over 200 stations across 116 markets.588    Since 2010, retrans fees across the television industry have risen589by over 2,000 percent. If the price of a gallon of milk had increased590at the same rate, it would cost more than $69 today.591    This consolidation has been extraordinarily profitable. In 2015,592Nexstar reported EBITDA of $302 million. By 2024, EBITDA had grown to593$1.8 billion--an increase of nearly 500 percent.iii594    Despite frequent claims of financial distress, major broadcasters'595financial results tell a different story. Sinclair, Scripps, and Tegna596have all recorded double-digit profit gains over the past decade and597all show healthy EBITDA profits.iv598    I have no personal animus toward Nexstar or other broadcasters.599Nexstar's CEO, Perry Sook, is clearly a talented businessman who has600delivered strong returns for shareholders.601    My concern is that the FCC has allowed an excessive concentration602of media power over a limited number of public broadcast licenses--603licenses that are supposed to be operated in the public interest, with604an emphasis on competition, localism, and diversity of viewpoints.605    By failing to uphold its mandate and by ignoring clear606congressional law, the FCC has harmed consumers and the public.607    Cable bills have risen by approximately 100 percent over the past608decade, driven largely by soaring retrans fees and forced bundling. If609the FCC continues to undermine the law, consumers will pay the price.610    You will hear claims that broadcasters are suffering and need611relief through consolidation. The truth is that these companies are612quite profitable--but they took on massive debt betting that the cap613would be eliminated.614    Now, as they refinance that debt at higher interest rates, they615seek regulatory relief to protect their margins.616    We have seen this movie before with radio consolidation following617the Telecommunications Act of 1996. Today, three conglomerates control618most major radio licenses, local programming has been hollowed out, and619those companies are burdened by unsustainable debt.620    The television industry's messaging has become extreme--claiming621consolidation somehow saves local news by cutting it, branding critics622as radicals, and insisting that allowing two or three companies to own623most stations is ``deregulation'' and ``competition.''624    We know that after Nexstar merged with Tribune, profits surged625while employment dropped from 16,193 employees to 12,142--a 25 percent626decrease--in just one year. In 14 markets, Nexstar now operates two627highly rated stations but has combined their local newsrooms to cut628costs.629    In its proposed merger with Tegna, Nexstar projects more than $300630million in immediate cost savings, including $135 million from631increased retrans fees and $165 million from local station savings--632typically that's achieved through newsroom consolidation.633    I am a common-sense conservative and a believer in free markets.634But when the government grants a limited number of licenses in every635market that marketplace is a closed one. That's why the public has a636right--and a duty--to ensure those licenses serve the public interest.637    Newsmax is not alone. CPAC and the National Religious Broadcasters638have both filed objections with the FCC, warning that lifting the cap639would harm consumers and suppress diversity of viewpoints.640    It is a mistake for conservatives to claim allegiance to free641markets while endorsing consolidation that destroys competition,642stifles innovation, and drives consumer prices higher.643    Just last week, the Senate Judiciary Committee--Republicans and644Democrats alike--recognized that allowing Netflix to merge with Warner645Bros. would stifle competition and harm consumers.646    There is room for reasonable accommodation: targeted waivers,647limited consolidation in small markets, and a review of whether TV648affiliates are receiving fair retrans fees from the big networks.649    But Congress should insist that any decisions on consolidation or650cap waivers be voted on by the full Commission, not quietly approved at651the bureau level.652    Let me be absolutely clear: the television industry is far too653valuable to be handed over to a small number of conglomerates that are654unaccountable to the public.655    Congress set the cap. Only Congress should change it--after careful656review. Newsmax stands ready to participate constructively in that657process.658659[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]660661    The Chairman. Thank you. Mr. LeGeyt.662663                  STATEMENT OF CURTIS LeGEYT,664665             PRESIDENT AND CHIEF EXECUTIVE OFFICER,666667              NATIONAL ASSOCIATION OF BROADCASTERS668669    Mr. LeGeyt. Good morning, Chairman Cruz, Ranking Member670Cantwell, and members of the Committee. My name is Curtis671LeGeyt, and I'm proud to testify on behalf of the NAB and our672nearly 1,300 free, local, over-the-air television stations that673serve your communities every day.674    When the FCC first imposed national and local television675ownership limits, Franklin Roosevelt was President. Now, 9676decades later, those same rules still prevent broadcasters and677broadcasters alone from owning more than two stations in any678local market and from reaching more than 39 percent of American679television households. These outdated regulations distort680today's video and advertising marketplace. They advantage giant681tech platforms, global streaming services, pay TV providers,682and national cable programmers while placing local broadcasters683at a severe disadvantage.684    In a digital media marketplace dominated by Google,685YouTube, Netflix, Amazon, Apple, Meta, and TikTok, ownership686restrictions that apply only to broadcasters are no longer687rational or sustainable. They prevent broadcasters from688achieving the scale necessary to compete for audience,689programming, advertising revenues, and investment capital. As a690result, your local stations remain hobbled by rules designed691for the analog era, rules that directly undermine broadcasters'692ability to provide our essential public service that remains693free and universally accessible to all viewers.694    During recent crippling winter storms across vast swaths of695the country and during devastating floods in both Texas and696Washington State, it was local broadcasters, not global697streamers or national pay TV channels, that remained on the698ground and on the air in those communities providing lifesaving699information to their viewers. And beyond times of emergency,700broadcasters are delivering the fact-based, most trusted701journalism that keeps your constituents and communities702informed and connected.703    Unfortunately, this local journalism is facing growing704financial pressure. Fewer than half of television stations now705report that their local news operations are profitable. Facing706ever rising news production costs and declining ad revenues,707some broadcasters are simply unable to continue maintaining708their own separate news operations. Without modernizing these709ownership rules, local television news, the last bastion of710truly local journalism in many communities, will suffer the711same fate as thousands of local newspapers.712    Some argue that allowing broadcasters to achieve greater713scale would reduce local news. The data shows just the714opposite. Over the past decade, as broadcasters gained modest715additional scale, the number of local news telecasts and hours716of locally produced news increased substantially. From 2011 to7172023, local news telecasts increased by more than 40 percent,718and total hours of local news grew nearly 50 percent. Scale719allows broadcasters to invest more heavily in journalism not720less, but it's not enough.721    Outdated rules also limit broadcasters' ability to provide722viewers access to marquee sports and entertainment. Instead of723subscribing to a new streaming service every time they want to724watch a game, viewers overwhelmingly prefer to watch sports on725broadcast television. However, keeping broadcasters726artificially small makes it harder to compete for increasingly727expensive sports rights against our unregulated streaming728rivals. Broadcasting share of viewership is already less than729half our streaming competitors, and this decline will continue730as premium sports content further migrates behind streaming731paywalls.732    In conclusion, localism is a vital but expensive American733value. Competitively hobbled TV stations lacking sufficient734resources will not provide quality local journalism, emergency735information, valued sports, and programming that your736communities depend upon. For these reasons, we urge Congress to737support the FCC's efforts to eliminate the outdated broadcast738TV ownership restrictions that no longer serve the public739interest. I want to personally thank the many members of this740committee, as well as President Trump, who have publicly741supported us on this issue. Congress should flatly reject742arguments from a single national programmer subject to no743similar restrictions and who invests zero dollars in your local744communities.745    Thank you again for the opportunity to testify today. I746look forward to your questions.747    [The prepared statement of Mr. LeGeyt follows:]748749  Prepared Statement of Curtis LeGeyt, President and Chief Executive750             Officer, National Association of Broadcasters751Introduction752    Good morning, Chairman Cruz, Ranking Member Cantwell and members of753the committee. My name is Curtis LeGeyt, and I serve as President and754Chief Executive Officer of the National Association of Broadcasters755(NAB). I am proud to testify today on behalf of nearly 1,300 free,756local over-the-air television stations that serve your constituents757every day.758    Local broadcast television is simple to describe, but hard to759replace. It is free. It is local. It is accountable to the public760interest obligations that come with a broadcast license.761    When your constituents need verified information quickly, they turn762on the television and tune to local broadcasting. When severe weather763hits, when a wildfire moves fast, when a bridge collapses, when a child764goes missing, local stations deliver factual, lifesaving information in765real time without a paywall.766    That service requires investment in journalists, on-air talent,767meteorologists, producers, engineers, towers, studios, safety equipment768and modern technology. The national broadcast television ownership cap769makes that investment harder by limiting broadcasters' ability to770compete for audience, advertising and programming in a marketplace that771no longer resembles the one that existed when this rule was created. It772is past time to level the playing field and eliminate this antiquated773restriction.774The Problem: A Twentieth-Century Cap in a Twenty-First Century Market775    When the Federal Communications Commission (FCC) first imposed776limits on the national and local ownership of broadcast TV stations,777Franklin D. Roosevelt was president. Cable and satellite TV didn't778exist. The Internet was a fantasy. Big Tech was a 2,000-foot-tall radio779tower. Yet nine decades later, these rules remain, preventing TV780broadcasters from owning more than two outlets in any local market\1\781and restricting a broadcaster's national reach at 39 percent of TV782households.\2\783---------------------------------------------------------------------------784    \1\ 47 C.F.R. Sec. 73.3555(b). The local TV rule prohibits the785common ownership of more than two full-power commercial TV stations in786any of the 210 Designated Market Areas (DMAs) in the U.S., regardless787of the number of stations or competitive conditions in these widely788disparate markets, ranging from New York City to Glendive, MT.789    \2\ 47 C.F.R. Sec. 73.3555(e). The national TV rule bans the common790ownership of full-power commercial TV stations that reach, in the791aggregate, more than 39 percent of TV households nationwide. For792purposes of calculating ``reach,'' the rule discounts the presumed 100793percent reach of UHF stations by half. Id. at Sec. (e)(2).794---------------------------------------------------------------------------795    These outdated rules unfairly skew today's video and advertising796markets. None of the dominant competitors that shape what Americans797watch face these limits. Global streaming platforms, Big Tech video798services and digital advertising giants can reach every household.799Broadcast television alone remains boxed in.800    Digital technologies and the Internet have completely transformed801the video and advertising markets, making a broadcast-only ownership802cap obsolete.\3\ Global streaming platforms now account for roughly803half of total viewing, yet broadcasters are still restricted from804reaching TV households nationwide. This means we cannot effectively805compete for audiences, advertising revenues and premiere programming.806As a result, local stations' most important public service--offering807news, emergency information and valued entertainment and sports808programming in local communities at no cost to the public--is in809jeopardy.810---------------------------------------------------------------------------811    \3\ See, e.g., Comments of NAB, MB Docket No. 22-459 (Dec. 17,8122025); Comments of NAB, MB Docket No. 17-318 (Aug. 4, 2025); Written Ex813Parte Communication of NAB, MB Docket No. 17-318 (Apr. 2, 2025).814---------------------------------------------------------------------------815Audience Viewing Habits and Advertising Markets Have Changed816    The notion that local broadcasters compete only against one another817for audience and programming rights is out of step with the reality of818today's media marketplace. According to recent Nielsen data, streaming819platforms comprise nearly half of all television viewing, more than820double that of all broadcast television outlets combined. And those821figures understate streaming's advantage because they do not fully822capture mobile viewing on iPhones and tablets.\4\823---------------------------------------------------------------------------824    \4\ The Gauge also does not include viewing of YouTubeTV, the825linear virtual multichannel video programming distribution service, in826YouTube's streaming share. Yet YouTube alone still garners about 60827percent of the share of total TV usage garnered by all broadcast828television. The ``Other'' category in The Gauge includes video gaming,829DVD playback, audio streaming, unmeasured video on demand, etc.830831[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]832833    This growth in streaming viewership has been accelerated by the834migration of premiere live sports away from broadcast stations to835behind these paywalled tech platforms. For example, Amazon Prime Video836viewing surged in December due to its streaming of four NFL Thursday837night games, including on Christmas Day. Netflix also featured back-to-838back NFL games on the holiday.\5\ And every major sports league,839including Major League Baseball, the National Basketball Association,840the National Hockey League and the NCAA now distribute significant841numbers of in-market and out-of-market games through global streaming842platforms. The bottom-line is that while we value the ongoing843relationship that these leagues and teams have with local broadcasters844and our networks, the games that once anchored free, over-the-air845viewing are increasingly balkanized across subscription services to the846detriment of local stations, our viewers, and the communities that rely847on us. Greater scale is needed to allow our industry to better compete848for these rights.849---------------------------------------------------------------------------850    \5\ See Nielsen, Streaming Shatters Multiple Records in December8512025 with 47.5 percent of TV Viewing, according to Nielsen's The Gauge,852nielsen.com (Jan. 20, 2026).853---------------------------------------------------------------------------854    The advertising marketplace has shifted even more. Digital855advertising is now the majority of local ad spending, and most of that856money does not stay in communities.\6\ It flows to digital platforms857that do not maintain local newsrooms, weather operations or public858safety infrastructure. Meanwhile, broadcast television advertising859revenue has declined sharply. These trends are the economic reality860behind what many communities are experiencing: fewer reporters, tighter861budgets and increasing difficulty sustaining robust local journalism.862---------------------------------------------------------------------------863    \6\ According to Borrell Associates, local digital advertising864reached $103 billion in 2024, accounting for about 70 percent of all865local ad spending. This report reconfirmed that the ``lion's share of866digital advertising'' leaves local markets and ``goes to the pureplay867digital companies such as Google, Facebook, and others,'' with local868outlets, including TV and radio stations and newspapers, capturing only869about 15 percent of all locally spent digital advertising. Digital870platforms' reshaping of the advertising market has radically undercut871support for locally-based media and journalism, and these trends will872only continue, with Borrell estimating that local digital ad spend will873reach nearly $121 billion by 2028. Borrell Associates, 2025 Annual874Report Benchmarking Local Digital Media, at 5-9 (May 15, 2025).875---------------------------------------------------------------------------876    As shown in the graphic below, broadcast television station877industry advertising revenues have declined by nearly 60 percent over878the past 25 years on a real (i.e., inflation adjusted) basis.879880[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]881882    Outside of the largest markets, the advertising marketplace is even883more dire. Television stations in mid-sized and small markets earn only884a fraction of the ad revenues garnered by stations in the largest885markets. In 2024 the average TV station in DMAs 51-100, 101-150 and886151-210 garnered merely 23.5 percent, 17.6 percent and 12.1 percent,887respectively, of the ad revenues earned by the average station in the88810 largest DMAs.\7\ Steady declines in ad revenue hurt local TV889stations' ability to deliver high quality programming, hire and retain890talented staff, maintain local newsrooms and serve our communities891effectively.892---------------------------------------------------------------------------893    \7\ Comments of NAB, MB Docket No. 22-459, at 95 (Dec. 17, 2025)894(citing BIA data).895---------------------------------------------------------------------------896The National Ownership Cap Doesn't Merely Limit Growth, it Hurts Local897        Viewers898    The current broadcast ownership restrictions impair our ability to899realize important economies of scale, acquire and produce content,900attract more viewers, earn necessary ad revenues, obtain needed901investment and provide free service to local communities. These rules902undermine localism and hurt competition in the video and advertising903markets by keeping broadcasters artificially weak and unable to offer904robust competition to other content providers and ad platforms.905    Streaming, Big Tech and social media platforms operate at a906significant competitive advantage without these constraints. They907scale, invest, acquire rights, capture advertising and reinvest908nationally and globally without regulatory restrictions. As a result,909they have tremendous advantages over TV broadcasters in the programming910market. Eliminating the national cap would enable TV broadcasters to911better compete for advertising, produce or purchase more and better912programming (including premiere sporting events), and invest in local913journalism. This means increased competition and more and better914content, all of which is freely-available to consumers.\8\915---------------------------------------------------------------------------916    \8\ NAB earlier documented the extremely high costs (running into917the tens of billions of dollars) of acquiring or producing918entertainment programming and the millions local TV stations expend919annually on local news programming, made all the more challenging for920broadcasters due to ownership rules limiting our audience reach and921thus our revenue base. See, e.g., Written Ex Parte Communication of922NAB, MB Docket No. 17-318, at 21-26 (Apr. 2, 2025) (documenting923programming costs, including local news costs that routinely represent924around one third of many stations' total annual expenses).925---------------------------------------------------------------------------926Scale is Not the Enemy of Localism. It is Often What Makes Localism927        Possible928    Economists have found that TV broadcasting, and especially local929news production, is subject to strong economies of scale and scope.930Restricting broadcasters' ability to scale leads to ``higher costs,931lower revenues, reduced returns on invested capital,'' resulting in932significantly less local news.\9\ The FCC itself has concluded that the933``efficiencies of common ownership'' enable TV stations to ``provide934more high-quality local programming, especially in revenue-scarce small935and mid-sized markets.'' \10\936---------------------------------------------------------------------------937    \9\ J.A. Eisenach and K.W. Caves, The Effects of Regulation on938Economies of Scale and Scope in TV Broadcasting, at 2-3 (June 2011),939attached to Reply Comments of NAB, MB Docket No. 10-71 (June 27, 2011)940(explaining that economies of scale are, by definition, ``associated941with falling unit costs of production--that is, with the production of942more output,'' such as programming, ``at lower average cost--and hence943are prima facie welfare enhancing''). Id. at 1. Accord Decl. of M.944Israel and A. Shampine, Comments of NAB, MB Docket No. 10-71, at945Appendix B946947 49-51 (June 26, 2014) (finding that economies of scale948and scope exist in TV broadcasting and that both lead to ``increased949investment in news programming''). These studies remain unrefuted.950    \10\ 2014 Quadrennial Regulatory Review, Order on Reconsideration,95132 FCC Rcd 9802, 9834, 9836 (2017).952---------------------------------------------------------------------------953    The need is urgent. The Radio Television Digital News Association954(RTDNA) reports that fewer than half of TV stations now say their local955news operation is profitable, after several years of decline.\11\956Facing high and ever-rising news production costs and declining ad957revenues, some broadcasters are simply unable to continue maintaining958their own separate local news operations.\12\ Financial pressures also959have led many local stations to decrease their TV news budgets, and the960pressure is real across market sizes.\13\961---------------------------------------------------------------------------962    \11\ B. Papper, K. Henderson and T. Mirabito, RTDNA/Syracuse963University, TV news profitability drops to lowest level since 2010, at9641 (July 28, 2025) (TV News Profitability Report).965    \12\ The number of TV stations originating local news has dropped966by 16 in the past two years, but the number of stations receiving local967news from one of the nearly 700 stations originating news has increased968by 20 (from 402 to 422) during that time. B. Papper, K. Henderson and969T. Mirabito, RTDNA/Syracuse University, Amount of local news stays970steady--for a change, at 3 (July 21, 2025).971    \13\ TV News Profitability Report at 3.972---------------------------------------------------------------------------973    Importantly, data show that when station groups have been able to974achieve greater scale, local news output increased materially over975time. As shown in the graphic below, from 2011-2023, as TV station976groups producing and airing local news grew in size but fell in number977(from 140 separate groups to 62, a 55.7 percent decline), the number of978local news telecasts and hours of local news increased by 41.7 percent979and 49.7 percent, respectively.980981[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]982983    Permitting TV station groups to achieve greater scale will further984enhance the quantity and quality of local and regional news. Ownership985policy should strengthen the services communities value most. The986national broadcast ownership cap does the opposite.987The FCC has Authority to Repeal its National Broadcast Ownership Cap988    The Supreme Court has long recognized that the FCC has broad989authority under the Communications Act of 1934 to adopt, modify or990eliminate ownership rules as part of its public interest licensing991framework.\14\ That has never been in doubt. And contrary to the992misleading arguments of those who oppose ownership modernization,993Congress did not strip that authority by implication in the994Telecommunications Act of 1996 or the Consolidated Appropriations Act995of 2004.996---------------------------------------------------------------------------997    \14\ FCC v. NCCB, 436 U.S. 775, 793-94 (1978) (upholding adoption998of newspaper/broadcast cross-ownership ban pursuant to the FCC's999authority under the Act to ``issue regulations codifying its view of1000the public-interest licensing standard''). Accord NBC v. U.S., 319 U.S.1001190, 214-18 (1943) (finding that the Act grants the FCC ``broad1002licensing and regulatory powers'' and upholding adoption of chain1003broadcasting rules as permissible exercise of its power to license1004stations in the public interest); U.S. v. Storer Broad. Co. 315 U.S.1005192, 201-203 (1956) (concluding that FCC had authority to impose rules1006limiting the multiple ownership of AM, FM and TV stations under its1007public interest rulemaking and licensing authority in the Act); FCC v.1008Prometheus Radio Project, 592 U.S. 414, 418 (2021) (while upholding the1009FCC's 2017 decision to repeal or relax several ownership rules, court1010stated that the FCC possessed broad authority under the Act to regulate1011broadcast media and, exercising that authority, it had historically1012maintained strict ownership rules).1013---------------------------------------------------------------------------1014    In 1996, Congress directed the FCC to modify its rules to increase1015the national audience reach limitation to 35 percent.\15\ All agree1016that directive did not convert the cap into a permanent statutory1017ceiling. In fact, when the D.C. Circuit Court of Appeals reviewed the1018FCC's early implementation of the 1996 statute, it confirmed that1019Congress had not ``enshrined'' the 35 percent cap into statute.\16\1020---------------------------------------------------------------------------1021    \15\ Telecommunications Act of 1996, Section 202(c)(1)(B).1022    \16\ Fox Television Stations, Inc. v. FCC, 293 F.3d 537, 540 (D.C.1023Cir. 2002).1024---------------------------------------------------------------------------1025    In 2004, following the FCC amending the cap to 45 percent, Congress1026stepped in and changed the number to 39 percent through an1027appropriations rider that again directed the FCC to modify its rules.1028However, in doing so, Congress never removed the FCC's well-recognized1029authority to amend or eliminate the national television cap at a later1030date. Instead, Congress merely removed the FCC's affirmative duty to1031re-examine the rule on a fixed schedule through the agency's1032quadrennial review.\17\ No one can point to any statutory directive1033expressly eliminating FCC authority to adjust the cap as it sees fit.1034---------------------------------------------------------------------------1035    \17\ See Appendix.1036---------------------------------------------------------------------------1037    Simply put, as explained in more detail in the Appendix, Congress1038did not mandate a permanent cap, and nor did it prevent the FCC from1039revisiting the cap at a later date. As the FCC itself has consistently1040determined under Republicans and Democrats, the FCC retains authority1041to modernize or repeal the national TV rule.1042Opposition to Eliminating the National Cap is Driven by Anti-1043        Competitive Interests1044    Many of the loudest opponents of reform are not motivated by1045protecting local service. They are direct competitors who benefit when1046broadcasters are held back, especially entities that want to limit1047broadcast competition while seeking scale for themselves. Others have1048maintained their decades-old positions on the issue that have remained1049unchanged even as the marketplace has been transformed by Big Tech and1050streaming dominance. What they have in common is a lack of credible1051legal or economic arguments and data to support their position.1052    The pay TV industry, including cable and satellite TV providers and1053one national cable programmer, has consistently opposed modernizing1054ownership rules, and even called for imposition of additional1055restrictions. All of this aims to keep broadcasters at a competitive1056disadvantage.\18\ NAB has long urged the FCC--and now we urge1057Congress--to disregard the pay TV industry's advocacy to restrict1058broadcast TV stations that compete with them for viewers, advertisers1059and content and that negotiate with them for retransmission consent1060fees. Keeping TV broadcasters artificially small and weak may be in the1061pay TV industry's interest, but it is not in the public's interest.1062After all, pay TV providers and national cable programmers do not1063provide important local services, including the news and emergency1064information that only locally-licensed broadcast stations offer, if1065they have the financial wherewithal to do so. And none are freely-1066available.1067---------------------------------------------------------------------------1068    \18\ See, e.g., Comments of The American Television Alliance, MB1069Docket No. 17-318 (Aug. 4, 2025); Comments of NCTA--The Internet &1070Television Association, MB Docket No. 17-318 (Aug. 4, 2025); Ex Parte1071Letter of DIRECTV, MB Docket No. 17-318 (Sept. 19, 2025); see also1072Comments of NCTA--The Internet & Television Association, MB Docket No.107322-459 (Dec. 17, 2025) (also calling for a stricter local TV rule).1074---------------------------------------------------------------------------1075    Newsmax, a national pay TV channel, is among the most vociferous1076opponents of eliminating the national broadcast TV cap.\19\ Newsmax1077does not want any TV station group expanding their national reach1078because that would provide more robust competition--and free, rather1079than subscription, competition--to its own news brand. This has nothing1080to do with safeguarding viewpoint diversity and everything to do with1081fearing the emergence of other strong, national competitors.1082---------------------------------------------------------------------------1083    \19\ Comments of Newsmax Media, Inc., MB Docket No. 17-318 (July108423, 2025); Comments of Newsmax Media, Inc., MB Docket No. 17-318 (Mar.108519, 2018); see also Comments of Newsmax Media, Inc., MB Docket No. 22-1086459 (Dec. 16, 2025) (also opposing repeal of the local TV ownership1087rule).1088---------------------------------------------------------------------------1089    The committee should evaluate arguments based on what strengthens1090local journalism, preserves free access, improves emergency information1091and increases competition. Maintaining the national cap fails that1092test.1093What's at Stake for Your Constituents1094    If the FCC's broadcast-only ownership limits remain frozen in time,1095the harm is not theoretical. It will show up in local communities. It1096will mean less local journalism and community-focused programming, and1097diminished access to premiere sporting events.1098    Local journalism does not happen by accident. It takes sustained1099investment. The national broadcast television cap restricts the revenue1100base that supports those investments, especially as advertising shifts1101to digital platforms that do not fund local reporting.1102    Free, over-the-air access to major live programming is at risk.1103Live sports is among the most desired content. Its cost continues to1104rise dramatically, and streaming platforms with unlimited scale are1105buying more rights and placing them behind subscription paywalls.1106Broadcasters need a fair chance to compete so that more marquee1107programming remains available free and over the air.1108    Local stations must continue upgrading technology to improve1109emergency alerting, weather reports, accessibility and the overall1110viewer experience. A regulatory regime that suppresses investment works1111against these public interest outcomes.1112Conclusion1113    Thank you for inviting me to testify today.1114    Local television broadcasters are proud of the service we provide1115to your constituents. We deliver our trusted local journalism, critical1116emergency information and valued programming, free and over the air.1117    But localism is an expensive value. Analog-era regulations that1118artificially limit broadcasters' ability to compete for investment,1119programming, audiences and advertising revenue weaken the very services1120policymakers say they want to protect.1121    We urge members of this committee to support the FCC in modernizing1122its broadcast ownership framework and eliminating the national1123television ownership cap.1124    I look forward to answering your questions.1125Appendix: Legal Analysis of FCC Authority to Eliminate the National Cap1126    As consistently recognized by the Supreme Court since the 1940s,1127the Commission has broad authority under the Communications Act of 19341128to adopt, alter or eliminate broadcast ownership rules ``codifying its1129view of the public-interest licensing standard.'' \20\ In neither the11301996 Telecommunications Act (1996 Act) nor the 2004 Consolidated1131Appropriations Act (2004 Appropriations Act) did Congress remove this1132long-standing authority, which authorizes the FCC to alter or repeal1133its current rule capping TV broadcasters' national reach at 39 percent,1134nor did it enshrine the 39 percent cap into statute.\21\1135---------------------------------------------------------------------------1136    \20\ See supra note 14.1137    \21\ For additional context, please see Reply Comments of the Joint1138Broadcasters, MB Docket No. 17-318, at 5-30 (Aug. 22, 2025) (explaining1139that the FCC has authority to revise or repeal the national TV cap and1140refuting at length the error-filled arguments to the contrary by those1141parties supporting ownership rules that harm broadcasters).1142---------------------------------------------------------------------------1143    To ``promote competition and reduce regulation,'' \22\ Congress in1144various provisions of Section 202 of the 1996 Act directed the FCC to1145revise or modify several of its long-standing ownership rules,1146including the national TV ownership cap. Specifically, Section1147202(c)(1)(B) did not set a statutory cap but only told the FCC to1148``modify its rules for multiple ownership set forth in section 73.35551149of its regulations . . . by increasing the national audience reach1150limitation for television stations to 35 percent'' (up from 25).\23\1151---------------------------------------------------------------------------1152    \22\ Pub. L. No. 104-104, 110 Stat. 56 (stating the purpose of the11531996 Act).1154    \23\ 1996 Act, Sec. 202(c)(1)(B), 110 Stat. at 111 (emphasis1155added).1156---------------------------------------------------------------------------1157    ``To ensure that the FCC's ownership rules d[id] not remain in1158place simply through inertia,'' \24\ Congress in 1996 also adopted1159Section 202(h), which requires the FCC to review its broadcast1160ownership rules biennially (now quadrennially) to determine whether1161they remain ``necessary in the public interest as the result of1162competition'' and to ``repeal or modify'' any rules that are not.1163Section 202(h) did not give the Commission authority it had lacked to1164review its rules and to retain, repeal or eliminate them--as the1165Supreme Court has made clear since 1943, the agency already possessed1166that authority under the 1934 Act--but only directed the FCC to1167exercise its existing authority on a periodic basis so that it1168``keep[s] pace with industry developments'' and ``regularly1169reassess[es] how its rules function in the marketplace.'' \25\1170---------------------------------------------------------------------------1171    \24\ FCC v. Prometheus, 592 U.S. at 419.1172    \25\ FCC v. Prometheus, 592 U.S. at 419.1173---------------------------------------------------------------------------1174    Notably, when reviewing the FCC's initial biennial review of all1175its ownership rules under Section 202(h), the D.C. Circuit Court of1176Appeals confirmed that Congress in the 1996 Act had not ``enshrined the117735 percent cap in the statute itself'' \26\ and in fact concluded that1178the FCC's retention of the 35 percent cap was arbitrary and capricious1179and contrary to Section 202(h).\27\ The D.C. Circuit thus affirmed that1180Congress' direction in Section 202(c)(1)(B) of the 1996 Act for the FCC1181to ``modify its rules'' by setting the national cap at 35 percent did1182not cement 35 percent into statute and left undisturbed the FCC's1183authority to change the cap further by setting it at a different1184percentage or by repealing it.1185---------------------------------------------------------------------------1186    \26\ Fox Television Stations, Inc., 293 F.3d at 540.1187    \27\ Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1043-451188(D.C. Cir. 2002) (finding that the FCC had ``adduced not a single valid1189reason to believe'' that the national TV ownership rule was in the1190public interest, ``either to safeguard competition or to enhance1191diversity'').1192---------------------------------------------------------------------------1193    Responding to the D.C. Circuit's 2002 ruling, the FCC determined in11942003 to increase the cap to 45 percent. This 45 percent cap raised some1195controversy in the analog era, and in 2004 Congress decided that a1196different percentage cap was more appropriate. Even in light of the1197D.C. Circuit's ruling that the 1996 Act had not enshrined the previous119835 percent cap into statute, Congress in Section 629(1) of the 20041199Appropriations Act again merely directed the FCC to amend Section1200202(c)(1)(B) of the 1996 Act, this time by inserting ``39 percent'' in1201place of ``35 percent.'' \28\ This action left untouched Section1202202(c)(1)(B)'s original language that had only directed the FCC to1203modify its rules--rules that the FCC has authority under the 1934 Act1204to change--and nowhere enshrined ``39 percent'' into statute.1205---------------------------------------------------------------------------1206    \28\ Section 629(1), Consolidated Appropriations Act, 2004, Pub. L.1207No. 108-199, 118 Stat. 3, 99.1208---------------------------------------------------------------------------1209    In Section 629(3) of the 2004 Appropriations Act, Congress also (1)1210changed the FCC's required periodic reviews of its ownership rules from1211biennial to quadrennial, and (2) relieved the Commission of its1212mandatory duty under Section 202(h) of the 1996 Act to review the1213national TV cap every four years.\29\ Textualists take notice: by its1214clear terms, Section 629(3) does not prohibit the FCC from ever1215reviewing the cap, but only provides that Section 202(h)'s affirmative1216obligation for the FCC to review all its ownership rules quadrennially1217``does not apply'' to any rules relating to the national audience reach1218limit. In short, the plain language of Section 629(3) merely states1219that the FCC is not required to review the national TV cap every four1220years but does not prevent it from reviewing and altering the rule1221under its established authority in the 1934 Act, as the Commission has1222concluded since 2013 in multiple proceedings concerning the national TV1223rule.\30\1224---------------------------------------------------------------------------1225    \29\ Section 629(3), Consolidated Appropriations Act, 2004, 1181226Stat. at 100 (stating that Section 202(h) ``does not apply'' to any1227rules relating to the 39 percent national audience reach limitation in1228Section 202(c)(1)(B)).1229    \30\ The FCC has consistently concluded that the 20041230Appropriations Act only directed it to revise its rules to reflect a 391231percent cap and removed the requirement to review the cap1232quadrennially. As the FCC explained, the 2004 Act did not impose a1233statutory cap or prohibit the FCC from evaluating the rule; thus, it1234retained authority under the 1934 Act to review the national cap but1235was merely not required to do so as part of its quadrennial reviews.1236The FCC emphasized that Congress was well aware of the agency's broad1237authority--indeed, its obligation--under the 1934 Act to reevaluate its1238rules and revise any that do not serve the public interest and could1239have foreclosed the FCC from ever revising the national cap by making1240it a statutory restriction or by otherwise withdrawing FCC authority to1241modify the cap. Congress, however, did not do so but opted for a1242limited measure reducing the cap from 45 to 39 percent and relieving1243the FCC of its duty to reevaluate the cap in the mandated quadrennial1244reviews. Report and Order, 31 FCC Rcd 10213, 10222-24 (2016). Accord1245Notice of Proposed Rulemaking, 28 FCC Rcd 14324, 14329-30 (2013). See1246also Order on Reconsideration, 32 FCC Rcd 3390, 3398 n.60 (2017)1247(referring to FCC's previous conclusions about the national cap);1248Notice of Proposed Rulemaking, 32 FCC Rcd 10785, 10788-89 (2017)1249(explaining the FCC's earlier conclusions that it had authority to1250modify or eliminate the national TV cap and noting the consistency of1251those conclusions with previous decisions by the Third and D.C. Circuit1252Courts of Appeal).1253---------------------------------------------------------------------------1254    Those supporting retention of FCC rules that disadvantage1255broadcasters erroneously claim that Section 629(3) prevents the1256Commission from ever reviewing or altering the 39 percent cap because1257that subsection removed it from the FCC's Section 202(h) obligation to1258review all its ownership rules quadrennially. But removing an1259affirmative duty to review the cap every four years clearly is not the1260same as prohibiting the FCC from ever reviewing it again. Simply put,1261just because someone isn't required to cook dinner or mow the lawn1262doesn't mean they aren't allowed to do so. The arguments of those1263opposing any changes to the 39 percent cap must fail because they are1264contrary to the text of Section 629(3), which contains nary a hint of1265any prohibitory language, and ``[o]nly the written word is the law.''1266\31\1267---------------------------------------------------------------------------1268    \31\ Bostock v. Clayton County, 590 U.S. 644, 653 (2020). ``We do1269not inquire what the legislature meant; we ask only what the statute1270means.'' Epic Sys. Corp. v. Lewis, 584 U.S. 497, 523 (2018). And1271prohibitions plainly absent from statutory language should not be1272inferred. See, e.g., Breuer v. Jim's Concrete of Brevard, Inc. 538 U.S.1273619, 694 (2003).1274---------------------------------------------------------------------------1275    Those claiming that the FCC lacks authority to reevaluate the 391276percent national cap also cannot explain how Section 629 of the 20041277Appropriations Act removed the FCC's authority--as affirmed multiple1278times across nine decades by the Supreme Court--to adopt, amend and1279eliminate ownership rules under its rulemaking and public interest1280licensing authority in the 1934 Act.\32\ Section 629 does not even1281mention, let alone cut back on or override, the 1934 Act or the FCC's1282broad authority under it, of which Congress was well aware.\33\1283---------------------------------------------------------------------------1284    \32\ See 1934 Act, 47 U.S.C. Sec. Sec. 303(r), 307, 308, 309, 3101285and 154(i).1286    \33\ See, e.g., H.R. Rep. No. 104-204, at 54 (1995), reprinted in12871996 U.S.C.C.A.N. at 18 (recognizing when adopting the 1996 Act that1288the FCC had regulated broadcast ownership since the 1940s).1289---------------------------------------------------------------------------1290    Nor can the opponents of broadcast TV ownership rule reform validly1291contend that Congress, when passing Section 629, somehow impliedly1292repealed the FCC's powers under the 1934 Act. The Supreme Court has1293made clear for 90 years--even calling it a ``cardinal rule''--that any1294repeals by implication are strongly disfavored.\34\ ``Congress will1295specifically address preexisting law when it wishes to suspend its1296normal operations in a later statute.'' \35\ But in Section 629,1297Congress did not specifically address the 1934 Act and did not suspend1298its operations or the FCC's long-standing authority under it to1299regulate ownership of broadcast stations. ``Congress `does not alter1300the fundamental details of a regulatory scheme in vague terms or1301ancillary provisions,' '' \36\ and it would not silently hide the1302elephant of suspending the FCC's broad licensing and rulemaking1303authority under the agency's foundational statute in any statutory1304mousehole, let alone one consisting of an ancillary, less than 200-word1305rider to an approximately 200,000-word appropriations bill.\37\1306---------------------------------------------------------------------------1307    \34\ Tenn. Valley Auth. v. Hill, 437 U.S. 153, 189 (1978), quoting1308Posadas v. Nat'l City Bank, 296 U.S. 497, 503 (1936); accord Me. Cmty.1309Health Options v. U.S. 590 U.S. 296, 315 (2020).1310    \35\ Epic Sys. Corp. v. Lewis, 584 U.S. 497, 510 (2018) (citation1311omitted).1312    \36\ Bostock, 590 U.S. at 680, quoting Whitman v. Am. Trucking1313Ass'ns, Inc., 531 U.S. 457, 468 (2001).1314    \37\ Some opponents of ownership rule reform also perfunctorily and1315erroneously contend that Section 629(2) of the 2004 Appropriations Act1316shows that Congress intended to permanently remove the national cap1317from FCC review. This subsection confusingly states that the FCC may1318not use its authority under Section 10 of the 1934 Act, 47 U.S.C.1319Sec. 160, to forbear from applying the 39 percent national cap to any1320entity exceeding that audience reach limitation. But the FCC's1321forbearance authority under Section 10 applies only to regulation of1322``telecommunications carriers or telecommunications services,'' not to1323broadcasters or broadcasting under Title III of the 1934 Act. In any1324event, Section 629(2)'s nonsensical prohibition on forbearance does not1325preclude other types of relief from the cap's restrictions, including1326relaxation or repeal of the cap itself. The FCC rejected claims a1327decade ago that Section 629(2) somehow prevented it from reexamining1328and revising the national TV cap. See Report and Order, 31 FCC Rcd132910213, 10222-23 n.77 (2016). NAB agrees with the FCC. Significantly,1330Section 629(2) refers specifically to the 39 percent limit in Section1331202(c)(1)(B) of the 1996 Act, which as discussed above, only directs1332the FCC to modify its national TV ownership rule, does not enshrine the1333cap into statute, and does not prohibit the FCC from later changing its1334rules.1335---------------------------------------------------------------------------1336    Congress' decision to remove the national TV cap from the mandated1337quadrennial reviews--but not to prohibit the FCC from reevaluating it1338ever again--is understandable from a practical point of view. After1339frequent changes to the level of the national cap in the span of a few1340years, from 25 to 35 to 45 to 39 percent, Congress was reluctant to1341require the Commission to turn around and reexamine the level of the1342cap yet again in just a couple of years.\38\ Thus, in Section 6291343Congress (1) again chose to direct the FCC to modify its rules, instead1344of enshrining the 39 percent limit into statute (which it easily could1345have done), and (2) chose to remove the national TV cap from Section1346202(h)'s mandated quadrennial reviews but did not prohibit the FCC from1347reviewing its rule at some point in the future. The ``one, cardinal1348canon'' in interpreting a statute is that one ``must presume that a1349legislature says in a statute what it means and means in a statute what1350it says there.'' \39\1351---------------------------------------------------------------------------1352    \38\ Despite changing the frequency of the required periodic1353ownership reviews from every two to every four years in the 20041354Appropriations Act, the next mandated quadrennial review was due in13552006, given that the FCC had conducted its last biennial review in13562002.1357    \39\ Connecticut Nat'l Bank vs. Germain, 503 U.S. 249, 253-541358(1992).13591360    The Chairman. Thank you. Mr. Johnson.13611362STATEMENT OF THOMAS JOHNSON, PARTNER AND CO-CHAIR OF ISSUES AND1363                    APPEALS, WILEY REIN LLP13641365    Mr. Johnson. Chairman Cruz, Ranking Member Cantwell,1366members of the Committee, thank you for the invitation to1367testify here today. This hearing is timely as the FCC considers1368whether to repeal obsolete ownership rules that are preventing1369local broadcasters from fairly competing in a media environment1370dominated by the national networks, social media platforms run1371by Big Tech, and online streaming services whose content does1372not always reflect the views of everyday American communities1373across the country.1374    Mr. Chairman, as the former general counsel of the FCC1375during the first Trump administration, one of my proudest1376moments was persuading the U.S. Supreme Court to take and1377ultimately decide by unanimous vote a case that upheld Chairman1378Pai's landmark media ownership reforms for the digital age,1379including outdated prohibitions on newspaper and broadcast1380cross-ownership. Now under Chairman Carr's leadership, the FCC1381is continuing the important work of reviewing the Agency's1382remaining ownership rules. In my view, all of these1383prescriptive rules are outdated and ought to be repealed, and1384chief among these is the national television broadcast1385ownership cap.1386    As general counsel, I defended the Agency's bipartisan1387consensus that the Agency has legal authority to eliminate that1388rule, and I continue to believe so today. The reason, Mr.1389Chairman, is simple. As Justices Thomas and Scalia have said1390repeatedly, when interpreting a statute, we must start with the1391text, and the relevant text here is straightforward. As I1392explained in more detail in a letter I submitted to the--to the1393FCC in the national cap record, on two occasions, in 1996 and13942004, Congress chose the language, ``modify its rules,'' to1395instruct the Commission to make a one-time change to its1396longstanding national ownership cap rule.1397    The Court of Appeals here in D.C. looked at the language in1398the 1996 Act and concluded that it was ``only the starting1399point from which the Commission was to assess the need for1400further change.'' If Congress intended to eliminate that1401discretion, the Court reasoned, ``It need only have enshrined1402the cap in the statute itself.'' Only two years later, in 2004,1403Congress directed the Commission to change the national cap1404level again, but kept that ``modify its rules'' formulation in1405place. That was not accidental. Congress had before it two1406bills that would have expressly codified the cap as the D.C.1407Circuit suggested, but adopted neither proposal. Congress'1408choice of words to direct a one-time rule change rather than1409impose a mandate, as it has in other parts of the1410Communications Act even with respect to broadcast policy, those1411words matter.1412    Now, I believe the FCC not only can modify the cap, but it1413should do so. During the early days of the cap, as you1414mentioned, Mr. Chairman, Americans still got their news and1415other programming primarily from one of the so-called Big Three1416broadcast networks. The FCC hoped that limits on audience reach1417would help ensure against those then dominant voices1418monopolizing the marketplace, but advances in technology have1419turned that original rationale on its head. Those networks1420increasingly distribute programming through their own streaming1421platforms, none of which are subject to the FCC's rules.1422    Ironically, a rule originally intended to constrain the1423power of large networks, now provides them with a competitive1424advantage over smaller local stations. Meanwhile, more than1425half of Americans today get their news and entertainment from1426streaming services, social media, and virtual MVPDs, like1427YouTube TV, for the first time, none of which are subject to1428this audience reach limitation. Imagine a rule that Hulu,1429Netflix, Facebook could only reach 39 percent of the1430population. They exceed those numbers today and would have to1431divest, but that's the world in which local broadcast lives.1432    Broadcast stations do have one advantage, as you mentioned,1433Senator Cantwell. They remain the source of news and1434information that Americans trust the most. Local newsrooms1435provide unbiased reporting free from algorithmic bias and1436politicized environments that infect a lot of online discourse.1437Eliminating the cap would provide stations with flexibility to1438take advantage of economies of scale to help them compete more1439effectively with today's modern media behemoths. It would also1440benefit viewpoint diversity. Affiliate groups that represent a1441broad cross-section of Americans would have more leverage to1442demand programming from networks and streamers that reflect1443conservative and moderate values, not only the progressive1444values of content creators in places like Hollywood and New1445York.1446    Now, even without the cap in place, broadcasters involved1447in an acquisition would still have to undergo the same1448competition review at the Department of Justice as every other1449sector of the economy. Indeed, broadcasters uniquely have to1450undergo a separate public interest review at the FCC, which1451historically has considered issues like localism and viewpoint1452diversity that national cap proponents have talked about. In1453conclusion, good deals that would otherwise be blocked by the145439-percent cap could get approved, while bad deals would not,1455or as President Trump put it this past weekend, letting good1456deals get done will result in ``more competition and at a1457higher and more sophisticated level'' between local affiliates1458and national TV networks.1459    I again thank the Committee. I look forward to your1460questions.1461    [The prepared statement of Mr. Johnson follows:]14621463 Prepared Statement of Thomas M. Johnson, Jr., Former General Counsel,1464                   Federal Communications Commission1465    Chairman Cruz, Ranking Member Cantwell, and Members of the1466Committee, thank you for the invitation to testify today. I am grateful1467for the opportunity to discuss the important topic of media ownership1468in the digital age, and in particular, why it is both lawful and in the1469public interest for the Federal Communications Commission to repeal an1470obsolete ownership limit on local broadcast television stations that1471has limited their ability to compete in a media environment1472increasingly dominated by Big Tech social media platforms, national1473programmers, and other media giants who are not subject to the same1474regulatory constraints.1475    Consumers trust their local broadcasters to provide them with1476unbiased local news, weather, sports, and other programming reflective1477of the communities they serve, and indeed, these FCC licensees have a1478public interest obligation to serve their local communities. Given1479that, it is imperative that broadcasters not be subject to1480prescriptive, artificial limits on their ability to scale effectively1481to continue performing their important public mission and to act as a1482check on national programmers whose content does not always reflect the1483views of everyday Americans across the country.1484My Background Promoting Media Ownership Reform1485    To provide the Committee with some context on my history with these1486issues: I am currently the Co-Chair of the Issues and Appeals practice1487at Wiley Rein LLP, and before that, in the first Trump administration,1488I served as General Counsel of the FCC under Chairman Ajit Pai and1489then-Commissioner (now Chairman) Brendan Carr.1490    During my tenure, the Office of General Counsel took seriously its1491obligation to stay within the limits of the authority that Congress1492delegated to the Commission while vigorously pursuing the public1493interest. I am proud that during my time at the FCC nearly all the1494Commission's orders were upheld in court. Relevant here, that record1495includes a unanimous Supreme Court decision in FCC v. Prometheus Radio1496Project that affirmed our landmark media-ownership reforms repealing1497long-outdated rules on media cross-ownership that had been held up in1498litigation in the courts of appeals for decades.1499    As GC under Chairman Pai, I also defended the Commission's1500authority to eliminate or modify an agency rule that restricts1501broadcasters from owning television stations that reach more than 391502percent of our national audience. This position is consistent with the1503agency's longstanding bipartisan consensus that--in the words of three1504former Democratic permanent or acting FCC Chairs (Tom Wheeler, Mignon1505Clyburn, and Jessica Rosenworcel)--the FCC retains ``authority to1506modify the national audience reach cap'' under the Commission's1507statutory mandate to ``revisit its own rules and revise or eliminate1508them when it concludes such action is appropriate.'' I continue to hold1509this view today.1510The FCC Has the Legal Authority to Eliminate the National Cap1511    The reason why is simple. As Justice Thomas and the late Justice1512Scalia would advise us, to discern the scope of FCC authority, we must1513start with the text of the statute. And that text here is1514straightforward.1515    As the former FCC Chairs understood, Congress gave the Commission1516broad authority, ``as public convenience, interest, or necessity1517requires,'' to ``[m]ake such rules and regulations. . .as may be1518necessary to carry out the provisions of'' the Communications Act.1519Pursuant to this authority, the FCC starting in the 1940s enacted and1520subsequently modified several media ownership rules--including a1521version of the national ownership cap.1522    Congress has never disputed the agency's authority to adopt those1523rules. Rather, on two occasions, Congress has modified the agency's1524judgment on specific ownership limits while preserving the FCC's1525authority to change those limits as competitive circumstances require.1526    In the Telecommunications Act of 1996, the most comprehensive1527reform to date of the Communications Act, Congress directed that the1528agency ``modify its rules'' governing media ownership in several1529respects, including by adjusting the national cap at the time from 251530percent to 35 percent. That ``modify its rules'' formulation is1531critical. As the D.C. Circuit held in 2002, that language preserved the1532FCC's discretion to change or repeal the national cap, and if Congress1533intended to eliminate that discretion, ``it need only have enshrined1534the 35 percent cap in the statute itself.''1535    Two years after that decision, and presumably aware of the court's1536construction of the 1996 Act, Congress in an appropriations measure1537again directed the Commission to change its rule-based national1538ownership limit--which the FCC had by then modified to 45 percent--this1539time requiring the Commission to lower the limit to 39 percent. But in1540doing so, Congress did not enshrine the new cap in the statute, as the1541D.C. Circuit suggested it might do. Congress merely substituted the1542number ``39'' for ``35'' while keeping the ``modify its rules''1543formulation in place.1544    In other words, Congress preserved the exact same language--1545``modify its rules''--that the D.C. Circuit had just determined was1546``only the starting point from which the Commission was to assess the1547need for further change.'' And that was no accident. When Congress1548passed that provision, it already had before it two bills in the House1549and Senate that would have expressly codified the national cap, but it1550ultimately adopted neither of those proposals.1551    Congress knows how to remove Commission discretion over broadcast1552policy when it wants to. In the Radio Broadcasting Preservation Act of15532000, for example, Congress directed certain minimum distance1554separations between broadcast channels and told the FCC it ``may not .1555. . eliminate or reduce'' those distances, except ``as expressly1556authorized by an Act of Congress enacted after the date of the1557enactment of this Act.'' That could not be clearer. But Congress has1558never used any such express restrictive language in connection with1559broadcast ownership limits--not in 1934, 1996, 2004, or today. And1560there is a longstanding presumption against implied repeals of1561preexisting laws, especially in connection with appropriations bills.1562    Now, as a former FCC General Counsel, I am aware of how agencies1563under the old Chevron deference regime would try to drive trucks1564through any statutory ambiguity to enhance their power. To cite one1565example, prior administrations relied on Chevron to attempt to impose1566utility-style mandates designed for telephone monopolies on broadband1567Internet providers under the mantle of ``net neutrality''--an effort1568that the FCC successfully reversed while I was GC. But Loper Bright,1569the case that overturned Chevron, recognized that there will be cases1570where Congress expressly delegates authority over a policy decision to1571a Federal agency. And the same Court that decided Loper Bright also1572decided Consumers Research v. FCC one year later--which expressly1573reaffirmed that Congress delegated ``significant discretion'' to the1574FCC in the Communications Act to adopt rules ``in the `public1575interest.' ''1576    Ultimately, under Loper Bright, the search must be for the best1577reading of the statute. And here, there's one best reading by a mile:1578Congress provided the FCC with the authority to adopt ownership rules,1579repeatedly ratified that authority, and consciously used a ``modify its1580rules'' formulation that preserves that authority for the future.1581    While critics of the FCC's authority to modify the cap purport to1582invoke ``textualism,'' their arguments are oddly unmoored from the1583text. They argue that a provision removing the cap from mandatory1584review every four years means that the FCC cannot modify the cap at1585all. But Congress did not say that. They argue that a provision1586prohibiting the FCC from exercising its separate forbearance authority1587means that Congress cannot exercise its rulemaking or waiver1588authorities. But Congress did not say that. They argue that a provision1589requiring companies in certain cases to divest enough stations to come1590into compliance with the cap within two years means the FCC cannot1591further modify the cap. But Congress did not say that either.1592    To quote Justice Alito, these arguments amount to ``pirate ship''1593textualism--a method of interpretation that ``sails under a textualist1594flag'' but seeks to ``update'' a statute rather than interpret it. That1595is impermissible. Especially after Loper Bright, neither the FCC nor1596the courts may draw strained inferences from neighboring provisions in1597a statute to reach a policy outcome preferred by certain parties. To1598the contrary, the best reading of the text Congress actually adopted1599must prevail. Here, that means affirming the FCC's longstanding1600authority to modify the national ownership cap.1601Eliminating The Cap Will Enhance Competition In The Media Marketplace1602    The FCC not only can modify the national television ownership cap--1603it should do so.1604    When I was at the FCC, I saw firsthand how antiquated rules based1605on outdated assumptions can harm innovation, investment, and1606competition in an ever-evolving technological landscape. Take ``net1607neutrality,'' for example. Proponents of the Obama-era ``net1608neutrality'' rules argued that we should apply the Communications Act's1609Title II framework--designed for the age of rotary phones and one major1610long-distance telephone network--to the modern broadband Internet1611economy. As we explained to the D.C. Circuit, those rules ``hampered1612broadband innovation, investment, and deployment'' and were unnecessary1613given that ``transparency, market forces, and enforcement of existing1614antitrust and consumer protection laws'' adequately protected against1615anticompetitive or other harmful conduct in the broadband industry.1616    Much the same could be said for the national cap today. When the1617FCC first adopted a similar rule in the 1940s, and even under the1618modern incarnation of the rule adopted in 1985, most Americans still1619got their news and other programming from one of the so-called ``Big1620Three'' broadcast networks--CBS, NBC, and ABC. The FCC intended that1621limits on national audience reach would help protect viewpoint1622diversity and constrain economic concentration by ensuring that then-1623dominant media voices could not monopolize the marketplace.1624    But advances in technology have now turned that original rationale1625on its head. Those networks increasingly distribute programming through1626their own streaming platforms online, none of which are subject to the1627FCC's audience reach limitation, rather than through their affiliated1628broadcast stations. Ironically, then, a rule originally intended to1629constrain the power of large networks now provides them with a1630competitive advantage over local stations that cannot scale as1631effectively or have the same bargaining power to distribute content via1632major online platforms.1633    Moreover, beyond the major networks, today's media landscape is1634littered with options for eyeballs and clicks that the FCC could not1635have imagined when it first started adopting ownership rules. First,1636there are the cable and satellite providers who offer pay-TV packages.1637Then, for the increasing number of cord-cutting Americans, there is an-1638ever expanding array of streaming services, social media networks, and1639virtual MVPDs like YouTube TV. Indeed, for the first time last year,1640streaming viewership surpassed both broadcast-and cable-television1641viewership combined. Meanwhile, social media recently overtook1642television as the principal place where more than half of Americans1643obtain their news.1644    These other media outlets face no similar arbitrary ``audience1645reach limitation'' like local broadcasters do. Imagine a rule that1646required Hulu or Netflix to limit subscribers to 39 percent of the1647public, or that cut off Facebook users at 39 percent of the Nation's1648population. According to recent Pew surveys, those services are1649currently used by 52 percent, 72 percent, and 68 percent of Americans,1650respectively. A similar ownership cap for digital media would require1651each of those services to divest consumers today. Yet local broadcast1652stations have operated under an equivalent cap for decades.1653    Broadcast stations do have one advantage--they remain the source of1654news and information that Americans trust the most. Local newsrooms1655continue to employ investigative journalists and content creators whose1656mission is to provide unbiased reporting on the day's events--freed1657from the algorithmic biases and politicized environments that infect1658much modern online social media. As Trinity Broadcasting Network, a1659Christian television broadcast licensee, put it in a comment submitted1660to the FCC supporting repeal of the national cap, ``free, over-the-air1661television remains one of the few distribution platforms where1662religious expression can reach audiences without gatekeepers, paywalls,1663or platform bias.''1664    Indeed, as FCC licensees using public airwaves, local broadcasters1665have a public interest obligation to serve their local communities.1666Precisely because of their special obligations and the unique place1667they occupy in the media ecosystem, broadcasters should not be1668encumbered by additional, arbitrary limits on their ability to compete1669with less regulated alternatives.1670    Eliminating the national ownership cap would provide stations with1671the flexibility to infuse additional capital into their operations and1672take advantage of economies of scale that could help them compete more1673effectively with today's modern media behemoths. While critics claim1674that additional station consolidation would threaten broadcast's local1675focus and mission, history tells a different story. The FCC has1676repeatedly concluded in record-based proceedings that stronger group1677ownership can benefit local programming. Indeed, to cite one recent1678example, when Nexstar acquired Tribune, the post-merger entity produced1679more local content than before, not less.1680    In any event, the alternative if the status quo continues is not a1681vibrant, thriving local news economy. The alternative is that broadcast1682remains an endangered species heading toward extinction. Local1683newspapers have already shuttered at exponential rates. Eliminating1684artificial media ownership rules imposed by the government--including1685the national cap--at least gives broadcast stations a chance to adapt1686and thrive in the new media environment under the same competition1687rules that apply to everyone else. The public interest, which the FCC1688is charged to protect by altering or repealing its rules as appropriate1689when competition evolves, demands no less.1690Repeal Would Enhance Viewpoint Diversity--Including Conservative1691    Voices1692    Some proponents of retaining the national cap argue that empowering1693local broadcasters would somehow hurt conservative voices in media.1694These arguments rely primarily on daisy-chain reasoning about how1695particular station groups might exert greater influence in persuading1696cable operators to carry certain programming affiliated with the1697station group. To the extent that occurs, the FCC has deemed such1698practices presumptively reasonable and there would be no political1699valence to them. But in any event, repealing the cap would benefit1700viewpoint diversity, including for conservatives.1701    Eliminating the national cap would empower station groups by1702enabling them to scale up and bargain more effectively with national1703programmers. That means affiliate groups that represent a broad cross-1704section of Americans would have more leverage to demand network1705programming that reflects conservative and moderate values--not the1706predominantly progressive politics of content creators from large1707coastal cities. Similarly, affiliate groups could bargain for more1708rights to ``preempt'' national programming in favor of local content,1709or more local control over what syndicated programming to air in what1710time slots. This too could exercise a gravitational pull on networks,1711which may be more inclined to offer programming that appeals to a1712broader audience.1713    A similar dynamic would play out on streaming media. Right now, the1714national broadcast networks use their leverage to obtain unfavorable1715terms from local stations for carriage rights on streaming services and1716virtual TV platforms. If station groups were allowed to expand1717unencumbered by the national cap, local broadcasters would be better1718positioned to obtain fair compensation for their content and bargain1719for retransmission rights on virtual platforms.1720    By contrast, who benefits from maintaining the status quo? It's the1721Big Tech and Big Media companies who dominate social media and other1722online platforms and whose politics lean decidedly liberal. If the1723content these companies produce turns a profit, it should be because it1724resonates with Americans, not because arbitrary government mandates1725crowd out potentially more popular options or allows these companies to1726acquire local content for pennies on the dollar.1727    As a case in point, consider the history of the FCC's Fairness1728Doctrine. Originally conceived as a way to ensure broadcasters would1729present balanced points of view on scarce public airwaves, it1730ultimately became weaponized in the 1960s as a means to silence1731conservative voices in radio. Following widespread public criticism,1732the rule's repeal in the 1980s led to an explosion in conservative talk1733show programs, led by Rush Limbaugh, that set the model for the1734conservative voices in cable news and online influencers that we have1735today.1736    The national television ownership cap has followed a similar1737trajectory. While conceived as a means to constrain the major networks,1738it now empowers them to the detriment of voices in local broadcasting.1739Repeal could help level the playing field and restore more balance in1740how television reports on the critical political and cultural issues of1741the day.1742Any Concerns About Competition Or Localism Can Be Addressed Case-by-1743        Case1744    Even if one believed that larger station groups would present1745competition or localism concerns in certain cases, it is quite an1746inferential leap--over a yawning chasm--to think that the solution is a1747prescriptive, across-the-board ownership limit pegged to 39 percent (a1748number that reflects a snapshot of decades-old market realities). One1749searches in vain for plausible defenses of ossifying for all time this1750precise Delphic ownership limit.1751    Eliminating the cap would simply level the playing field so that1752broadcasters are subject to the same competitive constraints as other1753companies throughout the media ecosystem. That does not mean no1754oversight over future broadcast deals. To the contrary, the Antitrust1755Division of the Department of Justice would still scrutinize deals that1756meet certain economic thresholds for compliance with competition laws--1757just as it does in every other sector of the economy. The Federal Trade1758Commission and related state authorities would continue to police1759unfair and deceptive practices. Any deals or business practices that1760are anticompetitive could still be enjoined, either by the government1761or in private lawsuits.1762    Indeed, because broadcasters are FCC licensees charged with1763operating in the public interest, any broadcast deals would have to1764undergo an additional independent review at the Commission. No other1765private companies to my knowledge undergo two layers of Federal1766competition review, but that will continue to happen for FCC licensees,1767regardless of whether prescriptive ownership rules remain in place.1768That is all the more reason why they shouldn't. And because the FCC's1769Congressional public interest mandate sweeps broader than concerns1770about competition, the FCC could continue to examine the effects of1771proposed transactions on localism and viewpoint diversity, two other1772areas of concern for national-cap proponents.1773    In short, good deals that would otherwise be blocked by the 391774percent cap could get approved, although only after vigorous review,1775while bad deals could still be blocked. Or as President Trump said this1776past weekend, ``[l]etting Good Deals get done'' will result in ``more1777competition, and at a higher and more sophisticated level,'' with the1778large national networks that currently dominate the landscape for TV1779programming.1780    In closing, I want to thank you again Chairman Cruz, Ranking Member1781Cantwell, and Members of the Committee, for holding this important1782hearing and for the opportunity to testify. I look forward to answering1783your questions.17841785    The Chairman. Thank you. Mr. Waldman.17861787            STATEMENT OF STEVE WALDMAN, PRESIDENT,1788                       REBUILD LOCAL NEWS17891790    Mr. Waldman. Thank you, Chairman Cruz, Ranking Member1791Cantwell, and other Committee members.1792    On average, two newspapers close every week in the United1793States. Three thousand five hundred have shut down in the last179420 years, and perhaps most importantly, in the last 20 years,1795there has been a 75-percent drop in the number of local1796journalists--that's in print, TV, digital--and the consequences1797for communities are really alarming. Studies show that areas1798with less local news have more corruption, more government1799waste, less civic involvement, less volunteering. People know a1800lot about national controversies, but not all that much about1801local issues: what the mayor did this year or even what the1802mayor's name was.1803    And there's one more thing that's a bit harder to measure1804but so important, is the vacuum is being filled by social media1805and national news, which are leaving communities more divided.1806As Senator Moran said last week about the Plainville Times,1807national journalism has the habit of tearing us apart;1808community journalism pulls us together. Yes, media1809consolidation is one of the causes. For instance, private1810equity firms in New York acquired lots of newspapers, then laid1811off the local reporters in the rest of the country, but the1812primary cause is the internet. Advertisers shifted spending1813toward Google, Facebook, and other tech platforms and then used1814their market clout to restrict competition and provide less1815revenue to local publishers.1816    And now comes another body blow: artificial intelligence.1817AI will further deplete the revenue of local news outlets. AI1818companies will suck in the local news content to train and1819ground the AI assistance, which then provide full answers1820instead of linking prominently off to the publisher websites.1821And those click-throughs are what have generated the traffic1822and the revenue for the local news outlets.1823    When the Washington Post announced its cuts, which included1824a 70-percent cut in the Metro staff, they noted that their1825search traffic had dropped by half in three years. And by the1826way, these drops in traffic are at conservative websites as1827well, but here's the horrible paradox of all this. As AI erodes1828local news businesses, that hollowness in turn will make it1829worse--will make AI worse. AI works well when it has massive1830amounts of data, but it really struggles when it's confronted1831with the condition called information scarcity, and local news1832suffers from that ailment exactly. Studies show AI routinely1833provides inaccurate information on local matters, and when1834malicious players are producing deepfakes and there are no1835local watchdogs, those will run rampant.1836    And to be clear, like, AI does offer tremendous1837opportunities to local newsrooms. It really does. I mean, the--1838these nearly magical tools can help local news outlets do more1839coverage with less money. But the tech industry has to go1840farther than that and help reverse the financial crisis, the1841revenue crisis that it helped to create, and I think there are1842a few ways to think about that.1843    First, AI companies must compensate local news1844organizations, including the small and medium-sized ones, for1845the content they use. Many of them have made deals with big1846media chains, but so far have left out thousands of smaller1847players. Second, we have the big controversies and energy over1848the construction of AI data centers. Well, there's an1849opportunity there, too. Here's an idea: have each data center1850contribute some money, a one-time donation to a community1851foundation to create an endowment that would help pay for local1852reporters, and those reporters can do the follow up. Did the AI1853companies actually buy from local businesses as they said they1854would or hire locally, or did they do the--pay their way on1855electricity as they said?1856    And finally, AI companies and social media platforms should1857pay, I believe, a mitigation fee to help finance the revival of1858community news. Even a tiny fee could help pay for something1859like Senator Cantwell's bill that would provide tax credits for1860the hiring of local news or tax credits for small businesses1861that advertise in local news, which is an idea we're seeing1862Republicans push in New Hampshire and Kansas right now.1863    Now, on the local TV ownership caps, our group has not1864taken a position on the question of whether or not Congress--1865FCC has the authority to do the caps on their own, but I would1866say this. First, I actually have some sympathy for both of1867these arguments. You know, the--it really is true that local TV1868news is incredibly important. In some places, it's the only1869thing left, and so we really agree that this ought to be looked1870at through the prism of whether or not it helps local news. On1871the other hand, there really is a lot of evidence that1872consolidation has gone in the other direction and actually1873hollowed out some newsrooms.1874    So, my advice would be to look at that question through the1875prism of whether it's good or bad for local news, and1876specifically look at whether it maintains or increases or1877reduces the number of local reporters and editors, not the1878number of hours because if you have less local reporters and1879more hours, what you actually have is more superficial local1880news or more copying. So, really look at the kind of capacity.1881And I think time is running out. We need to reverse this before1882nothing's left. We at heart need more human reporters living in1883the communities, accountable to and listening to their1884neighbors, and for that revival to happen, the biggest1885technology companies must quickly step up as well.1886    [The prepared statement of Mr. Waldman follows:]18871888  Prepared Statement of Steven Waldman, President, Rebuild Local News1889    Thank you Chairman Cruz for inviting me, and for your salient1890comments in the past about the importance of local news. And thank you1891Senator Cantwell for your strong leadership in trying to advance public1892policies to help local news.1893    Rebuild Local News is a nonpartisan group that develops and1894advocates First-Amendment-friendly public policies that strengthen1895community news. The Rebuild Local News Coalition includes 55 publisher1896associations, foundations, labor unions, journalists groups and civic1897groups. Together they represent 3,000 newsrooms and 15,000 journalists1898around the country--though the views here are my own and don't1899necessarily represent those of the member associations.1900    As you know, local news has collapsed. Approximately 3,5001901newspapers in the past twenty years have disappeared, representing more1902than 40 percent of the total which have closed.\1\ On average, two1903newspapers close each week. There's been a 75 percent drop in the1904number of reporters in the past 20 years.\2\ In 2002, there were about190540 reporters per 100,000 people. Now, that number is 8.2.\3\ According1906to the Local Journalist Index, 184 of Texas's 254 counties, about 721907percent, fall below the already anemic national average, while 20 of1908Washington's 39 counties, just over 51 percent, are in the same1909position.\4\1910---------------------------------------------------------------------------1911    \1\ Medill School of Journalism, State of Local News/News Desert1912Project, Northwestern Uni-1913versity. 2025. https://localnewsinitiative.northwestern.edu/projects/1914state-of-local-news/2025/report/1915    \2\ Muck Rack and Rebuild Local News. 2025. The Local Journalist1916Index. https://muckrack1917.com/research/local-journalist-index1918    \3\ Rebuild Local News & Muck Rack, Local Journalist Index.1919    \4\ The LJI also shows that the statewide average journalist1920density is 5.9 in Texas and 7.7 in Washington, both below the national1921level. National, State and County-level journalist density is drawn1922from the Local Journalist Index (LJI), produced by Rebuild Local News1923in partnership with Muck Rack.1924---------------------------------------------------------------------------1925    And of course, just to underline that no place is immune, last week1926we learned that The Washington Post would be reducing its metro staff1927by 70 percent, as part of a massive cut to their newsroom. The local1928news crisis is spreading.1929    As a result of the drop in the number of reporters and outlets,1930many communities have little or no local reporting on government,1931schools, courts, or public safety. This collapse has real consequences1932for how communities govern, how public dollars are spent, and how1933residents stay informed.1934    There are financial impacts. Communities with less local news had1935lower bond ratings, higher financing costs, and higher taxes.\5\ They1936have more government corruption and more government waste.\6\ \7\1937Communities that suffer from a loss of local news are also linked to1938increased regulatory violations and organizational wrongdoing.\8\1939---------------------------------------------------------------------------1940    \5\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in1941Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal1942of Financial Economics 135, no. 2 (February 2020): 445-467, https://1943doi.org/10.1016/j.jfineco.2019.06.003.1944    \6\ Matherly, T., & Greenwood, B. N. (2024). No news is bad news:1945The internet, corruption, and the decline of the Fourth Estate. MIS1946Quarterly, 48(2), 699-714. https://doi.org/10.25300/MISQ/2023/17869;1947Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital Cities,1948Accountability, and Corruption: Evidence from U.S. States,'' American1949Economic Review 104, no. 8 (August 2014): 2456-81, https://doi.org/195010.1257/aer.104.8.2456.1951    \7\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in1952Darkness?''.1953    \8\ Heese, Jonas & Perez-Cavazos, Gerardo & Peter, Caspar David,19542022. ``When The Local Newspaper Leaves Town: The Effects Of Local1955Newspaper Closures On Corporate Misconduct,'' Journal of Financial1956Economics, Elsevier, vol. 145(2), pages 445-463.1957---------------------------------------------------------------------------1958    The civic life of communities is undermined. The contraction has1959contributed to a significant drop in local civic knowledge and1960participation in the United States. Those who follow local news closely1961are more likely to engage in activities with civic organizations such1962as sports leagues, church groups or charity organizations' civic1963activities.\9\ Evidence also suggests that the decline of local news is1964linked to higher loneliness, especially in rural communities.\10\1965---------------------------------------------------------------------------1966    \9\ Michael Barthel et al., ``Civic Engagement Strongly Tied to1967Local News Habits,''.1968    \10\ Hayes, Danny and Trivedi, Anusha, Loneliness and the Local1969News Environment (February 05, 2026). Available at SSRN: https://1970papers.ssrn.com/sol3/papers.cfm?abstract_id=61831821971---------------------------------------------------------------------------1972    The basic health of the political system declines. Declines in1973local news result in less knowledge about public officials and less1974civic knowledge\11\, voters are less likely to have an opinion about1975their member of Congress,\12\ less likely to be able to name things1976they like or dislike about their representative.\13\ In 1966, 701977percent of voters could name their mayor. In 2016 only 40 percent of1978voters could.\14\ Communities with less local news have lower voting1979rates, and those that do regularly vote are more likely to follow local1980news.\15\ \16\ The members of Congress who get less coverage in the1981local press are less likely to appear as a witness before a1982congressional committee to advocate for their district.\17\1983---------------------------------------------------------------------------1984    \11\ Danny Hayes and Jennifer L. Lawless, ``As Local News Goes, so1985Goes Citizen Engagement: Media, Knowledge, and Participation in U.S.1986House Elections,'' The Journal of Politics 77, no. 2 (April 2015): 447-198762, https://doi.org/10.1086/679749.1988    \12\ Danny Hayes and Jennifer L. Lawless, ``The Decline of Local1989News and Its Effects: New Evidence from Longitudinal Data,'' The1990Journal of Politics 80, no. 1 (October 18, 2017): 332-36, https://1991doi.org/10.1086/694105.1992    \13\ James Snyder Jr. and David Stromberg, ``Press Coverage and1993Political Accountability,'' Journal of Political Economy 118, no. 21994(April 2010): 355-408, https://doi.org/10.1086/652903.1995    \14\ Hayes and Lawless, News Hole, 2.1996    \15\ Jessica Bruder, ``Is the Death of Newspapers the End of Good1997Citizenship?,'' Christian Science Monitor, November 11, 2012, https://1998www.csmonitor.com/USA/Society/2012/1111/Is-the-death-of-newspapers-the-1999end-of-good-citizenship.; Michael Ewens, Arpit Gupta, and Sabrina T.2000Howell, ``Local Journalism under Private Equity Ownership,'' SSRN, Oct.200111, 2021, https://ssrn.com/abstract=3939316.2002    \16\ Michael Barthel et al., ``Civic Engagement Strongly Tied to2003Local News Habits,'' Pewresearch.org (Pew Research Center, November 1,20042016), https://www.pewresearch.org/journalism/wp-content/uploads/sites/20058/2016/11/PJ_2016.11.02_Civic-Engagement_FINAL.pdf.2006    \17\ Snyder, Stromberg, ``Press Coverage and Political2007Accountability,'' 355-408.2008---------------------------------------------------------------------------2009    Just as important, studies have also shown that this contraction2010has exacerbated polarization and the nationalization of all news and2011disputes. The vacuum created by the loss of local news tends to be2012filled by national media and social media (which fuels polarization and2013is more polarizing and prone to spreading inaccuracies.) In communities2014with less local news, voters are more likely to vote on a party line2015basis\18\ and have more polarized views.\19\ As Senator Moran recently2016said, in speaking movingly about its recently-merged local newspaper,2017the Plainville Times, ``I saw first-hand how the newspaper supported2018the community and brought neighbors, friends and even strangers2019together. Community journalism pulls us together. National journalism2020has the habit of tearing us apart.''2021---------------------------------------------------------------------------2022    \18\ Daniel J. Moskowitz, ``Local News, Information, and the2023Nationalization of U.S. Elections,'' American Political Science Review2024115, no. 1 (February 2021): 114-29, https://doi.org/10.1017/2025s0003055420000829; Joshua P Darr, Matthew P Hitt, and Johanna L2026Dunaway, ``Newspaper Closures Polarize Voting Behavior,'' Journal of2027Communication 68, no. 6 (November 5, 2018): 1007-28, https://doi.org/202810.1093/joc/jqy051.2029    \19\ Darr JP, Hitt MP, Dunaway JL. Home Style Opinion: How Local2030Newspapers Can Slow Polarization. Cambridge University Press; 2021.2031---------------------------------------------------------------------------2032    There are multiple causes to the contraction. Some of it was self-2033inflicted by the news industry. As local papers were bought up by hedge2034funds or private equity firms based in New York, they cut reporters out2035in the rest of the country.\20\ Mega mergers financed with massive2036amounts of debt contributed, too, as news organizations used profits to2037pay off loans instead of investing in digital transformation or local2038coverage. We have even seen the rise of local newspapers that have no2039local reporters at all.\21\ In the case of both newspapers and local2040TV,\22\ consolidation and nationalization in many cases has aggravated2041the local news crisis, leading to fewer reporters in communities and2042less, or more superficial, coverage of school boards, economic2043development, elections, social problems and civic activity.\23\ Indeed,2044the revival and reformation of local news will require not just new2045business and editorial approaches--but new ownership models. We have2046seen that family-owned news organizations, smaller chains and2047nonprofits tend to do better on the local level.\24\ It appears that2048local news often does better when it is in local hands.2049---------------------------------------------------------------------------2050    \20\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local2051Journalism under Private Equity Ownership,'' NBER Working Paper 297432052(2022), https://doi.org/10.3386/w29743; Steven Waldman, ``The local2053news crisis illustrates the inadequacy of the current antitrust2054approach,'' Rebuild Local News, May 8, 2024, https://2055www.rebuildlocalnews.org/the-local-news-crisis-illustrates-the-2056inadequacy-of-the-current-antitrust-approach/2057    \21\ Abernathy, ``News Deserts and Ghost Newspapers: Will Local2058News Survive?,'' 34, www.usnewsdeserts.com (Chapel Hill: University of2059North Carolina, June 2020), https://www.usnewsdeserts.com/wp-content/2060uploads/2020/06/2020_News_Deserts_and_Ghost_Newspapers.pdf; Jessica2061Garrison, ``As the Salinas Californian withers, a city yearns to know2062its stories,'' Los Angeles Times, March 27, 2023, https://2063www.latimes.com/california/story/2023-03-27/as-the-salinas-californian-2064withers-a-city-yearns-to-know-its-stories.2065    \22\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''2066(PDF), https://www.free2067press.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed2068Feb. 6, 2026).2069    \23\ Free Press, ``Comments of Free Press: In the Matter of 20222070Quadrennial Regulatory Review,'' Mar. 3, 2023, https://2071www.freepress.net/download/free-press-2022-quadrennial-review-comments-2072pdf.2073    \24\ Ewens, Gupta, and Howell, ``Local Journalism under Private2074Equity Ownership.''2075---------------------------------------------------------------------------2076    But the primary reason for the collapse of local news business2077models is the rise of the internet. Local and regional advertisers2078shifted from local media to Google, Facebook and other tech platforms.2079Some 85 percent of local advertising now goes to non-local companies,2080Google, Meta and Amazon.\25\ Not all Big Tech behavior was malicious.2081Some of these trends happened because the tech companies provided2082better services to local businesses. But it is also true that they then2083used that market clout to squelch competition and provide less revenue2084to local publishers.\26\2085---------------------------------------------------------------------------2086    \25\ Borrell Associates, ``2025 Annual Report: Benchmarking Local2087Digital Media,'' May 2025, https://borrellassociates.com/ip_releases/20882025-annual-report/.2089    \26\ U.S. Department of Justice. (2025, April 17). Department of2090Justice prevails in landmark antitrust case against Google https://2091www.justice.gov/opa/pr/department-justice-prevails-landmark-antitrust-2092case-against-google2093---------------------------------------------------------------------------2094    And blame aside, the reality remains that the digital disruption2095had many great benefits and also some serious downsides--one of which2096is the tragic undermining of community news. It's only fair that the2097big winners of the digital revolution help repair the damage, whether2098it was intended or unintended.2099    Unfortunately and amazingly, the local news business models are2100once again feeling another body blow--this time from artificial2101intelligence.2102    To be clear, AI will provide many truly amazing opportunities for2103publishers who use it ethically and creatively. Right now newsrooms2104across the country are experimenting with how to reinvent themselves--2105providing more coverage for less money, thanks to AI. We applaud and2106support that innovation.2107    But when it comes to AI and local news, there are also several2108overriding--and ominous--trends.2109The first order economic impact is likely to be further erosion of the2110        local news business models--yet another blow to community2111        information and news.2112    Americans are indeed using AI search to get information about their2113communities. Last week, OpenAI reported that ``the demand for reliable2114local news is already visible inside ChatGPT at a rate of about 12115million prompts per week.'' \27\2116---------------------------------------------------------------------------2117    \27\ OpenAI Global Affairs, ``A Different Path on Local News,''2118(2026, February 3) https://openaiglobalaffairs.substack.com/p/a-2119different-path-on-local-news.2120---------------------------------------------------------------------------2121    Unfortunately, under the current system, local news outlets will2122again end up financially wounded. AI companies hoover up content2123created by local news outlets--content that came about as a result of2124paying a human being journalist. The AI companies use that to train and2125ground their models. The AI assistants can replace referral traffic by2126providing summaries instead of links--so users don't have to click2127through to some other website. That's the key difference. In the olden2128days--like, a year ago--even though there was a clear power imbalance2129in favor of big tech, they did also at least give a prominent link, so2130the user might sometimes click through to the news site. That provided2131traffic that the news outlets could convert to revenue.2132    AI will grievously wound, if not kill, the click-through.\28\ In2133announcing its layoffs, the Washington Post editors noted that their2134search traffic had dropped by one-half in just three years.\29\2135---------------------------------------------------------------------------2136    \28\ Pew Research Center, ``Google users are less likely to click2137on links when an AI summary appears in the results,'' July 22, 2025,2138https://www.pewresearch.org/short-reads/2025/07/22/google-users-are-2139less-likely-to-click-on-links-when-an-ai-summary-appears-in-the-2140results/.2141    \29\ Bauder, D. (2026, February 4). Washington Post cuts a third of2142its staff in a blow to a legendary news brand. Associated Press.2143https://apnews.com/article/washington-post-staff-reduction-layoffs-2144cuts-923f87d4bd319c8a64b278165d0a6e272145---------------------------------------------------------------------------2146    And, by the way, this phenomenon is nonpartisan: conservative sites2147are seeing major traffic declines too.\30\2148---------------------------------------------------------------------------2149    \30\ Analysis of the top 50 U.S. news websites reveals that 372150sites experienced year-over-year traffic declines in May 2025, with2151only 13 showing growth. Press Gazette. (2025). Most popular news2152websites in the US--monthly ranking Retrieved December 19, 2025, from2153https://pressgazette.co.uk/media-audience-and-business-data/2154media_metrics/most-popular-websites-news-us-monthly-3/2155---------------------------------------------------------------------------2156    Whatever the ultimate outcomes in the courts on questions of fair2157use, the fact will remain that the AI companies extract tremendous2158value from local news providers without giving much back to newsrooms--2159at a time when local news is already in an existential crisis.2160If unaddressed, the collapse of local news will actually make AI lower2161        quality and ultimately spread more misinformation.2162    AI struggles when there's a dearth of information on a topic.\31\2163It is more likely to be inaccurate and spread misinformation. The local2164news ecosystems in many communities suffer from this ``information2165scarcity.'' We've invented whole new terms--``news deserts'' and2166``ghost newspapers''--to capture how barren some of these areas are.2167Not surprisingly, AI has struggled to get local information right.2168Studies have found that AI assistants often flubbed\32\ local2169elections\33\ including information about how to register, where to2170vote,\34\ the positions of candidates,\35\ and how disabled people\36\2171could vote. In another study about elections in Switzerland and2172Germany, one-third of answers included ``wrong election dates, outdated2173candidates, or even invented controversies concerning candidates.\37\2174Chatbots are generally not well suited to adapt to the local context or2175language.'' In Australia, a mayor sued OpenAI when ChatGPT declared,2176falsely, that he had been convicted of bribery.\38\ The fact-checking2177and data analytics firm NewsGuard\39\ reported that the error rate for2178AI search had actually gone up in the past year, and regularly picked2179up material from fake local sites created by Russia.\40\2180---------------------------------------------------------------------------2181    \31\ Philip M. Napoli, ``AI Needs Us More Than We Need It,''2182Washington Monthly, Oct. 29, 2024, https://washingtonmonthly.com/2024/218310/29/ai-needs-us-more-than-we-need-it/2184    \32\ Democracy Reporting International, ``Are Chatbots Misinforming2185Us About the European Elections? Yes,'' by Austin Davis, Michael Meyer-2186Resende, Duncan Allen and Ognjan Denkovski, March 2024, https://2187democracyreporting.s3.eu-central-1.amazonaws.com/pdf/6628b70e0b1242188.pdf.2189    \33\ David Ingram, ``AI chatbots got questions about the 20242190election wrong 27 percent of the time, study finds,'' NBC News, June 5,21912024, https://www.nbcnews.com/tech/tech-news/ai-chatbots-got-questions-21922024-election-wrong-27-time-study-finds-rcna155640.2193    \34\ Matt O'Brien and Ali Swenson, ``AI chatbots provide many wrong2194answers about elections, report says,'' Associated Press, Feb. 27,21952024, https://apnews.com/article/ai-chatbots-elections-artificial-2196intelligence-chatgpt-falsehoods-cc50dd0f3f4e7cc322c7235220fc4c692197    \35\ Felix M. Simon, Sacha Altay, and Richard Fletcher, ``The role2198and reliability of AI chatbots during the 2024 UK general election,''2199Reuters Institute for the Study of Journalism, Sept. 2024, https://2200reutersinstitute.politics.ox.ac.uk/sites/default/files/2024-09/2201Simon%20et%20al%20Chat2202bots%20and%20UK%20Elections.pdf.2203    \36\ Benjamin Freed, ``Chatbots often give wrong voting info for2204people with disabilities, research finds,'' StateScoop, July 18, 2024,2205https://statescoop.com/chatbots-voting-disabilities-information-wrong-2206research-2024/2207    \37\ Salvatore Romano, Natalia Stanusch, Miazia Schuler, Riccardo2208Angius, Raziye Buse Cetin, Sonia Tabti, and Marc Faddoul, ``Bing: It's2209Not You, It's Me,'' AI Forensics, Dec. 15, 2023, https://2210aiforensics.org/work/bing-chat-elections.2211    \38\ Pranshu Verma, ``An AI chatbot said a mayor was a felon. Now2212he's threatening to sue OpenAI,'' The Washington Post, April 6, 2023,2213https://www.washingtonpost.com/technology/2023/04/06/chatgpt-australia-2214mayor-lawsuit-lies/.2215    \39\ NewsGuard, ``NewsGuard's One-Year AI Audit Progress Report2216finds that AI models spread falsehoods in the news 35 percent of the2217time,'' March 5, 2024, https://www.newsguardtech2218.com/press/newsguard-one-year-ai-audit-progress-report-finds-that-ai-2219models-spread-falsehoods-in-the-news-35-of-the-time/.2220    \40\ NewsGuard, ``August 2025 One-Year Progress Report: AI False2221Information Rate Nearly Doubles in One Year,'' Sept. 4, 2025, https://2222www.newsguardtech.com/wp-content/uploads/2025/09/August-2025-One-Year-2223Progress-Report-3.pdf.2224---------------------------------------------------------------------------2225Without local reporters, the deepfakes and malicious uses of AI on the2226        local level will be much harder to combat.2227    A survey of thousands of AI researchers found that 86 percent had a2228``substantial'' or ``extreme'' concern about the ``spread of false2229information e.g., deepfakes,'' and 79 percent worried about2230``manipulation of large-scale public opinion trends.'' \41\ We've seen2231how easy it is to concoct videos or stories that seem real. At the2232national level, on big stories, news organizations may be able to catch2233them. But on the local level, if there are no watchdogs, deepfakes will2234run rampant.\42\ In addition, AI will accelerate the rise of ``pink2235slime'' local news websites, misleading sites that have been created to2236look like legacy local news outlets\43\ while sneakily promoting2237bought-and-paid-for content by partisan activists. Newsguard has2238already identified 631 ``unreliable AI-generated news'' sites.\44\2239---------------------------------------------------------------------------2240    \41\ Katja Grace, Johnathan Sandamirskaya, Zach Stein-Perelman,2241Beth Barnes and Jasmine Wang, ``Thousands of AI Authors on the Future2242of AI,'' AI Impacts, Jan. 4, 2024, https://aiimpacts.org/wp-content/2243uploads/2023/04/Thousands_of_AI_authors_on_the_future_of_AI.pdf.2244    \42\ National Association of Broadcasters, ``NAB Applauds Senate2245Committee Passage of Journalism Competition and Preservation Act,''2246June 15, 2023, https://www.nab.org/documents/newsroom/2247pressRelease.asp?id=69132248    \43\ Priyanjana Bengani, ``As election looms, a network of2249mysterious `pink slime' local news outlets nearly triples in size,''2250Columbia Journalism Review, June 11, 2024, https://www.cjr.org/2251analysis/as-election-looms-a-network-of-mysterious-pink-slime-local-2252news-outlets-nearly-triples-in-size.php.2253    \44\ NewsGuard, ``AI Tracking Center,'' Feb. 5, 2026, https://2254www.newsguardtech.com/special-reports/ai-tracking-center/.2255---------------------------------------------------------------------------2256    We have a vicious cycle. AI undermines local news; the lack of2257local news, in turn, makes AI's quality worse.2258    Fortunately, a virtuous circle can be created: if AI helps revive2259local news, it will make its results higher quality. The AI industry2260ought to view itself as having a stake in reviving local news.2261    Some companies are working with news organizations to help them use2262the technology to better equip their reporters.\45\ For instance,2263OpenAI is working with the American Journalism Project to train2264newsrooms to better use AI to reach new audiences. \46\2265---------------------------------------------------------------------------2266    \45\ Local Media Association, ``Paris Brown--The Baltimore Times2267Has Been Named Digital Innovator of the Year by Local Media2268Association,'' Local Media Association, May 2025, https://2269localmedia.org/2025/05/paris-brown-the-baltimore-times-has-been-named-2270digital-innovator-of-the-year-by-local-media-association/ (accessed 02/227106/2026).2272    \46\ The Beacon, ``The Beacon's illuminating experience in AJP's2273Product and AI Studio,'' Jan. 8, 2026, https://thebeaconnews.org/2274stories/2026/01/08/the-beacons-illuminating-experience-in-aj2275ps-product-and-ai-studio/2276---------------------------------------------------------------------------2277    But the AI industry needs to go far beyond providing journalists2278with training on how to better use their products. It needs help to2279reverse the financial crisis.2280First, they need to compensate local news organizations--including2281        medium-and small-sized outlets--for the use of the content that2282        they use to craft their answers to consumers.2283    Some major publishers have made deals with AI companies for the use2284of the content\47\ but notably these companies have not made deals with2285the thousands of small and independent media, especially on the local2286level.\48\ We're concerned that medium and small sized players will be2287once again left out.\49\ Policymakers could consider ideas like those2288proposed by the Center for Journalism and Liberty such as allowing2289small publishers to bargain collectively and requiring AI companies to2290provide detailed summaries of training data sources.\50\2291---------------------------------------------------------------------------2292    \47\ Sara Fischer, ``The state of AI licensing,'' Axios Media2293Trends, September 9, 2025, https://www.axios.com/newsletters/axios-2294media-trends-a73658e0-8d8c-11f0-840d-2fc12eb558cf.html?chunk=4#sto2295ry4;Sara Guaglione, ``Here are the biggest moments in AI for publishers2296in 2025,'' Digiday, Dec. 26, 2025, https://digiday.com/media/here-are-2297the-biggest-moments-in-ai-for-publishers-in-2025/.2298    \48\ Journalism & Liberty, ``The Value of Journalism to AI,'' May22992024, https://www2300.journalismliberty.org/publications/value-of-journalism-to-ai.2301    \49\ David Buttle, ``Publishers with AI licensing deals have seven2302times the clickthrough rate,'' Press Gazette, Oct. 1, 2025, https://2303pressgazette.co.uk/comment-analysis/publishers-with-ai-licensing-deals-2304have-seven-times-the-clickthrough-rate/.2305    \50\ Courtney C. Radsch, ``Frenemies: Global approaches to2306rebalance the Big Tech v journalism relationship,'' Brookings2307(TechTank), August 29, 2022, https://www.brookings.edu/articles/2308frenemies-global-approaches-to-rebalance-the-big-tech-v-journalism-2309relations hip/ (accessed 02/06/2026) and Gordon Institute of Business2310Science (GIBS), ``Big Tech and Journalism--Principles for Fair2311Compensation,'' GIBS, adopted July 14, 2023, https://www.gibs.co.za/2312news/big-tech-and-journalism--principles-for-fair-compensation2313(accessed 02/06/2026)2314---------------------------------------------------------------------------2315Second, local efforts around the construction of data centers should2316        include the health of local information and journalism in the2317        discussions.2318    Communities are understandably concerned about the impacts of data2319centers on electricity prices, water use and other impacts. Some\51\2320are trying to block data centers entirely, which is their right.\52\2321For those communities that want data centers--but only if certain2322benefits are guaranteed--here's a modest proposal. In addition to2323remediating the effects on those other major issues, ask for something2324simple: the money to hire a couple of local reporters. The reporters2325can help ensure that the commitments from the tech companies are met,2326and in general make communities better functioning--covering everything2327from small businesses to city hall to high school sports.2328---------------------------------------------------------------------------2329    \51\ NAACP, ``Advocacy in Action: Artificial Intelligence Data2330Centers in Our Communities,'' May 2025, https://naacp.org/sites/2331default/files/documents/Advocacy%20in%20Action%20AI%233220Data%20Centers%20.pdf; MediaJustice, ``The People Say No: Resisting2333Data Centers in the South,'' September 2025, https://mediajustice.org/2334wp-content/uploads/2025/09/MediaJustice-Data-Centers-Report.pdf2335    \52\ Mijin Cha, ``The real race for an AI moratorium: stopping data2336centers,'' Tech Policy Press, April 4, 2024, https://2337www.techpolicy.press/the-real-race-for-an-ai-moratorium-stopping-data-2338centers/2339---------------------------------------------------------------------------2340    This can be done in a way that preserves editorial independence.2341Each data center would provide a one-time donation to create a2342perpetual endowment at a local community foundation. The independent2343community foundation would place two reporters in a local news area2344newsroom. Some companies have pledged special efforts to help the areas2345where data centers are based.\53\ But if the AI companies don't do this2346themselves, communities should consider requiring that these be2347included in the Community Benefit Agreements.2348---------------------------------------------------------------------------2349    \53\ Brad Smith, ``Building Community-First AI Infrastructure,''2350Microsoft On the Issues, Jan. 13, 2026, https://blogs.microsoft.com/on-2351the-issues/2026/01/13/community-first-ai-infrastructure/.2352---------------------------------------------------------------------------2353Third, we should ask AI companies and other social media platforms to2354        pay mitigation fees to help pay for the revival of community2355        news.2356    A few years ago, Sen. Cantwell sponsored an excellent bill that2357provided tax relief for news outlets that hired local reporters. A2358similar bill was proposed by Republican Rep. Claudia Tenney in the2359House of Representatives.2360    Since then, state legislatures have been experimenting. Illinois2361and New York passed employment credits. The one in Illinois is off to2362an excellent start, having provided help for 120 newsrooms in the2363state. Two thirds of them have 6 or few employees.\54\2364---------------------------------------------------------------------------2365    \54\ Rebuild Local News, ``Supporting local reporting in Illinois:2366early lessons and opportunities,'' May 22, 2024, https://2367www.rebuildlocalnews.org/supporting-local-reporting-in-illinois-early-2368lessons-and-opportunities/2369---------------------------------------------------------------------------2370    Sen. Cantwell and Rep. Tenney also proposed tax relief for small2371businesses that advertise in local news--a way of helping both2372restaurants, hardware stores and local papers. Recently, Republican2373lawmakers in Kansas and New Hampshire have proposed state versions of2374that plan.\55\2375---------------------------------------------------------------------------2376    \55\ Kansas State Legislature, ``House Bill 2276: Establishing the2377local news advertising tax credit act,'' Feb. 5, 2025, https://2378kslegislature.gov/li/b2025_26/measures/hb2276; New Hampshire State2379Legislature, ``House Bill 1420: relative to a tax credit for local news2380advertising,'' Jan. 14, 2026, https://legiscan.com/NH/text/HB1420/id/238132885552382---------------------------------------------------------------------------2383    In other states, including Washington, the local governments have2384helped support fellowship programs, managed by the state universities,2385that place journalists into local newsrooms.2386    These are all approaches that don't involve the government creating2387a board of people who give out discretionary grants. They use objective2388standards, without consideration of editorial direction--they are2389relentlessly focused on local coverage.2390    To pay for these, we suggest Congress and state legislatures2391consider applying a mitigation fee on the biggest technology and AI2392companies. Several bills have proposed assessing fees on advertising,2393which makes sense, but the advent of AI requires some new thinking,2394possibly a mitigation fee based on the number of active unique users2395too.2396    In general, we have entered a world in which national media, big2397tech and local news are all becoming more concentrated in a smaller2398number of very powerful companies. In terms of the ownership of TV2399channels, the main topic of this hearing, our coalition has not taken a2400formal position about the appropriate levels of ownership caps but we2401would urge this: seek policies that will definitively maintain or2402increase the number of local reporters in a community. Don't just look2403at the number of stations or the hours of coverage. More hours of2404coverage with fewer local reporters is a recipe for more superficial2405news. Look at the actual investment in reporting capacity.2406    Senator Cruz once wisely said ``big tech exercises a concentration2407of power that I believe is unknown in the history of mankind and that2408concentration of power is regularly used to trample on the little guy.2409To trample on companies they do business with and this instance to2410trample on local media organizations, whether you are talking about2411small town newspapers, whether you're talking about local broadcasters,2412anyone in the journalism spaces that is producing content . . . the2413idea that we would see monopoly control of public discussion in America2414to three or four billionaires in Silicon Valley, modern day American2415oligarchs, is profoundly dangerous.'' \56\2416---------------------------------------------------------------------------2417    \56\ U.S. Senate Committee on the Judiciary, ``Executive Business2418Meeting,'' Sept. 22, 2022, https://www.judiciary.senate.gov/meetings/241909/22/2022/executive-business-meeting.2420---------------------------------------------------------------------------2421    When it comes to local news, our hope is that local news will be in2422local hands, as much as possible. Public policies should gravitate2423toward that philosophy--a media system in which local news ownership2424and control is diffuse, fragmented and local.2425    Despite all of the destruction, we have also seen a tremendous2426amount of innovation--hundreds of new local news startups.\57\ They2427don't yet come close to filling the voids in information. But they do2428give some hope that if we can continue to improve the business and2429editorial models, draw in more money from philanthropy--and have smart2430public policy, we can construct a better local news system than we've2431had before.2432---------------------------------------------------------------------------2433    \57\ More than 300 over the past five years, according to Medill2434School of Journalism, State of Local News/News Desert Project. See2435Institute for Nonprofit News, https://inn.org/about/who-we-are/; LION2436Publishers, https://lionpublishers.com/about/; and American Journalism2437Project, https://www.theajp.org/about/; Local Media Association. ``20242438Digital Innovation Award winners: Honoring excellence in local media.''2439May 26, 2025. https://localmedia.org/2025/05/2024-digital-innovation-2440award-winners-honoring-excellence-in-local-media/2441---------------------------------------------------------------------------2442    Technology can help. But we also need actual human beings, living2443in their communities, accountable to and listening to their neighbors.2444To have that kind of revival of community news, the biggest technology2445companies will need to play a much bigger role in reversing this local2446news crisis.24472448    The Chairman. Thank you. Mr. Ruddy, let's start with you.2449You said in your testimony that NewsNation has more than 52450times fewer viewers than Newsmax does, but that Newsmax2451nonetheless has paid substantially less for its content, even2452though it is producing 5 times more viewers. Those are striking2453numbers. What's the cause of that?2454    Mr. Ruddy. Market leverage and market power. NewsNation is2455owned by Nexstar, and Nexstar owns today about 200 TV stations,2456and they go in with the cable operators to negotiate their2457agreements for those TV stations. They have incredible leverage2458because they have so many stations. So, imagine if they're2459negotiating with Spectrum. Charter goes by the name of2460Spectrum, and they have 50 stations in the various markets and2461they want a certain retrans fee. So, when they're in2462negotiations, they say to Spectrum you better pay us the rate,2463otherwise we're going to take the stations off your cable2464system, and that could be devastating for a company like2465Spectrum. And then they also say we have a cable channel and we2466want you to pay us a certain amount, and if you don't pay us,2467we can go dark on our broadcast stations.2468    Nexstar is not the only company that does this. ABC-Disney2469has ESPN and a whole number of channels, Fox has a whole number2470of channels, and they all use and wield the leverage of their2471broadcast stations to get high fees for their cable channels.2472I'm an independent media company. I don't have the leverage2473that these broadcast companies. So, one of the reasons we had2474the cap was to reduce the leverage so that they couldn't2475overpower the cable operators. And this is why cable bills are2476up over a hundred percent in recent years because of the2477immense power that these companies have.2478    The Chairman. Mr. LeGeyt, do you agree with Mr. Ruddy? Do2479you agree that it is market power that is resulting in higher2480fees being paid?2481    Mr. LeGeyt. Absolutely not. I represent at the National2482Association of Broadcasters, Nexstar's broadcast interests, so2483I can't speak to NewsNation, but what I can say is this. When2484you look at the media landscape, we are distant stars in the2485solar system that is Meta, Google, Apple, Amazon, Netflix.2486Right now, this administration is reviewing a deal that would2487merge two streaming behemoths, right--Netflix, Warner2488Brothers--and I point that out----2489    The Chairman. Mr. LeGeyt--Mr. LeGeyt, let me focus you on2490the specific question that I'm asking----2491    Mr. LeGeyt. Sure.2492    The Chairman.--which is, do you agree that the numbers Mr.2493Ruddy provided are accurate, namely that Newsmax has roughly 52494times as many viewers as NewsNation, and that NewsNation is2495paid more money than Newsmax is? Are those numbers accurate in2496your understanding?2497    Mr. LeGeyt. So, I don't have the viewership numbers in2498front of me, but I will--I will stipulate to that if he's2499documenting those, and I don't have any visibility into2500NewsNation's programming fees. That's not publicly available2501information.2502    The Chairman. Yes. Then let me ask, assuming those data are2503correct, do you have any explanation for why that would be the2504case other than market power? That explanation seems plausible2505to me. Is there another one other than leveraging the market2506power to extract those higher fees?2507    Mr. LeGeyt. I'm focused on ensuring that Nexstar actually2508has the market power it needs to compete with Big Tech, which2509has siphoned away from Nexstar and other broadcasters----2510    The Chairman. You, you don't want to answer that question.2511That's OK. Let's move on to a different question. This is a2512question for both Mr. LeGeyt and Mr. Ruddy. There has been a2513lot of discussion about local news. I believe--I agree local2514news is critically important. In both of your views, would2515eliminating or raising the media ownership cap strengthen or2516weaken local news, and would it increase or decrease diversity2517of views on air? Mr. LeGeyt.2518    Mr. LeGeyt. It would both increase competition for and2519production of local news, and it would increase diversity of2520voices, and the reason is simple: that right now, broadcasters2521are simply stifled in their ability to compete in this2522landscape. You have rules premised on the notion that2523broadcasters only compete against other broadcasters for2524advertising dollars, for audience, and for programming, and we2525know that that is not the case.2526    Over the course of the last 20 years, 70 percent of the2527local advertising marketplace has been siphoned away from2528traditional media by Big Tech. We are competing for2529programming, NFL games with Netflix and Amazon, and we're2530competing with--for audience with all of these streaming2531services. According to Nielsen, in December, streaming2532viewership was more--was nearly half of all television2533viewership. Broadcast, just 20 percent. So, we are competing2534against behemoths. The only way to invest in local news is to2535reverse this trend, gain some scale, and, and bring that2536revenue back to local broadcasting, and that is going to2537benefit local communities.2538    The Chairman. Mr. Ruddy, same question.2539    Mr. Ruddy. Well, I almost feel like I'm in a different2540universe than my respected guest member here, but let's go2541through that. TV is doing well. Nobody's denying they made2542almost $2 billion in 2024. They're projecting even bigger2543profits once this merger goes through. So, what is the aid that2544they need to do to upend the congressional law? Why are they2545going--running around using the bureaucracy rather than going2546to Congress? Because they know they have no support in2547Congress, and the public opinion polls show they have no2548support.2549    He said two things. One is, Nexstar, we know when they did2550the Tribune merger, ended up with 15--I think they're currently2551about 15 duopolies. In every case, they combined the two2552stations/newsrooms into one. That's the only way they make2553money. In their projections on the merger, they're saying2554because of the consolidation, they're going to have $3002555million in savings, and a hundred--almost half of it, $1352556million, comes from local programming consolidation. The only2557local programming local TV stations do is local news. That's2558pretty much the whole thing, so that's where this is all going.2559They can make fortunes, and it's local news that suffers, and--2560--2561    The Chairman. Final question. In 2023, I criticized then2562FCC Chairwoman, Jessica Rosenworcel, for delegating to the2563media bureau and to an administrative law judge a decision on2564the standard general acquisition of TEGNA. At the time, I wrote2565with my House counterpart, Congresswoman Cathy McMorris Rogers,2566``First, to keep the Commission accountable to Congress and the2567public, a full Commission vote is required for certain matters,2568particularly those involving significant legal or policy2569consequences. Designating a multibillion-dollar transaction,2570such as the standard general TEGNA transaction for an ALJ2571hearing is precisely the type of serious decision for which2572Commissioners must take responsibility.'' This is a question2573for all four of you. Do you believe the FCC should have a2574Commission-level vote on the Nexstar-TEGNA merger? Mr. Ruddy.2575    Mr. Ruddy. Well, especially because they're subverting what2576Congress said, and it was a congressional issue. You know, Mr.2577Johnson worked for Ajit Pai when he was Chairman. Ajit said--he2578was Trump's Chairman at the time. He said several times it was2579congressional law. He didn't like the law, but he said we had2580to--his words, ``The law must be obeyed.'' Chairwoman2581Rosenworcel, under, under the recent administration, nixed a2582Nexstar deal, saying that it violated the congressional law of2583the 39-percent cap. Brendan Carr was the ranking Republican at2584the time, and he offered a concurring opinion that did not2585dispute that.2586    The Chairman. OK. Mr. LeGeyt.2587    Mr. LeGeyt. The NAB doesn't advocate on any specific2588transaction, but we certainly support the full Commission2589voting to raise the national ownership cap.2590    The Chairman. Mr. Johnson.2591    Mr. Johnson. Under the Communications Act, Senator, the2592Commission has discretion to decide whether--with very limited2593exceptions, whether to decide something at the bureau or2594Commission level. Even when something is decided at the bureau2595level, there are mechanisms for review before the full2596Commission as well as ultimately in court.2597    The Chairman. Mr. Waldman.2598    Mr. Waldman. We haven't taken a position on that, but, in2599general, issues of this import should be at the Commission2600level.2601    The Chairman. Thank you. Ranking Member Cantwell.2602    Senator Cantwell. Well, Mr. Chairman, I want to weigh in on2603that particular point before I start my questioning. I2604definitely believe the FCC should have a Commission level--if2605they are going to take action. I'm not making a statement as to2606whether they have that power or not. I'm simply saying if they2607do, it should be at a Commission level, and I think that2608Chairman Carr has practically prejudiced himself in an2609information process that's supposed to be independent if he's2610already made a decision. So, I don't--I don't like that. I2611don't like that.2612    But let's start with something maybe we can agree on. Do2613the witnesses think that right now--I mean, because I look at2614these viewpoints, I'm kind of--last week I was where Mr.2615Waldman was. I was like on this hand/on that hand, and what is2616it we really want to provide? And so, you know, I'm for2617elevating this larger context that Big Tech just has too much2618power, but I don't know. Do they have too much power in this2619marketplace, Mr. Ruddy?2620    Mr. Ruddy. Well, I think that consolidated Big Tech is a2621danger to the public interest. I think there should be more2622competition in Big Tech across the board, and there should be--2623--2624    Senator Cantwell. I just meant as it relates to now2625preserving local journalism and how much of the business2626model--I mean, I think, here, you have a cord-cutting problem.2627Mr. LeGeyt basically has a--has a, you know, a big moneymaker2628for himself right now, which I'm for. I am for broadcast2629sports, not because the Seahawks won.2630    [Laughter.]2631    Senator Cantwell. I'm for broadcast sports because I do not2632want my consuming public to have to pay to see content they can2633just watch advertising to see. I want it to be cheaper. So, I'm2634for not allowing these people to put so much content behind a2635paywall and making consumers pay out the nose for it, so--but2636anyway. So, I just--on this point, do we need to do something2637here so that we have more level playing field? Are they the2638bigger issue here?2639    Mr. Ruddy. No, I think that local news is almost entirely2640by broadcast TV. Big Tech creates almost no original local2641news.2642    Senator Cantwell. But Mr. LeGeyt----2643    Mr. Ruddy. So, we need to protect the diversity and2644competition in that field.2645    Senator Cantwell. Right, but Mr. LeGeyt is telling you this2646is his moneymaker right now and is getting--he's getting eaten2647alive on this because of what's happening because of the2648digital advertising revenue, and the----2649    Mr. Ruddy. They haven't made the case. I'm sorry to say,2650Senator, they have not made the case that Big Tech has hurt2651their businesses. Their businesses have grown 500----2652    Senator Cantwell. I know----2653    Mr. Ruddy.--500 percent in the past decade. How do you--how2654do you explain that? That's all during the Big Tech period.2655    Senator Cantwell. Believe it or not, I'm going to agree2656with you in a minute, but on this point I don't, OK?2657    Mr. Ruddy. Yes.2658    Senator Cantwell. And so, I think the point is--OK. Does2659anybody else want to comment on this quickly because I have2660another question?2661    Mr. LeGeyt. Big Tech has entirely undermined the2662advertising model for local broadcasting.2663    Senator Cantwell. OK. Mr. Johnson.2664    Mr. Johnson. I think by eliminating some of these2665prescriptive rules, Senators, what you do is you give the2666affiliates better bargaining power negotiating at the table, so2667they can--in their discussion with MVPDs, with Big Tech, they2668can say we want more local control over programming.2669    Senator Cantwell. Mr. Waldman.2670    Mr. Waldman. Yes, absolutely. Big Tech is a big part of the2671reason for the undermining of the local news business model for2672TV and local news, and it's about to happen again with AI.2673    Senator Cantwell. Right. So, Mr. LeGeyt's key point,2674though, is that he--and, look, I've helped the broadcasters on2675good faith protections for broadcasters. I've actually sided2676with the broadcasters, you know, on these issues that now, you2677know, we're hearing complaints about. But again, in this world2678where the cord-cutting and streaming media is leading to this,2679I'm not sure that I believe that consolidating people so that2680you could then own three TV stations in one media market and2681then basically decimate that media market without competition,2682is the way to go.2683    And so, I have a concern, Mr. Waldman, that that is where--2684to your question which is you're asking me--us a question to2685consider, but I'm asking it back. Why would I want to support--2686now I'm not saying you have to have three TV stations in every2687media market, but I do want diversity, and why would I allow2688for more consolidation when our biggest problem has been2689concentration? Why would I go for that? Why would I go for this2690merger if, in fact, you're going to, basically, hand over more2691concentration, less diversity?2692    And if that means somebody's going to do general2693programming and give me less--and, Mr. LeGeyt, you made a good2694point about the number of eyeballs, power of growing because,2695like, digital did grow even with broadcasters, but that doesn't2696mean that we had all the local content or the diversity of2697voices. So, isn't this the crux of the issue that, basically,2698you're going to be able to own more media markets and2699concentrate three--own three TV stations and then, basically,2700decide how to blow them up and give me general programming from2701New York which I don't want?2702    Mr. Waldman. Which we are seeing more of, and, you know,2703Senator Cruz quoted President Reagan a while ago. I would quote2704President Reagan on another point which is, ``Trust but2705verify.'' Yes, in some cases mergers might lead to more local2706news, but the evidence is that in many, many cases it goes the2707other way, that it cuts local news. So, if you're going to be--2708if Congress considers loosening these caps at all, it should be2709contingent on commitments that they maintain or increase the2710number of local reporters.2711    Senator Cantwell. OK, interesting. I mean, this is the crux2712here. We can't be for a merger just to get bigger, to fight Big2713Tech on their eating up sports revenue, which they're putting2714behind a paywall that makes consumers pay more. I can't--you2715know, I can't be for that, but I do think that we have to also,2716you know, point out, Mr. Ruddy, that, like, I really don't want2717so much concentration of this marketplace by 80 percent, or2718whatever it is, ownership by these big corporations who then2719just generalize content out to my news stations. That's not2720even healthy for any of us in the ecosystem.2721    Mr. Ruddy. The National Hispanic Coalition did a poll in2722December, Democratic pollster, that found over 70 percent2723oppose the Nexstar merger and the consolidation. Only about--2724less than 7 percent supported it. A recent Republican poll,2725Public Opinion Strategies, found, again, 75 percent opposition2726to consolidation, only 7 percent. So, this is a bipartisan----2727    Senator Cantwell. Well, I definitely support more diversity2728in voices. I'm not--we have to figure out how we're going to2729get there, so, but anyway, I appreciate. Mr. Chairman, thank2730you.2731    The Chairman. Thank you. Senator Capito.27322733            STATEMENT OF HON. SHELLEY MOORE CAPITO,2734                U.S. SENATOR FROM WEST VIRGINIA27352736    Senator Capito. Mr. Chairman. Thank all of you all for2737being here. I'm around the corner here. I've been listening to2738the debate. Very interestingly, obviously, diverse opinions.2739I'm trying to think of my constituents listening to the same2740debate. I live in a small state, West Virginia, that has2741Nexstar stations and others, and I'm going back to the storm2742that we just had two weeks ago. What is everybody watching?2743They're watching their local broadcaster. They want to find out2744what roads are closed, what schools are closed, what can we2745anticipate coming forward.2746    And, you know, we all laugh about, you know, when you get2747older like I am, you know, you're all watching the Weather2748Channel all the time or the weather--the weather of your local2749weather. This is really important for local broadcasting. I2750agree with Senator Cantwell. The sports aspect of it is a huge2751aspect for a small state because we can't access--you know,2752sometimes if you don't buy the Big 12 Network, you can't watch2753West Virginia University play, which is like our pro team.2754We're not like the Chairman that has all kinds of teams in his2755state so--or Super Bowl winners, like the--like the Ranking.2756I'm trying to get in good with both of them, if you can tell.2757    [Laughter.]2758    Senator Capito. So, if I'm sitting there and I've just2759experienced--and I'm watching this hearing, I'm going to give2760it to all four of you because I'm interested to see how you2761would--how would your position help those people that2762desperately need to have that local programming in times of2763emergency, weather, outages, you know, and, and all other2764political news and everything? How would--and then we'll start2765with Mr. Ruddy.2766    Mr. Ruddy. OK. Well, let's imagine in one of those markets2767in your state, Senator, Nexstar owned two to four of these2768major highly rated stations, because in 30 markets across the2769country, they will have that type of dominance, and we know2770that in 15 already they just merged the newsrooms. So, if you2771go to channel--to the NBC channel, for instance, which they2772might have as an affiliate, and you see that they're covering2773the hospital and what's happening at the hospital as a result2774of the tragedy or the natural disaster, and then you watch the2775CBS station, which they also own, and they have the same2776reporter at the hospital, but they don't have the resources2777because they combined newsrooms, they're not at the school,2778which some kids were injured, let's say. So, they save money,2779but you have less content, less diversity of news, and that's2780the danger of both local consolidation and national2781consolidation.2782    Senator Capito. OK. Let me ask Mr. LeGeyt to answer that.2783    Mr. LeGeyt. Thank you, Senator.2784    Senator Capito. Mm-hmm.2785    Mr. LeGeyt. Mr. Ruddy's narrative is a compelling one, but2786it's a fiction because that is not what is happening in local2787communities. You know this well. WOWK, which Nexstar owns, is2788as committed a local station as exists in the country.2789    Senator Capito. True.2790    Mr. LeGeyt. And some of the combinations that we're talking2791about in local markets, they're the equivalent of one printing2792press being able to produce two newspapers. What we are--what2793we have shown over the course of the last decade in those2794markets where consolidation has occurred, is that it means more2795local news, and it means more local journalists. Now, certainly2796scale can mean some efficiencies when it comes to corporate2797overhead, but we as local broadcasters don't win if we're not2798producing the best local news in communities across the2799country. If we just become another nationalized media, we're2800losing that battle with Apple Plus, with Amazon Prime. That's2801not where Nexstar or any other local broadcast group is going2802to win in this media landscape. And the data shows that as we2803are able to get more revenue, whether it's from advertising or2804whether it's from retransmission consent, that that's being2805plowed back into local journalism, and it's also ensuring that2806we can provide expensive sports on broadcast television.2807    Senator Capito. All right. Mr. Johnson.2808    Mr. Johnson. Well, thank you for the question, Senator.2809Having spent a year out in West Virginia working for General2810Morrissey back in the 2017, I think it's very important that2811West Virginia communities get represented in these debates over2812media ownership. I think there are two ways in which removing2813some of these prescriptive ownership rules will help West2814Virginia communities. First of all, with respect to local news2815stories, as you say, the economies of scale that you introduce2816when you have larger station groups, that allows local2817affiliates to be more nimble. If there's a natural disaster, a2818pressing local news issue, they can often redirect resources to2819make sure that there's 24/7 coverage----2820    Senator Capito. Mm-hmm.2821    Mr. Johnson.--of whatever it is that's going on in a way2822that smaller independent stations sometimes cannot. The other2823thing is, it gives affiliates more leverage at the bargaining2824table, both with the national networks and with streamers and2825online platforms, or oftentimes right now, the networks really2826have the biggest seat at the table. So, that you're asking2827questions like can we have more local programming in West2828Virginia? Can we have more control over programming? That's2829going to ensure that those stations represent West Virginia2830values and not just California values.2831    Senator Capito. All right. Thank you, and then, Mr.2832Waldman, you want to take a swing at that?2833    Mr. Waldman. You know, I think in addition to what others2834have said, I would say--I know the topic of this hearing is the2835broadcast consolidation rules, but that's not the only factor2836that's going to affect whether you have local news in West2837Virginia.2838    Senator Capito. Mm-hmm.2839    Mr. Waldman. And so, we do also need to look at the bigger2840picture here, which is Big Tech and what's about to happen2841with--or it is starting to happen with AI and all the other2842ways that we can strengthen the local news environment. You2843know, we see around the country a flowering of new startups and2844efforts to help with local news, improving their business2845models, more philanthropy helping. But at the end of the day, I2846don't think we're going to get to what we need without Big Tech2847playing a role and public policy playing a role with creative2848solutions that will strengthen news in West Virginia and other2849places.2850    Senator Capito. Yes, I mean, I think that local2851broadcasting is absolutely essential to retain. When I see2852what's happened to our state's newspaper, we're down to 5 day,2853without being too critical of the newspaper, a lot of its2854national stories that are two days old. And so, I don't want to2855see that happen to our local affiliates, and I want to--I want2856to protect that the best way that I can. So, I appreciate the2857hearing. Thank you, Mr. Chairman.2858    The Chairman. Thank you. Senator Kim.28592860                  STATEMENT OF HON. ANDY KIM,2861                  U.S. SENATOR FROM NEW JERSEY28622863    Senator Kim. Yes, thank you all for coming on out here. Mr.2864Ruddy, I wanted to follow up on something you had talked about.2865You had talked about the retransmission fees, and talking about2866the challenges there in terms of costs. I'm trying to think2867about this in terms of my constituents, in terms of the2868consumers, and what is raising their costs. I wanted to ask2869you, when you're talking about the retransmission fees, how2870much of that do you believe is being pushed on to the consumers2871in terms of the cost going up?2872    Mr. Ruddy. I think, ultimately, almost all of it goes2873because they have to pay--the cable operators have to pay that2874to the TV broadcast groups. And so, they need to make a profit,2875so they're going to have to pass those--most of those costs2876over. And we're seeing it in the cable bills, which are--have2877gone up enormously and the reduction of content in cable.2878There's been a removal of channels.2879    Again, there are so few independent media voices because2880they'll tell me, the cable operators we don't--we like Newsmax.2881We don't have any money left for you because we have to pay the2882retrans fees, or they have to pay companies like NewsNation2883that have very little ratings, high fees because of their2884market leverage of their broadcast outlets. So, it's not good2885for consumers.2886    Senator Kim. So, you're saying that media--like, I'm trying2887to think through how do we articulate, you know, the--what is2888happening to the consumer. So, the media consolidation is2889leading to these retrans fees increasing due to the leverage2890that these companies now have, and that's being passed on to2891the consumer. Is that the argument that you're putting together2892here?2893    Mr. Ruddy. A little bit more than that. What we find is,2894the bigger the station, group or network, the more leverage2895they have, the higher fees. So, when Nexstar went above the cap2896several years ago and went to 70 percent, it was like a boon to2897the company, and that's where they went up from $300 million in2898EBITDA to almost $2 billion. And they're so greedy, they now2899want to go to 80 percent because they'll know they have even2900more market leverage. And now you're seeing other companies in2901the broadcasting industry wants everyone to have this2902opportunity. Ultimately, who gets screwed, frankly, is the2903consumer, right? We have to pay those bills, and it's market2904manipulation, market abuses that are causing this.2905    Senator Kim. Mr. LeGeyt, I wanted to bring you in on this.2906I wanted to ask you about, you know, another thing that Mr.2907Ruddy said, and then I'll go back to what we just talked about.2908He was talking about how if this consolidation does go forward,2909that he believes that there'll be really just, you know, two or2910three companies that really just dominate the space nationally.2911I understand what you're saying about the competition with the2912tech companies, but at least in terms of just what happens if2913we sort of game out what happens if we lift up this cap, do you2914agree that we're going to see sort of two to three companies2915kind of dominating nationally?2916    Mr. LeGeyt. I can't see the future in that regard----2917    Senator Kim. Yes.2918    Mr. LeGeyt.--but I can tell you that the status quo is2919untenable. And I think it's important to acknowledge here the--2920that these restrictions on the 39-percent cap, those are--2921that's an ex ante restriction, meaning before you can even get2922to the merits at the FCC or the Justice Department of making2923the case for your transaction, you're not at the table if you2924are proposing a transaction that violates these restrictions.2925So, what the NAB is advocating for is for those ex ante2926restrictions to be removed. I also think it's important to2927acknowledge here that over the last 3 years, industry wide,2928retransmission consent revenues have actually decreased year2929over year. Local news is funded by two----2930    Senator Kim. Can you say that one more time just so I get2931it right?2932    Mr. LeGeyt. Across the----2933    Senator Kim. Yes.2934    Mr. LeGeyt.--broadcast industry, the retransmission consent2935fees that is being represented we have this enormous market2936power to extract, have actually decreased year over year over2937the last 3 years, and the reason is simple. We're competing2938with Google, Apple, Netflix, Amazon for audiences. Our2939audiences have fragmented. Local broadcasters are competing2940against Google and Facebook for advertising dollars.2941    So, this narrative--and Chairman Cruz asked me the question2942directly earlier, and so I want to state my answer2943unequivocally, no, Nexstar does not have market power. They are2944competing against global behemoths for both audience,2945advertising, for programming rights. No broadcaster has market2946power in this media landscape.2947    Senator Kim. Yes. No, thank you. Look, I know my time's2948running out--but, Mr. Waldman, I'll just ask you a question for2949the record, if you can get back to me later, but just about,2950yes, what we talked about earlier about, you know, my state of2951New Jersey, the news deserts that we're continuing to have, the2952difficulties. I'm really just trying to get a sense of painting2953the picture of what would happen to my state, to the market2954that already is struggling to be able to find local news and to2955be able to have people in New Jersey understand what's going on2956in our community. So, if you don't mind, we can follow up with2957that later.2958    Mr. Waldman. Yes, thank you.2959    Senator Kim. With that, I'll yield back, Mr. Chair.2960    The Chairman. Thank you. Senator Moran.29612962                STATEMENT OF HON. JERRY MORAN,2963                    U.S. SENATOR FROM KANSAS29642965    Senator Moran. Chairman, thank you. Thank you to you and2966the Ranking Member for holding this hearing.2967    Mr. LeGeyt, let me start with what you just indicated in2968your response to the senator. So, this--what we're talking2969about is the threshold. The actual determination, there are2970still other factors that come into play that would allow for an2971acquisition or a merger to occur if it--but it first has to be2972allowed by this standard, this threshold.2973    Mr. LeGeyt. That's absolutely correct, Senator. The----2974    Senator Moran. And those items would then protect2975competition, would be among other--it and other things that2976would be considered.2977    Mr. LeGeyt. The FCC still maintains the authority to review2978every transaction and assess whether it is in the public2979interest on a case-by-case basis. The Justice Department will2980examine the pro-competitive and anti-competitive impact of any2981proposed transaction. Nothing that we are advocating for in2982terms of eliminating these decades-old restrictions will change2983that authority to review transactions on a case-by-case basis.2984    Senator Moran. Mr. Johnson, call on you as you're--in your2985previous capacity. Would you expand on the history of the FCC's2986actions in updating the national cap? Where does the FCC derive2987its authority to change the cap and why elimination of the2988national cap is necessary for continued health of local2989broadcasters?2990    Mr. Johnson. Thank you very much, Senator. I appreciate the2991question. So, the FCC has been adopting ownership rules and2992some version of the national cap since the FDR era pursuant to2993its general rulemaking authority to adopt rules to carry out2994the purposes of the Communications Act in the public interest,2995and Congress has never disputed that it has that general2996authority to adopt ownership caps. In fact, on two occasions,2997by directing the Commission to modify its rules to set a2998different cap level, the Commission--excuse me--Congress2999essentially ratified, yes, FCC, you have this authority to3000adopt these kind of rules. And here we think, based on the3001current marketplace realities, that the rule should be set at a3002different level.3003    So, Congress made that determination in 1996. The D.C.3004Circuit, as I said, it took a look at the text of that statute,3005and it said--based on an argument the FCC came in and said we3006don't have to make any adjustments or we can't make any3007adjustments to it, the Court said no. In fact, this language3008retains your discretion to modify the cap to a different rule--3009to a different amount. Two years later, only two years later,3010in 2004, Congress again changes the statute but keeps that key3011formulation, modify its rules in place, showing that Congress,3012in fact, did not intend to take off the table future FCC3013changes to the rules. In fact, there was a House bill and a3014Senate bill. Both of them would've expressed expressly3015enshrined the cap into law, as the D.C. Circuit suggested.3016There was another statute 4 years before 2004 in which Congress3017explicitly told the Commission you cannot change the minimum3018separation distance between broadcast channels unless and until3019Congress further acts.3020    So, Congress knows how to take away FCC discretion when it3021wants to, to use that clear language, but it didn't do so here.3022And so, in my view, the FCC retains that discretion.3023    Senator Moran. Thank you. Mr. Waldman, tell me what the3024world looks like with a cap being increased, and tell me what3025the world looks like in--if a cap isn't increased?3026    Mr. Waldman. Well, you know, we've heard testimony that3027said in the past, when you've had consolidation, it's led to3028more local news, and we've heard testimony saying that in the3029past when we've had more consolidation, it's led to less local3030news. The reality is both things could happen, and so when3031we're talking about what the FCC's authority is there, it's not3032just about the cap. It's also about the very definition of3033``localism.'' We can't keep paying lip service to localism,3034that----3035    Senator Moran. Let me--let me interrupt you and say that3036that goes back to the point that Mr. LeGeyt was making about3037there's more to come regardless of what the cap is. The FCC3038determines--makes the determination about whether a merger or3039an acquisition is in the best interest of----3040    Mr. Waldman. Yes, that's true. And I would just say that I3041would feel more comfortable if the FCC, in making those3042determinations, was centering local news, the fate of it, and3043how many local reporters there are in a community because if3044mergers were really looking at that, I think we'd be pointing3045in a much better direction.3046    Senator Moran. So, that is a task that perhaps Members of3047Congress who care about local news can make that case to the3048FCC, which is really an issue perhaps somewhat separate from3049the topic of whether or not to increase the cap?3050    Mr. Waldman. Or Congress itself can declare statutorily3051that the health of local news is part of the core definition of3052``localism'' that should be at the heart of any merger3053discussion.3054    Senator Moran. Nice to know that there's someone who thinks3055that Congress can still legislate. Thank you.3056    Senator Cantwell [presiding]. Senator Rosen.30573058                STATEMENT OF HON. JACKY ROSEN,3059                    U.S. SENATOR FROM NEVADA30603061    Senator Rosen. Well, thank you, Ranking Member Cantwell,3062and I want to thank Chairman Cruz for holding the hearing, all3063of you for being here. And as one person who loves our local3064news, I will say this is a really important issue and at the3065heart of each and every one of our communities, right,3066because--and I just want to say the media environment has3067changed dramatically since media ownership caps were first3068established and since Congress last changed them in 2004. While3069the ownership cap may need to be revisited to better align with3070today's media market, I want to be crystal clear: just because3071large corporations like Nexstar and TEGNA want to merge, it3072doesn't mean they can simply ignore the laws that Congress has3073put in place. In order for there to be a merger that results in3074ownership above the 39-percent cap, Congress would have to3075change the law.3076    So, I'm going to give my first question to you, Mr.3077Waldman. This isn't the first large media merger or media3078merger attempt that we've seen in recent years, right? So, when3079massive mergers like Nexstar-TEGNA have happened, what has been3080the impact on local jobs, consumer prices, our local newsrooms,3081and what happens if there are no other--well, if there aren't--3082if there aren't multiple newsrooms in one market? What happens3083to our local news? What happens to the flavor of our3084communities and our--not just our jobs, our union jobs, or jobs3085around the, again, the fabric of our communities?3086    Mr. Waldman. Well, you know, you see, in certain3087circumstances, you'll have two TV stations, and to a consumer,3088it looks like there are two different operations and there's--3089they may be even competitors, when it's actually they're using3090the same news broadcast. They're using the same content. So,3091part of what happens with consolidation is you have the mirage3092of lots of diverse voices but the reality of less and less3093original reporting.3094    Senator Rosen. Mm-hmm.3095    Mr. Waldman. And, you know, whether--on the question of3096whether or not removing the caps would lead to more situations3097like that or less, you know, the evidence is more in the--in3098the category that it's going to lead to less. You give someone3099money, it doesn't determine what they're going to spend it on,3100and if local news stations or station groups have more clout3101and more scale, there might be some that would use that for3102local news, but there's certainly no guarantee of that. And the3103evidence is actually in the other--in the other direction. And3104so, you end up in places like Nevada where, if you look at the3105whole local news ecosystem, you have the repetition of the--of3106the local TV, you have the newspapers declining, and the result3107is, like, a 75-percent drop in the number of reporters in3108Nevada.3109    Senator Rosen. I think it's very sad for our communities3110and for our--everybody who lives there. I want to move my next3111question to you, Mr. LeGeyt, because I want to mitigate the3112negative impact of the rules changes because the FCC and3113Congress established media ownership caps to protect consumer3114prices, to protect media diversity, protect jobs in journalism.3115It is, again, I believe, really important foundationally to our3116democracy, and I recognize that as the media landscape changes,3117Congress should, of course, reevaluate whether the rules need3118to be updated. Things are always changing.3119    So, my question to you again, Mr. LeGeyt, is if Congress3120changes or removes the ownership cap, how can we ensure that we3121keep media affordable for consumers, protect our local3122newsrooms, our journalists' jobs, give them that independence3123to focus on stories that matter to the neighborhoods, to the3124local community, right, and just improve media diversity and3125those independent voices that really focus on what matters? And3126if the current rules in place aren't working today, how do we3127protect the values? What's our alternative?3128    Mr. LeGeyt. Senator, thank you for the great question. I3129think, first, we need to level set with where we are today----3130    Senator Rosen. Mm-hmm.3131    Mr. LeGeyt.--in local broadcast. If they are measured as a3132standalone, meaning local stations independently in each3133market, irrespective of who owns them, more than half of local3134broadcast newsrooms in this country are currently is a3135standalone, not profitable, and that number is worsening every3136day.3137    Senator Rosen. Mm-hmm.3138    Mr. LeGeyt. So, the only way to ensure that communities3139across this country, many markets where individual stations3140would not be viable in terms of their own providing the local3141news, is to give those owners some scale so that they can take3142those efficiencies and plow them into local newsrooms.3143    Senator Rosen. Mm-hmm.3144    Mr. LeGeyt. I also think we're being prejudiced here in3145this debate by what's happened in the newspaper industry----3146    Senator Rosen. Mm-hmm.3147    Mr. LeGeyt.--and certainly, that is a cautionary tale. But3148in broadcast, the data shows the exact opposite, where over the3149last 10 years where broadcast groups have been able to gain3150more scale, it has actually resulted in more local news. And as3151Mr. Waldman alludes to, if you don't want to measure that3152success by hours of local news, let's look at our newsrooms--3153the employment in our newsrooms themselves.3154    Senator Rosen. Mm-hmm.3155    Mr. LeGeyt. You know, we're employing more than 27,0003156people in broadcast newsrooms.3157    Senator Rosen. Mm-hmm.3158    Mr. LeGeyt. That's more than our print counterparts, our3159digital news counterparts. Broadcasters truly are the last3160bastion of local journalism. Those numbers actually increased3161after the FCC in the first Trump administration took some3162actions to relax those cross-ownership rules. So, those3163broadcast newsrooms, even following the scale, some of the3164transactions that were done in the wake of those rule changes3165seven years ago, we continued to grow our newsrooms. It has3166only been over the last 3 years that the numbers have flattened3167out a little bit. I'm looking forward to more scale that3168eliminating this cap will allow so that we can continue to grow3169those newsroom numbers.3170    Senator Rosen. Thank you. Finding that balance, it's going3171to be up to all of us. So, thank you all for being here. Madam3172Chair.3173    Senator Cantwell. Senator Young.31743175                 STATEMENT OF HON. TODD YOUNG,3176                   U.S. SENATOR FROM INDIANA31773178    Senator Young. Thank you, Madam Chair. I thank our3179witnesses for being here today. There are a number of reasons3180why I regard this hearing as important. If members of my3181community don't have access to their local news, it can be an3182impediment to useful information and the decisions they make,3183the actions they take. Our sense of community can be undermined3184if we don't have access to information or our sense of3185solidarity with our neighbors, but I actually think what's most3186at stake is our democracy. If I don't know what's happening in3187the local planning meeting, if I don't know what's happening in3188the school board, if I don't know where monies are being3189invested locally as it relates to road projects, it's hard for3190me to cast informed votes at the ballot box. It's hard for me3191to meaningfully engage in, in democracy at the local level. Mr.3192Waldman, you've spoken to this issue of localism. Could you3193just take the predicate I've laid and unpack a bit more, say in3194the next 30 seconds or so, why this hearing is so important to3195you and should be important to my constituents?3196    Mr. Waldman. Well, you put it very eloquently. On some3197level, there are really concrete harms--literally more3198government waste and corruption--there's less knowledge about3199things, but it is also about community and cohesion of3200community. What we are seeing now as local--as local news has3201contracted, it's actually led to more polarization, and that's3202because you don't have the news about the things that bind us3203together.3204    Senator Young. Right.3205    Mr. Waldman. Whether it's the high school sports team, or3206the new theater experience, or that inspiring teacher that just3207passed away that you learned about, these are things where--3208make people, instead of looking at their neighbors as cartoon3209characters----3210    Senator Young. Yes.3211    Mr. Waldman.--or caricatures as actual neighbors.3212    Senator Young. And we have this twisted phenomenon--it3213strikes me as twisted--others have, I think, come to regard it3214as just the way things are--where even local news is becoming3215nationalized----3216    Mr. Waldman. Exactly.3217    Senator Young.--fitting into a national narrative,3218completely unhealthy, superficial I should add, in terms of how3219we look at some local issues, and it sells short our citizens.3220As we try and provide them the feedstock to be engaged members3221of the community, they don't have access, we don't have3222access--I'll personalize it oftentimes--to engage in local3223issues.3224    Mr. Waldman. There was a study that came out just yesterday3225that pointed to exactly this paradox, which is that people3226actually feel like it's easy to get information about national3227news and harder to get news about their own neighborhood.3228    Senator Young. So, this is--I just--I thought it was really3229important to cover that for my constituents and for others,3230because I think we make a mistake if we just regard this as an3231issue for business people and investors. It is that, it's a3232very important consideration, but we also need to be able to3233debate the merits and demerits of ownership decisions and caps3234within the context of community.3235    Mr. Waldman. Exactly.3236    Senator Young. So, Mr. LeGeyt, if the status quo as it3237relates to the ownership cap, something we've discussed at some3238length here, were to remain the same, what would be the impact3239to local broadcasters 10 years down the road, and what would3240that mean to my constituents in the state of Indiana?3241    Mr. LeGeyt. Thank you, Senator. And just to follow on from3242your initial remarks, what local stations are doing--what local3243broadcast stations are doing in your community throughout3244Indiana is providing that local trusted news, bringing3245communities together when other forms of media are monetizing3246division. We are combating mis- and disinformation. That's what3247local broadcasters do best, and we don't have a business if we3248are not exceptional in the service we're providing in local3249communities.3250    If you were to look market-by-market across the country,3251the number one station in those markets is the station that is3252most devoted to those community services. So, that is what we3253are fighting for today is that trusted local journalism, but it3254needs scale, right? I alluded to it previously and in my3255testimony, but today, as a standalone, more than half of local3256broadcast newsrooms in this country are not profitable. We are3257competing for advertising dollars with Google and Facebook,3258global behemoths. We're competing for eyeballs with Netflix and3259Amazon. We need scale in order to better compete, and that3260scale is going to pay for that localism, that investment in3261communities that is expensive. No one else in media has boots3262on the ground when that storm rolls through, both in3263anticipation, during the storm, and then in the aftermath to3264help the communities rebuild, and we need scale to compete with3265these nationwide pay TV providers. Otherwise, we can't fund3266that journalism, and we certainly can't pay for premier sports3267like the Super Bowl and keep them on broadcast.3268    Senator Young. I regret I'm already over my time, but I3269would love to ask all of you questions in this forum. Thank3270you, Madam Chair.3271    Senator Cantwell. Thank you, Senator Young. Senator3272Klobuchar, are you ready?3273    Senator Klobuchar. Yes.3274    Senator Cantwell. OK, great. Senator Klobuchar.32753276               STATEMENT OF HON. AMY KLOBUCHAR,3277                  U.S. SENATOR FROM MINNESOTA32783279    Senator Klobuchar. Thank you all. I'm sorry I missed some3280of it. I'll catch up. I was at--a ranking member on a hearing3281in Judiciary, so I guess I'll start with you, Mr. LeGeyt. As3282you know, I lead the Journalism Competition and Preservation3283Act to ensure that broadcasters and news publishers can3284negotiate for fair compensation with the Big Tech platforms,3285including some generative AI platforms. So, it's becoming to me3286more and more important we go forward with this, and we know3287there has been profiting off of news content across the board.3288The National Association of Broadcasters has said that this3289legislation would level the playing field by enabling fair3290negotiations and increased investment in local newsrooms. Why3291is it so critical for local news to empower news creators to3292negotiate their fair share of advertising revenue with Big Tech3293platforms? As you know, I lead that bill with--in the past with3294Senator Kennedy.3295    Mr. LeGeyt. Thank you, Senator, for the question. Over the3296course of the last two decades--and I--and I think this is an3297item that everyone on this panel can agree with--the Big Tech3298platforms have siphoned billions of dollars out of--out of3299local communities. More than 70 percent of the ad marketplace3300has gone from traditional media over to Big Tech, and that's3301undermining our ability to fulfill that local obligation that3302has been the topic of today's hearing. The JCPA is an extremely3303meaningful way to allow for leveling that playing field, allow3304us to negotiate fair compensation when our content is accessed3305through those platforms and increasingly through the generative3306AI platforms. But that lack of scale is also a symptom of what3307we are talking about here today, which is that broadcasters3308lack that scale to compete with these global behemoths in every3309context. And an important first step is for the FCC to update3310these broadcast ownership rules which would allow us to better3311compete with the tech platforms as well.3312    Senator Klobuchar. OK. Thank you. Sort of along these3313lines, as you know, Senator Cruz and I passed the--passed our3314bill, the Take It Down Act regarding nonconsensual porn, both3315AI created and actual. We've seen so many suicides of kids over3316this, and we passed it and the President signed it into law3317this last year. The next step to me is the deepfakes bill that3318Senators Coons, Blackburn, Tillis, and I have put forward that3319would establish rules of the road to give artists, musicians,3320anyone control over their own voice. In a previous hearing you3321told about--story about how people had created deepfakes of3322local news broadcasters. Could you talk--while I know this is a3323little off the focus, but not actually because all of this3324stuff is making it harder for the real news to get out there--3325the effect of this and the need for some rules on AI?3326    Mr. LeGeyt. Thank you, Senator. I'm happy to talk about it3327because it's existential. You know, a local broadcaster is only3328as good as the trust that we have in our local communities, and3329these deepfakes, especially of local news anchors on our radio3330stations, local voices risk undermining that trust. So, we are3331significant supporters of your NO FAKES legislation, look3332forward to working very, very closely together and advocating3333to get that over the finish line because it is--it is3334absolutely essential to ensure maintaining that trust on local3335stations as opposed to what's going on online.3336    Senator Klobuchar. Thank you. Mr. Waldman, we've seen AI3337developers enter into licensing agreements with some of the3338largest publishers: New York Times, Associated Press, Wall3339Street Journal. I'm concerned, however, that smaller papers,3340which we still have a number of them in Minnesota----3341    Mr. Waldman. Yes.3342    Senator Klobuchar.--that lack resources to protect their3343intellectual property are not benefiting from similar deals.3344What role should companies that profit from AI models that use3345news content play in ensuring journalists and newspapers are3346fairly compensated?3347    Mr. Waldman. I share that concern. There have been deals3348with big corporate media, but medium- and small-sized players3349have been left out----3350    Senator Klobuchar. Well, didn't----3351    Mr. Waldman.--and the AI companies have said they're too3352small.3353    Senator Klobuchar. Didn't USA Today do some study that--you3354know, going off script here, always trouble--but just showing3355that it's some of the smaller markets that were getting things3356stolen more because there's no way for them to access that, so3357instead of making agreements with them, they're taking the3358content?3359    Mr. Waldman. It's easy. The papers and the TV stations3360don't have the resources to fight it. They don't know how to3361track it. And so, yes, they're being----3362    Senator Klobuchar. And the AI companies don't have that3363data on some of the smaller stuff. I know this from checking.3364Like, you go in an area, small town, where there's a flood and3365they have tons of stuff wrong all the time.3366    Mr. Waldman. Well, that's the----3367    Senator Klobuchar. Yes.3368    Mr. Waldman.--great riddle here is that local news is3369degrading. AI is making it worse potentially, and that will3370make AI worse, you know, because AI needs to have accurate3371local information.3372    Senator Klobuchar. So how can we ensure--last question--3373that smaller newspapers are paid for their content by AI3374companies?3375    Mr. Waldman. Well, one is bills like yours or other efforts3376to require that local folks are treated evenly and that they3377have the ability to organize collectively. I would also say3378that you would want to look at things like mitigation fees3379placed on Big Tech companies that could be used to finance3380legislation and support local media.3381    Senator Klobuchar. Did you put your thumb up, Mr. Ruddy, or3382your hand up?3383    [Laughter.]3384    Mr. Ruddy. No, I'm sorry. I was just--somebody waved to3385me,----3386    [Laughter.]3387    Mr. Ruddy.--one of the photographers. I figured I'd wave3388back.3389    Senator Klobuchar. OK. That's a very good move. All right.3390Very good. Well, I just--I mostly just think we need to think3391of this. There have been a bunch of Republicans and Democrats3392willing to talk about this. There has been a bunch of more3393conservative news organizations that we've been able to work on3394on this. And just to sit there, to me, the potential of--3395outside of this merger issue, that the AI potential here, too,3396if we do legislation that we make sure we're evening the3397playing field. I believe Senator Fischer's up for questions.33983399                STATEMENT OF HON. DEB FISCHER,3400                   U.S. SENATOR FROM NEBRASKA34013402    Senator Fischer. Thank you, Senator Klobuchar, and thank3403you, too, to our witnesses who are here today. The hearing's3404trying to explore what's needed from Congress in its oversight3405of the FCC to update the video marketplace. What I see are3406clear competitive imbalances, especially between the3407broadcasters and Big Tech streaming services. Congress and the3408Commission must also be mindful of the big picture ripple3409effects of modernizing the outdated regulations.3410    Mr. LeGeyt, broadcast ownership caps were originally3411adopted to promote viewpoint diversity and localism. And I know3412that the Chairman touched on this topic as well, but I'd like3413to add a little Nebraska color in here.3414    Senator Klobuchar. Whoa.3415    Senator Fischer. Whoa?3416    Senator Klobuchar. Yes.3417    [Laughter.]3418    Senator Fischer. I get extra time now.3419    Senator Klobuchar. [Off mic.]3420    Senator Fischer. Oh, no. It's like 67 in Nebraska today,3421so, but----3422    Mr. LeGeyt. We should've done a field hearing.3423    Senator Fischer. Yes, we should have. We should have. But3424we had a large broadcast group and they closed, closed off the3425Scotts Bluff news station, KNEP, and that happened in early34262024. And it was one of the very few broadcast stations--TV3427stations that we have in the panhandle of Nebraska. Looking at3428small location stations like KNEP, would lifting the broadcast3429ownership cap raise or lower their chances of survival?3430    Mr. LeGeyt. It would increase their chances of survival3431very simply, and there are markets all across the country. We3432have local broadcasters in 210 different media markets. Not all3433of them are Washington, D.C. or even Omaha. You are talking3434about very, very small markets where the economics as a3435standalone just don't necessarily exist to support a local3436newsroom. And what we have seen is that in those instances3437where broadcast owners have been able to gain some scale, you3438are seeing more journalism happening in those communities, more3439production of local news, and it benefits your constituents.3440    Senator Fischer. Thank you. Today, the policies of3441broadcast ownership caps and retransmission consent, I think3442they're very entangled in practice, that we see. We know that3443ownership caps limit how large a broadcast group can get. We3444also know that retransmission consent gives value to scale. Mr.3445Ruddy, should Congress view those two policies as operating in3446tension, and if so, what guardrails, if any, would be3447necessary, do you think, to prevent any unintended consequences3448if the ownership limits were lifted?3449    Mr. Ruddy. Well, Senator, the--it's pretty clear we've3450talked about Nexstar having--already they've bypassed the cap.3451They're at 70 percent reach, and they're making a fortune,3452right? They're getting it--they get among the highest retrans3453fees of anyone in the industry, I'm told, and they're doing3454about $2 billion in profit. And again, it's all these big3455groups, and there's not--they're not alone, right? We have3456TEGNA has made $893 million in EBITDA profits, Sinclair $8003457million in 2024, Scripps almost $600 million.3458    There's this discussion here by the broadcast industry,3459they keep saying this untenable situation. What's the--they3460have given no data that they are being hurt in these markets3461and that the licenses are not worth anything. And the other3462thing that we keep hearing on the Big Tech issue, which I'm3463very concerned about Big Tech consolidation, but I don't3464understand why Brendan Carr at the FCC says, well, we should3465help the TV industry to fight the Big Tech, create more3466consolidation. As free market people, we shouldn't be, as I3467believe, trying to bolster one industry against the other. We3468should be holding Big Tech accountable and more competition.3469    Senator Fischer. Mr. LeGeyt, you look like you want to3470answer.3471    Mr. LeGeyt. What we're asking for at the FCC is not to help3472one industry versus another. This is to allow us to compete.3473You know, these are artificial restrictions on a broadcaster's3474ability to gain national scale and to gain some local scale3475that don't exist on any of our other competitors in the media3476landscape. This is about creating broadcasters viable so that3477we can invest in that local news and so that we can invest in3478that must-have sports programming.3479    Senator Fischer. And, Mr. Johnson, if these limits were3480relaxed, how do you think that's going to affect consumer3481prices, local station autonomy, and do you have any evidence3482that would guide how you're assessing this?3483    Mr. Johnson. Sure. Well, in my view, I mean, I think it's3484going to be good for local station autonomy and, ultimately,3485for consumer prices. I mean, the evidence shows, and the FCC3486has actually looked at this on multiple occasions--at least3487three occasions of which I'm aware, that economies of scale3488brought by larger station groups tend to benefit the values3489that the Commission looks at in its public interest analysis,3490including competition, including localism. What I would like to3491see is affiliates having a larger role at the bargaining table3492in their negotiations with major networks or in negotiations3493with streamers, which, right now, those negotiations are3494dominated by the major networks. I'd like them to be able to3495bargain for more ability to preempt national programming that3496might not reflect the values of people in different communities3497across the country, right? I'd like them to be able to reflect3498for more ability to choose what syndicated programming are we3499airing.3500    So, I think that you open up those possibilities more when3501you remove some of these artificial restrictive limits. I mean,3502the--kind of one of the questions raised by this back-and-forth3503is when you have this old ossified 39-percent ownership cap, do3504you regulate up or regulate down? I don't think the answer is3505you impose a 39-percent cap on the streamers that's pegged to3506decades-old market realities based on a snapshot in time back3507in the 1990s or early 2000s. It's let's put everyone on the3508same playing field. Continue to have competition review at the3509DOJ. You're going to still have public interest review at the3510FCC. That's going to give these broadcasters and these local3511stations a chance to survive and to thrive.3512    Senator Fischer. Mr. LeGeyt, if I could just get a--3513hopefully a short answer from you back to the retransmission3514consent fees that are there. Do you believe that the increased3515broadcast consolidation would have no material effect on the3516consent fees, or do you think that such effects would probably3517exist but should be tolerated? Where are you on that?3518    Mr. LeGeyt. I'm focused on the value that retransmission3519consent provides to local communities and local viewers. It is3520those dollars that are being plowed into local journalism.3521Without retransmission consent, there is no business model for3522local journalism, so that is my focus.3523    Senator Fischer [presiding]. Thank you very much. We've3524been joined by Senator Merkley. You are recognized.35253526               STATEMENT OF HON. EDWARD MARKEY,3527                U.S. SENATOR FROM MASSACHUSETTS35283529    Senator Markey. And you've been joined by Senator Markey as3530well.3531    [Laughter.]3532    Senator Markey. There's no--this Merkley-Markey thing is3533very confusing, you know?3534    Senator Fischer. We have been joined by Senator Markey, who3535is----3536    Senator Markey. No problem.3537    Senator Fischer.--who is a good friend and colleague.3538    Senator Markey. No, I had--I had----3539    Senator Fischer. I am so thrilled you are today.3540    Senator Markey.--Congressman Merkley-Markey for years, and3541I thought I escaped it when I came over to the Senate. So,3542thank you.3543    So, I'm glad that the Senate Commerce Committee is holding3544today's hearing on media consolidation because throughout my3545career, I have been very skeptical of media consolidation3546because I believe localism is essential to our democracy, and3547when ownership is local, journalism is local. When3548decisionmaking moves further away, communities lose coverage,3549accountability, and trust, and that was true decades ago when I3550was opposing consolidation, and it's still true today.3551    And right now, we're facing a real crisis in local3552journalism. Newsrooms are shrinking, reporters are losing their3553jobs, entire communities are becoming news deserts, and the3554same time, we're hearing calls to solve this crisis by3555eliminating the Federal Communication Commission's national3556ownership rule and allowing even more consolidation at the3557national level. That would be a mistake. We need a much broader3558conversation about this because just as eliminating the3559national ownership cap won't solve the local journalism crisis,3560neither will protecting the status quo, especially as new3561technologies, such as artificial intelligence, continue to3562undermine the news industry's business model. So, today I want3563to focus on one core question: how do we actually fix the local3564news crisis, not grow national media empires, but revive local3565journalism?3566    So, Mr. Waldman, you and your organization have been3567working on this issue for years. Do you agree that local3568journalism is strongest when news outlets are deeply rooted in3569the communities they serve with reporters physically present3570and accountable to local audiences?3571    Mr. Waldman. Absolutely. Local news in local hands works3572best. It builds trust. It's more accurate. It's more fair.3573    Senator Markey. When policymakers are consolidating--are3574considering different approaches to the local news crisis,3575including enabling greater media consolidation, do you agree3576that those policies should focus on getting more journalists on3577the ground covering local communities?3578    Mr. Waldman. Exactly. That should be at the center of the3579debate is whether or not there are enough journalists in those3580communities.3581    Senator Markey. And I completely agree with that, and I3582think we need to start considering ideas for how the government3583can invest in local journalism. The states are ahead of the3584Federal Government here, and I know that you have examples from3585Illinois and Kansas to demonstrate that. Unfortunately, the3586roll call is on right now, and I'm going to have to run over.3587But for those of us who care about local papers and broadcast3588stations, the responsibility is clear: we have to pursue3589solutions that actually rebuild local reporting capacity. And3590that means that as people are talking about media3591consolidation, we also have to ensure that it's not going to3592accelerate the disappearance of local journalism jobs, and it3593means identifying and advancing new ideas to solve the local3594journalism crisis.3595    And that's why I've been working on legislation to invest3596in local journalism with a strong role for the states as the3597laboratories of democracy, to distribute these funds to local3598news organizations to hire local journalists because if we are3599serious about saving local news, then the money needs to go to3600journalists who do the shoe-leather reporting and aren't scared3601to ask tough questions, rather than simply increasing the size3602or reach of large media companies.3603    So, I look forward, Mr. Chairman, to working with you on3604these issues. I think this is a very important discussion for3605us to have, and with that, I yield back because I really have3606to run over and make the roll call on the floor. Thank you.3607    The Chairman [presiding]. Thank you. Senator Moreno.36083609               STATEMENT OF HON. BERNIE MORENO,3610                     U.S. SENATOR FROM OHIO36113612    Senator Moreno. Thank you, Mr. Chairman, for acknowledging3613you saved the best for last. I appreciate that, right? Is3614that--that was what you said?3615    [Laughter.]3616    The Chairman. You may extend your remarks at your leisure.3617    [Laughter.]3618    Senator Moreno. Perfect. All of you are in the media,3619entertainment, and broadcast business, whether directly or3620indirectly. So, as we approach the end of this hearing, give me3621the 20- to 30-second reason why the cap should or should not be3622increased, starting with you, Mr. Waldman.3623    Mr. Waldman. Well, I think--our group actually hasn't taken3624a position on whether or not they have the authority to do3625that.3626    Senator Moreno. You can--feel free to.3627    Mr. Waldman. But I would say this, that if you look at3628liberalizing the cap, don't just assume that scale will lead to3629more local news. If you believe that's a possibility, then3630require it. Require that liberalization is tied to guarantees3631that it will lead to more hiring of local reporters.3632    Senator Moreno. Thank you. Mr. Johnson.3633    Mr. Johnson. Senator, I dealt with a very similar issue3634when I was General Counsel of the FCC under Chairman Pai. We3635repealed these prescriptive net-neutrality rules that were,3636industry-wide, applied to everyone, every Internet service3637provider of every shape and size. The problem with prescriptive3638rules like these media ownership rules is that they quickly3639become outpaced by technological change. This 39-percent number3640is pegged at what networks look like, broadcast groups look3641like 20, 25 years ago before this whole explosion of online3642streaming content. In order to have a prescriptive rule like3643that, you need to have pervasive evidence of market failure. We3644don't have that here. You need a scalpel instead of a3645sledgehammer. If there are competition concerns, let's handle3646that through the Department of Justice, through the FCC's3647existing public interest review, not through these outdated3648prescriptive rules.3649    Senator Moreno. Thank you. Mr. LeGeyt.3650    Mr. LeGeyt. Modernizing these ownership rules, including3651elimination of the national cap, is existential for the future3652of local broadcasting. Our industry is competing for3653advertising dollars with Google and Facebook, global behemoths.3654We are competing for audience and for programming with Netflix3655and Amazon and simply put, we are doing it with one hand tied3656behind our back because we can't even gain scale nationally to3657allow us to compete in those markets.3658    Senator Moreno. Mr. Ruddy.3659    Mr. Ruddy. Well, Senator, I think there are several3660reasons. One is Congress set the mandate. Michael O'Rielly, the3661former commissioner, just said overwhelming number of3662commissioners said it's law. Ajit Pai had said it's law.3663Brendan Carr had signed a concurring opinion saying it was law.3664They don't cite any legal experts that I'm hearing from that3665are saying that you could just change it by a bureaucratic act3666of the FCC. We've been sold a bill of goods. The FCC was3667mandated to do these public TV licenses to serve the local3668communities. In my mind, there has to be a tremendous emergency3669for this to all be waived so that big--three or four big3670companies can own all of these licenses. And so far, the3671broadcast industry has not told the Senate one--any data that3672provides that they're in crisis. In fact, Nexstar made $23673billion.3674    If you look at all the other--the top seven TV station3675groups all made pretty much in excess of $500 million in EBITDA3676in 2024. There is no crisis. They're inventing this because3677they know they can make billions of dollars by waiving the3678rule, and it doesn't serve the public interest, competition, or3679the diversity of voices that the public would like, especially3680with local news.3681    Senator Moreno. All right. Well, thank you. I'll turn it3682back over to Mr. Chairman. Thank you.3683    The Chairman. Thank you, Senator Moreno, and I will3684recognize Senator Lujan. And I will point out that Senator3685Moreno made the observation that this committee was leaving the3686very best for last. Senator Lujan.3687    [Laughter.]36883689               STATEMENT OF HON. BEN RAY LUJAN,3690                  U.S. SENATOR FROM NEW MEXICO36913692    Senator Lujan. Mr. Chairman--I don't know what you're up to3693today, Mr. Chairman, but----3694    [Laughter.]3695    Senator Lujan.--Bernie, I appreciate that, sir.3696    Senator Moreno. I knew you were coming in.3697    [Laughter.]3698    Senator Lujan. Thank you, Mr. Chairman. Mr. Ruddy, when3699Chair Carr appeared before this committee, I asked if the3700Federal Communication Commission was an independent Agency, and3701he responded, ``It is not formally independent.'' Now, frankly,3702his answer isn't surprising given his willingness to do the3703President's bidding, I would say. As a matter of fact, the3704FCC's website stated that it was an independent agency until I3705asked him the question. And while I thought Chairman Carr was3706the decisionmaker at the FCC, clearly he's not because someone3707that was over there, they changed the website. That aside, a3708few days ago, the President posted on Truth Social regarding3709the Nexstar-TEGNA proposed merger, ``Get that deal done,'' and3710Chairman Carr responded on X, ``President Trump is exactly3711right. The national networks like Comcast and Disney have3712amassed too much power. For years, they've been pushing this3713Hollywood and New York programming all over the country with no3714real checks. Let's get it done and bring real competition to3715them.''3716    Now, my question is, are you concerned about Chair Carr's3717willingness to rubber stamp this merger? And let me just go on3718to say that I certainly agree that I think in your filed3719testimony that Congress is the one that's established the 39-3720percent threshold here, but my question is, are you concerned3721about Chair Carr's willingness to rubber stamp this merger?3722    Mr. Ruddy. Well, you make a lot of good points. I do3723believe it's an independent agency. And even as an independent3724agency, they should be listening to the President, Members of3725Congress, and others, and they certainly should take that into3726account in their decision-making. He is not alone at the3727Commission. As you know, there's another member, and hopefully3728there'll be a--another Democratic member soon and another3729Republican member. I think Chairman Carr has not given the3730President good advice. I mean, on the face of it, he says that3731he wants to increase competition by allowing massive3732consolidation, so we move from seven TV companies to two or3733three? How does that increase competition? The purpose of3734competition and deregulation is to lower prices, but what we're3735seeing is when you--in a closed market--there are only four3736major licenses in every market--that they increase prices3737because they have so much market dominance and power. It makes3738common sense.3739    I believe that the Chairman has been inconsistent. For3740example, I think he was right to criticize Jimmy Kimmel. I3741don't believe in the censorship on Jimmy Kimmel, but I think3742that, you know, he'll say that I'm involved in this. He's3743calling for him to be fired because he says it's in the public3744interest, these are public licenses, but at the same time, he's3745saying the public interest doesn't matter. We should just allow3746three or four companies to own all the licenses.3747    I think there should be a consistency. I think he should3748encourage all of these major networks that, when it comes to3749politicized comedians, they should show balance, and I think3750it's unfair that we've had several that have just bashed3751President Trump for the 15 years without response. But I think3752the answer, again, is not censorship, and it's a balanced3753interest for the public interest. That's what these licenses3754are all about, and I think the merger of Nexstar has already3755proven it's bad for consumers. The prices have gone up, passed3756on the cable fees. It's led to the decimation of newsrooms in3757markets where they own more than one--two stations.3758    You know, when--before they did the merger with Tribune3759back a few years ago, they had 16,000 employees. Within one3760year, they went down to 12,000 employees. If you're a3761journalist working for Nexstar, you should be starting to post3762your resume if this merger goes through. It's going to be3763thousands of jobs, but, ultimately, again, it's the local3764communities that get hurt because of the lack of news3765diversity.3766    Senator Lujan. Well, to your point on that, sir, the3767President recently expressed his support for the Nexstar-TEGNA3768deal, yet was silent on the ownership cap. Have you talked to3769President Trump about the TV ownership cap?3770    Mr. Ruddy. I have talked to him in the past. I have not3771talked to him since he made that post, but----3772    Senator Lujan. Can you share what he said?3773    Mr. Ruddy. But let's go back. He was very emphatic. Back in3774November, he posted to Truth Social that bigger media is not3775good, that less media--less bigger networks is better, and that3776he supported, essentially, the ownership cap. In the Nexstar3777deal, he makes no reference to the--to the ownership cap. I3778believe that Nexstar is already in violation of the ownership3779cap. They're at 70-percent reach. They want to go to 803780percent. I think the President--I think the President makes a3781lot of good decisions, and he does when he's fully informed. I3782think Chairman Carr has not informed him and advised him well3783on this issue. And I have a disagreement with Chairman Carr3784very significantly, and I think he's not--he's not playing by3785commonsense rules, which is, more diversity of companies leads3786to more competition and lower prices.3787    Senator Lujan. I appreciate that, sir. Mr. Chairman, I have3788other questions. I'll submit them into the record because of3789time.3790    The one thing that I'll share based on your response, Mr.3791Ruddy, that I didn't get a chance to share with Chairman Carr3792is, if you watched that hearing, you saw how Chairman Carr was3793very critical of President Biden. He said President Biden made3794one bad decision after another. Well, if I had Chairman Carr in3795front of me again, I would remind him that one of the worst3796decisions he made was nominating Brendan Carr to the FCC. Thank3797you for the time.3798    The Chairman. Thank you. Since there is apparently a virtue3799in being last----3800    [Laughter.]3801    The Chairman.--I will take the Chairman's prerogative to do3802so. I want to go back to a question that I opened with, and I3803want to ask a specific yes/no. We talked about whether the FCC3804should make this decision at a Commission-level vote or at a3805bureau-level vote, and several of the answers said any decision3806to change the ownership cap should be at the Commission-level3807vote. I want to ask each of you, yes or no, should the FCC have3808a Commission-level vote on the Nexstar-TEGNA merger? Mr. Ruddy.3809    Mr. Ruddy. It should be a Commission-level vote with the3810full public process.3811    The Chairman. Mr. LeGeyt.3812    Mr. LeGeyt. I don't have a position on that.3813    The Chairman. Mr. Johnson.3814    Mr. Johnson. So, in transparency, Mr. Chairman, my firm3815represents Nexstar in this deal. I just want to say that for3816the record. I'm not speaking for the client. From my personal3817view, my answer is the same, that it's a matter of Commission3818discretion under the Communications Act.3819    The Chairman. Mr. Waldman.3820    Mr. Waldman. Yes.3821    The Chairman. Two yeses, two dodges. OK.3822    [Laughter.]3823    The Chairman. Let's get to the substance of the law. There3824is a disagreement about whether the FCC can change the 39-3825percent cap. Let's review what Section 629 of the 20043826Consolidated Appropriations Act did to the Telecommunications3827Act broadcast ownership rules. It changed the national3828television cap in the statute from 35 percent to 39 percent. It3829gave businesses two years to come into compliance with the 39-3830percent limit. It barred the FCC from using its forbearance3831authority to waive the cap, and it expressly excluded the 39-3832percent cap from being part of the FCC's established regulatory3833review process.3834    This is a question for both Mr. Ruddy and Mr. LeGeyt. Yes3835or no, on the day after the enactment of this 2004 law, did the3836FCC have the statutory authority to adopt rules that set the3837national television audience cap to say, 42 percent or 503838percent, or was the FCC instead bound to follow the 39-percent3839cap fixed by statute? Mr. Ruddy.3840    Mr. Ruddy. The reason Congress set it at 39 was that the3841FCC, after the 1996 Act, tried to raise it 45 percent by fiat,3842and they said, wait a minute, you can't do this. And they--3843there was a--basically bipartisan support for the 39 percent.3844So, I don't believe they have the authority, and several legal3845scholars have said they don't. And so, I'm not a legal expert,3846but it appears pretty black and white that they said it, and it3847should be--remain law.3848    The Chairman. Mr. LeGeyt, the day after the 2024 law was3849passed, could the FCC have set the cap at some number3850substantially higher than 39 percent?3851    Mr. LeGeyt. Legally, possibly, but as a matter of3852practicality, given that it was an appropriations directive3853from Congress, no, but importantly----3854    The Chairman. Well, you say ``legally possibly.'' How3855legally possibly?3856    Mr. LeGeyt. Because the--because Congress didn't set the385739-percent cap in statute. They directed the FCC to adjust3858their regulations from a 35- to 39-percent cap. It is not3859codified in statute.3860    The Chairman. How did they direct them to make it 393861percent?3862    Mr. LeGeyt. Through that appropriations act that you just3863referred to in 2004.3864    The Chairman. And an appropriations act is not statute?3865    Mr. LeGeyt. What the language of the Act did was that it3866directed a modification of the regulation.3867    The Chairman. But did it say any modification, or did it3868say modify it to 39 percent?3869    Mr. LeGeyt. Modify to 39 percent, but, importantly, it did3870not remove the FCC's authority, which had previously been3871upheld by the D.C. Circuit, to modify that number on an ongoing3872basis.3873    The Chairman. Well, it did explicitly exclude the 39-3874percent cap from being part of the established regulation3875review process.3876    Mr. LeGeyt. It did. It modified the requirement that the3877FCC review the cap, but it did not remove the affirmative3878authority on an ongoing basis to review it.3879    The Chairman. All right.3880    Mr. LeGeyt. It's a distinction with an important3881difference.3882    The Chairman. Next question. The NAB's position is now the3883FCC could use other authorities to get around that cap, which3884presumably are the same authorities the FCC had and could have3885used in 2004/2005 to change the cap. Put another way, the NAB's3886position on the 39-percent ownership cap is that, that which is3887not prohibited is permitted. This is a question for both Mr.3888Ruddy and Mr. LeGeyt. If we assume that Congress did not3889clearly bar the FCC from using its general authority to change3890the statutory cap, is there any legal limit to what the FCC can3891do with the cap? Mr. LeGeyt.3892    Mr. LeGeyt. No, there's not.3893    The Chairman. Mr. Ruddy.3894    Mr. Ruddy. Well, again, I'm not a lawyer, but if the--if3895you--if a court were to rule that the FCC was not bound by the38962004 law, I'm assuming that it could create a new cap number as3897it had in the past, but I do believe the 2004 law is binding3898and a matter of legal statute.3899    The Chairman. Mr. LeGeyt, could the FCC, the day after the3900law was adopted, decide that the ownership cap could be 1003901percent of U.S. households? Could it choose zero percent?3902    Mr. LeGeyt. The FCC as an administrative agency obviously3903needs to go through a period of notice and comment and3904appropriate administrative procedures, but nothing in the Act3905would prohibit the FCC from doing so.3906    The Chairman. So, it is--it is NAB's position the day after3907the statute passed that said change it to 39 percent, the FCC3908could have come in and said we're changing it to 100 percent?3909    Mr. LeGeyt. I think it's unrealistic that that APA process3910could take place in a single day, but again----3911    The Chairman. They initiate the process and it takes the3912time it does, and they could immediately then raise it to a3913hundred. Is that your position?3914    Mr. LeGeyt. Senator, I'd like to follow up on the question3915because I do think in the context of an appropriations3916directive, obviously you are talking about a Fiscal Year--a3917directive to the FCC. So, realistically, whether they had that3918authority on the next day, I'd like to dig into that a little3919bit more, but there's no question that the FCC maintained the3920authority to review the cap on an ongoing basis following the3921passage of that law.3922    The Chairman. Well, you'll certainly have an opportunity to3923follow up on that. And we're going to have written questions3924for the record, and I would welcome a more fulsome response.3925These are important and difficult questions.3926    Mr. Ruddy, same question. Could the FCC have decided right3927after the 2004 law was passed that the ownership cap should not3928be 39 percent, but rather, it should be 100 percent?3929    Mr. Ruddy. It sounds like it would be rather ridiculous if3930they just flouted what Congress voted and put into statute, and3931again, you have commissioner after commissioner, chairman after3932chairman. I mentioned earlier Ajit Pai, who was President3933Trump's first Chairman, repeatedly said that the cap was law, a3934matter of law, that he didn't like it, but he couldn't change3935it, and that, his words, ``We had to obey the law.'' Chairwoman3936Rosenworcel, made a opinion against Nexstar and one of their3937transactions saying they violated a congressional law and that3938the Congress only could change it, and Brendan Carr, who was3939the Ranking Member at the time, offered a concurring opinion3940and did not disagree with that.3941    So, I think you have a consistent trail here where logic--3942and I would really encourage the broadcast industry, if they3943really want this change, it's so important for them, go to the3944People's House, go to the Congress and the Senate, make their3945argument that they should do this, but they don't want to do3946this. They want to use the bureau level, the bureaucrats, and3947they don't even want to respond. Why can't we have an open3948process? Why are the broadcasters so afraid for the full3949Commission to look at this, and they want to have no opinion on3950it? Have transparency on this matter.3951    The Chairman. OK. Final question. If the FCC decides that3952it has the authority to set aside the statutory cap of 393953percent and to raise it substantially above what the statute3954says, what is the likelihood that that decision will be3955challenged in litigation, and what is a reasonable estimate for3956how long that litigation will take and what the consequences of3957that litigation will be? Mr. Ruddy and then Mr. Legeyt.3958    Mr. Ruddy. I am prepared to litigate the matter. I believe3959that it's just a blatant violation of congressional law, and I3960think it's a very dangerous thing that the--that they--that a,3961basically, industry group that stands to make billions of3962dollars can just circumvent what Congress has said, that the3963public overwhelmingly supports my position and the current law,3964that they would like less consolidation, and they want more3965diversity in media.3966    The Chairman. And, Mr. LeGeyt, you get the final word,3967which I guess, given the Committee's rule, means you're the3968best that is here.3969    Mr. LeGeyt. Thank you, Mr. Chairman. I think if history is3970a guide here, every modification that the FCC has made to its3971ownership restrictions has been challenged in court on one side3972or the other, so I would certainly expect that here as well.3973But we would certainly ask that that judicial review be3974expedited because this is an existential crisis for local3975broadcasters. Our competitive landscape is one in which3976broadcasters are competing with one hand tied behind our back3977because of the scale of these global tech companies: Netflix,3978Amazon, Google, Facebook. They are siphoning away our3979advertising revenue. They are pulling away our viewers, and the3980only way we can invest in local communities like yours, and3981continue to do the invaluable work being done across the many3982markets in your state, is with more scale.3983    I mean, I made the point separately, but I want to leave3984the Committee with this: that if judged on an independent,3985standalone basis, more than half of the broadcast newsrooms in3986this country are not profitable. They would not exist as3987standalone businesses. The only way that we can continue to3988serve communities in the 210 markets in this country is to have3989some scale to do so and elimination of these rules, which are3990not--you know, nine decades old, last reviewed more than 203991years ago. This media landscape's been completely reshaped, and3992we need to compete.3993    The Chairman. OK. I want to thank all the witnesses for3994their testimony today. This hearing, I think, was quite helpful3995to the Committee.3996    Senators will have until the close of business on February399717 to submit questions for the record. The witnesses will have3998until the close of business on March 3 to respond to those3999questions.4000    This concludes today's hearing. The Committee stands4001adjourned.4002    [Whereupon, at 12:21 p.m., the Committee was adjourned.]40034004                            A P P E N D I X40054006                            Consumer Technology Association4007                                    Arlington, VA, February 9, 202640084009Hon. Ted Cruz,4010Chairman,4011Committee on Commerce, Science, and Transportation,4012United States Senate,4013Washington, DC.4014Hon. Maria Cantwell,4015Ranking Member4016Committee on Commerce, Science, and Transportation,4017United States Senate,4018Washington, DC.40194020Dear Chairman Cruz, Ranking Member Cantwell, and Members of the4021            Committee:40224023    In advance of tomorrow's hearing to examine broadcaster4024consolidation, the Consumer Technology Association (CTA), urges the4025Committee to approach any relaxation of broadcast ownership limits with4026significant caution. CTA represents the U.S. consumer technology4027industry and is North America's largest technology trade association.4028    Broadcast television uses exclusive access to publicly owned4029spectrum, a finite resource the Federal government must manage in the4030public interest. Changes to ownership rules that further consolidate4031control of local broadcast licenses should not occur without a4032corresponding reassessment of whether broadcast spectrum is being used4033efficiently and in a manner that best serves American consumers and the4034broader economy.4035    As a recently released study by the National Association of4036Broadcasters (NAB) reveals, just 9 percent of consumers surveyed say4037they use an antenna to access live television, including local4038broadcast TV stations, a big drop from when the Federal Communications4039Commission's (FCC) ownership rules were first put in place in the40401940s.\1\4041---------------------------------------------------------------------------4042    \1\ See National Association of Broadcasters (NAB), New National4043Survey: Voters Say Outdated Broadcast Ownership Cap is Unfair to Local4044Stations (February 2, 2026), available at: https://www.nab.org/4045documents/newsRoom/pressRelease.asp?id=7389.4046---------------------------------------------------------------------------4047    CTA market research also shows that approximately 8 percent of4048video content viewers rely on a TV antenna as the only source of video4049content.\2\ Ironically, while these findings confirm the reality of how4050most consumers choose to access local TV stations, the questions posed4051in NAB's recent survey on public support for relaxing ownership caps4052are so contrived, they stand in stark contrast to other reputable4053studies which show the opposite: consumers want to preserve the4054localism that comes from local TV stations.\3\4055---------------------------------------------------------------------------4056    \2\ See CTA 2025 U.S. Consumer Technology Ownership & Market4057Potential Study (May 2025), available at: https://www.cta.tech/4058research/2025-us-consumer-technology-ownership-market-potential-study/.4059    \3\ See TVB Television Bureau of Advertising, Survey Finds that 954060percent of Respondents Believe Accessing Local News on Their Local TV4061Station is Important (September 29, 2025), available at: https://4062www.tvb.org/wp-content/uploads/2025/10/Survey-Finds-that-95-of-4063Respondents-Believe-Accessing-Local-News-on-Their-Local-TV-Station-is-4064Important-.pdf; Pew Research Center, Views of local news (May 7, 2024),4065available at: https://www.pewresearch.org/journalism/2024/05/07/views-4066of-local-news/ (``most U.S. adults (85 percent) believe local news4067outlets are at least somewhat important to the well-being of their4068local community, including 44 percent who say they are extremely or4069very important.'').4070---------------------------------------------------------------------------4071    We ask this Committee to consider the obvious: local broadcast TV4072spectrum remains increasingly underused in many markets, as consumer4073viewing habits continue to migrate toward streaming, mobile, and on-4074demand platforms. Yet, demand for licensed and unlicensed spectrum to4075support next-generation wireless services, innovation, and economic4076growth is growing. Allowing greater consolidation of broadcast4077ownership without addressing this imbalance risks entrenching4078inefficient spectrum use while foreclosing opportunities for higher-4079value applications.4080    The NAB's push for loosened ownership restrictions and new mandates4081requiring the inclusion of a NEXTGEN TV tuner in all televisions and a4082mandate of AM radios in cars reveals a misuse of valuable public4083spectrum and a reliance on Washington largesse at the expense of4084consumers. If the spectrum broadcasters are using were being put to its4085best use in 2026, broadcasters would not be seeking government action4086to force consumers to buy receivers they do not want.4087    CTA believes that if Congress or the FCC considers relaxing the4088broadcast ownership rules, such action should be paired with meaningful4089measures to return underused broadcast spectrum to the Federal4090government and should not include mandates that force consumers to buy4091features they do not want. This would help ensure that the public4092receives fair value for the use of the airwaves and that spectrum4093policy keeps pace with modern consumer and economic needs.4094    Ownership rules were created to promote localism, competition, and4095diversity. Relaxing those rules without securing tangible public4096interest benefits--particularly improved spectrum efficiency--risks4097hurting those objectives while delivering limited consumer benefit.4098    CTA stands ready to work with the Committee to advance a forward-4099looking spectrum policy that balances the needs of broadcasters with4100the urgent demand for spectrum to support wireless innovation, economic4101competitiveness, and consumer choice.4102    We appreciate your attention to this important issue.4103            Respectfully submitted,4104                                              Gary Shapiro,4105                                           Executive Chair and CEO,4106                                       Consumer Technology Association.4107                                 ______41084109                                          Free Press Action4110                                  Washington, DC, February 10, 202641114112Chairman Ted Cruz,4113Ranking Member Maria Cantwell,4114U.S. Senate Committee on Commerce, Science, and Transportation,4115Washington, DC.41164117Re: Free Press Action Submission for the Record for Full Committee4118            Hearing Entitled ``We Interrupt This Program: Media4119            Ownership in the Digital Age''41204121Chairman Cruz, Ranking Member Cantwell, and Members of the Committee:41224123    Free Press Action submits the attached comments, filed by Free4124Press in August 2025 with the Federal Communications Commission, for4125your consideration as a submission for the record of today's hearing.4126    We filed these comments when the agency sought to refresh the4127record in its proceeding on the National Television Multiple Ownership4128Rule, better known as the broadcast television national audience reach4129limit or the ``national cap.'' In announcing today's hearing, Chairman4130Cruz explained that it would focus ``particularly'' on ``one rule4131limiting a single broadcaster from reaching beyond 39 percent of U.S.4132television households nationwide.'' He also noted that many4133stakeholders ``contend . . . that the current 39 percent cap is4134statutory, meaning it can only be changed by an act of Congress and not4135through regulation'' at the FCC.4136    What the Chairman referred to as an expert contention is in fact4137the obvious reading of the law at issue today. When Congress set this4138limit in 2004, it instructed the FCC to adopt a rule to this effect4139instead of placing the limit in the body of the Communications Act.4140Based on nothing more than this slender difference in the manner of4141Congress's unmistakable pronouncement, some suggest that the agency can4142choose to ignore it. This is a remarkable and untenable position,4143especially when there is no ambiguity whatsoever in the figure Congress4144set. Should industry advocates have their way, it would beg the4145question: what is the expiration date on congressional enactments? And4146when do agencies (especially after Loper Bright) get to ignore the4147plain meaning of legislation? The answer is clear: they do not.4148    As the attached comments explain in great detail, it is not merely4149Free Press that holds this position. Several broadcasters themselves4150have argued that the Commission has no power to waive or eliminate the4151congressionally set national cap, as has former Republican FCC4152Commissioner Michael O'Rielly (who worked as congressional staff on the41532004 law that set it).4154    Any brazen attempt by the FCC to ignore this law would be an4155affront to congressional authority. As our comments explain, it also4156would have devastating consequences. Nothing about the march of media4157technology into the Internet and streaming era has diminished the4158importance of local broadcasting. The national cap is an important4159structural tool that mitigates large ownership groups' market4160incentives to abandon localism. This is not mere conjecture. There is4161ample evidence demonstrating the harms to localism that follow4162consolidation.4163    Most notably, despite rising revenues, the number of broadcast TV4164stations producing original local news has declined since 1996.4165Furthermore, research demonstrates how national consolidation4166diminishes competition, localism, and viewpoint diversity. One study4167our comments cite shows that large national chains achieve their post-4168consolidation synergies by replacing original local news with4169duplicated and out-of-market programming. Another survey of local TV4170newsroom managers demonstrates how consolidation undermines the public4171interest, depletes journalism and working journalists, and creates a4172race to the bottom.4173    Broadcasters' statements to Wall Street show that their companies4174are in great financial health, regardless of the different tune they4175sing inside the Beltway. While they lament supposed competition with4176``Big Tech,'' all available evidence--including broadcasters' own4177comments--shows local TV firms are not in the same product market as4178online companies like Google, Meta, Amazon, or Netflix. None of those4179tech firms produce local news. Eliminating the national cap would harm4180localism but not mediate the issues created by large tech firms'4181practices.4182    Finally, as our attached filing documents in copious detail,4183broadcast representatives have repeatedly told investment analysts how4184resilient their live sports and local news programming are even in the4185face of changing viewing patterns. Broadcasters' premise that national4186consolidation begets more local news is completely unfounded. Local4187broadcast revenues rose far faster than the rate of general inflation4188during the Internet era. But employment in local TV newsrooms did not4189grow with owners' increasing fortunes.4190    Broadcast firms have in many cases outperformed the broader market4191and other advertising-supported companies on metrics like return on4192capital, profit margins, and stock price. The national cap is not a4193barrier to continued financial prosperity. Broadcast executives have4194told Wall Street analysts and their own investors to expect continued4195healthy local advertising and retransmission consent payment growth4196thanks to strong viewer demand, new technologies, and what Nexstar's4197CEO labeled the ``unparalleled local moat'' broadcasters enjoy.4198    We thus submit the attached FCC filing to counter broadcast4199representatives' unfounded claims regarding the supposed justifications4200for changing the national cap that Congress set, as well as the4201fanciful suggestion that this change is within the FCC's authority.4202            Sincerely,4203                                           Matthew F. Wood,4204                                    VP of Policy & General Counsel,4205                                                     Free Press Action.4206                                 ______42074208[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]42094210                           EXECUTIVE SUMMARY4211    The law is clear: Congress fixed the maximum reach of broadcast4212television license holders at 39 percent of TV households nationwide,4213and it specifically removed this national cap from the Commission's4214congressionally-mandated quadrennial review of all other broadcast4215ownership policies. But despite this clarity, the new Commission is4216requesting a refresh of the record in an eight-year-old proceeding, in4217which any changing external market conditions are simply not germane to4218the law, and in which any fair analysis of the television broadcasters'4219own economic data shows them in no need of the relief they seek.4220    But as Chairman Carr's tenure so far demonstrates, his Commission4221is not going to let little things like the law, settled precedent, or4222even the First Amendment get in the way of its partisan and ideological4223aims. Chief among these is following the Trump administration's dictate4224to use the Commission's licensing authority to exert total control over4225the media. Media consolidation and deal approvals are now explicitly a4226way for President Trump to further consolidate his dictatorial power,4227through explicit loyalty tests and pledges to use the public airwaves4228as a propaganda tool against the American public. Chairman Carr has4229made it known that every FCC-licensed firm's continued existence will4230now be contingent upon that company's editorial and internal personnel4231decisions aligning with the White House's wishes.4232    As the saying goes, ``all politics is local,'' and though media4233markets are changing, local broadcast TV news stations (and their4234websites) remain the dominant source that Americans use to inform4235themselves about electoral politics. This is why this proceeding--one4236whose very initiation ignores the congressionally-set national cap--4237threatens democracy and freedom. Chairman Carr is placing a ``for-4238sale'' sign on the public's airwaves, and inviting media companies to4239monopolize the local news markets as long as they agree to pay the4240price of political fealty to Donald Trump and the MAGA movement.4241    Though the law that binds the Commission in this proceeding does4242not turn on contemporaneous policy arguments, in these comments we4243demonstrate how the national cap remains good policy today. It4244continues to promote competition, localism, and diversity. This greater4245competition and diversity of sources remains critical, in part because4246local TV news broadcasts continue to have a disproportionate impact on4247public opinion and voting behavior.4248    Promoting the public interest, as the Communications Act requires,4249and fostering a vibrant marketplace of ideas at the local level4250requires a jurisprudence standard beyond antitrust analyses alone.4251Public airwaves remain a scarce resource, and those privileged enough4252to hold a broadcast TV license have an outsized impact on many facets4253of life including voting and democracy itself. The national cap and4254policies that limit how much local broadcast media one owner can4255control are therefore necessary to promote the public interest, and4256help the Commission to strike a balance between private profits and4257democracy's needs.4258    Nothing about the march of media technology into the Internet and4259streaming era has diminished the importance of local broadcasting. And4260the national cap is an important structural tool that mitigates large4261ownership groups' market incentives to abandon localism. This is not4262mere conjecture. There is ample evidence demonstrating the harms to4263localism that follow consolidation. Most notably, despite rising4264revenues, the number of broadcast TV stations producing original local4265news declined since 1996. Furthermore, other research demonstrates how4266national consolidation diminishes competition, localism, and viewpoint4267diversity. A recent study shows that large national chains achieve4268their post-consolidation synergies by replacing original local news4269with duplicated and out-of-market programming. A separate recent survey4270of local TV newsroom managers further demonstrates how consolidation4271undermines the public interest, depletes journalism and working4272journalists, and creates a race to the bottom.4273    Though the continued application of the national cap is not tied to4274television licensees' balance sheets, their own evidence and statements4275show that broadcast television companies are in great financial health.4276The push for national consolidation has nothing to do with enriching4277viewers' lives--only shareholders' wallets. Despite the Commission and4278the broadcast industry lamenting the existence of ``Big Tech,'' all4279available evidence--including comments from broadcasters themselves--4280shows that local TV firms are not in the same relevant product market4281as online companies like Google, Meta, and Amazon.4282    Nor are local TV broadcasters in the same relevant product market4283as online video distributors like Netflix. None of those tech firms4284produce local news. Eliminating the national cap will only serve to4285harm localism, and will do nothing to mediate the myriad issues created4286by the various large tech firms' behavior and practices. While4287viewership of linear television on the whole is in decline, this trend4288is not observed equally among all linear television sectors. Online4289television continues to take a larger share of viewing time, but4290virtually all at the expense of time previously spent watching linear4291cable networks. Indeed, broadcast companies representatives have4292repeatedly told investment analysts in the past year how resilient4293their live sports and local news programming are in the face of4294changing viewing patterns.4295    And the broadcasters' central premise--that national consolidation4296is in the public interest because it begets more local news--is4297completely unfounded. The local broadcast TV industry's revenues have4298risen far faster than the rate of general inflation during the Internet4299era. But unlike the local newspaper sector, employment in local TV4300newsrooms did not grow with the owners' increasing fortunes. RTDNA4301published data indicating that TV newsroom employment has been4302essentially flat since the industry rebounded from the Great Recession,4303at approximately 28,000 jobs both in 2012 and in 2024, as their4304revenues grew much faster.4305    The fact is that while under the national ownership cap, broadcast4306TV firms have in many cases outperformed the broader market and other4307advertising-supported companies on metrics like return on capital,4308profit margins, and stock price. This historical financial performance4309shows that the national cap is not a barrier to continued financial4310prosperity. That is especially true looking ahead, as local TV4311companies have many new revenue-generating opportunities to pursue4312outside of national consolidation. Broadcast TV executives have told4313Wall Street analysts and their own investors to expect continued4314healthy local advertising and retransmission consent payment growth4315thanks to strong viewer demand for live sports and local news. And4316broadcasters expect the new ATSC 3.0 transmission technology to further4317enhance their bottom line.4318    In sum, the Commission has no authority to increase or eliminate4319the national cap. Doing so would be a disaster for localism.4320                                 ______43214322                           TABLE OF CONTENTS4323Executive Summary4324                                 ______43254326I. Introduction4327                                 ______43284329II.  The Commission Does Not Have Authority to Increase or Eliminate4330the National Audience Reach Cap43314332        A.  Congress Set a Specific 39 Percent National Audience Reach4333        Limit in the Consolidated Appropriations Act of 2004. Only4334        Congress Can Change this Number43354336        B.  Though the Law Bars the Commission from Altering the 394337        Percent National Audience Reach Value It Retains the Authority4338        to Determine How That Reach Is Calculated43394340III.  Limiting Broadcast Television Licensees' National Reach Remains4341Critical to Promoting Competition, Localism, and Diversity43424343        A.  Local TV News Stations Have a Disproportionate Impact on4344        Public Opinion and Voting Behavior43454346        B.  The National Cap and Local Broadcast Ownership Limits4347        Remain Vital Policies that Promote the Public Interest and4348        Strike a Balance Between Private Profits and Democracy's Needs43494350        C.  Promoting a Vibrant Marketplace of Ideas at the Local Level4351        Requires a Jurisprudence Standard Beyond Antitrust43524353        D.  The National Cap Is an Important Structural Tool that4354        Mitigates Large Ownership Groups' Market Incentives to Abandon4355        Localism43564357        E.  Broadcast TV Consolidation Has Harmed Localism43584359                a.  The Number of Stations Producing Original Local4360                News Has Declined Since 199643614362                b.  Research Demonstrates How National Consolidation4363                Diminishes Competition, Localism, and Viewpoint4364                Diversity. Large National Chains Achieve Their Post-4365                Consolidation Synergies by Replacing Original Local4366                News with Duplicated and Out-of-Market Programming43674368                c.  Evidence from Inside Local TV Newsrooms4369                Demonstrates How Consolidation Undermines the Public4370                Interest and Creates a Race to the Bottom43714372IV.  Broadcast Television Companies Are in Great Financial Health and4373Further Consolidation Will Only Benefit Wealthy Shareholders43744375        A.  Local TV Broadcasters Are Not in the Same Relevant Product4376        Market as Online Tech Giants Like Google, Meta, and Amazon, Nor4377        Are They in the Same Relevant Product Market as Online Video4378        Distributors Like Netflix. Eliminating the National Cap Will4379        Harm Localism and Will Not ``Rein in'' Big Tech Companies43804381        B.  The Rise of Online Video Does Not Lessen the Need for the4382        National Cap. Local TV Broadcasters Do Not Compete Directly4383        Against National Online Video Providers, Including the Online4384        Services of the Big 4 Networks43854386        C.  The Decline in Linear TV Viewing Has Disproportionately4387        Impacted Cable Networks, Not Local Broadcast Television43884389        D.  Local TV Broadcast Revenue Growth During The Previous Two4390        Decades Did Not Result in Newsroom Staffing Increases43914392        E.  Broadcast TV Chains' Healthy Financial Performance During4393        the Streaming Media Era Demonstrates that the National Cap is4394        Not a Barrier to Continued Financial Prosperity43954396        F.  Local TV Broadcasters Have Many New Revenue-Generating4397        Opportunities to Pursue Outside of National Consolidation43984399                a.  Broadcasters Expect to See Continued Healthy Local4400                Advertising and Retransmission Consent Payment Growth4401                Thanks to Strong Viewer Demand for Live Local Sports4402                and News Programming44034404                b.  Continued Advances in Digital Broadcast4405                Transmission Technology Create New Revenue4406                Opportunities for Broadcasters44074408V. Conclusion4409                                 ______44104411I. Introduction4412    On June 18, 2025,\1\ the Federal Communications Commission4413requested updates to the record in a proceeding it did not have any4414legal basis to conduct in the first place. The law is unambiguous:4415Congress fixed the maximum reach of broadcast television license4416holders at 39 percent of TV households nationwide, and it specifically4417removed this policy from the Commission's congressionally-mandated4418quadrennial review of all other broadcast ownership policies.\2\4419---------------------------------------------------------------------------4420    \1\ Media Bureau Seeks to Refresh the Record in the National4421Television Multiple Ownership Rule Proceeding, MB Docket No. 17-318,4422Public Notice, DA 25-530 (rel. June 18, 2025) (``Public Notice'' or4423``Notice.'').4424    \2\ See infra Section II (complete discussion of the legal history4425of the national cap); see also Dana A. Scherer, ``Federal4426Communications Commission (FCC) Media Ownership Rules,'' Congressional4427Research Service, R45338 (June 1, 2021) (``[In 2004] Congress enacts4428the 2004 Consolidated Appropriations Act, 2004 (P.L. 108-199), which4429directs the FCC to increase its national TV ownership cap to 39 percent4430of national audience, thereby preempting FCC's rule that would have4431raised the cap to 45 percent. The act also directs the FCC to review4432its media ownership rules every four years (instead of every two4433years), exempting rules related to the ownership cap from the review.4434[In 2003 the] U.S. Court of Appeals, 3rd Circuit, finds that new law4435makes challenges to the FCC's UHF discount moot. Court finds that4436barring congressional intervention, the FCC may decide the scope of its4437authority to modify or eliminate the UHF discount outside the context4438of its quadrennial media ownership review.''). As we detail in Section4439II, infra, the Third Circuit delineated the Commission's authority to4440consider the UHF discount policy outside of the Quadrennial Review, but4441not the percentage itself.4442---------------------------------------------------------------------------4443    But as Chairman Carr's tenure so far demonstrates, his Commission4444is not going to let little things like the law, settled precedent, or4445even the First Amendment get in the way of the Trump administration's4446plan to use the Commission's licensing authority as a tool to exert4447total control over the media.\3\ Media consolidation and deal approvals4448are now explicitly a way for President Trump to further consolidate his4449dictatorial power, through explicit loyalty tests and pledges to use4450the public airwaves for propaganda against the American public.\4\4451---------------------------------------------------------------------------4452    \3\ See Comments of Free Press at 33-35, MB Docket No. 25-73 (filed4453Mar. 7, 2025).4454    \4\ See, e.g., Office of Commissioner Anna M. Gomez, Commissioner4455Gomez on Unprecedented FCC Approval of Paramount Transaction, FCC (July445624, 2025) (``In an unprecedented move, this once-independent FCC used4457its vast power to pressure Paramount to broker a private legal4458settlement and further erode press freedom. Once again, this agency is4459undermining legitimate efforts to combat discrimination and expand4460opportunity by overstepping its authority and intervening in employment4461matters reserved for other government entities with proper jurisdiction4462on these issues. Even more alarming, it is now imposing never-before-4463seen controls over newsroom decisions and editorial judgment, in direct4464violation of the First Amendment and the law The Paramount payout and4465this reckless approval have emboldened those who believe the government4466can--and should--abuse its power to extract financial and ideological4467concessions, demand favored treatment, and secure positive media4468coverage. It is a dark chapter in a long and growing record of abuse4469that threatens press freedom in this country.'').4470---------------------------------------------------------------------------4471    This proceeding is a farce. Chairman Carr long ago made up his mind4472to dismantle what's left of the Commission's ownership rules, and made4473it abundantly clear both before the Media Bureau issued this Notice\5\4474and before the November 2024 election in his political campaigning4475benefitting then-candidate Trump.\6\4476---------------------------------------------------------------------------4477    \5\ See, e.g., George Winslow, ``FCC's Carr Calls Station Ownership4478Caps `Arcane' and `Artificial,' '' TV News Check (May 7, 2025) (quoting4479Carr in an interview stating, ``we have these arcane, artificial limits4480on how many TV stations any one company can own. But of course, that4481doesn't apply to big tech. So you have, you know, relatively small TV4482station groups that are competing with Google and Facebook and others4483in the advertising part. So I want to ultimately empower those local4484stations and, frankly, constrain some of the power of those national4485programmers.''). As we discuss below, the notion that local TV chains4486compete in the same economic product market as online search and social4487media firms is both wrong as a matter of basic economics, and also4488unmoored from the Communications Act's public interest policy framework4489applied to firms that are given government-sanctioned monopoly control4490over this portion of the public airwaves.4491    \6\ See, e.g., Joshua Benton, ``What would Project 2025 do for (or4492to) journalism? From defunding NPR and PBS to kicking reporters out of4493the White House, it's an array of conservative priorities and Trumpian4494retreads,'' Nieman Lab (Sept. 25, 2024).4495---------------------------------------------------------------------------4496    Large broadcast TV firms are already moving ahead with deals,\7\4497knowing this Commission will grant waivers of its remaining ownership4498rules,\8\ which--because of the roadblock to autocracy known as legal4499due process--cannot be immediately dismantled,\9\ even as the Chairman4500strains to find more and more streamlined ways to ``delete, delete''4501important public safeguards.4502---------------------------------------------------------------------------4503    \7\ Though the Commission's local multiple ownership rule still4504nominally prohibits top-four co-ownerships, TV station groups are4505banking on waivers and ploughing ahead with the formation of new4506duopolies. See, e.g., Michael Johnson, Justin Nielson & Mike Reynolds,4507``Gray Media and Scripps TV station swaps could be a precursor to more4508dealmaking,'' S&P Glob. Market Intel. (July 11, 2025) (``In a deal that4509could set the stage for similar transactions, Gray Media Inc. and The4510E.W. Scripps Co. intend to swap stations in five small and mid-sized4511markets. The moves will bolster the companies' strategic positions in4512these markets and create duopolies at a time when the broadcast4513industry is pushing for relaxation or changes to decades-old rules that4514have limited ownership and reach. . .With this pending transaction,4515Scripps President and CEO Adan Smyson has indicated that deal approval4516will likely occur through a waiver.'').4517    \8\ See Comments of Perry A. Sook, Founder, Chairman & CEO, Nexstar4518Media Group, Inc., Nexstar Q1 2025 Investor Call (May 8, 2025) (Sook Q145192025 Comments) (``Obviously, any action that Congress would take would4520put whatever those rule changes were out of reach of judicial review,4521which would be nice as well. But I also think that the Chairman has4522indicated his willingness to consider waivers during either the4523pendency of rule-making or waivers just in general. So I think you'll4524see all of those levers be pushed as time goes on this year, and I do4525think you'll see M&A activity come into focus as the year goes on.'').4526Sook was then asked, ``are you comfortable sort of putting pen to paper4527and beginning to transact when the process is at that phase, but maybe4528does still face some challenges in the courts?''--to which he answered,4529``as it relates to your question, would we be willing to put pen to4530paper during the pendency of an NPRM, I think, again, depends on the4531circumstances and having a willing counterparty that was willing to do4532so as well. But I think you've seen this company take risk, acceptable4533risk, calculated risk for an opportunity. So I don't think you'd see4534any change in our behavior as we move through this year and the4535deregulation of our industry.'' Id.4536    \9\ See, e.g., Johnson et al., supra note 7; Comments of4537Christopher S. Ripley, President & CEO, Sinclair, Inc., Q1 20254538Investor Call (May 7, 2025) (``That said, in terms of M&A in the4539meantime, just the rules that we have on the books today. Which include4540things like the UHF discount, which include ownership of two big fours4541subject to a big four waiver, but it's--the rules as they exist today4542do actually afford most players, including Sinclair, a significant4543amount of flexibility for M&A. So I think that, at least from our4544perspective, you're going to see more activity from us. You've already4545seen some, right? We announced a sale of five markets, a station swap--4546but you're going to start seeing more in the weeks to come, we will4547start filing for some of the JSA buy-ins that I've been talking about4548before, and that's a very accretive trade that should add tens of4549millions of dollars to our bottom line with very little cash out the4550door. I think station swaps are going to happen in the meantime, while4551we wait for some of these rules to change and even large-scale M&A or4552mergers, are on the to-do list, I think, for many broadcasters and I4553don't think many and depending on the situation, I just don't4554necessarily have to wait for the rules to change.'') (emphasis added).4555---------------------------------------------------------------------------4556    The only price for consolidation is bending the knee, and the line4557starts outside of the FCC Chairman's office. Trump's vanity and4558autocratic demands seemingly have no bounds, and Carr apparently has no4559qualms about satisfying them. Carr's grossly partisan and deeply4560hypocritical water-carrying for Trump have forever stained the agency,4561making it clear that the Commission is no longer independent, impartial4562or fair. Carr once suggested of elected Democrats' actions that their4563alleged questioning regarding ``a private entity's decision about what4564news to carry cannot be reconciled with bedrock principles of free4565speech and journalistic freedom.'' \10\ He said their inquiry was ``a4566chilling transgression of the free speech rights that every media4567outlet in this country enjoys,'' because ``[a] newsroom's decision4568about what stories to cover and how to frame them should be beyond the4569reach of any government official, not targeted by them.'' \11\ My how4570times have changed, now that Carr is the one doing the targeting at4571this president's bidding.4572---------------------------------------------------------------------------4573    \10\ Office of Commissioner Brendan Carr, FCC Commissioner Carr4574Responds to Democrats' Efforts to Censor Newsrooms, FCC (Feb. 22,45752021).4576    \11\ Id.4577---------------------------------------------------------------------------4578    Chairman Carr has made it known that every FCC-licensed firm's4579continued existence will now be contingent upon that company's4580editorial and internal personnel decisions aligning with the White4581House's wishes.\12\ Carr's actions disregard the First Amendment and4582the Communications Act.\13\ Mob-style government is back, and this time4583without the need to face the electorate again unless a ``Trump 2028''4584run defies yet another constitutional provision, the administration is4585unshackled from any pretense of respect for the laws and institutions4586like the First Amendment that actually make America unique.\14\4587---------------------------------------------------------------------------4588    \12\ See Michael J. Socolow, ``ABC and CBS settlements with Trump4589are a dangerous step toward the commander in chief becoming the editor-4590in-chief,'' Nieman Lab (July 15, 2025) (``It's not certain what the ABC4591and CBS settlements portend, but many are predicting they will produce4592a `chilling effect' within the network news divisions. Such an outcome4593would arise from fear of new litigation, and it would install a form of4594internal self-censorship that would influence network journalists when4595deciding whether the pursuit of investigative stories involving the4596Trump administration would be worth the risk.''). This article was4597written shortly before the Commission's final approval of the Skydance-4598Paramount merger, an order that desecrates the First Amendment by4599conditioning the government's approval of the license transfer on4600Skydance's installation of an ombudsman to monitor CBS's news content4601to ensure it doesn't anger Donald Trump, even though there's a lengthy4602history of basic facts upsetting his fragile narcissistic ego. See4603Ashley Belanger, ``Skydance deal allows Trump's FCC to `censor speech'4604and `silence dissent' on CBS,'' Ars Technica (July 25, 2025); see also4605Comments of The Foundation for Individual Rights and Free Expression at46067-8, MB Docket No. 25-73 (filed Mar. 7, 2025) (``[T]he Commission's4607request for public comment lacks any legitimate regulatory rationale,4608but its realpolitik purpose is sadly transparent. This proceeding is4609designed to exert maximum political leverage on the CBS network at a4610time when President Trump is engaged in frivolous litigation against it4611over the same 60 Minutes broadcast, with the FCC using other regulatory4612approvals the network needs to exert added pressure. This is not just4613unseemly, it is precisely the sort of unconstitutional abuse of4614regulatory authority the Supreme Court unanimously condemned in NRA v.4615Vullo There is a name for this kind of thing--it is called a show4616trial. When proceedings become a performative exercise conducted to4617further a political purpose, they forfeit any claim to legitimacy. Show4618trials tend to be retributive rather than corrective and are designed4619to send a message, not just to their unfortunate victims, but as a4620warning to other would-be transgressors. There is a dark and deadly4621history of such showcase proceedings in authoritarian regimes around4622the world, ranging from Stalin's purges of perceived political4623opponents to China's trials of `rioters and counterrevolutionaries'4624after the 1989 Tiananmen Square protests. In our own country, similar4625tactics were employed during the Red Scare with investigations and4626hearings aptly described by the Chairman of the House Committee on Un-4627American Activities as `the best show the committee has had yet.' Those4628who staged the proceedings `were not seeking justice but staging a show4629trial to accuse, indict, and punish.' And while the stakes of a sham4630FCC proceeding obviously differ, the perversion of the rule of law is4631the same.'') (internal citations omitted).4632    \13\ Chairman Carr's actions in his baseless CBS 60 Minutes ``news4633distortion'' investigation, which was launched during the review of the4634Skydance-Paramount merger, along with the final deal approval amount to4635a backdoor violation of Section 326. See 47 U.S.C. Sec. 326 (``Nothing4636in this Act shall be understood or construed to give the Commission the4637power of censorship over the radio communications or signals4638transmitted by any radio station, and no regulation or condition shall4639be promulgated or fixed by the Commission which shall interfere with4640the right of free speech by means of radio communication.''); see also4641Comments of Free Press, MB Docket No. 25-73, at 32-33 (filed Mar. 7,46422025).4643    \14\ Of course, Trump's first term also posed threats to press4644freedom and open Internet policies as well, along with a slew of other4645harms. Amidst a flurry of open corruption and norms violations in this4646second Trump term, it is all but forgotten that the Trump4647administration already secured a deal with one of the largest U.S.4648local TV chains ahead of his first term. See, e.g., Josh Dawsey & Hadas4649Gold, ``Kushner: We struck deal with Sinclair for straighter4650coverage,'' Politico (Dec. 16, 2016).4651---------------------------------------------------------------------------4652    Chairman Carr insists that his quid pro quo exercise of power and4653intrusion into the First-Amendment-protected editorial decisions of the4654news media is simply required to restore ``trust'' in the media, even4655as he ominously notes that ``we will be watching.'' \15\ But it is not4656the greater public who express a decline in trust of the media; this4657distrust is heavily partisan. It is a view widely held by Republican4658Party voters who have had their minds poisoned against journalists,4659scientists, civic institutions, people of color, LGBTQ+ persons,4660Democrats, any Republicans who investigated the January 6, 20214661insurrection, sexual assault victims, and any other groups or4662individuals that Fox News deems worthy of hating (see Figure 1).4663---------------------------------------------------------------------------4664    \15\ See Ted Johnson, `` `Trump Transaction Tax': Skydance's FCC4665Saga Raises Fears That It's The Template For Future Media Merger4666Reviews,'' Deadline (July 25, 2025).4667---------------------------------------------------------------------------4668       Figure 1: Distrust in the Media by Political Party ID \16\4669---------------------------------------------------------------------------4670    \16\ See Megan Brenan & Lydia Saad, ``Five Key Insights Into4671Americans' Views of the News Media,'' Gallup (Feb. 27, 2025).46724673[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]46744675    The Chairman's intrusion into CBS News' editorial decisions, his4676hassling of public media stations, and his thuggish ``investigation''4677of NBC are not going to restore anyone's trust in the news media.\17\4678But query whether that is truly his goal. Much of the right-wing media4679``entertainment'' ecosystem (left untouched by Carr) amounts to4680propaganda and demonstrable falsehood,\18\ and constantly feeds viewers4681a distorted version of reality they wouldn't readily find from4682legitimate journalism operations.\19\ Though now with the Commission's4683Skydance-Paramount ``deal,'' there is legitimate reason to question4684whether other established outlets have crafted their news coverage to4685curry favor with Trump as well, or to not run afoul of the president4686and his FCC henchman.4687---------------------------------------------------------------------------4688    \17\ See, e.g., Austin Fuller, ``FCC chair requests investigation4689into NPR, PBS underwriting,'' Current (Jan. 30, 2025); see also ``FCC4690Chairman Opens Inquiry Into Comcast-NBC Affiliate Practices With Local4691Broadcasters,'' Newsmax (July 29, 2025).4692    \18\ See, e.g., Dan Froomkin, ``Fox News isn't news: A new study4693suggests Fox News viewers aren't just manipulated and misinformed--they4694are literally being made ignorant by their consumption habits,'' NBC4695News (Apr. 9, 2022).4696    \19\ See, e.g., David Folkenflik, ``You Literally Can't Believe The4697Facts Tucker Carlson Tell You. So Say Fox's Lawyers,'' NPR (Sept. 29,46982020); David Bauder, Randall Chase & Geoff Mulvihill, ``Fox, Dominion4699reach $787M settlement over election claims,'' Associated Press (Apr.470018, 2023) (``Dominion set out to prove in the lawsuit that Fox acted4701with malice in airing allegations that it knew to be false, or with4702`reckless disregard' for the truth. It presented volumes of internal e-4703mails and text messages that showed Fox executives and personalities4704saying they knew the accusations were untrue, even as the falsehoods4705were aired on programs hosted by Maria Bartiromo, Lou Dobbs and4706Jeannine Pirro. Records released as part of the lawsuit showed that Fox4707aired the claims in part to win back viewers who were fleeing the4708network after it correctly called hotly contested Arizona for Democrat4709Joe Biden on election night. One Fox Corp. vice president called them4710`MIND BLOWINGLY NUTS.' During a deposition, Murdoch testified that he4711believed the 2020 election was fair and had not been stolen from4712Trump.'').4713---------------------------------------------------------------------------4714    The late Speaker of the House Tip O'Neill famously quipped that4715``all politics is local.'' Whatever the ultimate truth of that4716statement, it is certainly the case that local broadcast TV news4717stations (and their websites) \20\ are the dominant source that4718Americans use to inform themselves about electoral politics.\21\4719Certainly all broadcast television is local, and the privilege to use4720these portions of the public airwaves for constitutionally protected4721speech is limited to very few speakers because broadcast spectrum4722remains scarce.4723---------------------------------------------------------------------------4724    \20\ ``2024 Local Broadcast TV News Study,'' TVB (2025) (``There is4725duplication between local broadcast TV news viewers and those who4726access local broadcast TV station news websites/apps. 76 percent of TV4727station news website/app users also view local TV news on TV. 464728percent of TV station news viewers also access websites/apps. Local4729broadcast TV news is the #1 source for news, not only for local news,4730but for all news in general.'') (emphasis added).4731    \21\ See, e.g., Elisa Shearer et al., ``Americans Changing4732Relationship with Local News,'' Pew Rsch. Ctr. (May 7, 2024); Elisa4733Shearer et al., ``Americans Views of 2024 Election News,'' Pew Rsch.4734Ctr. (Oct. 10, 2025); Danilo Yanich & Benjamin E. Bagozzi, ``Reusing4735the News: Duplication of Local Content'' at 6-7, University of4736Delaware, (May 2025) (``Yanich 2025 Study'') (``Americans use several4737sources for local news. Still, almost two-thirds (64 percent) get local4738news from TV news stations, more than online forums (52 percent); radio4739(52 percent) or daily newspapers (33 percent). However, those data4740obscure an important reality: the stories that are consumed online are4741overwhelmingly produced by legacy mass media sources. For example,4742almost one-quarter of the public who viewed local TV news in 2019 did4743so online. For daily newspapers, that proportion was even higher, at 434744percent. In 2024, the proportion of online use by local television4745consumers rose to 38 percent. That pattern is evident in the prominence4746of newspapers and local television websites in television markets. The4747size of the market affects the prominence of newspapers and television4748as the main sources of local news. In the largest 22 markets in the4749country (excluding New York and Washington, DC, with their national4750newspapers), local newspaper websites were the most popular in 14 of4751them; local TV websites led in the remaining 8 markets. Further, that4752dominance extended to a sample of 37 smaller television markets4753(between #25 and #150), where local television led in 23 and local4754newspapers led in 13 markets.'') (internal citations omitted).4755---------------------------------------------------------------------------4756    This is why this proceeding--one that ignores the congressionally-4757set national cap limit--threatens democracy and freedom. Chairman Carr4758is placing a ``for-sale'' sign on the public's airwaves, and inviting4759media companies to monopolize the local news markets as long as they4760agree to display political fealty to Donald Trump and the MAGA4761movement. These and other Trump administration actions have landed the4762U.S. ``on a watchlist for urgent concern over the health of its civic4763society, alongside Turkey, Serbia, El Salvador, Indonesia and Kenya.''4764\22\4765---------------------------------------------------------------------------4766    \22\ See Betsy Reed, ``US placed on rights watchlist over health of4767its civil society under Trump,'' The Guardian (July 30, 2025) (`` `The4768United States appears to be sliding deeper into the quicksands of4769authoritarianism. Peaceful protests are confronted with military force,4770critics are treated as criminals, journalists are targeted, and support4771for civil society and international cooperation have been cut back,'4772Mandeep Tiwana, Civicus's secretary general, said in a statement. . . .4773Tiwana also pointed to the Trump administration's latest attacks4774against media networks, including funding restrictions on public4775broadcast stations including PBS and NPR.'').4776---------------------------------------------------------------------------4777    Perhaps Chairman Carr believes this despicable use of executive4778power by his own party won't one day be turned around, and used by4779other partisans against Trump and his ideological brethren. However, by4780opening the door to broadcast TV monopolization, Carr will have4781unleashed a force that is near impossible to control. Billionaires have4782recently gone on a spree of buying local media outlets. Most of those4783billionaires have largely expressed fealty towards Donald Trump and4784MAGA, but not all (much to the Chairman's disdain).\23\ But as Elon4785Musk's more recent actions show, oligarchs answer to no one.\24\4786Handing even more media control to a handful of conglomerates and4787billionaires already so dominant in the space is a wildly dangerous4788idea no matter who holds the presidency, even as Trump and his captured4789FCC have tightened their grip on what those media moguls do and say for4790now.\25\ And as we explain in the section below, doing so by increasing4791or eliminating the broadcast TV national audience reach cap set by4792Congress is outside of this Chairman's authority.4793---------------------------------------------------------------------------4794    \23\ In a comment made during an appearance on Fox News last fall,4795Carr played to his audience's predispositions, stating that ``for too4796long in this government, particularly over the last couple of years,4797your last name dictated how the government treated you If your last4798name was Soros, well, the Commission bent over backwards and gave you a4799special, unprecedented Commission-level shortcut to buy 200 radio4800stations. If your last name was Musk, then you lost $800 million4801contracts that you lawfully got.'' Kristen Altus, ``Trump's pick for4802FCC chairman vows to take `very hard look' at broadcast operations,4803Soros radio takeover,'' Fox News (Nov. 24, 2024).4804    \24\ See, e.g., Dave Smith, ``Elon Musk says Trump `is in the4805Epstein files. That is the real reason they have not been made public,'4806'' Fortune (June 5, 2025).4807    \25\ See generally Tim Karr, ``A More Perfect Media: Saving4808America's Fourth Estate from Billionaires, Broligarchy and Trump,''4809Free Press (July 2025).4810---------------------------------------------------------------------------4811II. The Commission Does Not Have Authority to Increase or Eliminate the4812        National Audience Reach Cap.4813A. Congress Set a Specific 39 Percent National Audience Reach Limit in4814        the Consolidated Appropriations Act of 2004. Only Congress Can4815        Change this Number.4816    The law is rarely as clear as it is on the central issue of this4817proceeding. Congress specifically set the national audience reach limit4818for broadcast television licensees (the ``national cap'') at 39 percent4819of U.S. television households.\26\ Contemporaneous reporting suggested4820that Congress had definitively set the cap, and precluded the FCC from4821altering it\27\--a conclusion with which consumer advocates\28\ and4822broadcasters themselves\29\ repeatedly agreed. Following the plain and4823uncontroversial meaning of this congressional enactment, as several of4824the largest broadcast conglomerates in the country have long4825interpreted it, ought to be simple for a Chairman that likes to don the4826guise of a humble regulator.4827---------------------------------------------------------------------------4828    \26\ See Consolidated Appropriations Act of 2004, Pub. L. No. 108-4829199, Sec. 629(1), 118 Stat. 3 (2004) (``CAA'').4830    \27\ See, e.g., Frank Ahrens, Democrats Decry `Compromise' on FCC4831Rule, Wash. Post (Nov. 25, 2003), archived at https://archive.ph/ambG54832(``The new language means that the cap would no longer be set by4833regulation but by Federal law, making it more difficult to challenge in4834court. Several media companies have already had success in getting4835courts to block enforcement of the existing FCC regulations, in part4836because the limits are not spelled out in law.'').4837    \28\ See, e.g., Comments of Free Press at 5-6, MB Docket No. 13-2364838(filed Dec. 16, 2013).4839    \29\ For example, when Sinclair was worried a different FCC might4840lower the 39 percent figure, it told the Commission ``[t]he CAA also4841stripped the FCC of its authority to modify the 39 percent cap by4842explicitly carving out the ownership cap from the FCC's statutorily-4843mandated review process.'' Comments of Sinclair Broadcast Group at 6,4844MB Docket No. 13-236 (filed Dec. 16, 2013). Likewise, in 2013 ION Media4845argued that the national ownership cap was foreclosed from future4846revision by the Commission, noting that CAA's Section 629 ``stands as4847an ongoing directive to the FCC to maintain the national ownership cap4848at 39 percent.'' Comments of Ion Media Networks at 12, MB Docket No.484913-236 (filed Dec. 16, 2013). And at the time, Fox Broadcasting argued4850that the CAA ``unequivocally converted the Cap into a statutory4851limitation of 39 percent potential audience reach,'' and that ``these4852efforts were designed to ensure that the FCC would have no further4853independent authority to modify the Cap.'' Comments of 21st Century4854Fox, Inc. and Fox Television Holdings, Inc. at 2, MB Docket No. 13-2364855(filed Dec. 16, 2013).4856---------------------------------------------------------------------------4857    Yet here we are with a request from that same Chairman to refresh4858the record of an eight-year-old proceeding, in which the changing4859external market conditions are simply not germane to the law. As former4860Commissioner Mike O'Rielly noted in 2016, the national ownership cap4861``remains one of the few media ownership rules specifically set by4862statute and the only one exempted from the Quadrennial Review process4863governing the other ownership rules, in order to protect a tenuous4864compromise from the whims of the Commission.'' \30\ Rejecting the too-4865cute-by-half argument that Congress's action in the Consolidated4866Appropriations Act in 2004 (``CAA'') simply removed the cap from the4867Quadrennial Review proceeding but not from other Commission revisions,4868Commissioner O'Rielly noted that ``such a reading is preposterous as it4869would effectively create one of the biggest backdoors in the history of4870legislating.'' \31\4871---------------------------------------------------------------------------4872    \30\ Amendment of Section 73.3555(e) of the Commission's Rules,4873National Television Multiple Ownership Rule, MB Docket No. 13-236,4874Report and Order, 31 FCC Rcd 10213 (2016) (``UHF Discount Repeal4875Order'') (Dissenting Statement of Commissioner Michael O'Rielly).4876    \31\ Amendment of Section 73.3555(e) of the Commission's Rules,4877National Television Multiple Ownership Rule, MB Docket No. 17-318,4878Notice of Proposed Rulemaking, 32 FCC Rcd 10785 (2017) (``2017 UHF4879Discount NPRM'') (Statement of Commissioner Michael O'Rielly).4880---------------------------------------------------------------------------4881    It may be tempting for some of the broadcasters who argued a few4882short years ago that the Commission had no authority to change the4883national cap to now change their own tune, because they see an4884administration ostensibly willing to raise or eliminate that cap4885instead of lowering it. As we discuss below, those regulatory favors4886will not be free, as the Trump FCC and Brendan Carr have taken every4887opportunity to strain the First and Fourteenth Amendments and exact an4888exorbitant political price alongside literal bribes to get deals4889approved.4890    Yet it's remarkable how proponents of lifting the cap now must4891contort themselves to make this legal argument. As Commissioner4892O'Rielly described last time around, it requires people to believe that4893the FCC is free to change any number set by Congress itself unless4894Congress also wrote into the law ``and the agency can't change this4895figure either.'' That kind of drafting requirement would make a mockery4896of almost every clear pronouncement in statute. Congress need not4897specify ``and we really mean it'' in the law, by taking the extra step4898of explicitly disallowing agency changes to its rules.\32\ Yet that's4899essentially what Congress did in this instance, writing a ``no-4900backsies'' policy into the admittedly unusual structures of4901forbearance, the media ownership rules, and the quadrennial review.4902---------------------------------------------------------------------------4903    \32\ Cf. UHF Discount Repeal Order, 31 FCC Rcd 10213, at4904 21. The4905Wheeler FCC suggested not only that it could modify or eliminate the4906UHF discount calculation, but that it even had ``the authority to4907modify the national audience reach cap'' more generally, because ``no4908statute bars the Commission from revisiting the cap. . .in a rulemaking4909proceeding so long as such a review is conducted separately from a4910quadrennial review of the broadcast ownership rules pursuant to Section4911202(h) of the 1996 Act.'' As we explain below, this view is incorrect4912when it comes to the cap figure set by Congress itself as opposed to4913the Commission's home-made UHF discount. Contrary to Commissioner4914O'Rielly's assertion on this specific point in his 2017 UHF Discount4915NPRM statement, Free Press never made any such argument with respect to4916the 39 percent national audience reach figure itself. See Comments of4917Free Press at 6 n.8, MB Docket No. 17-318 (filed Mar. 19. 2018).4918---------------------------------------------------------------------------4919    Indeed, the manner by which the current national cap came to be is4920a rare example of Congress swiftly acting to directly and unambiguously4921overrule Commission action. When Congress overhauled the Communications4922Act with the Telecommunications Act in 1996, it placed a 35-percent4923limit on any broadcast television license holder's national reach.\33\4924In 1998, the Commission retained this cap in its first biennial4925review,\34\ a decision that the D.C. Circuit remanded in the Fox I case4926because the Commission had failed to show that retaining the specific492735-percent limit was in the public interest pursuant to the court's4928understanding of the then-biennial review requirements in Section4929202(h) of the 1996 Act.\35\ In response to this remand and subsequent4930agency review, the Commission then increased the cap to 45 percent in4931July 2003.\36\4932---------------------------------------------------------------------------4933    \33\ Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.493456, Sec. 202(c)(1)(B) (1996).4935    \34\ 1998 Biennial Regulatory Review of the Commission's Broadcast4936Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the4937Telecommunications Act of 1996, MB Docket No. 18-349, Report and Order,493815 FCC Rcd 11058, 11072-7549394940 25-30 (2000) (``1998 Biennial Review4941Order'').4942    \35\ Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1042-434943(D.C. Cir. 2002) (``Fox I'').4944    \36\ 2002 Biennial Regulatory Review--Review of the Commission's4945Broadcast Ownership Rules, GC Docket No. 02-277, Report and Order, 184946FCC Rcd 13620,4947 583 (2003) (``2002 Biennial Review Order'').4948---------------------------------------------------------------------------4949    Mere days later, the FCC's action was met by a rapid and stern4950Congressional rebuke,\37\ led by Senators Ted Stevens (R-AK), Trent4951Lott (R-MS), and Byron Dorgan (D-ND).\38\ After the bicameral4952congressional actions and resolution of disapproval that immediately4953followed the FCC's 2003 decision, Congress's eventual response\39\ in4954the CAA passed in early 2004 consisted of five clear actions. That law4955moved the cap to 39 percent,\40\ and set parameters for how firms4956exceeding the cap should come into compliance through timely4957divestitures;\41\ it barred the Commission from using its Section 104958forbearance authority to allow firms to exceed 39 percent national4959reach;\42\ it changed the omnibus biennial media ownership rule review4960requirement to a quadrennial review;\43\ and it barred the Commission4961from considering the national cap in the quadrennial review, clearly4962addressing and routing around the D.C. Circuit's decision in Fox I.\44\4963---------------------------------------------------------------------------4964    \37\ Ahrens, supra note 27 (``Many members of Congress and advocacy4965groups said the change would allow the big media companies to grow too4966big, potentially at the expense of local broadcasters. Sen. Ted Stevens4967(R-Alaska) added a rider to an omnibus spending bill under4968consideration that would fix the 35 percent cap in Federal law. In4969July, the House passed a spending bill with language identical to4970Stevens's.'').4971    \38\ On September 16, 2003, the Senate adopted a resolution of4972disapproval concerning the FCC's 2002 Biennial Review Order on a 55-404973basis. See Roll Call Vote 108th Congress 1st Session, Vote No. 348,4974concerning S.J.Res.17, ``A joint resolution disapproving the rule4975submitted by the Federal Communications Commission with respect to4976broadcast media ownership'' (2003); see also Frank Ahrens, Compromise4977Puts TV Ownership Cap at 39 percent, Wash. Post (Nov. 25, 2003),4978archived at https://archive.ph/FPaXR.4979    \39\ The Senate's final compromise on the national cap in the 20044980CAA first appeared in the Conference Report after the Senate adopted4981the CAA. See H.R. Rep. No. 108-401, at 98 (2003) (Conf. Rep.).4982    \40\ CAA Sec. 629(1).4983    \41\ Id. Sec. 629(2).4984    \42\ Id.4985    \43\ Id. Sec. 629(3).4986    \44\ Id.4987---------------------------------------------------------------------------4988    Despite this clear congressional intent to cement the national cap4989at 39 percent and remove it from the congressionally required review of4990all other media ownership rules, the current Commission is4991contemplating a transparently corrupt attempt to change that national4992cap and enable massive consolidation of local news markets by the4993Nation's biggest broadcast conglomerates. If it obliterates the4994national cap in this fashion, the Commission will be open for business:4995Broadcasters who wish to swap, sell, or buy TV licenses will need to4996gain approval from the FCC, an agency that is currently led by a4997radical ideologue who has repeatedly demonstrated his willingness to4998use the deal-approval process as a way to ensure fealty to Donald Trump4999and his fascist agenda. That means deal applicants must become5000supplicants to a dictatorial president, and show fealty by changing5001their corporate diversity policies\45\ as well as their editorial news5002coverage.\46\5003---------------------------------------------------------------------------5004    \45\ See, e.g., Karr, supra note 25 at 8.5005    \46\ Id. at 6, 17.5006---------------------------------------------------------------------------5007    To illustrate the unlawfulness of the big broadcasters' current5008push to have the Commission increase or eliminate the national cap,5009consider the following hypothetical: It is January 24, 2004, mere hours5010after President Bush signed the CAA into law setting the cap at 395011percent. Imagine that Chairman Powell then issued a new NPRM (outside5012of the Quadrennial Review) to increase the cap from 39 percent to 405013percent. It would have been the ultimate act of regulatory hubris, even5014if Chairman Powell had asked questions in this hypothetical NPRM about5015how the market had changed in the intervening months since Congress5016acted. No judge worthy of their robe would have blessed such a move.5017    The hypothetical is no less absurd today if we merely lengthen the5018time period between the CAA becoming law and the Commission issuing a5019public notice to revisit Congress's decision. It does not matter5020whether it is eight months, eight years, or eight decades since5021Congress put the ``39 percent'' figure into the law and directed the5022FCC to adopt this figure in its rules. Nor does it matter that a future5023FCC would take such potential action outside of the quadrennial review.5024In light of the Fox I history, the CAA's removal of the national cap5025from the quadrennial review was not merely a superfluous step designed5026to build just one additional speed bump for agency reconsideration.5027Congress set a specific value for national reach, and barred the FCC5028from substituting the agency's judgement for Congress's own.5029B. Though the Law Bars the Commission from Altering the 39 Percent5030        National Audience Reach Value, It Retains the Authority to5031        Determine How That Reach Is Calculated.5032    In the instant Notice, the Commission asks if it ``retains the cap5033in any form, should [the cap] include a UHF discount or any other form5034of discount?'' \47\ The premise of this question is off-base, as the50352004 CAA forbids the Commission from deciding not to retain the 39-5036percent value chosen by Congress. However, as the courts have affirmed,5037Congress left the manner by which a license holder's national reach is5038determined to the Commission's reasoned judgement (so long as5039alterations to that method are made outside of the quadrennial5040review).\48\5041---------------------------------------------------------------------------5042    \47\ Notice at 2.5043    \48\ Shortly after the CAA became law in 2004, the Third Circuit5044held that all objections to the Commission's 2002 action in the5045Biennial Review Order to change the national cap from 35 to 45 percent5046were rendered moot. However, the Third Circuit further held that the5047Commission retained authority to consider regulations defining the UHF5048discount outside of the context of the quadrennial review. See5049Prometheus Radio Project v. FCC, 373 F.3d 372, 397 (3d Cir. 2004)5050(``Prometheus I'') (``Although we find that the UHF discount is5051insulated from this and future periodic review requirements, we do not5052intend our decision to foreclose the Commission's consideration of its5053regulation defining the UHF discount in a rulemaking outside the5054context of Section 202(h). The Commission is now considering its5055authority going forward to modify or eliminate the UHF discount and5056recently accepted public comment on this issue. Barring congressional5057intervention, the Commission may decide, in the first instance, the5058scope of its authority to modify or eliminate the UHF discount outside5059the context of Sec. 202(h).'').5060---------------------------------------------------------------------------5061    When the Commission established the UHF discount in 1985, it did so5062based on the physical realities of UHF and VHF analog signal5063transmission and reception, and the former's limitations.\49\ In other5064words, the UHF discount was the best available method for calculating5065for a license holder's actual reach at a time when the overwhelming5066majority of U.S. households accessed broadcast stations via an5067antenna.\50\ Thus, the Commission's framing in the instant Notice is5068inappropriate because the UHF discount was never intended as an5069economic modification of the national ownership cap. Other than5070impacting how many people a single license actually is capable of5071reaching via over-the-air or pay-TV transmission pathways, changing5072market realities have nothing to do with the rationale for the5073discount; the discount was predicated solely on technological5074realities.\51\ And the DTV transition upended this technological5075reality, making the current discount an utter anachronism. As the5076Commission found in 2016, ``experience since the DTV transition5077demonstrates that UHF channels are equal, if not superior, to VHF5078channels for the digital transmission of television signals. Thus . .5079.the UHF discount can no longer be supported on technical grounds.''5080\52\5081---------------------------------------------------------------------------5082    \49\ See Amendment of Section 73.3555 of the Commission's Rules5083Relating to Multiple Ownership of AM, FM and Television Broadcast5084Stations, GN Docket No. 83-1009, Memorandum Opinion and Order, 100 FCC50852d 74, 88-94,50865087 33-44 (1985) (``1985 UHF Discount Order'').5088    \50\ In 1985, only approximately 32 million of the 87 million U.S.5089households subscribed to cable television service. See Television &5090Cable Factbook, Warren Comm'cns News, Inc., archived at https://5091archive.ph/z005A; see also Federal Reserve Bank of St. Louis, U.S.5092Census Bureau, Total Households (retrieved from FRED, July 11, 2025).5093    \51\ A licensee's actual reach is impacted by the market realities5094of pay-TV adoption (and carriage of a broadcast station on pay-TV5095systems). In other words, though the UHF vs. VHF signal disparity issue5096remained a technological reality until completion of the DTV5097transition, a UHF licensee's actual potential population reach via the5098combination of over-the-air and pay-TV distribution was some degree5099higher than simply a maximum potential reach of 50 percent of the5100television households in a given Designated Market Area (``DMA'').5101    \52\ UHF Discount Repeal Order, 31 FCC Rcd 10213, at5102 2.5103---------------------------------------------------------------------------5104    We note that when Congress set the national cap at 39 percent (55105years prior to completion of the DTV transition), it was well aware of5106the Commission's prior determination that ``the digital transition will5107largely eliminate the technical basis for the UHF discount.'' \53\ Thus5108there is no hidden meaning to be gleaned from the fact that Congress5109did not mention the UHF discount in the 2004 CAA; to Congress, limiting5110a single licensee's actual potential reach to 39 percent was the sole5111policy objective.\54\ The Commission's ongoing use of the cap some 165112years after completion of the DTV transition is methodologically5113indefensible, especially given the technological superiority of UHF5114digital signal transmission compared to VHF digital coverage. To5115faithfully comply with the law, the Commission should adopt a reach-5116calculation methodology that better captures a licensee's actual5117potential reach, and enforce the statutorily imposed 39-percent limit5118based on that more technologically defensible methodology.5119---------------------------------------------------------------------------5120    \53\ 2002 Biennial Review Order, 18 FCC Rcd 13620, at5121 591 (``[I]t5122is clear that the digital transition will largely eliminate the5123technical basis for the UHF discount.'').5124    \54\ We use the term ``potential'' here to reflect that the 39-5125percent national reach value was established without regard to whether5126or not a household does tune into a given station, but instead what5127broadcast TV signals a given household could tune into.5128---------------------------------------------------------------------------5129III. Limiting Broadcast Television Licensees' National Reach Remains5130        Critical to Promoting Competition, Localism, and Diversity.5131A. Local TV News Stations Have a Disproportionate Impact on Public5132        Opinion and Voting Behavior.5133    As noted in the previous section, only Congress can change the5134national ownership cap. Therefore, any discussion of the supposed5135rationale for the policy changes the Commission here contemplates is5136irrelevant. But the national cap itself remains an incredibly important5137policy, and its elimination would further harm the health of our5138democracy.5139    The axiom that ``a well-informed electorate is a prerequisite to5140democracy'' is often attributed to Thomas Jefferson,\55\ though the5141actual quote is even more salient: ``wherever the people are well5142informed they can be trusted with their own government; that whenever5143things get so far wrong as to attract their notice, they may be relied5144on to set them to rights.'' \56\ A functioning democracy that is5145healthy enough to thwart totalitarian forces requires the free flow of5146news and information from diverse and independent sources, as well as5147representatives who act with integrity and courage to uphold the rights5148of all. The public requires this diverse array of high-quality5149journalism in order to inform itself on pressing political issues at5150both the national and local levels. This principle is the basis of the5151First Amendment, and remains as true today as when that amendment was5152conceived in the late 18th century.5153---------------------------------------------------------------------------5154    \55\ See, e.g., Moshe Marvit, ``A Well-Informed Electorate Is a5155Prerequisite for Democracy,'' Century Found. (May 2, 2013).5156    \56\ Letter from Thomas Jefferson, to Richard Price (Jan. 8, 1789)5157(on file with the Library of Congress).5158---------------------------------------------------------------------------5159    In fact, even with the Internet having torn down publishing5160barriers, this principle is more important than ever to protect and5161promote. Changes in technology and advertising-supported media markets5162do not eliminate the need for media ownership limits, especially the5163national cap. Despite the prominence of social media and online5164streaming, local television stations remain the most important sources5165of local news and information.\57\ Indeed, with the secular decline of5166the local newspaper industry and dramatic decline in the number of5167working print journalists,\58\ local broadcast television stations are5168in many places the only well-resourced producers of local news. With5169the President and Republican-led Congress's recent callous move to5170defund public broadcasting, local commercial television stations will5171be even more dominant as a source for local news.\59\5172---------------------------------------------------------------------------5173    \57\ Yanich 2025 Study at 4-5.5174    \58\ According to Free Press's analysis of the Bureau of Labor5175Statistics Occupational Employment Survey, the total number of persons5176employed in the occupation category ``news analysts, reporters and5177correspondents'' working at newspaper publishers declined from 36,2705178in 2002 to 15,250 in 2023. See Bureau of Labor Statistics, Occupational5179Employment and Wage Statistics, Occupational Employment Survey.5180    \59\ See, e.g., Timothy Karr, ``Defunding Public Media Makes5181Perfect Sense If Destroying Democracy Is the Goal,'' Free Press (July518218, 2025).5183---------------------------------------------------------------------------5184    Nothing about the changes in technology and in Americans' general5185media consumption habits has diminished local TV news' impact on5186voters. Certainly, the absolute deluge of candidate and Political5187Action Committee ads that fills the commercial time around local news5188broadcasts before every election is a testament to how local TV impacts5189and shapes public opinion.\60\ According to Pew, ``regular voters'5190pathway of choice is local TV,'' and local TV was by far the most-used5191news source among survey respondents, including people who describe5192themselves as ``highly active'' in local politics.\61\ A study by5193Gallup and the Knight Foundation reported that ``Americans who5194primarily access news online are less likely than those who mostly rely5195on newspapers or TV to say they are highly knowledgeable about issues5196facing their local community. . . . Differences by media platform are5197smaller or nonexistent when people are asked how knowledgeable they are5198about issues facing the country as a whole.'' \62\5199---------------------------------------------------------------------------5200    \60\ See, e.g., ``The 2024 Voter Funnel Study,'' TVB (2025),5201archived at https://archive.ph/00h1t (``2024 Voter Funnel Study'')5202(``80 percent of respondents took some action after seeing/hearing a TV5203ad, including word of mouth, online use and even voting!'').5204    \61\ Michael Barthel, Jesse Holcomb, Jessica Mahone & Amy Mitchell,5205``Civic Engagement Strongly Tied to Local News Habits,'' Pew Rsch. Ctr.5206(Nov. 1, 2016).5207    \62\ ``American Views 2020: Trust, Media and Democracy: A Deepening5208Divide,'' Gallup & Knight Found (Nov. 9, 2020).5209---------------------------------------------------------------------------5210    The conclusions of these studies still hold today. According to a5211TVB survey of voters in nine swing states following the November 20245212election, ``TV was the most important influence throughout the voter5213decision process. This was true of all political parties and all age5214groups, as well as Hispanic and AA-Black voters. Of those that cited TV5215as most important in the awareness stage, seven out of ten picked5216broadcast TV over cable, eight out of ten for Democrats and AA-Black5217voters. For local news and information, the websites of choice were5218local TV stations' sites.'' \63\ Only eight percent of these swing-5219state voters cited social media as influencing them to vote for a5220candidate.\64\5221---------------------------------------------------------------------------5222    \63\ See 2024 Voter Funnel Study.5223    \64\ Id.5224---------------------------------------------------------------------------5225    We expect broadcasters to file comments in this proceeding with5226similar data reflecting the importance of local TV news; but where we5227will almost certainly disagree with them is in our assessment of the5228financial state of their industry, and of the impact of the national5229cap and consolidation on the news itself and the public who watches it.5230Broadcast-TV firms routinely lump their business in with local5231newspapers in policy discussions on local news (particularly those5232involving potential subsidies). But the financial trajectories of local5233print and local TV are in opposite directions.5234    Because print journalism has declined while broadcast revenues and5235profits have grown,\65\ local TV stations arguably have even more of a5236disproportionate impact on public opinion than they did when Congress5237fixed the national cap at 39 percent in 2004. Yet there's no indication5238that the Carr Commission even considers the negative impact that5239consolidation could have on the health of our democracy. For Chairman5240Carr, there apparently is one gigantic media market, and he's going to5241help his Republican-friendly broadcast TV chains further consolidate5242the airwaves, in order to supposedly help them compete with the big5243tech firms that dominate their respective online search and social5244media markets. Of course, it is patently ridiculous and economically5245ignorant to draw a formal market boundary around every single firm that5246generates revenues from advertising (as we discuss below in Section5247IV). But discarding the realities and economics of the local5248marketplace of ideas like Carr proposes, all to suit the interests of a5249small number of politically connected and profitable corporations, is5250simply not in the public interest. American communities will pay a5251hefty price if the Commission jettisons the national cap. Doing so5252would unleash market forces that diminish localism while giving a small5253number of for-profit corporations undue influence over the public5254through those companies' control over local news sources.5255---------------------------------------------------------------------------5256    \65\ See infra Section IV.5257---------------------------------------------------------------------------5258B. The National Cap and Local Broadcast Ownership Limits Remain Vital5259        Policies that Promote the Public Interest and Strike a Balance5260        Between Private Profits and Democracy's Needs.5261    Broadcasting is a unique form of media, in part because spectrum5262(or more colloquially, ``the public airwaves'') is a finite and scarce5263resource. This scarcity justifies government regulation,\66\ as does5264broadcasting's pervasiveness.\67\ In Red Lion, the Court held that5265``differences in the characteristics of new media justify differences5266in the First Amendment standards applied to them.'' \68\ Scarcity5267justified differential treatment for broadcasting because ``[w]here5268there are substantially more individuals who want to broadcast than5269there are frequencies to allocate, it is idle to posit an unabridgeable5270First Amendment right to broadcast comparable to the right of every5271individual to speak, write, or publish.'' \69\5272---------------------------------------------------------------------------5273    \66\ See Nat'l Broad. Co., Inc. v. United States, 319 U.S. 190, 2265274(1943).5275    \67\ In Pacifica, the Supreme Court noted that broadcast regulation5276is justified because of the medium's two distinct features:5277broadcasting is ``uniquely pervasive'' with broadcast signals reaching5278into private domiciles; and ``broadcasting is uniquely accessible to5279children,'' with broadcasters largely unable to age-gate specific5280programs. FCC v. Pacifica Found., 438 U.S. 726, 748-49 (1978).5281    \68\ Red Lion Broad. Co., Inc. v. FCC, 395 U.S. 367, 386 (1969).5282    \69\ Id. at 389.5283---------------------------------------------------------------------------5284    Nothing about the ongoing march of technology in the half-century5285since that case has changed this reality. Broadcast TV licenses remain5286incredibly scarce, and broadcast TV continues to have an outsized5287impact on democracy, even in the digital content age.\70\ Broadcast5288license holders have a unique statutory obligation to serve the public5289interest, convenience and necessity. This obligation to serve the5290interests of a local community of license implicates quite a bit more5291than simply airing a newscast filled with content produced for airing5292across multiple localities.\71\ The law--the Communications Act of52931934, along with the 1996 Telecommunications Act and its amendments to5294the 1934 Act, and the CAA's further amendments to it in 2004, all--5295require the FCC to pursue the goals of competition in broadcasting (not5296merely video), and to promote localism, diversity of opinion and5297diversity of ownership in broadcasting as well.\72\ In other words,5298broadcasting is a fundamentally distinct form of media, in terms of5299both the information market in which it resides and in legal terms too.5300---------------------------------------------------------------------------5301    \70\ The different advertising strategies during the 2024 national5302election cycle certainly reflect this reality. See, e.g., Shane5303Goldmacher & Nicholas Nehamas, ``Harris, With an Online Avalanche,5304Outspends Trump by Tens of Millions,'' N.Y. Times (Sept. 20, 2024)5305(``Mr. Trump is also being outspent on television--but by smaller5306margins. Part of that spending emphasis reflects Mr. Trump's own5307worldview. Mr. Trump, who starred in the network television show ``The5308Apprentice,'' has said privately that he thinks digital spending is a5309waste and has urged his campaign to spend more on TV, according to a5310person who has heard him make such remarks and insisted on anonymity to5311discuss his private comments.''); Kiara Alfonseca & Soo Rin Kim,5312``Trump and allies are pouring millions into anti-trans election ads as5313election nears,'' ABC News (Oct. 21, 2024) (``[T]he Trump campaign and5314Republican groups have spent more than $21 million on anti-trans and5315anti-LGBTQ television ads as of Oct. 9, nearly a third of roughly $665316million television ad spending during that time period, media tracking5317agency AdImpact told ABC News. However, transgender issues are among5318the least important issues motivating voters to head to the ballot box,5319according to a Gallup poll.'').5320    \71\ See infra Section III.E.b. (discussion of the growing trend of5321local broadcast news sharing within and across markets).5322    \72\ FCC v. Consumers' Rsch., 145 S.Ct. 2482, 2507 (2025) (``For we5323have long held that `the words ``public interest'' in a regulatory5324statute' do not encompass `the general public welfare' but rather `take5325meaning from the purposes of the regulatory legislation.' '' (citing5326NAACP v. FPC, 425 U.S. 662, 669 (1976) and N.Y. Cent. Sec. Corp. v.5327United States, 287 U.S. 12, 24-25 (1932)).5328---------------------------------------------------------------------------5329C. Promoting a Vibrant Marketplace of Ideas at the Local Level Requires5330        a Jurisprudence Standard Beyond Antitrust.5331    Broadcast-TV licenses are a special class of spectrum licenses;\73\5332and as with all such licenses, there tend to be far fewer licenses than5333potential speakers wishing to access these public airwaves. This5334scarcity, and the potential ``tragedy of the commons'' it creates,5335serve as the original impetus of the ``public interest, convenience and5336necessity'' language in the Act.\74\ The Commission's local multiple-5337ownership policies and Congress's statutory limitation on a broadcast-5338TV licenseholder's national reach act in conjunction to balance5339broadcasters' commercial incentives and the public's interest.5340---------------------------------------------------------------------------5341    \73\ Broadcast license holders are not common carriers, unlike5342Commercial Mobile Radio Service spectrum license holders. The latter5343transmit the speech of others, and are prohibited by law from unjustly5344or unreasonably discriminating against, or giving ``any undue or5345unreasonable preference or advantage to any particular person''5346accessing these portions of the public airwaves. Thus common carriers5347are important mediums that carry the public's speech. In contrast,5348broadcasters use the public airwaves to transmit their own First5349Amendment-protected speech. When they are granted exclusive access to5350this portion of the public airwaves for this purpose, they are5351privileged, which comes with the price of acting in the public5352interest. This exclusive license distinguishes broadcast TV firms from5353both common carriers and other media firms. See, e.g., Written5354Testimony of Matthew F. Wood, Policy Director, Free Press and the Free5355Press Action Fund, before the Congress of the United States House of5356Representatives Committee on Energy and Commerce, Subcommittee on5357Communications and Technology, ``From Core to Edge: Perspective on5358Internet Prioritization,'' at 29-30 (Apr. 17, 2018).5359    \74\ See Stuart A. Shorenstein & Lorna Veraldi, ``Defining the5360Public Interest in Terms of Regulatory Necessity,'' 17 J. Civ. Rts. &5361Econ. Dev. 45, 46 (2003) (recounting a report from Newton Minow5362concerning an interview with Sen. Clarence Dill, leading sponsor of the5363Radio Act of 1927: ``[Sen. Dill] and his colleagues . . . knew they had5364to have some legal standard with which to award licenses to some people5365while rejecting others, because there were not enough channels to go5366around. `A young man on the committee staff had worked at the5367Interstate Commerce Commission for several years,' Dill recalled, `and5368he said, ``Well, how about `public interest, convenience and5369necessity'? That's what we used there.'' That sounded pretty good, so5370we decided we would use it, too.' '').5371---------------------------------------------------------------------------5372    In other words, by preventing monopolization of the public5373airwaves, these policies promote the Act's goals of competition,5374localism, and diversity. This standard is rightly far more rigorous5375than the one at the center of an antitrust inquiry, which is concerned5376with price and market power alone. As the court in Prometheus I noted,5377``[t]he Commission ensures that license transfers serve public goals of5378diversity, competition, and localism, while the antitrust authorities5379have a different purpose: ensuring that merging companies do not raise5380prices above competitive levels.'' \75\5381---------------------------------------------------------------------------5382    \75\ Prometheus Radio Project v. FCC (``Prometheus I''), 373 F.3d5383372, 414 (3d Cir. 2004).5384---------------------------------------------------------------------------5385    The marketplace of ideas is fundamentally different from the5386marketplace for goods and services. The local news market that would5387result from elimination of the national cap would not be one that5388produces journalism in service of democratic values, such as an5389informed electorate and robust debate on issues of local and national5390importance. What's more, without a national cap, the local television5391market would not serve all audiences efficiently and fairly.\76\5392Broadcast-TV news firms have a strong incentive to maximize profit,5393which in today's media market favors maximizing share of the most5394frequent local TV news viewers, doing so at the lowest possible5395cost.\77\5396---------------------------------------------------------------------------5397    \76\ See infra Section III.D.5398    \77\ Recent survey-based research from the Shorenstein Center5399illustrates the real-world consequences of these economic incentives.5400See Thomas E. Patterson, ``Can They Do Good and Still Do Well? Local TV5401Stations and Communities' Information Needs'' 11, Harv. Kennedy Sch.5402Shorenstein Ctr. on Media, Pol. & Pub. Pol'y, (June 2025) (Shorenstein5403Center Study) (``A second news director worried that they understood5404only part of their community. `We have thorough research that provides5405clear direction to what television news viewers want to see in our5406newscasts,' he said. `But we have very little research focused on5407people who have elected not to watch television news. I worry that5408we're steering our content to the ``choir'' and not the congregation.'5409'').5410---------------------------------------------------------------------------5411    First Amendment jurisprudence for decades has supported the premise5412that media policy is about more than economics\78\ and concerns both5413the preservation of robust debate\79\ and the airing of a diversity of5414views\80\ on a broad swath of issues.\81\ What's more, the uniqueness5415and civic importance of local news requires policy makers to consider5416both the potential long-term and short-term effects of consolidation.5417Long-term effects include the neglect of certain issues, as well as5418increased vulnerability to government censorship.\82\ But the short-5419term and transitory effects are equally dangerous to democracy. Local5420TV news is a critical source of information for voters as they solidify5421their opinions in the final weeks of an election.\83\ What stories a5422licensee chooses to emphasize and explain at a substantive level, and5423what PAC attack ads they choose to accept, reject, or fact-check, can5424determine electoral outcomes.\84\ This necessitates a more careful5425regulatory approach for broadcast television ownership than a general5426antitrust, even if the geographic and economic product markets are5427properly defined.5428---------------------------------------------------------------------------5429    \78\ See, e.g., Associated Press v. United States, 326 U.S. 1, 205430(1945) (``The First Amendment, far from providing an argument against5431application of the Sherman Act, here provides powerful reasons to the5432contrary. That Amendment rests on the assumption that the widest5433possible dissemination of information from diverse and antagonistic5434sources is essential to the welfare of the public, that a free press is5435a condition of a free society. Surely a command that the government5436itself shall not impede the free flow of ideas does not afford non-5437governmental combinations a refuge if they impose restraints upon that5438constitutionally guaranteed freedom.''); Fox Television Stations, Inc.,5439v. FCC, 280 F.3d 1027, 1047 (D.C. Cir. 2002) (``An industry with a5440larger number of owners may well be less efficient than a more5441concentrated industry. Both consumer satisfaction and potential5442operating cost savings may be sacrificed as a result of the Rule. But5443that is not to say the Rule is unreasonable because the Congress may,5444in the regulation of broadcasting, constitutionally pursue values other5445than efficiency--including in particular diversity in programming, for5446which diversity of ownership is perhaps an aspirational but surely not5447an irrational proxy.'').5448    \79\ See, e.g., Red Lion, 395 U.S. at 390 (``It is the purpose of5449the First Amendment to preserve an uninhibited marketplace of ideas in5450which truth will ultimately prevail, rather than to countenance5451monopolization of that market, whether it be by the Government itself5452or a private licensee.''); Turner Broad. Sys., Inc. v. FCC, 512 U.S.5453622, 638-39 (1994) (``Turner I'').5454    \80\ See, e.g., Associated Press, 326 U.S. at 20.5455    \81\ See, e.g., Red Lion, 395 U.S. at 390.5456    \82\ While the potential for government censorship of private news5457media previously seemed like a distant memory from the 1918 Sedition5458Act (repealed in 1920), the Carr FCC's intrusion into broadcast5459licensees' editorial decisions marks a return to this unthinkable5460practice.5461    \83\ See, e.g., 2024 Voter Funnel Study.5462    \84\ While it is rare, broadcast stations have rejected PAC ads in5463the past. See, e.g., Scott Finn, ``Should TV Stations Refuse To Air5464Political Ads That Make False Claims?,'' NPR (Oct. 3, 2012) (noting5465several instances of broadcast stations refusing to air PAC ads);5466Timothy Karr, ``Left in the Dark: Local Election Coverage in the Age of5467Big-Money Politics'' 7, Free Press (Sept. 2012) (``Broadcasters in the5468markets that we studied devoted little to no airtime to segments that5469fact-checked the claims made in political ads. They spent no time5470investigating the organizations that funded the ads.'').5471---------------------------------------------------------------------------5472    Balancing a license holder's economic interest and the public's5473interest (while maintaining the critical firewall that keeps government5474from interfering with a license holder's editorial choices) requires5475structural ownership barriers. Market forces alone in a scarce physical5476medium simply will not result in ``the widest possible dissemination of5477information from diverse and antagonistic sources [that is] essential5478to the welfare of the public.'' \85\ Indeed, the Supreme Court5479articulated this ``positive vision'' of the First Amendment\86\ in Red5480Lion, where it ruled that ``[i]t is the right of the viewers and5481listeners, not the right of the broadcasters, which is paramount. . . .5482It is the right of the public to receive suitable access to social,5483political, aesthetic, moral and other ideas and experiences which is5484crucial here.'' \87\ As the high court said, ``the `public interest' in5485broadcasting clearly encompasses the presentation of vigorous debate of5486controversial issues of importance and concern to the public.'' \88\5487---------------------------------------------------------------------------5488    \85\ Associated Press, 326 U.S. at 20.5489    \86\ SAGE Encyclopedia of Journalism 1277-79 (Gregory A. Borchard,5490ed., Sage Publications 2d ed. 2022) (``A positive First Amendment5491approach insists that the government should have a more active role in5492promoting a better speech environment for citizens so that a healthier5493democracy can flourish Undergirding the vision of a positive First5494Amendment is the belief that media should represent a diversity of5495voices and viewpoints--and that government, backed by the First5496Amendment, should mandate access and create infrastructure that allows5497for multiple voices. From this view, the First Amendment permits the5498government to enact policies that ensure public access to important5499information and to media systems.'').5500    \87\ Red Lion, 395 U.S. at 390.5501    \88\ Id. at 385.5502---------------------------------------------------------------------------5503    Limits on media ownership are therefore based on the notion that5504``diversification of mass media ownership serves the public interest by5505promoting diversity of program and service viewpoints, as well as by5506preventing undue concentration of economic power.'' \89\ Furthermore,5507``the greater the diversity of ownership . . . the less chance there is5508that a single person or group can have an inordinate effect, in a5509political, editorial, or similar programming sense, on public opinion5510at the regional level.'' \90\5511---------------------------------------------------------------------------5512    \89\ FCC v. Nat'l Citizens Comm. for Broad., 436 U.S. 775, 7805513(1978); Prometheus I, 373 F.3d at 383 (citing Nat'l Citizens Comm. for5514Broad., 436 U.S. at 780).5515    \90\ Sinclair Broad. Grp., Inc. v. FCC, 284 F.3d 148, 160 (D.C.5516Cir. 2002) (internal citations omitted).5517---------------------------------------------------------------------------5518    In sum, the Commission's ownership policies are chiefly concerned5519with promoting competition, localism, and diversity in5520broadcasting.\91\ Economic concentration is only one of several dangers5521that the Communications Act as amended and the Commission's rules5522intend to avoid.\92\ Excessive influence over public opinion,5523diversity, and ensuring high-quality journalism and service to local5524communities are additional goals. Economic efficiency, already at the5525core of antitrust policy, is--and must be--a secondary concern to these5526core precepts of the Communications Act that governs this Commission's5527actions.5528---------------------------------------------------------------------------5529    \91\ See 2002 Biennial Regulatory Review--Review of the5530Commission's Broadcast Ownership Rules, MB Docket 02-277, Report and5531Order, 18 FCC Rcd 13620,5532 17 (2003) (``2002 Biennial Review Order'')5533(``We identified diversity, competition, and localism as longstanding5534goals that would continue to be core agency objectives in this5535area.'').5536    \92\ The Commission's concern about economic concentration of5537broadcast TV licenses is usually based on concerns about how this5538market power would impact the balance between broadcasters and5539multichannel video program distributors in their carriage negotiations.5540---------------------------------------------------------------------------5541D. The National Cap Is an Important Structural Tool that Mitigates5542        Large Ownership Groups' Market Incentives to Abandon Localism.5543    The physical realities of over-the-air transmission make5544broadcasting a local medium. Because of these physical realities, U.S.5545policy has long focused on ensuring that broadcasting serves the5546diverse needs of local communities.\93\ The Commission, Congress, and5547the Supreme Court have over the years noted the importance of local5548broadcast stations serving local communities, ``as an outlet for local5549self-expression.'' \94\ As the Court explained in Turner I, ``Congress5550designed this system of allocation to afford each community of5551appreciable size an over-the-air source of information and an outlet5552for exchange on matters of local concern. . . . [T]he importance of5553local broadcasting `can scarcely be exaggerated, for broadcasting is5554demonstrably a principal source of information and entertainment for a5555great part of the Nation's population.' ''\95\5556---------------------------------------------------------------------------5557    \93\ Localism as a core public policy goal has roots in the 19275558Radio Act. See, e.g., Philip Napoli, Foundations of Communications5559Policy: Principles and Process in the Regulation of Electronic Media5560203 (2001).5561    \94\ United States v. Sw. Cable Co., 392 U.S. 157, 174 (1968)5562(quoting H.R. Rep. No. 1559, 87th Cong., 2d Sess., 3).5563    \95\ Turner I, 512 U.S. at 663 (quoting U.S. v. Sw. Cable, 392 U.S.5564at 177).5565---------------------------------------------------------------------------5566    As we've noted, nothing about the march of media technology into5567the Internet and streaming era has diminished the importance of local5568broadcasting. Thus it remains true that ``the people as a whole retain5569their interest in free speech by radio and their collective right to5570have the medium function consistently with the ends and purposes of the5571First Amendment.''\96\ And it should be exceedingly clear that national5572conglomerates serving more and more television markets have every5573incentive to cut back on local coverage, local facilities, and local5574reporters, in favor of national and generic coverage they can produce5575more cheaply and in centralized fashion.5576---------------------------------------------------------------------------5577    \96\ Red Lion, 395 U.S. at 390.5578---------------------------------------------------------------------------5579    The D.C. Circuit in Sinclair highlighted the necessity of the5580Commission's focus on localism in promoting the public interest.\97\5581The growth of online media has not made localism any less important; in5582fact, America's growing diversity makes localism more important than5583ever. The civic issues that are most salient to people living in5584smaller metropolitan areas along the southern border are going to be5585distinct from those that most concern people living in Great Plains5586farming communities or in the dense Northeast I-95 corridor. We elect5587our state and Federal representatives on a local basis. And many of the5588public policies that impact families and small businesses--such as5589education, policing policy, and zoning regulations--are predominantly5590made at the local level.5591---------------------------------------------------------------------------5592    \97\ 284 F.3d at 160.5593---------------------------------------------------------------------------5594    Thus, the need for quality local news and civic information goes5595well beyond electoral impacts. Localism impacts the criminal and civil5596justice systems. Juries are locally selected, and they make impactful5597decisions on a variety of civic issues. These decisions involve juries5598relying on local standards, which are likely impacted over time by5599local broadcast TV media.5600    While we do not expect the Commission will expressly discard its5601past findings on the importance of localism because of changes in the5602broader media markets, the Public Notice reflects a dated and over-5603simplified understanding of how present market forces and consolidation5604work to disincentivize localism.\98\ The Commission seems to believe5605(or to espouse, for purely political and partisan purposes) that5606broadcast-TV localism is merely a question about the relationship5607between national broadcast networks and their news-producing affiliated5608stations.\99\5609---------------------------------------------------------------------------5610    \98\ Notice at 2 (``In the [2017] National Cap NPRM, the Commission5611discussed economies of scale made possible by expansion of station5612ownership that may help broadcast television remain competitive in the5613marketplace and deter the migration of expensive over-the-air5614programming to other video programming distributors. The Commission5615also reasoned that, by placing limits on the expansion of network owned5616and operated station groups, a national cap would preserve a balance in5617the marketplace between the networks and their local affiliates. Do5618these prior conclusions remain accurate in 2025, and can they be5619expected to remain valid going forward? If so, and the Commission5620retains a national audience reach cap, should common ownership of5621stations that are not affiliated with major national broadcast networks5622(i.e., ABC, CBS, NBC, or FOX) be excluded from the cap?'').5623    \99\ Id. at 2, n.7 (``Specifically, the Commission noted its prior5624conclusions, dating back to 2003, that a national cap would promote5625localism by enabling local affiliates to influence programming5626decisions by the networks and to exercise their rights to preempt the5627airing of network programming in favor of programming better suited to5628their local communities' needs.'').5629---------------------------------------------------------------------------5630    The localism rationale for the national cap articulated in the 20025631Biennial Review Order did indeed incorporate the thesis, as stated by5632NAB, that ``the cap is necessary to counteract the networks' strong5633financial incentive to promote the widest distribution across the5634Nation of network programming irrespective of the tastes of one or more5635particular local cities.'' \100\ Yet as those same national networks5636shift away from linear programming in all but the sports and news5637categories, following viewers' changing demand and consumption5638patterns, and the networks thus sink billions of dollars into their5639subscription video on demand (SVOD) internet-delievered services, this5640analysis is far too simplistic. Because of viewer demand for live5641sports (and the cost to for this content, either directly through the5642networks' deals with sports leagues, or indirectly through the5643affiliates' reverse retransmission fees), both the national networks5644and local affiliates have a strong incentive to air that programming5645live over local stations. But the networks are less incentivized today5646to preempt local programming with other national content, either on5647their owned stations or affiliates, because they are better able to5648reach and satisfy a wider audience for this entertainment fare by5649steering viewers interested in such non-sports and non-news programming5650to their SVOD services. Contrary to Chairman Carr's blithe assertions5651and saber-rattling, the ``Big 4'' networks may have more incentive5652today to forge direct relationships with subscribers and viewers of5653their entertainment programming; but they actually have less incentive5654and ability to impact (much less dictate) what the local TV affiliates5655they do not own may air outside of live sports and national news5656blocks.5657---------------------------------------------------------------------------5658    \100\ See 2002 Biennial Review Order5659 541; NAB/NASA Comments at 9,566033, MB Docket No. 02-277 (filed Jan. 2, 2003).5661---------------------------------------------------------------------------5662    However, the rationale of the 2002 Biennial Review Order about the5663incentives of the networks is now apt for the national broadcast chains5664such as Nexstar and Sinclair. These and other national chains have a5665strong financial incentive to promote the widest distribution of their5666own news and vertical network programming irrespective of the tastes of5667one or more particular local cities. Sinclair offers a prime example of5668how this incentive translates in the increasingly concentrated local TV5669market.\101\ And Nexstar, now owner of The CW and NewsNation (formerly5670WGN), has also made it abundantly clear that its business model favors5671distribution of centrally produced programming to their local stations,5672and repurposing already overworked local reporters to spend more time5673working for NewsNation.\102\5674---------------------------------------------------------------------------5675    \101\ See, e.g., Jacey Fortin & Jonah Engel Bromwich, ``Sinclair5676Made Dozens of Local News Anchors Recite the Same Script,'' N.Y. Times5677(Apr. 2, 2018).5678    \102\ See, e.g., Comments of Perry A. Sook, Founder, Chairman and5679CEO, Nexstar Inc., Bank of America 2024 Media, Communications &5680Entertainment Conference (Sept. 5, 2024) (``Sook Sept. 2024 Bank of5681America Comments'') (When asked about synergies between local news5682departments and NewsNation, Sook noted the company had ``built a5683facility in Washington, D.C. at 400 North Capitol, which is steps off5684of the Hill . . . where . . . a senator can come in and do a national5685interview for NewsNation or The Hill, can go sit with a correspondent5686for the Hill . . . and we can deliver that to 70 percent of the U.S.''5687Sook also emphasized the synergies from putting local reporters to work5688for NewsNation, stating ``we have the largest newsgathering5689organization collectively in the United States of any company in the5690world. And that those 5,500 journalists that are spread across 405691states could augment the coverage of [NewsNetwork] and provide5692resources that other folks simply wouldn't have. So it has been5693profitable from day one, given that we had embedded distribution5694revenue in WGN America that we've substantially improved on. The5695advertising is sold at a higher cost per thousand in news than it is in5696entertainment programming. And so we've been the beneficiary of5697that.'').5698---------------------------------------------------------------------------5699    The broadcasting industry's push to eliminate the national cap is5700motivated by potential ``synergies'' achieved from economies of scale.5701But the synergies gained from the marginal benefit of further5702consolidating the already consolidated back-office functions of local5703stations are not material enough to justify the premiums these firms5704will have to pay to acquire smaller station groups. The synergies that5705have these firms pushing for national consolidation are found in5706programming. The evidence strongly suggests that as station groups5707become larger, economies of scale favor greater production and5708distribution of national content.5709    As Sinclair grew larger it implemented its so-called ``news5710directive,'' and forced its ``News Central'' and later ``National News5711Desk'' programming onto its local affiliates.\103\ It also expanded its5712programming portfolio by purchasing the Tennis Channel and Fox's former5713Regional Sports Networks, and by launching a number of national5714broadcasting digital subchannel networks such as Comet, Charge!, Roar,5715and The Nest. As Nexstar grew, it took its increased profits and bought5716a national broadcast network (The CW) and a national basic cable5717network (WGN). This growth not only undermined localism incentives, it5718also gave these firms increased market power to impose exponential5719increases in retrans rates.\104\5720---------------------------------------------------------------------------5721    \103\ See Fortin & Bromwich, supra note 101; see also Elizabeth5722Jensen, ``Sinclair Broadcast Group thrusts itself into the news,'' L.A.5723Times (May 8, 2004);Andrew Heyward, ``All news may be local--but more5724and more of it is going national,'' Knight Cronkite News Lab (Sept. 2,57252021).5726    \104\ See, e.g., Justin Nielson, ``Retransmission-per-subscriber5727rates continue to climb in Q4 2024,'' S&P Glob. Market Intel. (May 7,57282025) (showing that between the fourth quarter of 2023 and the fourth5729quarter of 2024 the weighted average monthly per-subscriber retrans fee5730rose 16 percent for the entire industry, but Nexstar led the pack with5731a 50 percent increase, with Sinclair's one year increase amounting to573218 percent). These increases are impacted by the timing of retrans5733negotiations with cable, satellite and virtual distributors. But the5734industry's double-digit gains reflect local TV broadcasters' strong5735bargaining position even in the streaming media era. See, e.g.,5736Comments of Christopher S. Ripley, President & CEO, Sinclair, Inc.,5737Deutsche Bank 32nd Annual Leveraged Finance Conference (Sept. 24 2024)5738(``We just reiterated our net retrans guidance over the next couple of5739years of mid-single digits. And that's having gone through a very5740significant renewal cycle that we currently have completed about 755741percent of all of our Big 4 traditional subscriber renewals and they've5742all been either meeting or exceeding our internal expectations. So5743again, back to momentum, a lot of operating momentum there on the5744advertising side, on the retransmission side.'').5745---------------------------------------------------------------------------5746    Therefore today, this ``balance in the marketplace between the5747networks and their local affiliates'' has more to do with how these5748very profitable companies divide up the growing retransmission consent5749fee ``pie'' than it does with the core public interest concern of5750localism.\105\ Networks need affiliates to reach sports viewers, and5751affiliates need the network's marquee sports programming.5752---------------------------------------------------------------------------5753    \105\ Notice at 2.5754---------------------------------------------------------------------------5755    When the FCC concluded in the 2002 Biennial Review Order that ``a5756local station maximizes its income by providing programming desired by5757its local community irrespective of national programming preferences''5758\106\ that was theoretically plausible only under the conditions in5759which local broadcasters were statutorily prohibited to grow beyond a5760certain size. Indeed, consider the case of ION (then Paxson). Because5761of its greater national reach, thanks to the UHF discount, its5762financial incentives were heavily tilted towards building its own5763national network that aired very little local content.\107\5764---------------------------------------------------------------------------5765    \106\ See 2002 Biennial Review Order5766 392.5767    \107\ Paxson did eventually make some news sharing agreements in57682000 that involved tape-delayed re-airing of other local station's5769broadcasts. But the Commission's elimination of the main studio rule in57702019 was predictably followed by Ion stations closing local studios and5771consolidating operations in E.W. Scripps' national facilities. See,5772e.g., Brian Lowry, ``Pax TV Is Giving Reruns a Whole New Meaning,''5773L.A. Times (Apr. 22, 2000); Jon Ellis, ``FCC/CRTC Monitor: New FM5774Signal in Brainerd, New LPTV in Fargo,'' N. Pine (Oct. 31, 2021)5775(noting several FCC filings by E.W. Scripps notifying the Commission of5776relocations of Ion affiliate studios to the company's Cincinnati5777facility).5778---------------------------------------------------------------------------5779    In sum, the dividing line between large national networks and local5780station ownership groups does not lie exclusively along the axis5781between traditional Big 4 networks' owned and operated (``O&O'')5782stations on one side, and other network affiliates owned by5783broadcasters other than ABC, CBS, Fox and NBC on the other. Nexstar and5784Sinclair--two of the largest U.S. broadcast ownership groups--each have5785a history of regularly using their tremendous reach to acquire,5786shutter, and consolidate local newsrooms; each have acted in ways5787demonstrating that their economic incentives favor centralized content.5788Thus the notion raised in the Notice of applying the national cap to5789``Big 4'' O&O firms but not other licensees\108\ is completely5790unjustifiable, and the Commission cannot find any source of authority5791in the law for any such differential application.\109\ Any weakening of5792the national cap, whether impermissibly tailored in this fashion or5793simply applied to all license holders, would do irreparable harm to5794localism.5795---------------------------------------------------------------------------5796    \108\ Notice at 2 (``If . . . the Commission retains a national5797audience reach cap, should common ownership of stations that are not5798affiliated with major national broadcast networks (i.e., ABC, CBS, NBC,5799or FOX) be excluded from the cap?'').5800    \109\ As discussed in Section II, when Congress enacted the CAA in58012004 it removed the Commission's authority to increase the 39 percent5802cap. The Commission retains the authority to determine how this reach5803is calculated (e.g., with or without the UHF discount), so long as this5804change is deliberated and made outside of the Quadrennial Review. See5805Prometheus I, 373 F.3d at 396. But it would be completely arbitrary and5806capricious for the Commission to calculate reach differently depending5807on whether or not a licensee owns one of the Big 4 networks. The text5808of the CAA, directing the Commission to adopt the 39 percent cap in its5809rules, says nothing about national network owners or local affiliates.5810In straightforward fashion, the resulting rule simply forbids grant5811transfer, or assignment of a commercial television broadcast station5812license to any party if it would result in that party exceeding the 395813percent national audience reach cap. 47 C.F.R. Sec. 73.3555(e)(1). And5814there's nothing in the CAA to suggest the Commission retains authority5815to use a technical determination when calculating reach in order to5816implement an economic policy goal. What's more, the economic arguments5817about the cost differential between UHF and VHF that the Commission5818relied on in the 2002 Biennial Review Order are not valid for digital5819television transmission. See 2002 Biennial Review Order5820 591.5821---------------------------------------------------------------------------5822E. Broadcast TV Consolidation Has Harmed Localism.5823a. The Number of Stations Producing Original Local News Has Declined5824        Since 1996.5825    Perhaps the most damning evidence against the national broadcast5826ownership groups' push to eliminate the national cap in the name of5827``saving local news'' is the fact that the number of broadcast TV5828stations producing original local news declined since consolidation5829accelerated following the changes to broadcast ownership limits5830specified in and precipitated by the Telecommunications Act of 1996.5831Dr. Bob Papper, Professor of Broadcast and Digital Journalism at5832Syracuse University, on behalf of the Radio and Television Digital News5833Association (``RTDNA''), has conducted an annual survey of U.S.5834broadcast station news directors since 1995. As a part of this5835research, Dr. Papper also conducted an annual census of all U.S.5836broadcast television stations to determine if they aired any local5837news, and if so, whether it was produced by the station itself or5838originated from a different station.5839    This RTDNA research shows that despite massive increases in5840revenues and profits (nominal and inflation-adjusted),\110\ the number5841of local TV stations originating news declined from 746 in 1996 down to5842695 in 2025.\111\ Meanwhile, the number of stations not originating,5843but rather receiving and airing local news originated by another5844station, increased from 18 in 1995 to 422 in 2025 (see Figure 2).\112\5845---------------------------------------------------------------------------5846    \110\ See infra Section IV for full discussion of the broadcast TV5847industry's financial performance during the past three decades.5848    \111\ See Bob Papper, Michael Gerhard, & Joe Misiewicz, ``Another5849Growth Year for News and Staff,'' RTNDA (June 1997); see also Bob5850Papper, Keren Henderson, & Tim Mirabito, ``Amount of local news stays5851steady--for a change,'' RTDNA (June 21, 2025).5852    \112\ Free Press compiled these data directly from RTDNA research5853and Dr. Papper's archive, available at https://bobpapper.com/clients/.5854---------------------------------------------------------------------------5855                               Figure 2:58565857[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]58585859    These trends clearly reflect that as broadcast TV ownership further5860consolidated--with deals promised not only to bolster the bottom line5861but to bolster local news production too--original and locally5862originated news production declined. The number of original local news-5863producing stations declined, while firms simply re-aired existing5864production on stations that either never had any local news to begin5865with (usually the UPN, WB, MyNetworkTV or CW affiliate in a duopoly5866with a Big 4 affiliate) or on stations that formerly produced their own5867local news. Stations that previously added to competition, diversity of5868opinion, and localism, completely lost original local news. These are5869the ``synergies'' that the Commission should expect from its unlawful5870exploration of eliminating the national cap in this proceeding, and any5871plans to otherwise decimate what remains of its local ownership limits5872in other dockets.5873b. Research Demonstrates How National Consolidation Diminishes5874        Competition, Localism, and Viewpoint Diversity. Large National5875        Chains Achieve Their Post-Consolidation Synergies by Replacing5876        Original Local News with Duplicated and Out-of-Market5877        Programming.5878    The common refrain from the broadcast TV chains and their lobby is5879that consolidation is in the public interest because an increase in5880local news follows,\113\ or that without consolidation, local news will5881decline.\114\ But this is nonsensical. Companies seek to maximize5882profit to generate greater returns for shareholders. The trickle-down5883notion that more revenues will inexorably lead to more spending is5884fanciful and false. Firms maximize returns by minimizing costs and5885increasing revenue. Cost-cutting economics at local TV stations favor5886practices such as cutting staff, news sharing, greater use of social5887media clips in the news instead of original reporting, emphasis on5888partisan and sensationalistic content, substitution of local coverage5889with national content, and less investment in investigative journalism5890or other public interest journalism with high positive externalities5891because that is expensive to produce and attracts fewer viewers than5892infotainment fare does.\115\5893---------------------------------------------------------------------------5894    \113\ See, e.g., Ted Johnson, ``Broadcast TV Lobby Praises FCC5895Chairman For Deregulatory Push, Even As He Also Investigates Some Of5896Their Members,'' Deadline (July 29, 2025). Broadcasters point to the5897increase in hours of local news. But as we discuss below, a closer look5898at the actual content of these broadcasts show that these increased5899hours are simply repeated stories. What's more, local stations bring in5900more advertising revenue during local news day parts than they would5901running syndicated programming, because syndicated deals usually5902involve a split of ad revenues with the syndicator. See, e.g.,5903``Competition in Television and Digital Advertising,'' Transcript of5904Proceedings at the Public Workshop Held by the Antitrust Division of5905the United States Department of Justice (May 2-3, 2019) (``2019 DOJ5906Workshop'') (reporting Gray Media co-CEO Pat LaPlatney explaining that5907``there are three types of ad inventory. There's network, like5908primetime[;] local news and local programming where the broadcaster5909owns and sells all of the inventory. And then, there's syndicated5910programs, syndicated inventory where the inventory is divided between5911the syndicator and the station.'').5912    \114\ Broadcast companies often equate their own financial fortunes5913with the fortunes of journalism itself, which they claim can only be5914saved by blessing their monopolization of all local news markets. See,5915e.g., Hank Price, ``The Reality Of Local TV Station Consolidation,'' TV5916News Check (June 27, 2025) (``By reducing the number of owners, the5917theory is that combined stations will be able to increase advertising5918rates, reduce expenses and become much more profitable than single5919stations are today.''); Mike Reynolds, ``Nexstar eyes station expansion5920amid expected deregulation after U.S. election,'' S&P Glob. Market5921Intel. (Nov. 8, 2024) (``Sook also advocated for the preservation of5922local journalism, stating the industry needs strong companies that5923compete on a level playing field for viewers and advertisers on every5924screen in the US, not just some of them. He said that while `Big Tech5925has unfettered access,' broadcast is kept to a 39 percent ownership5926cap. `We're not allowed to reach every television home in America with5927our local station footprint. To preserve that last mile, we think the5928Republic has a vested interest in maintaining a free and independent5929press,' he said, adding that the company sees `broadcast journalism5930remaining or becoming that last bastion of a free and independent press5931at the local level.' '').5932    \115\ See, e.g., Gregory J. Martin & Joshua McCrain, ``Local News5933and National Politics,'' 113 Am. Pol. Sci. Rev. 372, 372(2019)(``We5934investigate whether this trend is demand-or supply-driven, exploiting a5935recent wave of local television station acquisitions by a conglomerate5936owner. Using extensive data on local news programming and viewership,5937we find that the ownership change led to (1) substantial increases in5938coverage of national politics at the expense of local politics, (2) a5939significant rightward shift in the ideological slant of coverage, and5940(3) a small decrease in viewership, all relative to the changes at5941other news programs airing in the same media markets. These results5942suggest a substantial supply-side role in the trends toward5943nationalization and polarization of politics news, with negative5944implications for accountability of local elected officials and mass5945polarization.''); Price, supra note 114 (``As we have seen so often,5946expense cuts will be the primary goal of most companies. For some5947owners, expense cuts may be their only priority. Because payroll is the5948largest expense for any television station, eliminating staff will top5949the list of cuts News product will, of course, be impacted. As we have5950seen in the past, an owner with two major stations in the same market5951will likely eliminate the entire staff of whichever station is weaker.5952In many cases one newscast will then be simulcast on both stations. . .5953. However Top 4 consolidation is achieved, we also know that after5954reducing expenses, many companies will then continue to do business as5955usual.'').5956---------------------------------------------------------------------------5957    These are the real-world consequences of consolidation, and they5958must factor into the Commission's public interest analysis. The gating5959factor cannot simply be whether ``consolidation increase[s] profits,''5960as that likely outcome is self-evident from the push to do so. The5961question that is unique to the Commission's task is: ``will these rule5962changes improve incentives that lead to license holder actions serving5963the public interest?'' As we discuss below, it is clear from thirty5964years of non-stop consolidation that shareholder interests cannot, and5965do not, map cleanly onto the public interest. Indeed, in the short term5966(which is the horizon of most C-suite executives at publicly-traded5967companies),\116\ the corporate interest and the public interest are5968orthogonal at best and diametrically opposed all too often.5969---------------------------------------------------------------------------5970    \116\ Dennis Carey, Brian Dumaine, Michael Useem, & Rodney Zemmel,5971``Why CEOs Should Push Back Against Short-Termism,'' Harv. Bus. Rev.5972(May 31, 2018).5973---------------------------------------------------------------------------5974    The goal of localism is inseparable from the other pillar of5975American broadcast policy: diversity. Diversity does not just mean5976programming from different corporate producers; it requires diversity5977in the content and viewpoint of programming.\117\ Thus, ten or even5978twenty newscasts that all serve up the same superficial, if-it-bleeds-5979it-leads soundbites do not constitute diversity. Serving local5980interests is meaningless if the diverse elements in a community--5981cultural, social, and political--are not represented on the airwaves.5982---------------------------------------------------------------------------5983    \117\ Red Lion, 395 U.S. at 389-95.5984---------------------------------------------------------------------------5985    And recent evidence, compiled from surveys of news directors and5986from a detailed study of the actual content of local news broadcasts,5987demonstrates clearly that large broadcast chains prioritize increasing5988their own profits over increasing localism and diversity. A recently5989released Shorenstein Center survey of local TV news directors from many5990major U.S. broadcast news firms offers a window into how corporate5991strategies are harming localism. The survey ``asked respondents to5992indicate the degree to which their stations relied on content from5993outside sources, such as their network, management group, or other5994providers,'' and found that those who indicated that they rely on such5995content ``quite a bit'' or ``a lot'' were ``typically part of a large5996ownership group.'' \118\ These stations in ``large ownership groups''5997were far more likely to rely on third-party content to fill their5998newscasts than either network O&O stations or independently owned5999stations.\119\6000---------------------------------------------------------------------------6001    \118\ Shorenstein Center Study at 13 (``Seventeen percent of6002respondents stated that `not much' of their content came from these6003sources, while 51 percent said their stations used only `some' outside6004content. However, the 28 percent of stations relying `quite a bit' on6005externally provided material and the 6 percent relying on it `a lot'6006were typically part of a large ownership group.'').6007    \119\ Id. (``In contrast, only 26 percent of the Network Owned-and-6008Operated stations (O&Os) and 19 percent of independently owned stations6009claimed to rely `quite a bit' or `a lot' on outside-produced6010content.'').6011---------------------------------------------------------------------------6012    A groundbreaking study by University of Delaware Professor Danilo6013Yanich and his co-author Benjamin E. Bagozzi provides a detailed look6014into the extent of this type of ``news sharing.'' \120\ Yanich and6015Bagozzi constructed a database of transcripts from the local news6016broadcasts of 861 stations in all 210 U.S. television markets,6017encompassing a three-month period in the fall of 2019.\121\ The authors6018``employed automated text reuse methods to measure the extent to which6019local broadcast station pairs duplicated (exact text reuse) each6020other's news content.'' \122\ And their standard for duplication was6021very conservative. Duplication required ``50 percent of the broadcast6022news content (excluding sports, weather and commercials) of a station6023pair'' to be a match.\123\6024---------------------------------------------------------------------------6025    \120\ Yanich 2025 Study.6026    \121\ Id. at 2. The authors chose a time window ``before the COVID6027pandemic so that coverage was not affected by a single overwhelming6028story.''6029    \122\ Id.6030    \123\ Id.6031---------------------------------------------------------------------------6032    The study first classified stations into those who ``originated6033local news'' and those stations which ``only presented news,'' or so-6034called ``non-originators,'' based on RTDNA's 2019 census.\124\ Yanich6035and Bagozzi's data indicated that ``three quarters of the stations6036(n=647) were originators with the remaining one quarter (n=214) being6037non-originators.'' \125\ This figure is similar to, though slightly6038lower than, RTDNA's census of originators (n=706, 66 percent) compared6039to non-originators (n=363, 34 percent) in 2019.\126\ The difference6040between the two estimates is explained by the difference in the total6041sample size. RTDNA's analysis included all stations that aired news in6042early 2019 (n=1,069), while Yanich and Bagozzi's sample (n=861) was6043smaller, limited by the availability of transcripts from the firm6044TVEyes.6045---------------------------------------------------------------------------6046    \124\ Id. at 10.6047    \125\ Id.6048    \126\ Supra Figure 2.6049---------------------------------------------------------------------------6050    After a rigorous analysis of the database transcripts, Yanich and6051Bagozzi found ``96 duplicating station pairs involving 182 unique6052stations (some stations had multiple arrangements).'' Over half of6053these duplicating station pairs (52 percent) were stations in a so-6054called ``shared services agreement'' (``SSAs'').\127\ Though the6055prevalence of duplication was not linear with market size, overall the6056researchers found that ``smaller DMAs had higher proportions of6057duplicating station pairs than did larger markets.'' \128\ The6058prevalence of duplication was high, with the authors reporting that6059``across all station pairs, the average proportion of duplicated6060content was 69 percent, with a range of 51 to 96 percent.'' \129\6061---------------------------------------------------------------------------6062    \127\ For a history of the use and prevalence of SSAs and other6063operational arrangements that big chains have used to evade the local6064multiple ownership rules, see S. Derek Turner, ``Cease to Resist: How6065the FCC's Failure to Enforce Its Rules Created a New Wave of Media6066Consolidation,'' Free Press (Mar. 2014).6067    \128\ Yanich 2025 Study at 10, 25 (``The top 100 DMAs . . .6068accounted for 40 percent of the duplicating stations with the highest6069proportion in DMA Group 1 [markets 1-25] (14 percent) and lowest in DMA6070Group 4 [markets 76-100] (7 percent). However, the two DMA Groups that6071represent the smallest television markets (DMA Groups 5 [markets 101-6072150] and 6 [markets 151-210]) . . . accounted for 60 percent of the6073duplicating station pairs (28 percent and 32 percent for DMA Groups 56074and 6, respectively). Clearly, duplicating station pairs were a6075substantial feature in the smallest television markets across the6076country.'').6077    \129\ Id. at 26.6078---------------------------------------------------------------------------6079    Notably, the authors found that ``just four station groups6080controlled over half (53 percent) of the duplicating station pairs.''6081\130\ And the largest U.S. broadcast chain ``Nexstar was the most6082active controller of duplicating station pairs (22 percent).'' \131\6083---------------------------------------------------------------------------6084    \130\ Id. at 3.6085    \131\ Id.6086---------------------------------------------------------------------------6087    Because the most common form of news sharing arrangements involves6088duopolies, SSA station pairs, or other connecting agreements for6089stations operating in the same DMA, it is not surprising that the study6090found that ``in a significant majority of cases, 86 percent (83 out of609196 duplicating pairs), the duplication occurred inside the market. In6092the other 14 percent (13/96) there was at least one station whose6093duplicating partner was outside the market.'' \132\6094---------------------------------------------------------------------------6095    \132\ Id. at 31.6096---------------------------------------------------------------------------6097    However, that they found any different-market pairs of stations6098duplicating content is notable for a study of local TV news. What's6099more, the study found that the prevalence of sharing was higher between6100out-of-market duplicating pairs than it was for those inside the same6101DMA. ``For the outside-of-market station pairs, the average duplication6102of content was 80 percent over 83 percent of the rolling 3-day windows.6103For markets in which the duplicating pairs were inside the DMA the6104average duplication of content was 68 percent on 61 percent of the6105rolling 3-day windows.'' \133\6106---------------------------------------------------------------------------6107    \133\ Id. at 33.6108---------------------------------------------------------------------------6109    The finding of a higher level of content duplicated by these out-6110of-market pairs is highly germane to this proceeding, as it speaks to6111the economic incentives and the balancing act broadcasters strike in6112these arrangements. The owners of the stations in these combined6113operations are incentivized to air the minimal amount of locally6114produced content that makes it seem local (particularly weather and6115sports, which were not included in the Yanich study) to attract an6116optimal audience size, while keeping costs down by using content6117produced outside the market.6118    The study's authors ended their report noting that ``the6119inescapable conclusion that we draw is that ownership--or more6120accurately control--matters in the production of local television news.6121The control of television stations that is derived from duopolies,6122service agreements, and common ownership often results in duplicated6123content that serves the calculus of the economies of scale. We should6124not be surprised by that finding, because the system is designed that6125way. . . . Text reuse--the duplication of the exact same material6126across news broadcasts--is a direct and unambiguous form of the6127achievement of economies of scale. The station group bears the cost of6128production of the story once and sells it to advertisers multiple6129times. As fewer station groups control more of the local television6130ecosystem, accomplishing that duplication becomes easier. And all the6131incentives for it are clear. Our analysis shows that those incentives6132are significantly utilized.'' \134\6133---------------------------------------------------------------------------6134    \134\ Id. at 57.6135---------------------------------------------------------------------------6136c. Evidence from Inside Local TV Newsrooms Demonstrates How6137        Consolidation Undermines the Public Interest and Creates a Race6138        to the Bottom.6139    The 2025 Shorenstein Center survey of local TV news directors and6140station general managers referenced in the prior section should serve6141as a canary in the coalmine for the Commission, as it contemplates6142unleashing another massive wave of media consolidation. Though the6143industry's CEOs and lobbyists like to pat themselves on the back,6144morale inside newsrooms is bad, and there is a widely held perception6145among newsroom staff that the quality of local TV news is in decline.6146When asked about their perception of the trend in the quality of news6147in their local market area, ``sixty percent said the quality has6148declined, with a quarter of them categorizing the decline as very6149substantial.'' \135\6150---------------------------------------------------------------------------6151    \135\ Shorenstein Center Study at 7.6152---------------------------------------------------------------------------6153    This is the reality inside newsrooms after two decades of6154consolidation--economies of scale make broadcast chain CEOs more6155money,\136\ but at the expense of competition, localism, and diversity6156in local news and content. And as the Shorenstein Center survey6157demonstrates, consolidation exacts a steep personal cost from working6158journalists, threatening the future of the profession as younger6159generations perceive it as a dead-end. As the study's author Thomas6160Patterson notes, ``a widely expressed view among respondents was that6161their station's reporting is declining in quality, partly from thinly6162stretched staff, partly from the departure of talented journalists, and6163partly from inadequately trained entry-level journalists.'' \137\ These6164responses center on the connection between adequate staffing and6165training, something that station owners might be able to address with6166investment. Indeed, when local news directors were asked whether an6167``increase in broadcast staff'' would ``improve their `ability to6168better serve audiences' information needs,' '' an overwhelming majority6169(66 percent) agreed that such an increase in staffing would be6170``important'' or ``very important'' to that effort.\138\ But these6171local TV news directors aren't counting on their corporate offices to6172actually put resources behind their sloganeering. ``When these6173respondents were then asked about the likelihood that their station6174would be able to increase its broadcast staff, only 8 percent deemed it6175`very likely' while 33 percent judged it `somewhat likely.' ''.\139\6176---------------------------------------------------------------------------6177    \136\ See, e.g., Tom Stephenson, ``The Life and Times of a Media6178Magnate,'' D Mag. (June 8, 2020) (``The Nexstar CEO is proud to say, `I6179want my commission salespeople to be the highest-paid people in town.'6180He'd like to be paid more, too. In the last two years, shareholders6181have, by the slimmest of margins, rejected multimillion-dollar6182compensation packages for the CEO. `I guess if they felt they wanted to6183vote with their feet, they wouldn't own the shares. But that doesn't6184seem to be what's happening,' Sook says. `So, yes, it's a point of6185frustration for me, because the performance has been there.' ''). Sook6186eventually got what he wanted. According to SEC filings, his total6187annual compensation between 2020 and 2024 ranged from $21 million to6188$39.3 million.6189    \137\ Shorenstein Center Study at 17.6190    \138\ Id.6191    \139\ Id.6192---------------------------------------------------------------------------6193    The Shorenstein Center survey also provides evidence that rising6194profits do not mean station group owners invest more in their local TV6195news stations. Though one assistant news director reported that ``[o]ur6196ownership . . . proves that good journalism can be good business,''6197others weren't so upbeat. One respondent said ``[w]e are chronically6198short-staffed. Ownership groups for decades have been extracting more6199output from fewer staff with less money.''\140\ That respondent6200lamented how staffing cuts had become untenable, stating ``[w]e're6201getting ever closer to the point of simply being unable to get6202newscasts on the air because we just don't have the people to do it.''6203\141\ Another respondent reflected, ``[o]ur corporate ownership cares6204more about making money than serving our community.'' \142\ Echoing6205this sentiment, a respondent told Shorenstein Center researchers,6206``[o]ur station's primary function has become generating cash for the6207corporation.'' \143\ There were many more responses in this vein.\144\6208---------------------------------------------------------------------------6209    \140\ Id. at 27 (emphasis added).6210    \141\ Id.6211    \142\ Id.6212    \143\ Id. at 28.6213    \144\ Id. at 27-28. Other quotes include: ``Local news needs6214investment from ownership, not just to increase content and coverage,6215but for staff. The current staff is spread too thin.''; ``Corporate6216ownership groups need reasonable profit margins but their response is6217always `we need to operate lean' or `the money isn't there this year.'6218''; and ``Corporate owners need to prioritize paying news staff higher6219salaries. We are losing too many good young journalists to jobs outside6220of broadcast news.'' Id.6221---------------------------------------------------------------------------6222    Local TV newsroom staff already perceive their salaries as6223abysmally low.\145\ A 2024 RTDNA study found high levels of newsroom6224employee burnout, particularly as stations looking to cut costs rely on6225journalists to be ``multi-media journalists'' who handle all aspects of6226story production.\146\ Any Commission rulings leading to yet another6227massive wave of local and national consolidation would only worsen this6228situation, as consolidation of the market into the hands of fewer and6229fewer owners would increase these firms' monopsony power over labor.6230This would reduce the quality and expertise of newsroom labor forces6231over time (as staff retire, leave for other careers, or eschew the6232career altogether), further harming the public interest. The staff that6233remain will become more overworked, forced to take on more duties that6234take them away from the core task of reporting.6235---------------------------------------------------------------------------6236    \145\ Id. at 10 (``TV station stations worry about their ability to6237attract and retain talented staff. Local TV news has one of the lowest6238salary levels for college graduates of any profession, a problem of6239growing concern for local stations.'').6240    \146\ Bob Papper & Keren Henderson, ``Local TV news staffing rises6241despite burnout challenges'' 4, RTDNA (May 21, 2024) (``For the second6242year in a row, the survey asked whether news directors had seen more6243evidence of staff burnout than in the past. Staff burnout continues to6244be a growing problem, with nearly two-thirds (62.9 percent) of news6245directors agreeing. In the top 25 markets, the percentage is lower at624652 percent, as well as in the smallest markets at 54.5 percent.6247Nevertheless, all market sizes are over 50 percent, with markets 26 to6248100 surpassing 70 percent.'').6249---------------------------------------------------------------------------6250    When corporate chain owners cut staff to boost profits, it should6251not be surprising that this has an impact on the scope and quality of6252news coverage. However, consolidation also reduces the market6253incentives for local TV news stations to differentiate their product6254through editorial decisions too. When station owners face little6255competition locally and nationally, they are incentivized to gain6256audiences through shock, fear, and sensationalism, as well as through6257repetitive emphasis on weather updates and breaking news stories. While6258these may be of interest to the public, they do not adequately serve6259the public's democratic information needs.\147\6260---------------------------------------------------------------------------6261    \147\ Shorenstein Center Study at 19 (``News is inherently a6262construct, shaped by subjective judgments about what is important on6263any given day. Certain events virtually command attention, but they are6264uncommon. News outlets have choices when deciding on the day's lineup6265of stories. News directors will weigh perceived relevance, interest,6266and impact in making these choices but there are no objective criteria.6267As a result, the `news' is not a mirror of the community but a curated6268narrative that amplifies certain topics while downplaying or ignoring6269others. Local TV news has traditionally prioritized weather, crime, and6270breaking stories, assuming they capture and hold viewer attention.6271Crime stories particularly elicit emotional responses like concern for6272personal safety, which can strengthen viewer engagement. This focus6273has, over time, shaped audience expectations, with viewers now seeking6274out this content, thereby reinforcing its demand.'').6275---------------------------------------------------------------------------6276    These economic consequences of consolidation are seen in the6277Shorenstein Center study, which found that that only 12 percent of news6278directors report their stations have a ``heavy'' emphasis on ``local6279government and issues,'' versus 35 percent saying they have a heavy6280``emphasis on breaking news (such as crime and accidents).'' \148\ Only628132 percent of respondents said their station had a reporter assigned6282full-time to cover local government.\149\ This de-emphasis on local6283government reporting is nothing new; it's been the defining trend of6284the consolidation era.\150\ But it can continue to decline. Indeed,6285there are station directors that would like to use existing staff to do6286more ``community'' reporting.\151\ But the study found that ``staff6287size was unrelated to the use of community journalism, suggesting it is6288less an issue of resources than of editorial interest.'' \152\ In other6289words, stations are not investing enough in news, but the market6290incentives of consolidation can also impact what type of news they6291invest in too.6292---------------------------------------------------------------------------6293    \148\ Id. at 12.6294    \149\ Id. at 13.6295    \150\ Id. at 13 (``In general, when examined through the lens of6296the priority assigned to specific topics, the emphasis aligns with what6297we found when comparing the relative importance of breaking news versus6298coverage of local governance and issues. The emphasis also aligns with6299a longer-term tendency in local TV news. The movement away from6300coverage of local government to breaking news is more than two decades6301old, illustrated by the shift away from assigning a full-time reporter6302to cover city hall. When we asked respondents whether their station had6303a reporter assigned full-time to cover local government, only 326304percent said it did.'').6305    \151\ Id. at 21-22 (``Among the hallmarks of newspaper reporting at6306its peak was a commitment to types of journalism--enterprise,6307community, and investigative reporting--that go beyond the6308straightforward reports of the day's events. Enterprise journalism6309involves stories that reporters pursue independently without relying on6310external prompts like press releases or news conferences. Community6311journalism focuses on covering local neighborhoods and groups, while6312investigative reporting seeks to uncover developments that are not6313readily evident. . . . Enterprise reporting and community journalism go6314beyond standard news, providing stories and amplifying voices that help6315the audience to be more aware and connected to their community. By6316emphasizing these forms of journalism, while being mindful of their6317community's diversity, TV outlets can ensure that local narratives are6318aired. Investigative reporting is equally important but more6319challenging, given the substantial reporting resources typically6320required to thoroughly investigate alleged wrongdoing.'').6321    \152\ Id. at 22.6322---------------------------------------------------------------------------6323    This survey offers evidence that stations that differentiate6324themselves by eschewing the cheaper crime blotter model and moving6325towards covering local government issues are likely to find long-term6326success. ``Stations that strongly emphasize local government and issues6327were most likely to report a gain in audience. Sixty-one percent of6328these stations reported an increase in audience share--11 percentage6329points higher than the other stations' average.'' \153\ While noting6330that ``there is more than one path to attracting and building an6331audience,'' the Shorenstein Center survey recounted the experience of6332one station news director whose station increased ratings after moving6333away from heavy breaking news coverage in favor of community reporting:6334---------------------------------------------------------------------------6335    \153\ Id. at 21.63366337        We addressed this question a couple years ago and decided to6338        lean into neighborhood news. Rather than all reporters living6339        and working within a 5-mile radius of the station, we now have6340        reporters spread throughout our market living and reporting in6341        communities that only saw a TV reporter when bad news happened.6342        We have filled a vacuum of news and information in communities6343        that saw a substantial decrease in local news outlets. We now6344        report on local government, schools, businesses, and people on6345        an everyday basis. This is in direct contrast to our6346        traditional competitors who report heavily on breaking news and6347        crime.\154\6348---------------------------------------------------------------------------6349    \154\ Id. at 20.63506351    Indeed, given the twenty-year decline in the newspaper business,6352local TV station groups had an opportunity to fill the void in6353community, enterprise, and investigative reporting. But the Shorenstein6354Center study confirms what any news consumer knows quite well: local TV6355as a whole has not moved to fill this void, with many station groups6356choosing to double down on weather and crime.\155\ While the survey6357responses and the data above demonstrate that emphasizing truly local6358coverage can be profitable for individual local stations, most station6359groups freed from the sensible media ownership limits the FCC has6360already discarded will chase the quicker and easier profits that come6361from ruthless down-sizing and centrally produced, duplicated content.6362This trend is especially worrisome as our Nation becomes more diverse,6363because when these national, top-down interests prevail, news directors6364in all markets will be less likely (and able) to devote coverage to6365marginalized communities and other underserved groups. Indeed,6366according to the Shorenstein Center study, this is already an ongoing6367problem in some newsrooms.\156\6368---------------------------------------------------------------------------6369    \155\ Id. at 23 (``In our previous study of local public radio, in6370communities where the newspaper had declined, we found a strong6371commitment by stations to increase their coverage of local governance6372and issues to offset the decline. We did not find the same commitment6373among local TV news stations. In areas where the leading newspaper had6374scaled back its coverage, two-thirds (64 percent) of our TV respondents6375said their station had not made a change to accommodate the loss, while637627 percent claimed a moderate increase in coverage of local governance6377and issues, and only 9 percent reported a substantial increase.'').6378    \156\ Id. at 10-11 (``[W]e asked respondents about the significance6379of some of the challenges their stations might face. At the top of6380respondents' list of challenges was serving `the community's6381information needs.' Eighty-eight percent of respondents identified as6382`significant' or `very significant.' A news director explained, `How6383can we truly serve our audience to the best of our ability if we do not6384know exactly what they need?'. . .Of less concern to stations were the6385`information needs of underserved local groups' and the `diversity of6386our news staff.' Each was mentioned by two-thirds of respondents as a6387``significant'' or ``very significant'' challenge. Here, unlike the6388other concerns, the demographic composition of the media market was6389related to the responses. TV stations in racially and ethnically6390diverse markets were twice as likely as stations in heavily white areas6391to say staff diversity and the needs of underserved groups were ``very6392significant'' concerns.'').6393---------------------------------------------------------------------------6394IV. Broadcast Television Companies Are in Great Financial Health and6395        Further Consolidation Will Only Benefit Wealthy Shareholders.6396    As the prior section illustrated, the national cap remains vital to6397protect localism, as market conditions increasingly favor lower-cost,6398duplicative, or nationally produced and distributed content. The6399American public does not need and does not want more media6400consolidation. They want more diverse and independent media sources for6401the sake of healthy democratic discourse.\157\ This preference matches6402what Congress enacted into law and directed the FCC to implement with6403respect to the national cap. The only constituency clamoring for the6404Commission to unleash another wave of local media mergers is the6405broadcast lobby.6406---------------------------------------------------------------------------6407    \157\ See Jessica J. Gonzalez, S. Derek Turner, Matt A. Barreto, &6408Henry Fernandez, ``Free Press 2024 Poll: Detailed Analysis of Finding''640925, Free Press, BSP Research & African American Research Collaborative6410(May 28, 2024) (showing a majority of American adults agreeing that6411``having more independent news outlets is important to stopping6412disinformation and is good for the health of our democracy,'' compared6413to 32 percent saying ``we already have enough choices in news outlets,6414and creating more news outlets won't change anything'').6415---------------------------------------------------------------------------6416    The subtext of the Notice's request to refresh the record in this6417proceeding is largely an economic pleading: that complete removal of6418ownership limitations--including the national cap at issue here--is6419necessary to preserve localism, because without further consolidation6420the local news business becomes uneconomical. But the evidence strongly6421suggests a different conclusion. Despite massive change in the overall6422information markets in the Internet era, broadcast TV stations are6423doing well financially. FCC Policies that promote competition,6424diversity, and localism by preventing broadcast monopolies are not--and6425have never been--in conflict with the economic necessities of this for-6426profit industry.6427    Below we analyze the financial state of the local broadcast6428television industry over the past two decades, at the sector level and6429individual-company level. This analysis indicates that despite ongoing6430changes to the broader information markets, the local TV industry's6431financial health is good--certainly generating enough cash to support6432their local news operations. Unlike other parts of the media business6433such as newspapers or linear cable networks, the local TV sector's6434future looks bright. Broadcast executives at the same companies likely6435to plead the need for consolidation in this docket routinely extol6436their financial performance data and forecasts. They also praise and6437even brag about the numerous technological and market opportunities on6438the horizon that will allow broadcast license holders to continue to6439return the level of growth that Wall Street demands (even if that6440pursuit of excess profit is harmful to Main Street).6441    Indeed, to see that consolidation is not necessary for local TV6442station groups to continue to thrive, one only needs to examine what6443the large national ownership groups were saying a year ago about the6444state of their business. Their comments prior to the 2024 election came6445at a time when the 39 percent national cap remained a legal certainty6446under the prior FCC. On Nexstar's final investor call before that6447election, its CEO, Perry Sook, gushed about ``the power of broadcast6448television,'' stating that ``at a time when the pay-TV industry6449continues to experience subscriber attrition and there is intense6450competition for national advertising dollars, Nexstar generated the6451highest first and second quarter distribution and total revenue levels6452in the company's history.'' \158\ Sook also noted that even after6453national media companies sunk billions into their SVOD application6454services, linear TV remains ``the only segment that generates profit.''6455\159\ Sook's comments echo other analysts' observations that content6456companies are rethinking the value proposition of SVOD because of6457linear TV's better economics\160\--especially when it comes to live6458sports and news,\161\ where linear delivery still reigns supreme.\162\6459---------------------------------------------------------------------------6460    \158\ See Comments of Perry A. Sook, Founder, Chairman & CEO,6461Nexstar Media Group, Inc., Nexstar Q2 2025 Investor Call (Aug. 8, 2024)6462(``Sook Aug. 2024 Comments'') (``Nexstar's strong second quarter6463financial results mark another quarter of record total net revenue and6464our third consecutive quarter of all-time high quarterly distribution6465revenue. We translated this revenue growth into another quarter of6466solid adjusted EBITDA and adjusted free cash flow growth, reflecting6467our disciplined operating strategies. Just stop and think about that6468for a minute. At a time when the pay-TV industry continues to6469experience subscriber attrition and there is intense competition for6470national advertising dollars, Nexstar generated the highest first and6471second quarter distribution and total revenue levels in the company's6472history. Why is that? Well, it comes down to the value of our6473programming and reach delivered to our audiences, customers and6474programming partners. The power of broadcast television was again6475validated in a few recent high-profile settings.'') (emphasis added).6476    \159\ Id. (``Moreover, as more media companies lean back into the6477power of linear, the only segment that generates profit, by the way, we6478expect the relative value of the pay-TV bundle with all of its premium6479sports and local news content to look more and more attractive, leading6480to an inflection point in the future in subscriber attrition. . .As a6481result, we have delivered outsized long-term returns for our6482shareholders.'').6483    \160\ See, e.g., Tom Wainwright, ``Streaming slows to a trickle in64842025,'' The Economist (Nov. 19, 2024) (``Yet making money from6485streaming is proving harder than expected. Netflix, its largest6486exponent, is making steady profits. Disney's streaming division broke6487even in the second quarter of 2024. But most of Hollywood's older6488studios are still losing money on their digital ventures, and6489shareholders are jumping ship.''); Adam Rumanek, ``The Future Of6490Streaming: Balancing Ads, Subscriptions And Content,'' Forbes (June 23,64912024) (``As a whole, the streaming industry is coming to the6492realization that subscriptions don't pay for platforms--advertisers do.6493Subscriptions alone can't sustain unlimited growth, and not everyone6494has the disposable income to spend an extra $15 per month on streaming6495content.''); ``Analysis: As NFL Streaming Viewership Grows, Linear TV6496Continues to Dominate,'' VAB Press Release (Feb. 4 2025) (``While6497streaming expanded its viewership, broadcast and cable TV continued as6498the dominant platforms for primetime games.'').6499    \161\ See, e.g., Jay Langan, ``Surviving the Streaming Surge: How6500Linear TV Still Holds Value,'' Ocean Media Inc. (May 21, 2024)6501(``Despite these challenges, one segment of linear TV that continues to6502thrive is sports broadcasting. Along with live events such as award6503shows, sporting events remain a cornerstone of linear TV. Ratings for6504sports have remained robust, and in some cases, have even grown. This6505resilience makes sports broadcasting a prime area for investment News6506is another segment where linear TV maintains its relevance. In an6507election year, for example, news ratings typically see a significant6508boost. However, advertisers must navigate the complex landscape of6509brand safety, especially when it comes to politically charged content6510on channels like Fox News. Despite these challenges, news programming6511offers a consistent and reliable audience, making it a viable option6512for certain advertisers.'').6513    \162\ See, e.g., Zaneta Kucerova, ``A Sports League Maximizes6514Revenue from Media Rights,'' S&P Glob. Market Intel. (Apr. 4, 2024)6515(``Despite these challenges, sports content remains dominant on linear6516TV, accounting for over 95 percent of the most-watched programs in 20236517in the U.S. Live sports programming strength grows as networks compete6518with streaming services for valuable media rights. Additionally, sports6519content continues to be vital for broadcasters as audiences tune in for6520live games despite alternative entertainment options. In the U.S.,6521local rights are shifting from regional sports networks to local6522broadcast stations and new sports-centric streaming services that6523target broader audiences.'').6524---------------------------------------------------------------------------6525    Helping to fuel this renewed optimism (which, we must note again,6526was also expressed last year before the election) is the fact that6527cord-cutting appears to be slowing.\163\ The remaining linear6528subscribers are customers with high demand for live sports and live6529local news.\164\ As broadcast station magnates and TV advertising execs6530routinely crow to investors, this is vital programming that broadcast6531has ``got a monopoly on.''\165\6532---------------------------------------------------------------------------6533    \163\ See, e.g., Comments of Kevin P. Latek, Executive VP, Chief6534Legal & Development Officer and Secretary, Gray Media Inc., Q2 20256535Investor Call (Aug. 8, 2024) (``We remain optimistic that the pace of6536sub declines will slow going forward. This is a result of the addition6537of more streaming apps to MVPD bundles, the proliferation of ads and6538price increases in streaming products, more MVPD control over the6539carriage and payment for the little watch[ed] cable channel and the6540migration of sports to broadcast networks and local stations.''); Mau6541Rodriguez & John Fletcher, ``Multichannel video market share Q4 2024:6542Turning a corner?,'' S&P Glob. Market Intel. (July 25, 2025) (``[H]ope6543exists with some U.S. households warming to streaming bundles,6544according to commentary and results from the big three cable6545operators.''); Mike Reynolds, ``Charter sees lowest video subscriber6546losses since 2021,'' S&P Glob. Market Intel. (July 25, 2025) (``CFO6547Jessica Fischer told analysts on the company's July 25 earnings call6548that the second quarter represented Charter's best video period since65492021. Fischer attributed the improvement primarily `to better connects6550year-over-year, resulting from the new pricing and packaging we6551launched last fall and lower churn year-over-year, driven in part by6552our programmer app inclusion packaging.' '').6553    \164\ See, e.g., Logan Jones, ``51 percent of Americans still have6554cable TV, here's why,'' CableTV.com (Mar. 28, 2025) (describing a6555survey of cable TV subscribers, in which the two top programming types6556cited as reasons for continued linear cable TV subscriptions were live6557sports and news).6558    \165\ See MediaTalk,: TVB Chief Shares How Local Broadcast is6559Winning the Ad Game (A S&P Global Market Intelligence Podcast Feb. 27,65602025) (Steve Lanzano, President and CEO of TVB noting, ``The world as6561it comes from broadcast is, quite frankly, is a sports and news world,6562right? We have NFL football, basically almost exclusively, and we're6563really the local news game in town, right? Radio's kind of walked away6564from local news. Newspapers are non-existent. So we've got a monopoly6565on those two things. And as long as that continues, we're going to be6566okay.'') (emphasis added).6567---------------------------------------------------------------------------6568    Local broadcast TV companies are largely fiscally optimistic6569because of live sports. In particular, local TV broadcasters are6570filling the void left by the collapse of the cable Regional Sports6571Network (RSN) business, and doing so by striking deals directly with6572local sports teams and leagues.\166\ Half of all U.S. TV households6573have kept their traditional pay-TV subscriptions,\167\ and they tend to6574be more affluent and have a high willingness to pay for live sports and6575news. As Sook explained it last August, ``[t]he broadcast television6576business model is anchored by loyal pay television subscribers,6577including sports and news viewers who subscribe in order to access our6578content and which account for the increasingly large percentage of the6579pay-TV subscriber universe, and the high net worth audiences aged 456580plus who enjoy the superior interface and experience that payTV6581provides.'' \168\ Local TV chains are shifting their mix towards more6582live sports,\169\ which they expect will bolster their ability to6583continue commanding retransmission payment increases that outpace6584inflation.\170\6585---------------------------------------------------------------------------6586    \166\ See Sook Aug. 2024 Comments (``For example, the NBA bypassed6587the contract renewal on a cable television network in favor of a deal6588that included increased distribution on broadcast television, given our6589tremendous proven value of the broadcast model that that will bring to6590the league. In fact, a recent statement by the NBA said, `Throughout6591these negotiations, our primary objective has been to maximize the6592reach and accessibility of our games for our fans.' We know that reach6593and accessibility is the lifeblood of every sport and there's no6594platform that can match the reach of broadcast television. This is a6595proven path that has sustained the long-term growth of the NFL and one6596we believe the NBA will prosper from as well. To that point, NFL6597Commissioner Roger Goodell reiterated his commitment to broadcast6598television during an interview just last month, saying, `A lot of our6599media is not about the dollars as much as it is about how we reach more6600fans. That's the primary objective for us.' He went on to comment that6601the NFL's presence on broadcast is `what has led to the great not only6602popularity of the league, but obviously, the great ratings.' '')6603(emphasis added).6604    \167\ See, e.g., Mau Rodriguez & John Fletcher, ``Multichannel6605video market share Q1 2025: Lowest first-quarter losses since 2019,''6606S&P Glob. Market Intel. (May 23, 2025) showing that the number of6607residential multichannel subscriptions (including virtual) amounted to660850 percent of U.S. occupied housing units.6609    \168\ See Sook Aug. 2024 Comments.6610    \169\ See Sook Sept. 2024 Bank of America Comments (``And so now6611we've increased the amount of programming that the network offers by6612over 40 percent total hours of network programming, and we went from6613100 percent entertainment programming to now 46 percent sports, 546614percent entertainment. And I can imagine over the next 3 years that6615those numbers will flip, that will be majority sports versus6616entertainment. And again, live sports, it's what people watch and they6617watch it live. You can DVR it if you're not going to be home to see the6618start of the game, but you'll likely know the outcome if you wait until6619the next day to watch it. And advertisers are into it not only because6620of the association with the sport. It's a lean forward experience, I'm6621alert, paying attention to what's going on as well as the ads. But then6622the things we can do with our local assets to tie a bow around it and6623do local activation for that particular network sponsor at a local6624level in the markets, where they do business and we do business.'').6625    \170\ See Sook Aug. 2024 Comments (``But again, I think you'll see6626the impact on our distribution fees as these sports become part of the6627package that our affiliate stations as well as our O&Os are able to6628take to market in discussions with distributors. So it's a virtuous6629circle going in the right direction.'').6630---------------------------------------------------------------------------6631    The reality is that even prior to November 2024, local broadcast TV6632conglomerates had been forecasting a bright financial future. Clearly,6633they did not view the national cap as a barrier to continued earnings6634growth.\171\ These companies were returning value to shareholders, both6635through earnings and, in Nexstar's case, by buying back its own stock6636to generate a hefty 20-percent embedded return.\172\6637---------------------------------------------------------------------------6638    \171\ See, e.g., Comments of Lee Ann Gliha, Executive VP & CFO,6639Nexstar Media Group, Inc., Citigroup 2024 Global TMT Conference (Sept.66404, 2024) (``Gliha 2024 Bank of America Comments'') (``I think6641historically, the company has a significant return based on M&A--debt-6642financed M&A. That's become less a part of our story. Sort of not since66432019 have we done a major M&A deal, because we're at the cap, as Perry6644mentioned earlier. So there's less of that to do these days. So that6645means that we need to figure out ways to generate great returns for our6646shareholders with that excess cash flow. And so we've been doing that6647in a variety of ways. We have a dividend now that's north of a 46648percent yield, that's a claim of a little over $200 million on our6649cash. We have some mandatory amortization that has to get paid every6650year on our debt, and that leaves a significant amount of free cash6651flow left to make the decision on what to do. Because our stock trades6652at like a 20 percent free cash flow yield, it's very, very accretive on6653a free cash flow per share basis to be buying back our stock on a6654regular basis.'').6655    \172\ Id. Prior to the 2024 election, Sook laid out Nexstar's basic6656dealmaking calculus, which was only to pursue those ``accretive deals''6657that generate better than a 20-percent embedded return, which is the6658return the company sees on share repurchases. In other words, the6659rationale for its push to kill the national cap is that Nexstar views6660national consolidation as highly ``accretive'' to return value to share6661holders, not because more consolidation advances some altruistic motive6662to improve journalism or fill news deserts. See Sook 2024 Bank of6663America Comments (``I always tell people it would have to be an6664actionable transaction and highly accretive, more accretive than buying6665back our own stock, which is an embedded 20 percent return that Lee Ann6666does every day. And so if the profile existed at a risk-adjusted return6667and it was an actionable transaction, I think we would certainly lean6668into it. But in this regulatory environment, it would be very tough to6669get done.'').6670---------------------------------------------------------------------------6671A. Local TV Broadcasters Are Not in the Same Relevant Product Market as6672        Online Tech Giants Like Google, Meta, and Amazon, Nor Are They6673        in the Same Relevant Product Market as Online Video6674        Distributors Like Netflix. Eliminating the National Cap Will6675        Harm Localism and Will Not ``Rein in'' Big Tech Companies.6676    The broadcast lobby and its allies argue that elimination of the6677national cap and other broadcast regulations are necessary to let them6678``compete against `Big Tech.' '' \173\ While it is understandable that6679the local TV industry would want to harness for its own financial gain6680the bipartisan political frustration with tech giants, local broadcast6681television is in a separate formal economic market than online search,6682social media, and online retail commerce.\174\ Local broadcast6683television stations sell advertising in the ``television spot6684advertising market,'' with geographic market boundaries set by the6685DMA.\175\6686---------------------------------------------------------------------------6687    \173\ See, e.g., George Winslow, ``Broadcasters Urge FCC to Hit the6688Delete Button on Antiquated Regs,'' TV Tech (Apr. 21, 2025); John6689Eggerton, ``NAB: Deregulating Broadcasters Is Key to Competing with Big6690Tech, Broad. & Cable (Jan. 19, 2023).6691    \174\ Local broadcast television stations sell advertising in the6692``television spot advertising'' market. See, e.g., Complaint6693  2,6694United States v. Sinclair Broad. Grp., Inc., No. 1:18-cv-2609 (D.D.C.6695Nov. 13, 2018), Dkt. No. 1.6696    \175\ See, e.g., Competitive Impact Statement at 2 n.1, United6697States v. Sinclair Broad. Grp., Inc., e No. 1:18-cv-2609 (D.D.C. Nov.669813, 2018), Dkt. No. 3 (``Spot advertising differs from other types of6699television advertising, such as network and syndicated television6700advertising, which are sold by television networks and producers of6701syndicated programs on a nationwide basis and broadcast in every market6702where the network or syndicated program is aired.''); id. at 2-36703(``Broadcast television `spot' advertising, which typically comprises6704the majority of a station's revenues, is sold directly by the station6705itself or through its sales representatives to advertisers who want to6706target viewers in specific geographic areas called Designated Market6707Areas.'').6708---------------------------------------------------------------------------6709    As explained above, antitrust alone is not a sufficient barometer6710or legal framework for assessing whether broadcasting serves the public6711interest; but antitrust law does provide the parameters for assessing6712and establishing relevant product markets between alleged competitors.6713None of the ``Big 3'' tech giants that bring in significant advertising6714revenues (Alphabet, Meta Platforms, and Amazon) compete in the local6715television spot advertising market. Google competes in other markets,6716chiefly the general search services,\176\ publisher ad servers, ad6717exchanges, and advertiser ad network markets.\177\ The FTC is currently6718arguing in court that Facebook competes in the ``personal social6719networking market,'' and though its parent company Meta disputes that,6720neither side is arguing for a product market definition that also6721includes local TV stations.\178\ The FTC has also brought an antitrust6722case against Amazon (which earns billions from advertisements placed on6723its commerce website),\179\ alleging violations in the ``online6724marketplace services'' and ``online superstore'' product markets.\180\6725Amazon also bundles Amazon Prime Video with its Amazon Prime6726subscription service. But that service, like Netflix or Disney+, is not6727in the ``television spot advertising market.'' \181\6728---------------------------------------------------------------------------6729    \176\ Complaint6730 88, United States v. Google LLC, No. 1:20-cv-673103010 (D.D.C. Oct. 20, 2020), Dkt. No. 1.6732    \177\ Complaint6733 279, United States v. Google LLC, No. 1:23-cv-673400108 (D.D.C. Jan. 24, 2023), Dkt. No. 1.6735    \178\ See, e.g., Cecilia Kang, ``Does Meta Have a Social Media6736Monopoly? Here's What the U.S. Has Argued,'' N.Y. Times (May 15, 2025).6737    \179\ See, e.g., Melissa Otto, ``Global Digital Advertising6738Revenues--A Look at the Big Three: Alphabet (GOOGL), Meta Platforms6739(META), Amazon.com (AMZN),'' S&P Glob Visible Alpha (May 17, 2023).6740    \180\ Complaint ⁋⁋ 122, 186, FTC v. Amazon Inc., No.67412:23-cv-01495 (W.D. Wash. Sept. 26, 2023), Dkt. No. 1.6742    \181\ Though Netflix has not been the subject of a DOJ or FTC6743antitrust complaint, it has been accused in ongoing litigation of6744unlawful activities harming competition in the ``video-streaming6745services'' product market. See Complaint, Bracamontes v. Meta6746Platforms, Inc., No. 1:24-cv-11839 (N.D. Ill. Nov. 18, 2024), Dkt. No.67471.6748---------------------------------------------------------------------------6749    The broadcasters and the Commission cannot simply draw a circle6750around every single firm that sells advertising and call it a relevant6751product market. Doing so would throw out decades of precedent based on6752rigorous economic analysis. For the purpose of antitrust analysis, the6753other agencies that review broadcasting deals and a wider range of6754competition issues (i.e., DOJ and FTC) and the courts have consistently6755favored a narrower approach to market definition.\182\ Those other6756antitrust agencies don't even consider local TV stations as operating6757in the same product market as local newspapers, even though both types6758of firms sell space for advertising served to local audiences.\183\6759While it is true that firms like Alphabet, Meta, Amazon, and local TV6760broadcasters all earn revenue from selling audience attention to6761advertisers (on one side of a two-sided market) and doing so must6762attract a share of the public's attention and time, it is wrong in a6763formal and practical economic sense to draw the market boundaries so6764broadly. This is why the FTC and DOJ have consistently applied the6765``television spot advertising market'' definition when considering6766matters involving broadcast television. Indeed, broadcast TV stations6767actually have a competitive moat that protects them from competition,6768but only if they lean into the localism aspects of their business6769(which also happen to be one central public policy purpose of their6770exclusive licenses to the public airwaves).\184\6771---------------------------------------------------------------------------6772    \182\ See, e.g., Times-Picayune Publ'g Co. v. United States, 3456773U.S. 594, 612 n.31 (1953) (``For every product, substitutes exist. But6774a relevant market cannot meaningfully encompass that infinite range.6775The circle must be drawn narrowly to exclude any other product to6776which, within reasonable variations in price, only a limited number of6777buyers will turn; in technical terms, products whose `cross-6778elasticities of demand' are small. Useful to that determination is,6779among other things, the trade's own characterization of the products6780involved. The advertising industry and its customers, for example,6781markedly differentiate between advertising in newspapers and in other6782mass media.'').6783    \183\ The agencies have consistently defined the product market6784that newspapers operate in as ``the sale of daily English-language6785local daily newspapers to subscribers and the sale of local advertising6786in those newspapers.'' See, e.g., Application for Temporary Restraining6787Order and Order to Show Cause at 10, United States v. Tribune Publ'g6788Co., No. 2:16-cv-01822, (C.D. Cal. Mar. 17, 2016), Dkt. No. 5.6789    \184\ See, e.g., Shorenstein Center Study at 24 (``To compete in6790this environment, local news outlets need to rely on their competitive6791advantage--their focus on local news. It sets them apart, not only from6792national outlets but also from other non-news media that increasingly6793attract people's attention. Local TV stations should recognize the6794power of their brand as a trusted local source and enhance their6795ability to provide timely, relevant local content. While other content6796types can deepen audience engagement, local stations risk losing6797relevance if they fail to deliver consistent, robust local news. For6798audiences seeking local stories, the local TV station remains one of6799the few trusted sources, whereas when other content is at issue, there6800are more attractive alternatives.'').6801---------------------------------------------------------------------------6802    Even setting aside market competition analysis and considering6803instead the Chairman's supposed goal of ``reining in big tech,'' \185\6804there's no explanation of how local TV consolidation enables those6805firms to compete against Google and Meta. Certainly, local TV firms are6806not going to lower their advertising rates after consolidating. That's6807the opposite of what microeconomics suggests would happen, and not one6808single broadcaster has suggested they would lower spot rates following6809elimination of the national cap. Carr's ideology and predilections here6810thus contradict basic logic, which says that increased competition6811tends to make prices lower; it doesn't magically make prices higher so6812long as the revenues from those ad sales (theoretically) might trickle6813down towards useful outputs like spending on local news production.6814---------------------------------------------------------------------------6815    \185\ See, e.g., Ari Bertenthal, ``FCC's Carr Sends Message to Big6816Tech,'' Broadband Breakfast (Nov. 7, 2024).6817---------------------------------------------------------------------------6818    If we consider the narrower, but still too broad, product market of6819``video services,'' allowing giant local TV broadcast firms to6820monopolize the public airwaves in every U.S. DMA is not going to6821materially impact the price of advertising in that broader video market6822(but it would result in monopoly pricing in the local television spot6823ad market). Advertisers who spend money to reach audiences watching6824YouTube, Netflix, Disney+, Apple TV+, Paramount+, Amazon Prime and6825other global SVOD providers are accessing a different product market6826than local broadcast TV stations offer. Ad-buying firms create6827advertising campaigns and access a number of different media6828distributors across different product markets to reach their target6829audiences.6830    Broadcasters have made this clear when talking to their investors.6831Just last summer, Sinclair's CEO noted that his local stations don't6832view online video as a competitive threat, and explained that the6833impact from formerly ad-free SVOD providers now including ads ``has not6834shown up in our core business . . . [it] hasn't affected our CPMs on6835the linear side.'' \186\ In fact,6836---------------------------------------------------------------------------6837    \186\ See, e.g., Comments of Christopher S. Ripley, President &6838CEO, Sinclair, Inc., Q2 2024 Investor Call (Aug. 8, 2024) (``Ripley6839Aug. 2024 Comments'') (``So we have not--it's an interesting question6840in terms of extra ad avails that are coming on to the marketplace from6841either FAST channels, AVOD, SVOD, and where you would think you could6842see it would be potentially in the pricing on the linear side, and that6843has not shown up in our core business. And I believe it hasn't shown up6844on the linear side because we are still the kings by a wide margin of6845reach, frequency, premium content, you name it, across all the6846categories, we're at the top of the heap when it comes to any sort of6847comparison. Just to give you an idea, 80 percent of adults on any given6848day interact with broadcast; 56 percent cable TV and 43 percent--if I6849remember correctly, over 46 percent for paid streaming. And then paid6850streaming, you get a dice set up between all the various suppliers. So6851we have a significant lead in terms of reach, frequency and the premium6852nature of our content and people watching it live, specifically like6853news and sports. And so there's a glut of inventory that has come to6854the marketplace, hasn't affected our CPMs on the linear side. And what6855it has done, interestingly enough, is it improved our audience6856extension business. When an advertiser comes to Sinclair, we don't just6857sell them a slate of linear spots on our networks, we sell them an6858entire campaign, right? It's a 360 one-stop shop experience and that6859includes things like AdWords and websites and social and you name it,6860we do the entire campaign for you. And a major component of that is6861here's your linear plate and here's an audience extension package,6862which will reach on to these various connected TV and OTT platforms.6863And so that's a pretty significant portion of the digital business. And6864because there has been so much inventory made available in that area,6865we've been able to push down what we pay for the inventory. So it's6866expanded our margins in that business, which affects both STG, which6867does a significant amount of business on audience extension, but also6868Compulse360 which services our TV sellers but also services other local6869media companies and other local ad agencies. The margins there have6870increased because they've been able to negotiate and push down pricing6871of all the various publishers that are putting out these ad avails and6872some of that's translated into the pricing that goes to the ultimate6873client, but not all of it. And so margins have been expanding there.'')6874(emphasis added).6875---------------------------------------------------------------------------6876    Sinclair's CEO noted that the entry of SVOD providers into the6877online video ad business actually improved Sinclair's margin in its6878``audience extension business,'' which is the company's ``one-stop shop6879experience and that includes things like AdWords and websites and6880social,'' in addition to its linear networks and stations.\187\ The6881Notice suggests\188\ that competition from online video might require6882re-assessing and even eliminating the national cap applicable to6883broadcasters. Yet Sinclair proudly proclaimed before Trump's re-6884election, with the cap still firmly in place, that broadcast TV is6885``still the king[ ] by a wide margin of reach, frequency, premium6886content, you name it, across all the categories,'' noting that ``806887percent of adults on any given day interact with broadcast'' versus6888``46 percent for paid streaming.'' \189\ Similarly, last September,6889Nexstar's CEO told attendees at an investor conference that digital6890advertising and linear TV advertising are complements, not substitutes,6891with linear broadcast TV advertising remaining critical for branding6892purposes.\190\6893---------------------------------------------------------------------------6894    \187\ Id.6895    \188\ Notice at 2 n.5 (``For example, in the National Cap NPRM, the6896Commission noted, among other developments, the growth of video6897programming options available to consumers (including online6898alternatives to traditional video distribution), reverse compensation6899fees paid by affiliates to broadcast networks, common ownership of6900broadcast and cable networks, consolidation among both MVPDs and non-6901network owned broadcast television station groups, and continuing MVPD6902video subscriber losses.'') (internal citation omitted).6903    \189\ Ripley Aug. 2024 Comments.6904    \190\ See Sook Sept. 2024 Bank of America Comments (``I mean you6905can spend so much time and effort trying to be specific with your6906targeting, you can forget to build a brand. And I think of all6907purchasing kind of coming through a purchase funnel, right, where you6908need to be creating a brand at the top of the purchase funnel, and at6909the bottom, you can be very price and item specific. But you need to6910use television and digital assets to work in tandem as people work6911through their purchase funnel, making those decisions, whether it's for6912household goods or appliances or cars. And so I think the two assets6913that we concentrate on are TV and digital, and I think they complement6914each other very well through the purchase funnel.'') (emphasis added).6915---------------------------------------------------------------------------6916    If this Commission conducts an honest and unbiased analysis of the6917continuing need for the national ownership cap, it will recognize that6918broadcasters talk out of both sides of their mouth, pleading poverty6919before regulators while telling Wall Street that the local TV market is6920``not nearly as competitive as the national landscape'' and that6921broadcast TV still reigns supreme in these vital and lucrative local6922markets.\191\6923---------------------------------------------------------------------------6924    \191\ See Comments of David Lougee, President and CEO, TEGNA Inc.,6925Q2 2024 Investor Call (Aug. 7, 2024) (``Lougee Aug. 2024 Comments'')6926(When asked about the future outlook for the broadcast TV business,6927TEGNA's outgoing CEO said ``we have a tremendous amount of assets.6928We've got strong local brands in local communities, which are not6929nearly as competitive as the national landscape, that's a valuable6930asset. To have valuable local content that is strongly branded is--can6931be a jumping off point to source significant new business, whether6932organic or inorganic, as Julie and we have said many times.'')6933(emphasis added).6934---------------------------------------------------------------------------6935B. The Rise of Online Video Does Not Lessen the Need for the National6936        Cap. Local TV Broadcasters Do Not Compete Directly Against6937        National Online Video Providers, Including the Online Services6938        of the Big 4 Networks.6939    In the Notice, the Commission asked, ``how has the national6940audience reach cap affected broadcast television's market position in6941relation to other video distributors, such as online video providers,6942that are not restricted by ownership limits?'' \192\ In doing so, the6943Notice referenced the 2017 National Cap NPRM's discussion of6944``economies of scale made possible by expansion of station ownership6945that may help broadcast television remain competitive in the6946marketplace and deter the migration of expensive over-the-air6947programming to other video programming distributors.'' \193\6948---------------------------------------------------------------------------6949    \192\ Notice at 2.6950    \193\ Id.6951---------------------------------------------------------------------------6952    As discussed above, it is fundamentally wrong for the Commission to6953treat online video providers as operating in the same relevant product6954market as local television broadcasters. The prior Commission6955recognized this in the 2018 Quadrennial Review Order, noting that6956``non-broadcast sources of video programming do not compete with6957broadcasters for retransmission consent fees, network affiliations, or6958the provision of local programming, which continue to remain largely6959unique to broadcast television.'' \194\ And ``while broadcasters may be6960seen as participating in various markets or competing along various6961dimensions . . . the provision of local programming remains a hallmark6962of broadcast television and an area where viewers directly benefit from6963competition among local broadcast television stations.'' \195\ Thus the6964Commission concluded that these non-broadcast programming options are6965not ``substitutes to broadcast programming.'' \196\6966---------------------------------------------------------------------------6967    \194\ See, e.g., In the Matter of 2018 Quadrennial Regulatory6968Review--Report and Order, 38 FCC Rcd. 12782, 12824 (2023) ⁋ 756969(2023) (``2018 Quadrennial Review Order'').6970    \195\ Id.6971 75.6972    \196\ Id.6973 73.6974---------------------------------------------------------------------------6975    With the instant Notice, the Commission now appears to be6976myopically focused on the business of broadcasting in the context of6977the larger advertising and video markets, while ignoring the important6978fact that broadcast license holders have a monopoly right to a portion6979of the public airwaves, and one that comes with legal obligations that6980are unique to that spectrum band. This is not only a radical departure6981from the agency's prior analytical standard, it is a departure from the6982Commission's prior conclusion that even under a ``competition-only''6983analytical framework, ``loosening our rules and allowing additional6984consolidation (or, under some proposals, unlimited consolidation) would6985cause substantial harm to the public interest.'' \197\6986---------------------------------------------------------------------------6987    \197\ Id.6988 21 n.68.6989---------------------------------------------------------------------------6990    But to be clear, maintaining the national cap has not meaningfully6991harmed the broadcast chains in any way; in fact, the national cap has6992acted to incentivize localism, and that comes with economic benefits to6993broadcasters, not just the detriments they pretend. Online video6994distributors do not produce local news. Advertisers have demand for6995viewers who watch local news broadcasts, and those advertisers have a6996limited number of options to reach that audience in each specific DMA.6997This specific demand, with limited supply, gives broadcast TV owners6998pricing power within the local television spot advertising market.6999Indeed, as the former Trump administration Assistant Attorney General7000Makan Delrahim noted that there are ``varying levels of substitution7001for ad placement across media'' and that ``even if it means absorbing a7002price increase, some of the evidence we have seen suggests that7003advertisers are unlikely to look beyond broadcast spots within a given7004DMA.'' \198\ Thus, given the limited ad inventory for local affiliates7005during national programming blocks and the high demand for that7006inventory, it's no surprise that local broadcast TV stations generate7007the bulk of their advertising revenues from local spot ads.\199\ What's7008more, differential regulatory treatment even within the local news7009market has always been the norm (for example, print vs. broadcast).7010That decision for differential treatment was made by Congress (and7011upheld by the Supreme Court in cases like Red Lion) because of the7012limited nature of these airwaves that are a public resource.7013---------------------------------------------------------------------------7014    \198\ See 2019 DOJ Workshop.7015    \199\ See, e.g., Justin Nielson, ``Complete picture of U.S. TV7016station industry revenues, 2009-2030,'' S&P Glob. Market Intel. (July701729, 2025) (``S&P Complete Picture'') (containing data indicating that7018core local and political advertising revenues were 90 percent of local7019U.S. TV broadcaster's 2024 revenues, with core national ad revenue only702010 percent); 2019 DOJ Workshop (featuring Gray Media co-CEO Pat7021LaPlatney noting that ads are ``sold three ways--locally, regionally,7022and nationally. And for Gray, in 2018, local and regional was roughly702380 percent of our advertising revenue, excluding political.'').7024---------------------------------------------------------------------------7025    The ``growth of video programming options available to consumers''7026\200\ consists almost entirely of non-local subject matter. It's7027heavily tilted towards entertainment content, and the growth in news7028content is programming covering national topics. If anything, these7029programming trends in the broader video markets highlight that market7030forces alone would incentivize less localism were there no national7031cap.7032---------------------------------------------------------------------------7033    \200\ Notice at 2 n.5.7034---------------------------------------------------------------------------7035    The Notice likewise points to ``online alternatives to video7036distribution'' \201\ as a factor that implicates the policy purpose of7037the national cap, but concerns about broadcast license consolidation7038impacting localism are not germane to how programming is distributed.7039They are about the programming itself. Indeed, many local broadcasters7040have free online streams of their own programming (i.e., not network7041content), and they are reaching audiences via their own websites7042(multimedia) and ``FAST'' platforms.\202\ Thus, many local broadcasters7043already have national reach when distributing their programming online,7044as they always have in the Internet era. What has not changed, and will7045not change, is the physical reality that broadcasting is a local7046phenomenon, and monopoly spectrum licenses to distribute programming7047via broadcast are granted on an eight-year renewable basis, under the7048terms defined by the Commission and the Communications Act.7049---------------------------------------------------------------------------7050    \201\ Id.7051    \202\ FAST is an acronym for free advertiser-supported television,7052and includes online services such as Pluto TV (Paramount-owned), Xumo7053TV (Comcast-owned), Tubi (Fox-owned), Roku TV, and many others.7054Sinclair's NewsON has 285 TV station partners in more than 165 U.S.7055markets. See, e.g., ``NewsON Partners with Lilly Broadcasting to Expand7056Coverage in NY and PA,'' Press Release, NewsON (Apr. 1, 2025).7057---------------------------------------------------------------------------7058    The Notice also raises the issue of reverse compensation fees paid7059by affiliates to broadcast networks,\203\ which are today about half of7060the amount that pay-TV distributors pay to those affiliates for7061retransmission consent.\204\ National broadcast networks are taking a7062growing share of the growing retransmission consent fee pie. But that7063is the reality of having to pay for content that attracts audiences.7064Local broadcasters may not like this (the same way pay-TV customers7065don't like the below-the-line ``broadcast recovery'' fees),\205\ but it7066does not harm local stations' positive financial health. Local TV7067affiliates have a self-proclaimed ``monopoly'' on airing whatever must-7068see national content these rising reverse retrans fees pay for (e.g.,7069live sports), which is programming that drives viewers to their7070channels. And that ultimately benefits the local broadcasters' bottom7071lines, while it also helps maintain audience attention to live local7072news--the other compelling, must-have content over which local7073broadcasters themselves have a monopoly. The exponential rise in7074retrans fees\206\ enriched broadcasters and broadcast networks, and it7075also directly contributed to cord-cutting by MVPD customers less7076willing to pay those price hikes. Allowing broadcasters to increase7077their market scale will enhance their market power to extract even7078higher fees from pay-TV distributors, particularly as the remaining7079MVPD customers are those who have stuck around for live sports and7080local news. Broadcasters are still coming out ahead when considering7081the entire retrans picture, and broadcast TV consolidation has only7082strengthened their position against pay-TV providers.\207\7083---------------------------------------------------------------------------7084    \203\ Notice at 2 n.5.7085    \204\ See, e.g., S&P Complete Picture.7086    \205\ See, e.g., Luke Bouma, ``Comcast Price Hikes Push Monthly7087Bills Over $250 for Many Customers With TV & Internet,'' Cord Cutters7088News (Jan. 21, 2025) (``Adding to the burden for customers, Comcast has7089also significantly increased several add-on fees. The Broadcast TV fee,7090a controversial charge levied to recoup the costs of carrying local7091broadcast channels, has skyrocketed to $25.25 per month. These fee7092increases have long been a source of frustration for consumers, who7093feel they are being nickel-and-dimed for essential services. The lack7094of transparency surrounding these fees and their substantial increases7095contribute to customer dissatisfaction.'').7096    \206\ See infra Figure 6.7097    \207\ The Notice asks about the impact of ``consolidation among7098both MVPDs and non-network owned broadcast television station groups.''7099Notice at 2 n.5. MVPD consolidation doesn't seem to have impacted7100broadcasters' negotiating power when it comes to retrans, and the pay-7101TV market has expanded since early 2017 with the rise of ``virtual''7102MVPDs. And as the rapid growth in retrans revenues shows, consolidation7103among non-Big 4 broadcast station groups has contributed to an increase7104in broadcasters' negotiating power, largely because local stations7105remain the only way MVPDs can get the programming that their most7106loyal, traditional viewers want (live sports and news).7107---------------------------------------------------------------------------7108C. The Decline in Linear TV Viewing Has Disproportionately Impacted7109        Cable Networks, Not Local Broadcast Television.7110    While viewership of linear television is in decline, this trend is7111not observed equally amongst all linear television sectors. Online7112television continues to take a larger share of viewing time, but7113virtually all at the expense of time previously spent watching linear7114cable networks. We can see this in Figure 3 below, which shows data7115from Nielsen's ``The Gauge,'' reflecting the relative shares of viewing7116hours for online, linear cable, linear broadcast, and ``other'' viewing7117such as watching DVDs.\208\7118---------------------------------------------------------------------------7119    \208\ See ``The Gauge,'' Nielsen (June 2025) (noting that ``other''7120includes ``TV usage that does not fall into the broadcast, cable or7121streaming categories. This primarily includes all other tuning7122(unmeasured sources), unmeasured video on demand (VOD), audio7123streaming, gaming and other device (DVD playback) use'').71247125[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]71267127    These data show that there is stability in broadcast viewership,7128relative to cable. In May 2021, broadcast accounted for 25 percent of7129viewing time, while cable captured 40 percent. Four years later in May71302025, cable's share of viewing time had declined to 24 percent, while7131broadcast had only fallen to 20 percent. In the four years between May71322021 and May 2025, streaming's share of viewing time increased by 197133percentage points while cable's share dropped 15 percentage points.7134    Last summer, Nexstar's CEO Sook highlighted the difference between7135online video's impact on linear cable networks compared to its impact7136on linear broadcasting. ``I think you have to separate linear7137television into two buckets. One is broadcast television and the other7138is cable television. And there is no question that cable television and7139the long-tail cable network, companies that have long-tail cable7140portfolios, are under pressure. But I would say broadcast television,7141which is where we live primarily with what we do, is--again, we just7142put up another record quarter, last quarter of net revenue growth.''7143\209\ Sook went on to point out the differences in viewership between7144local TV stations and cable networks, noting that because of this7145disparity, ``cable nets are overpriced relative to their viewership,7146broadcast nets are underpriced relative to their viewership.'' \210\ In7147Sook's view, this underpricing gives broadcasters like Nexstar the7148ability to command ever-escalating retransmission consent fees from7149pay-TV providers. As he noted too, those fees are forecast to grow7150faster than the typical rate of general inflation.\211\ Sook's comments7151about his company's ``outsized returns,'' which he attributed to that7152fact that ``what we're negotiating are for local broadcast stations and7153signals,'' reflects the positive financial prospects for the local TV7154industry.\212\ That industry does not need further consolidation in7155order to continue to thrive.7156---------------------------------------------------------------------------7157    \209\ See Sook Sept. 2024 Bank of America Comments.7158    \210\ Id.7159    \211\ Id. (``And so we've been able to kind of improve our position7160every single time we've gone back to the well in that regard. And I7161think we expect we will continue to be able to do that for some period7162of time. I read a piece of research, last night on the plane coming up,7163that has a projection of affiliate fees, cable networks, down 5 percent7164through the forecast period, which I think went through maybe `26,7165retransmission fees, which is broadcast, increasing 5 percent over that7166same period of time.'').7167    \212\ Id. (``And I think it's that divergence that you're seeing,7168and obviously, we get outsized returns, again, because of our scale7169fact that the predominance of what we're negotiating are for local7170broadcast stations and signals. And so I think we do see that7171continuing. We're not at parity. We're not at stasis to where we feel7172like we're getting our fair share. We're still working our way up.'').7173---------------------------------------------------------------------------7174D. Local TV Broadcast Revenue Growth During The Previous Two Decades7175        Did Not Result in Newsroom Staffing Increases.7176    We now turn to a detailed examination of the operational and7177financial state of the local TV industry, both at the sector-level and7178at the leading ownership groups. We then conclude with an examination7179of the industry and other analysts' forecasts for how the business will7180fare in the coming decade.7181    We begin by looking at local TV newsroom employment. Unlike the7182local newspaper sector, employment in local TV newsrooms has held7183steady over the past decade. RTDNA published data indicating that TV7184newsroom employment has been essentially flat since the industry7185rebounded from the Great Recession, at approximately 28,000 jobs both7186in 2012 and in 2024.\213\7187---------------------------------------------------------------------------7188    \213\ See Papper, supra note 146 at 2.71897190[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]71917192    Employment holding steady is certainly preferable to a decline. Yet7193the most salient fact for present purposes is that this flat employment7194trend occurred during a time when local TV revenues were growing faster7195than the rate of inflation (see Figure 5). Between 2012 and 2018 (the7196latter being the peak year for U.S. broadcast TV station inflation-7197adjusted revenues), revenues increased 28 percent on an inflation-7198adjusted basis, but U.S. broadcast TV newsroom employment declined even7199as revenues soared. Indeed, despite record revenues in 2018, broadcast7200TV news employment was at its lowest level of any year between 2012 and72012024. COVID-era financial disruptions, inflation, and slowing retrans7202growth flattened the broadcast TV industry's revenue curve. Yet 20247203inflation-adjusted total revenues were still 19 percent higher than7204they were in 2012, while newsroom staffing was essentially flat as7205noted above.\214\7206---------------------------------------------------------------------------7207    \214\ Based on other historical RTDNA TV newsroom employment data7208(via Dr. Papper's archives, supra note 112) the number of local TV7209newsroom jobs increased by only 5 percent from 2009 to 2024, while7210total local TV industry revenues increased by 49 percent during that7211same time-frame even after adjusting for inflation. During this time,7212there was considerable industry consolidation. These divergent7213trajectories reflect the industry's chief method for improving the7214economic bottom line: mergers and cost-cutting, often in the form of7215cutting newsroom jobs.7216---------------------------------------------------------------------------7217    And as discussed previously, these revenue increases came at a time7218when the number of TV stations producing local news declined.\215\7219Consolidation is making broadcasters more money, in large part because7220stations save money as the number of TV newsrooms producing news7221declines, and the amount of duplicated news aired on other stations7222increases. As Dr. Papper put it in a 2018 report, ``the total number of7223stations running local news . . . keeps increasing, but it's doing so7224because a smaller number of newsrooms are running news on more and more7225outlets.'' \216\7226---------------------------------------------------------------------------7227    \215\ Supra Figure 2.7228    \216\ See Bob Papper, ``Research: 2018 local news by the numbers,''7229RTDNA (June 13, 2018).72307231[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]72327233    The local TV industry's economic recovery following the Great7234Recession was largely due to massive increases in revenues from7235retransmission consent payments and political advertising.\217\ Figure72366 shows local TV stations' annual (inflation-adjusted) retransmission7237fee revenues between 2006 and 2024. If we compare two national election7238years (2008 and 2024) we see a remarkable inflation-adjusted increase7239in retrans revenues of nearly 2,000 percent. While the outsized7240inflation following the pandemic put an end to this meteoric rise, this7241only appears to be a lull. A recent forecast by S&P Global suggests7242retrans revenues (which include carriage payments made not only by7243traditional cable and satellite pay-TV but also by virtual MVPD7244distributors to local TV stations) will rise at a compound annual7245growth rate of 2.2 percent between 2025 and 2030.\218\ Though not the7246exponential growth of the late-aughts to early 2010s, this expected7247growth is above the Federal Reserve's two-percent inflation target.7248---------------------------------------------------------------------------7249    \217\ Inflation-adjusted political ad revenues for the U.S. local7250TV industry increased 437 percent between 2009 and 2024. See S&P7251Complete Picture.7252    \218\ Id.72537254[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]72557256    It's important to put these revenue data in context with viewership7257data. As noted above in the discussion of Nielsen's ``Gauge'' data,7258viewing habits have changed in the streaming media era. Though nowhere7259near the level seen in cable, cord-cutting and streaming have decreased7260broadcast viewership too. Some publicly available ratings data suggest,7261however, that local TV news broadcasts are not only outperforming7262linear cable TV, they are not even seeing the same size declines as7263primetime network programming. Below in Figure 7, we show an excerpt of7264ComScore audience data via Pew Research Center. This information7265captures the average number of televisions turning into news7266programming on the local network affiliates during key news day-parts,7267from 2016 through 2022. While there was a 9 percent drop between 20187268and 2022 (even-numbered non-Presidential election years) in the average7269local TV news audience,\219\ this drop is far less than the 31 percent7270drop in average primetime viewership at the Big 4 broadcast7271networks.\220\ Comparing two presidential election years (2016 vs.72722020), we observe a 12 percent drop in the average local TV news7273audience compared with a 32 percent drop in the Big 4 networks' average7274primetime audience.7275---------------------------------------------------------------------------7276    \219\ This average is calculated based on the number of televisions7277tuning into the morning, evening, and late-night local news dayparts.7278See ``Local TV News Fact Sheet,'' Pew Rsch. Ctr. (Sept. 14, 2023).7279    \220\ These figures were calculated based on annual primetime7280viewership data reported by Variety. See Michael Schneider, ``Most-7281Watched Television Networks: Ranking 2024's Winners and Losers,''7282Variety (Dec. 26, 2024).72837284[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]72857286    While any decline in viewership is not welcome to broadcasting7287firms, this particular decline is not a cause for great concern, as7288revenues continued to grow. This indicates the pricing power that7289broadcasters retain in spite of declining audiences. And it also7290indicates that broadcasters adding more news day-parts with repeated7291segments is a low-cost method for them to sell more profitable ad slots7292than they would have if they stuck with syndicated programming.7293Furthermore, the declines in local TV news viewers in terms of the7294percentage of all U.S. TV households are not that large. From the7295Comscore data presented by Pew, we estimate that about 2.4 percent of7296all TV households tuned into local news during 2018, compared to 2.17297percent in 2022.7298E. Broadcast TV Chains' Healthy Financial Performance During the7299        Streaming Media Era Demonstrates that the National Cap is Not a7300        Barrier to Continued Financial Prosperity.7301    The historical financial performance of the five largest TV7302broadcasting companies, as measured both by their total number of7303licensed stations and total number of DMAs served, generally shows7304positive results too. These five firms (all publicly traded companies)7305are Nexstar, Gray, Sinclair, E.W. Scripps, and TEGNA. We do not include7306the Big 4 networks' parent companies, as they are each multimedia7307conglomerates that derive a substantial amount of their income from7308businesses other than local TV broadcasting.7309    First, we present these five local TV ownership groups' operating7310revenues, advertising revenues, and political advertising revenues,7311comparing how these values changed from 2016 to 2024 (adjusted for7312inflation). All of the firms acquired new broadcast TV stations and7313entered new markets during this time (see Figures 16-21 below). There7314are some external factors impacting these results, which are unrelated7315to the firms' broadcast TV consolidation or the financial performance7316of their core local TV business during this time. For instance,7317Sinclair made a costly and ultimately unwise decision to purchase Fox's7318Regional Sports Networks in August 2019, which the company later spun7319off into a subsidiary that declared Chapter 11 bankruptcy in March73202023. E.W. Scripps divested all of its print assets in April 2016, and7321spun-out its broadcast radio business in December 2018. It then7322acquired Ion Media in January 2021. And Nexstar purchased the CW7323network in a deal that closed in October 2022.7324    With these caveats in mind, we see that even after adjusting for7325inflation, most of the five largest local broadcast TV firms saw7326healthy operational revenue growth, ad revenue growth, and political ad7327revenue growth (see Figure 8).73287329[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]73307331    However, as noted, all five firms added stations to their portfolio7332after 2016. Accordingly, we present these revenue changes on a per-7333station basis (Figure 9) and a per-market basis (Figure 10). These data7334are still heavily impacted by each company's entry and exit into and7335out of non-local TV businesses. Nexstar's and Gray's performances are7336good indicators of the general trajectory of the local broadcast TV7337business during this period. Certainly these data capture how much the7338local TV political advertising business has grown since 2016. During7339the 2024 election cycle, all of these largest five broadcasting chains7340saw double-digit or triple-digit percentage growth in their inflation-7341adjusted political advertising revenues compared to the 2016 cycle,7342even on a per-station and per-market basis.73437344[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]73457346    We next examine the changes in these five ownership groups'7347publicly traded stock prices since the stock market's bottom in March73482009 to the end of 2024 (see Figure 11).\221\ We also include7349Entravision, which is the next largest publicly traded local broadcast7350TV firm, but which has a station portfolio that contracted slightly7351during this period (see Figure 21). During this time, the S&P 5007352increased seven-fold (693 percent). The three largest local TV chains7353all outperformed the broader market, with Nexstar's share price7354increasing 21-fold. Sinclair's performance is notable given the RSN7355bankruptcy misstep.7356---------------------------------------------------------------------------7357    \221\ The values presented do not represent total yield during this7358period, as dividend payments are not included in the calculation.73597360[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]73617362    Because of all of the various business moves that impacted each of7363these firms' revenues during the comparison period, we next examine two7364key profitability metrics that enable meaningful comparisons not7365greatly impacted by one-off events. First, we examine the local7366broadcast firms' Return on Capital (ROC). This is a useful measure as,7367over time, successful firms that return value to shareholders should be7368earning a return on capital that exceeds their cost of capital.\222\7369Below in Figure 12, we show the ROC for the local broadcast firms, for7370each firm's entire time as a publicly-traded company. And in Figure 137371that follows, we present ROC values for six other advertising-supported7372firms (Alphabet, Meta, Warner Bros. Discovery, IAC Corp., Paramount/7373CBS, and Fox Corp).7374---------------------------------------------------------------------------7375    \222\ See Aswath Damodaran, ``Return on Capital (ROC), Return on7376Invested Capital (ROIC) and Return on Equity (ROE): Measurement and7377Implications'' 5, Stern Sch. of Bus., (July 2007).7378---------------------------------------------------------------------------7379    All of the local broadcast TV firms had average ROC values between73805 and 8 percent during their time as publicly traded companies. These7381are reasonable returns that for most time periods would exceed each7382firms' cost of capital. These returns are also comparable to, or larger7383than, the ROCs observed at Warner Bros. Discovery, IAC Corp.,7384Paramount/CBS, and Fox Corp. Alphabet and Meta both had ROCs that were7385above all other firms in this comparison. Those two companies are also7386widely viewed as some of the most financially successful firms in7387history, and their businesses have attracted significant antitrust7388attention.73897390[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]73917392    We next conduct a similar comparison of these companies' EBITDA7393margins. EBITDA (Earnings Before Interest, Taxes, Depreciation, and7394Amortization) margin is a useful profitability metric that reflects how7395much revenue a firm converts into operational earnings, before7396considering certain (often one-time, or irregular) expenses.\223\7397---------------------------------------------------------------------------7398    \223\ ``What is EBITDA,'' Money (Feb. 26, 2024).73997400[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]74017402    As seen above in Figures 14 and 15, the local broadcast TV7403companies all have healthy margins, which match or exceed what is7404commonly considered a ``good'' EBITDA return.\224\ Most of the local7405broadcasters' average historical EBITDA margins are comparable to7406Alphabet's, and exceed the historical returns seen at Warner Bros.7407Discovery, IAC Corp., Paramount/CBS, and Fox Corp.7408---------------------------------------------------------------------------7409    \224\ See, e.g., Louise Downing, ``Understanding the EBITDA Margin7410(With Formula),'' Am. Express (June 3, 2024) (``A good EBITDA margin7411may fall between 15 percent and 25 percent, says Simon Thomas, Managing7412Director of accountancy firm Ridgefield Consulting. Generally, the7413higher the EBITDA margin, the greater the profitability and efficiency7414of a company.'').74157416[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]74177418F. Local TV Broadcasters Have Many New Revenue-Generating Opportunities7419        to Pursue Outside of National Consolidation.7420    The local television broadcasting industry's financial performance,7421while that industry was subject to the 39 percent national cap, was7422more than adequate for these companies to return value to shareholders.7423And even as they claim the need for more complete deregulation, these7424same companies project a bright financial future that local7425broadcasters have ahead of them, even if the Commission chooses to7426follow the law and declines to eliminate or raise the national caps.7427a. Broadcasters Expect to See Continued Healthy Local Advertising and7428        Retransmission Consent Payment Growth Thanks to Strong Viewer7429        Demand for Live Local Sports and News Programming.7430    As we recounted above, leading local broadcast company executives7431were ebullient about the future of their industry when speaking to7432investment analysts last summer. That came at a time when they could7433not know for sure there would be an FCC willing to raise Congress's 397434percent national cap, all to allow broadcasters further power to7435monopolize local DMAs. And their optimism was well-founded. Cord-7436cutting appears to be slowing instead of accelerating as it did in7437recent time periods, and the remaining linear TV subscribers place high7438value on live sports and local news. They also are a more affluent7439demographic sought out by advertisers.\225\7440---------------------------------------------------------------------------7441    \225\ See, e.g., Gliha 2024 Bank of America Comments (``The other7442piece that we offer is news and the overlap between what also do[ ]7443sports fans like, 90 percent of them also like news. And so it's a7444great sort of combination. So if you look at the composition of the pay7445TV ecosystem that was sports and news fans in 2019, it was 51 percent.7446Now what is that in 2023, it's 68 percent. And the actual quantum of7447sports and news subscribers has actually increased. Now if you look at7448people that are not interested in sports or news . . . the content is7449not really kind of our bread and butter. That's decreased from 147450percent in 2019 to 4 percent in 2023. So a large portion of that7451attrition that's been happening has been the folks that are not7452interested in sports or news. So we're now at this point where . . .7453those people are out of the ecosystem and maybe we have a moderation.7454You would look at that data and go, no, that sounds like that could be7455a thesis that would make sense. And then that's supplemented by the7456second thesis . . . which is the age, the demographics. So if you look,7457almost 2/3 of the pay TV ecosystem now is people that are 45-plus. And7458if you look 5 years ago, it was 59 percent of the population. So again,7459you've seen sort of the people that are the demographic, the younger7460demographic that wanted to leave have left. And we think that sort of7461will be a very good positive change for our business.'').7462---------------------------------------------------------------------------7463    And though the advertising sector is vulnerable to pull-backs in7464times of economic uncertainty, broadcast executives have repeatedly7465told Wall Street that their local ad business is faring far better than7466the national spot market, because the local ad business tends to be7467``much more stable than the national market.'' \226\ There's also no7468sign of the political ad machine slowing down, with S&P Global7469forecasting compound annual growth rates in this category to exceed the7470Federal Reserve's two percent inflation target in the coming7471decade.\227\ And we previously discussed the industry's and analysts'7472expectations that they will be able to continue to count on7473retransmission consent and vMVPD carriage payment growth exceeding7474inflation for years to come as well.\228\7475---------------------------------------------------------------------------7476    \226\ Id. (``We generate somewhere--68 percent to 70 percent of our7477revenue on the advertising side comes from the local market and the7478local market tends to be much more stable than the national market,7479because [the] local market is more call to action versus the national7480market, which is more branding. And so I would say, we've been seeing a7481sequential improvement in the rate of decline for the last few quarters7482. . . on the advertising side.''); see also Lougee Aug. 2024 Comments7483(``The economy continues to proceed with a sluggish and uncertain pace,7484and that's been echoed in national ad spend, which is lower than we7485anticipated going into the year. That said, local advertising is faring7486well considering the headwinds facing national as small and medium7487local businesses show [ ] more willingness to spend.''); Justin7488Nielson, ``US TV and radio station ad projections, 2025-2035,'' S&P7489Glob. Market Intel. (July 1, 2025) (``S&P Projections'') (``Over the7490[2025-2035] forecast, U.S. TV station national core spot ad revenue7491should decline at a 5.0 percent CAGR to $3.07 billion in 2034. Local7492spot ad revenue is forecast to be more resilient to digital7493alternatives and increase at a 1.5 percent CAGR to $14.43 billion in74942034.'').7495    \227\ See S&P Projections.7496    \228\ See, e.g., S&P Complete Picture; Comments of Perry A. Sook,7497Founder, Chairman & CEO, Nexstar Media Group, Inc., Citigroup 20247498Global TMT Conference (Sept. 4, 2024) (``Nexstar has been collecting7499distribution checks from MVPDs since 2005, and we continue to post7500linear growth. So the rate of change in unit rate is, has been7501sufficient to outrun the decline in the universe, right? And that has7502been a part of our thesis. Again, why? Because the bulk of what we're7503negotiating for are broadcast stations and not cable networks.'').7504---------------------------------------------------------------------------7505    Much of this optimism is built on the continued high levels of7506viewer demand for live sports, and the local broadcasters' recent moves7507to strike deals with local teams and sports leagues\229\ to air games7508that were once only available on national cable sports networks and7509RSNs.\230\ Nexstar in particular has made a conscious effort to shift7510the balance of programming towards sports, which it expects will soon7511be the majority of the content it airs on the CW network.\231\ And7512former TEGNA CEO David Lougee noted last summer, ``a great deal of the7513most passionate and consumed local sports content is returning to local7514broadcasting.'' \232\ This trend is accelerating, and it will keep7515broadcasters' bottom lines growing, even if they are not allowed to7516monopolize the public airwaves even more at the national level and7517within DMAs too.7518---------------------------------------------------------------------------7519    \229\ See S&P Projections (``An additional catalyst in the local ad7520revenue forecast is the influxof TV station owners' local over-the-air7521sports rights deals, with sports partnerships from Gray Media Inc., The7522E.W. Scripps Co., Nexstar Media Group Inc., Sinclair Inc. and TEGNA7523Inc. indicating future upside in overall ratings and local ad revenue7524potential in the companies' markets.''); see also Comments of Sandra7525Breland McNamara, Executive VP & COO, Gray Television, Inc., Q2 20247526Investor Call (Aug. 8, 2024) (``Our strong local stations proved7527themselves over the past year as they demonstrated the power of7528television to a large number of local professional sports teams and7529fans alike. In the last 2 weeks, as Hilton mentioned, we announced the7530launch of Rock Entertainment Sports in partnership with Dan Gilbert's7531sports and entertainment properties as well as Palmetto Sports &7532Entertainment, a new statewide sports network in South Carolina.7533Throughout this year, we have been working aggressively on a number of7534other opportunities to bring more sports back to local broadcast7535television stations.'').7536    \230\ See, e.g., Comments of Robert D. Weisbord, COO & President of7537Local Media, Sinclair, Inc., Q2 2024 Investor Call (Aug. 7, 2024)7538(``One of the most important assets broadcast TV has as an industry are7539live sports programming assets, which drive the highest viewing7540audiences of the year. As we noted last quarter, 97 of the top 100 most7541watched telecasts in 2023 were on broadcast TV, with the other 3 being7542college football playoff games. 96 of the top 100 most watched7543telecasts were sports programming content, with the National Football7544League contributing 93 of the top 100. In addition, we have several7545professional franchises begin to shift more and more of their on-air7546games to local broadcast stations and away from cable and regional7547networks. . . . With limited exposure to near-term league renewals7548across the sports landscape, we continue to expect sports programming7549to be an important driver of broadcast value proposition to our viewers7550for many years to come.'').7551    \231\ See, e.g., Sook Sept. 2024 Bank of America Comments.7552    \232\ See Lougee Aug. 2024 Comments (``The recently announced NBA7553network deals is a notable milestone that I don't think has been7554adequately reported on. Specifically, the deal with NBC signifies a7555huge shift away from paid cable to broadcast for the league. As we've7556talked about before, that's no accident. [A]t its core, the7557implications of this trend are important. A great deal of the most7558passionate and consumed local sports content is returning to local7559broadcasting.'').7560---------------------------------------------------------------------------7561b. Continued Advances in Digital Broadcast Transmission Technology7562        Create New Revenue Opportunities for Broadcasters.7563    There will likely come a time in the distant future when broadcast7564viewership declines to an inflection point--one when station owners are7565no longer able to squeeze out ever-increasing retrans payments and7566command higher and higher prices for local spot ads. But even if that7567time comes sooner than anticipated, it does not mean that broadcasters'7568financial fortunes will follow the same trajectory as other industries7569that have entered secular decline (such as the local print business).7570    Broadcasters are already moving their operations more into the7571digital realm, taking advantage of so-called ``connected TV''7572advertisements and reaching consumers nationwide through FAST7573platforms.\233\ Online services like LocalNow, NewsON and Zeam are just7574a few of the new ways for local broadcasters to reach cord-cutters, and7575generate significant revenues through digital ad targeting.\234\ Social7576media companies are increasingly turning to local broadcasters to7577license their content.\235\ And local TV broadcasters are even getting7578into the sports podcast business.\236\7579---------------------------------------------------------------------------7580    \233\ See, e.g., Comments of Donald Patrick LaPlatney, President,7581Co-CEO & Director, Gray Media, Inc., Q2 2024 Investor Call (Aug. 8,75822024) (``Our digital businesses are also continuing to grow audience7583and revenues. In the second quarter, we once again set new records for7584engagement as well as double-digit growth in the number of digital7585advertisers and in total digital revenue which we include in core ad7586revenue. Our Connected TV and FAST Channel offerings continue to roll7587out finding viewers and attracting advertisers in this important and7588growing part of the ecosystem.''); Lougee Aug. 2024 Comments (``We're7589especially seeing that at Premion, our industry-leading CTV sales7590platform that serves the local marketplace. Our hypothesis continues to7591hold true that the local market will continue to adopt CTV advertising7592and Premion is well positioned to capitalize on this opportunity. Our7593Premion sales footprint reaches almost 80 percent of U.S. households7594and there's considerable upside cross-selling to our existing linear7595customers as they increasingly adopt CTV. We're confident our recent7596acquisition of Octillion, which marries cutting-edge technology with7597Premion sales acumen, will further accelerate the combined7598businesses.'').7599    \234\ See, e.g., ``News-Focused Local TV App Zeam Expands To LG,''7600Radio and Television Bus. Report (July 8, 2025).7601    \235\ See, e.g., David Bauder, ``Nextdoor social site, looking for7602a revival, pins hopes on partnership with local news providers,''7603Associated Press (July 15, 2025).7604    \236\ See, e.g., Ripley Sept. 24, 2024 Comments (``And our podcast7605business, which we don't talk a lot about, but we just launched 2 new7606sports-focused podcasts. I encourage you all to check them out, one7607called the Triple Option, the other called Throwbacks. This last week,7608they were the #1 and #2 sports broadcasts in the country. So having a7609lot of success there.'').7610---------------------------------------------------------------------------7611    ATSC 3.0 technology is expected to provide a huge boost to7612broadcasters' bottom lines as they use their spectrum to become7613important players in the internet-of-things and datacasting7614markets.\237\ Broadcasters are already pressuring the Commission to7615force a technology transition to ATSC 3.0, which will allow them to7616``fully monetize ancillary uses'' of the public airwaves.\238\7617Broadcasters view this new transmission standard as a way for them to7618do ``what cable did'' and move from one-way video distribution to two-7619way datacasting, something that will generate billions in new revenues,7620but will likely go towards higher CEO pay tied to company stock prices7621rather than towards quality journalism.\239\7622---------------------------------------------------------------------------7623    \237\ See, e.g., S&P Projections (``Digital/online should be the7624fastest-growing ad category. . .on the promise of streaming initiatives7625and NextGen TV, which enhances capabilities for ultra-high definition7626(UHD), high dynamic range (HDR), multicasting, targeted advertising,7627spectrum leasing for the Internet of things, and subscription-based7628premium content.'').7629    \238\ See, e.g., Sook Q1 2025 Comments (``In addition to our7630deregulatory agenda to level the playing field and to enable7631consolidation, we are also seeking to obtain a firm transition date for7632ATSC 1.0 standards to ATSC 3.0 standard, which will support and advance7633our rollout of high-speed data transmission and other services to allow7634us to fully monetize ancillary uses of our spectrum.'').7635    \239\ See, e.g., Sook Sept. 2024 Bank of America Comments (``I7636think our industry, the local broadcast station industry, has the7637ability to make a similar pivot to what cable did, which distributed7638legacy video through those pipes and are now distributing data through7639those same pipes. We have the ability to do the same thing. We still7640have video on the air, our television product. But ATSC 3.0, next-gen7641TV is an IP-based transmission schema, which is in sync with all the7642other devices you have in your hand or your home, but it's also in sync7643with the rest of the world that's adopting this technology. So it's a7644more efficient use of the spectrum. So I still have the same 67645megahertz to play with, but I can do more things, because it's a more7646efficient transmission schema. So we're focused on, first and foremost,7647the business applications and think that the follow-on of that will be7648the consumer applications, which is a better picture, higher-quality7649audio, but we have to retrofit everything we do, like we did when we7650transitioned from analog to digital. . . . But the upside is, we see,7651in 10 years, the ability to make as much money from ancillary uses of7652our spectrum as we do from distribution revenue today, and that would7653be for our industry, $15 billion, and for our company, something in the7654$2.5 billion range. So if that's all net to equity, you can imagine how7655exciting that could be for those of us that own the stock.'').7656---------------------------------------------------------------------------7657V. Conclusion7658    The Commission does not have the authority to increase,7659differentially apply, or eliminate the national cap explicitly set by7660Congress. And even if the Commission did possess this authority,7661lifting the cap to allow unchecked national consolidation would cause7662irreparable harm to the public interest. Stifling competition and7663diversity through national conglomeration would deal a fatal blow to7664localism, as national owners follow their economic incentives that lead7665them away from adequately serving the information needs of local7666communities.7667            Respectfully Submitted,7668                                            S. Derek Turner7669                                                 Yanni Chen7670                                            Matthew F. Wood7671                                                             Free Press7672                                 ______76737674                                    National Action Network7675                                                  February 10, 202676767677Hon. Ted Cruz,7678Chairman,7679Committee on Commerce, Science, and Transportation,7680United States Senate,7681Washington, DC.7682Hon. Maria Cantwell,7683Ranking Member,7684Committee on Commerce, Science, and Transportation,7685United States Senate,7686Washington, DC.76877688RE: Ownership in the Digital Age'' Defense of Statutory Authority and7689            Market Competition76907691Dear Chairman Cruz and Ranking Member Cantwell,76927693    The National Action Network respectfully submits this testimony for7694the record regarding the critical matter of broadcast media ownership.7695As this Committee evaluates the regulatory framework of the digital7696age, we urge a steadfast commitment to the structural protections that7697preserve independent local journalism, facilitate market entry for7698diverse owners, and protect consumers from anti-competitive pricing. We7699state our firm opposition to any effort to weaken the thirty-nine7700percent national audience reach cap or to relax local ownership limits7701that prevent the monopolization of America's public airwaves.7702    Our position is rooted in the belief that media pluralism is an7703essential requirement for the economic health and civic representation7704of all Americans. Whether in urban centers or rural townships, citizens7705depend on local broadcast television as their primary window into the7706actions of their government. When large corporate TV station groups7707consolidate, they create a centralized filter for local news, where7708editorial decisions are moved from the community to national corporate7709headquarters. This creates a dangerous gatekeeper bias that allows a7710few corporate executives to effectively censor local viewpoints that do7711not align with a national narrative.7712    Arguments for the deregulation of the national audience reach cap7713frequently ignore the clear statutory requirements established by the7714legislative branch. The thirty-nine percent cap is not a discretionary7715administrative rule but a statutory mandate.7716    Considering recent judicial shifts away from agency deference, it7717is clearer than ever that Federal agencies have no authority to re-7718interpret unambiguous statutory commands. Congress was specific in its77192004 amendments; there is no gap for the Federal Communications7720Commission to arbitrarily ``waive'' a Federal statute or substitute the7721statute's clear intent with its own policy preferences.7722    Any attempt by the Commission to circumvent this limit through7723regulatory waivers or the continued use of the technologically obsolete7724``ultra-high frequency (UHF) discount'' accounting fiction constitutes7725a direct infringement upon Congressional authority. We advocate for7726strict adherence to the letter of the law to ensure that the American7727national discourse is not dominated by a concentrated few.7728    Beyond the implications for democratic discourse, media7729consolidation has triggered a significant market failure that imposes a7730regressive economic burden on every American family. As large entities7731acquire multiple affiliates within a single market, they gain the7732leverage to demand exorbitant retransmission consent fees. These fees7733have reached an average of twenty-two dollars and sixty-two cents7734($22.62) per subscriber per month, translating to nearly two hundred7735and seventy dollars ($270) annually per household.7736    These costs are passed directly to consumers, functioning as a7737monopolistic extraction from working-class families and seniors on7738fixed incomes. Furthermore, this consolidation has led to over twenty-7739four hundred broadcast blackouts since 2010. We are actively tracking7740the industry's most significant transactions and assert the presumptive7741illegality of any merger deal that exceeds established antitrust7742concentration thresholds. When a merger is presumptively illegal under7743Department of Justice standards, the Commission's public interest7744review must be at its most skeptical. Allowing a few behemoths to land-7745bank broadcast signals across the country inflates acquisition costs7746and makes it mathematically impossible for local entrepreneurs to7747compete.7748    The public airwaves are a national resource that must be managed7749for the benefit of all citizens. To ensure a competitive, transparent,7750and accountable media landscape, the National Action Network recommends7751that the Commission maintain strict statutory compliance with the7752thirty-nine percent national audience reach cap and permanently7753eliminate the UHF discount. We further recommend closing regulatory7754loopholes such as shared service agreements that create de facto7755monopolies and directing the Federal Communications Commission to7756implement incentives that prioritize station ownership for new7757entrants. We urge this Committee to choose a path that favors7758competition over consolidation and the public interest over corporate7759monopoly.7760            Respectfully submitted,7761                                              Ebonie Riley,7762                                                               SVP,7763                                               National Action Network.7764Legal Appendix: Notes and References7765    1 Statutory Supremacy and Agency Deference: Under the7766standard established in Loper Bright Enterprises v. Raimondo (2024),7767courts no longer defer to agency interpretations of ambiguous statutes.7768Because 47 U.S.C. Sec. 533(f)(1)(A) contains an explicit ``shall not7769permit'' command, any FCC attempt to modify the 39 percent cap without7770a new Act of Congress is legally void.77717772    2 Presumptive Illegality of Market Concentration: The77732023 DOJ/FTC Merger Guidelines and the precedent in United States v.7774Philadelphia National Bank establish a structural presumption of7775illegality for any merger resulting in a market share greater than 307776percent or a significant increase in the Herfindahl-Hirschman Index7777(HHI). Many current ``mega-merger'' proposals in the broadcast space7778exceed these thresholds and are therefore presumptively unlawful.77797780    3 Reasoned Decision-Making in Localism: The Eighth7781Circuit's decision in Zimmer Radio of Mid-Missouri v. FCC (2025)7782emphasizes that while the FCC has discretion in line-drawing, it must7783provide a record supported by contemporary evidence. Any expansion of7784ownership caps must be justified by more than a desire for corporate7785scale; it must prove a benefit to the ``localism'' mandate that7786justifies the use of public spectrum.77877788    4 The UHF Discount as ``Arbitrary and Capricious'':7789Given that the digital transition has equalized the signal strength of7790UHF and VHF channels, the continued application of a 50 percent ``reach7791discount'' lacks a rational basis in engineering or economics. Under7792the Administrative Procedure Act, the continued use of this discount to7793bypass the 39 percent cap is vulnerable to being set aside as arbitrary7794and capricious.7795                                 ______77967797      Response to Written Questions Submitted by Hon. Ted Cruz to7798                              Chris Ruddy7799    Question 1. In your experience, including from witnessing prior7800mergers, how has increased consolidation influenced diversity of7801editorial voices, localism, and the availability of a broad range of7802viewpoints in the media marketplace?7803    Answer. As the national television ownership cap has increased,7804consolidation has increased along with it. At the local level,7805consolidation allows major networks and station groups to reduce costs7806by cutting local programming in favor of nationally syndicated content.7807In these instances, both diversity of voices and localism suffer.7808    Sinclair Broadcasting, one of the Nation's largest station groups,7809famously attempted to ``nationalize'' local news programming by7810requiring nationally produced scripts to be aired across its local7811stations. Major networks such as ABC, CBS, and NBC also exercise7812significant editorial control over their owned-and-operated stations,7813particularly with respect to local news content.7814    It is not surprising that major networks typically own stations in7815large, predominantly ``blue'' markets. The editorial viewpoints of7816these stations often both reflect and reinforce a liberal perspective.7817The merger between Nexstar and Tribune gave Nexstar access to major7818markets, including New York and Chicago. Nexstar-owned stations are7819widely regarded as having a liberal bias. A review of FEC data from the78202024 presidential election cycle found that approximately 78 percent of7821political donations made by Nexstar employees went to Democrat Kamala7822Harris.78237824    Question 2. It's been 22 years since Congress last weighed in on7825the national ownership cap. Is 39 percent still the right threshold?7826And is a national ownership cap the best way to safeguard viewpoint7827diversity and competition--or could harmful concentration be better7828managed with market-by-market or alternative protections?7829    Answer. I have not concluded that the current 39 percent national7830ownership cap represents the final or definitive standard for ownership7831reach. Because the cap was established by Congress, Congress should7832carefully examine the effects of any proposed increase, including the7833impact on broadcast stations, local businesses affected by television7834advertising rates, and community leaders and elected officials7835concerned about the preservation of local programming in the face of7836national consolidation.7837    The national ownership cap is not a complete solution for7838preserving localism and competition, but it remains an important tool.7839Currently, seven or eight television companies control the overwhelming7840majority of major TV broadcast licenses in the top 75 U.S. markets.7841Without the cap, it is conceivable that four major networks could7842ultimately control most of these major licenses.7843    Equally concerning is the path the FCC appears to be taking in7844allowing circumvention of the ``one major station'' rule, which was7845designed to prevent a single company from owning multiple top stations7846in the same market. If the FCC grants Nexstar additional waivers, it7847could own two to four major stations in as many as 25 markets. If the7848Commission allows other station groups to follow Nexstar, this creates7849the potential for one or two station groups to control a dominant share7850of all major television licenses nationwide.7851    The most effective way to preserve competition is through diverse7852ownership. Rules requiring fairness, diversity, and balance can be7853easily circumvented. Structural ownership limits are far more durable7854and enforceable safeguards.7855                                 ______78567857   Response to Written Question Submitted by Hon. Maria Cantwell to7858                              Chris Ruddy7859    Media Consolidation and Journalism. In the last fifteen years, the7860five largest station groups have added over 500 stations to their7861ownership portfolios. That market concentration could grow even more,7862with the Nexstar-Tegna merger and Sinclair's hostile takeover attempt7863of Scripps.7864    Researchers from the University of Chicago looked at how increased7865consolidation impacts the content and coverage of local newscasts.7866    They found that when Sinclair acquired a station, coverage of local7867events and local politics declined by about 10 percent. A 2025 study by7868the University of Delaware found that in nearly two-fifths of TV7869markets, stations controlled by the same company air newscasts that are7870word-for-word identical more than 50 percent of the time.78717872    Question 1. Mr. Ruddy, how has media consolidation affected your7873news organization?7874    Answer. I believe that national consolidation and expanded station-7875group reach have contributed to a reduction in local programming. Large7876television groups have financial incentives to streamline operations,7877duplicate content across markets, and centralize control of local news7878production at the national level.7879    Newsmax has not been directly harmed by local news consolidation.7880However, consolidation has allowed large station groups to own more7881stations in more markets, giving them substantial leverage over cable7882and pay-TV operators (MVPDs). With that leverage, station groups can7883demand excessive retransmission fees for their broadcast stations.7884    Additionally, many broadcast groups also own cable networks. These7885companies can use their market power to require pay-TV distributors to7886carry their affiliated cable channels--even where there is limited7887consumer demand. At the same time, they can demand significant carriage7888fees for their cable channels that may not be justified by ratings7889performance.7890    As a result, station groups reduce both the available carriage7891slots for independent networks and the financial resources that MVPDs7892can allocate to such networks like Newsmax. For example, Nexstar's7893cable network has approximately 20 percent of Newsmax's ratings, yet it7894enjoys broader distribution and commands significantly higher fees.7895Notably, among the top 50 cable networks, Newsmax is the only one not7896owned or created by a major broadcast group or media conglomerate.7897                                 ______78987899    Response to Written Question Submitted by Hon. Tammy Baldwin to7900                              Chris Ruddy7901    Question. In today's diversifying media landscape, Americans are7902consuming local news and entertainment across broadcast, cable,7903streaming and broadband platforms. Should Congress and the FCC evaluate7904each proposed consolidation transaction individually, or is a broader,7905cross-platform assessment of cumulative media concentration necessary7906to protect competition and consumer access to local news coverage?7907    Answer. Congress and the FCC should establish clear, industry-wide7908ownership parameters and limits. The FCC and the Department of Justice7909should review proposed mergers to ensure compliance with those7910standards. There must be a consistent and even playing field for all7911participants in the broadcast industry.7912    In setting these standards, regulators may consider the broader7913media landscape and its impact on broadcasting. However, the broadcast7914industry remains uniquely powerful in its ability to aggregate large7915audiences. It is also distinct in that it operates on publicly owned7916spectrum licenses granted to private and nonprofit entities to serve7917local communities. Local TV stations currently dominate local news.7918Several studies show that most American get such news from their local7919TV stations.7920    If Congress, the FCC, or the DOJ were to adopt an overly expansive7921``broader market'' definition when evaluating potential monopolies,7922they would significantly weaken their ability to enforce antitrust7923protections and protect competition--not only in broadcasting but7924across multiple industries.7925                                 ______79267927 Response to Written Questions Submitted by Hon. John Hickenlooper to7928                              Chris Ruddy7929    Merger Review & Political Influence: Every state values the7930importance of independent, diverse, and community-based media.7931    In every issue for which the FCC has jurisdiction-it is essential7932every decision be made solely based on the facts, to benefit the public7933interest, and be free of political influence. The President recently7934stated:79357936        ``We need more competition against THE ENEMY, the Fake News7937        National TV Networks. Letting Good Deals get done like Nexstar-7938        Tegna will help knock out the Fake News because there will be7939        more competition, and at a higher and more sophisticated7940        level,'' the President wrote. ``Those that are opposed don't7941        fully understand how good the concept of this Deal is for them,7942        but they will in the future. GET THAT DEAL DONE! PRESIDENT7943        DJT.''79447945    Question 1. While the President is free to express his views, does7946the President publicly advocating for or against a merger create an7947appearance of political influence?7948    Answer. Yes, but the President is well known for letting his views7949be known on many issues. I still expect a serious process at the FCC7950and DOJ relating to the merger.79517952    Question 2. Does the term ``Fake News Media'' appear in the7953Communications Act? Please answer yes or no.7954    Answer. I am not aware of that provision appearing in the Act.7955                                 ______79567957   Response to Written Questions Submitted by Hon. John Fetterman to7958                              Chris Ruddy7959    Question 1. Mr. Ruddy, while I support the 39 percent cap, and7960oppose efforts to raise it or undermine it--like mergers--it is clear7961that the cap isn't sufficient to help local and diverse viewpoints'7962coverage. How could Congress potentially include new platforms in the7963audience calculations to address broadcast companies' concerns over7964streaming services? For example, could Congress include streaming7965services' viewers in calculating total viewership?7966    Answer. While I appreciate your support for the ownership cap, it7967would be unwise to include streaming service audiences when calculating7968a local market's reach or size.7969    Local television stations are unique because of their over-the-air7970broadcast reach, must-carry protections that ensure carriage on local7971MVPD systems, and the fact that major digital platforms frequently7972amplify their local news reporting. I am not aware of local streaming7973services that consistently produce local news and community programming7974comparable to that provided by broadcast stations.7975    Given the importance and influence of local television7976broadcasters, they should not be evaluated or regulated as though they7977operate on the same footing as national streaming platforms or other7978digital technologies.79797980    Question 2. Nexstar claims that lifting the cap so the merger can7981proceed will produce millions in ``efficiencies,'' which is just7982lawyer-speak for closing stations and laying people off. One report7983said ``eliminating staff will top the list of cuts'' and ``a lot of7984good people are going to lose their jobs.'' How many journalists and7985other broadcast industry workers will lose their jobs if this deal is7986approved? How many of those journalists would be from diverse7987viewpoints and backgrounds?7988    Answer. I have not conducted a full analysis of the potential7989employment impact of a Nexstar-Tegna merger. However, we do know that7990prior to Nexstar's 2019 merger with Tribune, the two companies together7991employed approximately 16,000 people. One year after the merger, the7992combined company employed roughly 12,000--a 25 percent reduction in7993staff within a single year.7994    Given that the primary function of major station groups is local7995news production, it is reasonable to assume that a substantial portion7996of those reductions affected journalists and other newsroom personnel.7997    Based on publicly available information, Nexstar and Tegna7998currently employ approximately 18,000 people combined. A hypothetical799925 percent reduction after such a merger would result in approximately80004,500 lost jobs.8001                                 ______80028003Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to80048005                              Chris Ruddy8006Retransmission Leverage and Consumer Protections8007    Question 1. Mr. Ruddy, you said that bigger station groups can use8008their leverage in retransmission talks to raise fees, and that those8009costs get passed on to consumers, including through bundling and tying8010demands. I want to know what practical consumer protections could8011reduce harm during retransmission disputes without Congress setting8012prices.80138014    a) What consumer harms should Congress first consider and what data8015should companies be required to share so Congress can measure those8016harms?8017    Answer. I have not conducted a detailed study of the specific8018mechanisms Congress could use to protect consumers from excessive8019retransmission fees. However, allowing station groups to own large8020numbers of stations unquestionably increases their leverage over MVPDs,8021potentially leading to distorted fee structures.8022    Congress could consider several options to address this issue:80238024  1.  Reevaluate or eliminate must-carry requirements for broadcasters8025        on MVPD systems.80268027  2.  Limit the number of stations that may be negotiated together in8028        retransmission consent agreements.80298030  3.  Prohibit bundling practices and require separate negotiations for8031        broadcast stations and affiliated cable networks80328033    b) If Congress does not create new consumer protections, what8034specific, checkable commitments would you support from large station8035groups to reduce consumer harm?8036    Answer. I believe the FCC and Congress should establish clear8037limits on the number of major television stations a single group may8038own within a given market. These limits could vary based on market8039size.8040    For example:80418042   In the top 20 markets, a station group could be limited to8043        owning one major station.80448045   In markets ranked 21-50, ownership could hypothetically be8046        limited to two stations.80478048   In markets ranked above 50, ownership could potentially be8049        capped at three stations.80508051    These parameters are only hypothetical to explain one approach. I8052believe such tiered limits would better reflect market dynamics while8053preserving competition and localism.8054Emergency Communications and Consolidated Newsrooms8055    Question 1. I know that my constituents depend on local8056broadcasters for urgent, life-saving information, and the hearing8057discussed how consolidation could affect coverage. But I want to know8058what specific baseline expectations should apply if ownership limits8059are loosened and newsrooms are combined.80608061    a) If one company owns multiple stations in a market and combines8062news operations, what specific, checkable expectations should apply to8063make sure emergency coverage stays strong?80648065    b) If you don't support new requirements, what measurable items8066should Congress require stations to report so communities can confirm8067consolidation isn't weakening emergency response?8068    Answer. I do not believe I am fully qualified to address this8069question in detail. However, consolidation tends to reduce local8070newsroom staffing and local coverage, which may in turn diminish the8071depth and responsiveness of television news coverage during local8072emergencies.8073    Newsmax does not take a formal position on specific regulatory8074requirements related to emergency communications.8075                                 ______80768077      Response to Written Questions Submitted by Hon. Ted Cruz to8078                             Curtis LeGeyt8079    Question 1. Sec. 629 of the 2004 Consolidated Appropriation Act8080gave broadcasters two years to divest and come into compliance with the8081new 39 percent cap.80828083    a. Yes or No: did the FCC enforce this requirement and did8084broadcasters comply with that divestiture directive at that time?8085    Answer. No, the FCC did not enforce this requirement against any8086particular broadcaster because all broadcast TV station groups were8087below the 39 percent cap in 2004. Indeed, Congress directed the FCC to8088update its rules to reflect a 39 percent cap at that time because it,8089along with the UHF discount, was set to ensure that every broadcast8090group was below the limit.80918092    b. If Congress truly left the FCC with broad authority to adjust8093the cap going forward, why did Congress force companies to incur the8094time and expense to meet a limit that the Commission could later change8095or undo?8096    Answer. Congress did not force any companies to incur any time or8097expense to meet the 39 percent audience reach cap. When the 39 percent8098cap was adopted in 2004, no broadcast TV station group exceeded that8099limit. Indeed, Congress directed the FCC to update its rules to reflect8100a 39 percent cap at that time because it, along with the UHF discount,8101was set to ensure that every broadcast group was below the limit.81028103    Question 2. What would be the practical impact on large broadcast8104deals if a court were to rule that the FCC lacks the authority to8105change the 39 percent national television cap?8106    Answer. If a court ruled that the FCC lacked authority to change8107the 39 percent cap, and that ruling was upheld, then the FCC's 398108percent national audience reach rule would remain and continue to limit8109broadcasters' ability to acquire stations that theoretically are8110capable of reaching more than 39 percent of U.S. television households.81118112    Question 3. Given the litigation risk and uncertainty around the8113FCC's authority to change the 39 percent cap, why hasn't NAB focused on8114getting Congress to clarify or update the statute and provide greater8115legal certainty for the major deals that are now pending?8116    Answer. NAB agrees with the FCC's consistent position that it has8117the authority to alter its National Television Ownership Cap Rule and8118believes that a reviewing court would uphold FCC action to change or8119repeal that rule.8120                                 ______81218122   Response to Written Questions Submitted by Hon. Maria Cantwell to8123                             Curtis LeGeyt8124    AI Investment in Local Journalism. AI companies are training their8125models on decades of quality journalism. The New York Times and Wall8126Street Journal have the resources to fight back--and they are, in8127court. But what about the Yakima Herald-Republic? Or the Spokesman-8128Review in Spokane? They don't have the resources for this.8129    Some licensing deals are getting done--OpenAI and the Associated8130Press, for example. But there is far more litigation than there are8131agreements, and local outlets are being left out entirely.8132    Journalists deserve compensation and attribution for the content8133they produce. That's why Senator Blackburn and I introduced the8134bipartisan COPIED Act to keep AI companies from using journalists'8135content without consent.8136    Local news is the supply chain that AI companies are using to train8137their models and improve their products. If they use it all up and8138don't replenish it with new local content, there won't be any quality,8139local information for their models.81408141    Question 1. Should AI companies contribute to preserving and8142rebuilding local journalism?8143    Answer. Yes.8144    Broadcasters invest billions of dollars each year in reporters,8145meteorologists, producers, engineers and technology to deliver trusted8146news and lifesaving information free and over the air.8147    At the same time, Big Tech platforms and AI developers are8148ingesting that content, often without permission, attribution or8149compensation. As we have seen repeatedly, these platforms act as8150gatekeepers--deciding what content is seen, how it is monetized and how8151much revenue is returned to the content creator.8152    If AI systems are trained on the backs of local journalists while8153advertising dollars continue to migrate to global tech platforms that8154do not reinvest in local communities, the result will be fewer8155reporters and diminished local coverage. That is not a sustainable8156model.8157    Innovation should not come at the expense of the very journalism8158that fuels it. Fair compensation, meaningful consent and respect for8159intellectual property are essential if we expect local journalism to8160survive in the AI era.81618162    Sports Broadcasting. College sports fans today face a nearly8163impossible landscape. On a typical Saturday this past fall, fans needed8164access to as many as 24 different platforms to watch every college8165football game--ESPN, ESPN+, Peacock, Paramount+, Fox, the Big Ten8166Network, the SEC Network, the ACC Network, and on and on.8167    Sports fans are now spending over $100 a month on streaming apps8168just to keep up. Meanwhile, the games that air on free, over-the-air8169broadcast television consistently draw the biggest audiences.8170    Texas-Ohio State on Fox drew 16.6 million viewers. When games move8171behind paywalls, viewership drops, and fans get shut out--particularly8172in rural communities and smaller markets without reliable broadband.8173    This is a problem for fans. But it is also a problem for colleges.8174Less visibility means less fan engagement, less alumni support, and8175less exposure for student athletes. That is especially true for mid-8176major schools and women's and Olympic sports that are already8177struggling for airtime.8178    My SAFE Act would require football and basketball games to be8179available for free in a school's local market on at least one broadcast8180outlet. It would also allow colleges to pool their media rights--the8181way professional leagues can--so smaller schools aren't left behind.81828183    Question 1. What are the benefits to colleges and to local8184communities when games are available on free, over-the-air television8185instead of behind a paywall?8186    Answer. Consumer access to sporting events through free, over-the-8187air television has long been a cornerstone of the American sports fan8188experience. As distribution becomes more fragmented across streaming8189services and paywalls, fans face higher costs and greater confusion8190just to follow their teams. Just last week, the FCC requested comment8191on how the fragmentation of sports programming across myriad8192subscription streaming services has frustrated consumers and affected8193TV broadcasters' ability to obtain rights to popular sports programming8194and to meet their public interest obligations, including their8195production of local news and reporting. Public Notice, FCC's Media8196Bureau Seeks Comment on Sports Broadcasting Practices and Marketplace8197Developments, MB Docket No. 26-45, DA 26-188 (Feb. 25, 2026).8198    Local broadcasters provide the widest reach for live events,8199bringing fans together to celebrate their favorite teams. Free8200broadcast television requires no subscription, no broadband package and8201no monthly fee. That universal accessibility ensures that families--8202including those in rural communities and those without reliable high-8203speed internet--are not shut out of the moments that unite their8204communities.8205    When games remain available over the air, colleges benefit from8206broader exposure, stronger alumni engagement and deeper community8207connection. Student-athletes gain visibility. Communities gain shared8208experiences. And sports remain accessible to the public--not just to8209paying subscribers.8210    Preserving the ability of broadcasters to compete for sports rights8211helps ensure that sports remain widely available and continue to serve8212as a unifying civic experience rather than a fragmented, paywalled8213product.82148215    Question 2. How can increased access to college sports on local8216broadcast stations help support women's and Olympic sports programs8217that are struggling for visibility?8218    Answer. When sports are placed on free, over-the-air platforms,8219they reach the broadest possible audience. That exposure supports8220sponsorship opportunities, strengthens recruiting, and deepens8221community engagement.8222    Expanding access to women's and Olympic sports on broadcast8223television ensures these programs are not relegated to inaccessible,8224paywalled digital outlets, but are easily accessible for free, over-8225the-air.8226                                 ______82278228 Response to Written Questions Submitted by Hon. John Hickenlooper to8229                             Curtis LeGeyt8230    Local News Production: Uplifting local voices and independent8231journalism is a bipartisan priority that many of us share. However, the8232FCC recently eliminated the ``Main Studio Rule'', which allows station8233groups to produce broadcast segments far away from the communities they8234serve.8235    For a mountain community in the San Luis Valley or the Western8236Slope, `local news' produced in a different media market is not local8237at all.82388239    Question 1. How would lifting the national ownership cap bring more8240local voices to rural Colorado when the FCC's elimination of the main8241studio rule already allows broadcasters to move production hundreds of8242miles away from the communities they serve?8243    Answer. Rural stations operate with far smaller revenue bases than8244stations in major markets. In mid-sized and small markets, average8245station advertising revenues are only a fraction of those in the8246largest markets. At the same time, local news production is expensive--8247requiring investment in reporters, meteorologists, equipment,8248facilities and technology. Fewer than half of television stations now8249report their local news operations as profitable.8250    Data show that as broadcast groups have achieved greater scale,8251total local news output has actually increased. Economies of scale8252allow stations to spread fixed costs, invest in newsroom staff, upgrade8253equipment, and sustain coverage in communities that otherwise might not8254support a standalone operation.8255    The elimination of the main studio rule did not eliminate8256broadcasters' public interest obligations. Stations remain licensed by8257the FCC, subject to license renewal review, public file requirements,8258political broadcasting requirements, emergency alert compliance and8259accountability to their communities. In order to continue to meet those8260obligations, broadcasters must be allowed to compete effectively so8261they can continue investing in local voices, local news and emergency8262service in the communities they are licensed to serve.82638264    Question 2. Does further consolidation not risk turning these local8265stations into empty `ghost' newsrooms?8266    Answer. Local news production is expensive. From 2003 to 2018, news8267costs, on average, accounted for about a quarter of local television8268stations' total expenses, while news costs often have accounted for8269around one-third of many major network affiliated stations' total8270expenses. Yet fewer than half of TV stations now report their news8271operations as profitable.8272    Importantly, the data show that scale has not reduced local news8273output--it has increased it. Between 2011 and 2023, the number of local8274news telecasts actually increased by 41.7 percent and total hours of8275local news increased by nearly 50 percent. Economies of scale have8276enabled reinvestment in news production, particularly in mid-sized and8277smaller markets.8278    The evidence does not support the notion that scale automatically8279produces ``ghost'' newsrooms. What the data show is that allowing8280stations to achieve sufficient scale can help sustain--and even8281expand--local news output in the face of significant marketplace8282disruption.82838284    Colorado Impact: While we all agree our broadcasters serve an8285important role in our communities, the best interests of Coloradans are8286top of mind.8287    In the Denver market, a Nexstar and Tegna merger could combine Fox828831 and 9 News stations. This creates a concentrated duopoly with less8289competition.82908291    Question 3. Do you believe Coloradans have the necessary assurances8292there won't be newsroom layoffs or independent voices drowned out in8293Colorado if the FCC allows for additional stations to consolidate? Why8294or why not?8295    Answer. First, I want to be clear that NAB is not advocating for8296the approval of any particular merger, including the pending8297transaction to which you are referring. The FCC's public interest8298standard requires case-by-case review of proposed transactions to8299ensure service to local communities is strengthened.8300    However, the current antiquated broadcast ownership restrictions do8301not even allow these case-by-case evaluations to take place, stopping8302many potential transactions at the outset, regardless of their merits.8303What we know from today's marketplace is that maintaining outdated8304restrictions does not guarantee newsroom stability. In fact, it8305constrains broadcasters' ability to compete and generate the revenue8306needed to sustain reporters, meteorologists and investigative8307journalists.8308    The focus of any evaluation of a transaction should remain on8309whether that transaction enhances investment in local services,8310including news and emergency reporting, and preserves free access to8311trusted programming. Artificial caps that weaken broadcasters'8312competitive position against global tech companies and streaming8313platforms do not serve those goals.83148315    Merger Review & Political Influence: Every state values the8316importance of independent, diverse, and community-based media.8317    In every issue for which the FCC has jurisdiction-it is essential8318every decision be made solely based on the facts, to benefit the public8319interest, and be free of political influence. The President recently8320stated:83218322        ``We need more competition against THE ENEMY, the Fake News8323        National TV Networks. Letting Good Deals get done like Nexstar-8324        Tegna will help knock out the Fake News because there will be8325        more competition, and at a higher and more sophisticated8326        level,'' the President wrote. ``Those that are opposed don't8327        fully understand how good the concept of this Deal is for them,8328        but they will in the future. GET THAT DEAL DONE! PRESIDENT8329        DJT.''83308331    Question 4. While the President is free to express his views, does8332the President publicly advocating for or against a merger create an8333appearance of political influence?8334    Answer. The Communications Act entrusts the FCC with the8335responsibility to evaluate transactions under the public interest8336standard. Confidence in the regulatory process depends on decisions8337grounded in the evidentiary record and the law. It is essential that8338merger review remains independent, fact-based, and consistent with8339statutory obligations.83408341    Question 5. Does the term ``Fake News Media'' appear in the8342Communications Act? Please answer yes or no.8343    Answer. No.8344                                 ______83458346Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to83478348                             Curtis LeGeyt8349Emergency Communications and Consolidated Newsrooms8350    Question 1. I know that my constituents depend on local8351broadcasters for urgent, life-saving information, and the hearing8352discussed how consolidation could affect coverage. But I want to know8353what specific baseline expectations should apply if ownership limits8354are loosened and newsrooms are combined.83558356    a. If one company owns multiple stations in a market and combines8357news operations, what specific, checkable expectations should apply to8358make sure emergency coverage stays strong?83598360    b. If you don't support new requirements, what measurable items8361should Congress require stations to report so communities can confirm8362consolidation isn't weakening emergency response?8363    Answer. As you note, local broadcasters play a unique and critical8364role in keeping communities informed, particularly when faced with8365emergencies and natural disasters. When wildfires spread, hurricanes8366make landfall, or a child goes missing, viewers turn to their local8367stations--free and without a paywall--for verified, lifesaving8368information.8369    Local broadcasters already have unique public interest8370obligations--and extensive reporting requirements at the FCC--that no8371streaming platform or Big Tech company bears.8372    Specifically, stations must already:83738374   Maintain and certify operational compliance with the8375        Emergency Alert System (EAS), including participation in8376        national and state tests and filing required reports in the8377        FCC's ETRS system;83788379   Maintain quarterly Issues/Programs Lists in their online8380        public inspection files demonstrating how they serve community8381        needs;83828383   Comply with political broadcasting and reporting8384        requirements under the Communications Act of 1934 and FCC8385        rules;83868387   Request renewal of their licenses every eight years by8388        filing license renewal applications certifying compliance with8389        FCC rules and public interest obligations, which local viewers8390        may oppose if they believe their stations have failed to serve8391        their local communities;83928393   Maintain technical operations consistent with FCC8394        authorization to ensure reliable transmission capability during8395        emergencies.83968397    The most effective safeguard for emergency coverage is ensuring8398that local stations have the economic capacity to sustain these8399operations in a marketplace increasingly dominated by global platforms8400that bear none of these obligations.8401    Strong emergency service depends on strong local stations. Policies8402that allow broadcasters to compete effectively are essential to8403preserving that lifeline.8404                                 ______84058406      Response to Written Questions Submitted by Hon. Ted Cruz to8407                             Thomas Johnson8408    Question 1. Sec. 629 of the 2004 Consolidated Appropriation Act8409gave broadcasters two years to divest and come into compliance with a8410new 39 percent cap.84118412    a. Did broadcasters comply with that divestiture directive at that8413time?8414    Answer. I am not personally aware of any instances of a broadcaster8415having an audience reach above 39 percent at the time the 2004 CAA was8416passed. There was public reporting at the time that Congress selected841739 percent to accommodate then-existing ownership levels at certain8418large stations groups. See, e.g., Frank Ahrens, Compromise Puts TV8419Ownership Cap at 39 percent, The Washington Post (Nov. 25, 2003),8420https://tinyurl.com/4vrz27hs. But I do not have independent knowledge8421on whether that was the case.84228423    b. If Congress left the FCC with broad authority to adjust the cap8424going forward, why did Congress force companies to incur the time and8425expense to meet a limit the Commission would later change or undo?8426    Answer. As noted above, I am not aware of evidence supporting the8427conclusion that existing station groups had to incur time and expense8428to come into compliance with the 39 percent ownership cap in 2004.8429    In my view, the divestiture provision allows any parties that may8430exceed the cap through acquisition of additional stations (whether at8431the time of enactment or in the future) a two-year grace period to come8432into compliance with the cap, without requiring immediate action at the8433time of acquisition or impeding the closing of a pending transaction.8434    That grace period is explicitly tied to the ``39 percent national8435audience reach limitation in paragraph (1)(B).'' As I testified at the8436hearing, and as the courts have determined, by directing the FCC in8437paragraph (1)(B) to ``modify its rules,'' Congress required a one-time8438change to the Commission's rules, and did not enact an unchangeable8439mandate.8440    Should the Commission change its rules to eliminate any cap on8441national audience reach, the divestiture provision would cease to have8442continued operation. But that is nothing unusual. Congress routinely8443adopts provisions--such as sunset dates, judicial review channeling8444provisions, or directions to conduct rulemakings or submit reports--8445that have time-limited application. And the FCC would be free in any8446proceeding to modify any of its ownership rules to adopt similar grace8447periods, as appropriate, as a matter of its general rulemaking8448authority.8449    Congress, likewise, could choose to modify or eliminate any of the8450FCC's ownership rules as it deems appropriate.84518452    Question 2. It's been more than two decades since Congress directed8453the FCC to set the national TV ownership cap at 39 percent. Although8454the FCC has adjusted inputs such as the ``UHF discount'' and the way8455the ``national audience reach'' is calculated, the 39 percent numerical8456cap has never changed. Why has the FCC never changed it?8457    Answer. The FCC has changed aspects of the cap, including by8458removing and then reinstating the UHF discount in 2016 and 2017,8459respectively. The 2016 removal of the UHF discount had the practical8460effect of significantly tightening the cap. I do not have personal8461knowledge on why the FCC did not change the numerical cap between 20048462and the present.8463    Based on my own experience as FCC General Counsel, and as evidenced8464by this hearing, I can say that the national television ownership cap8465is a highly-contested public policy issue. Thus, the rulemaking dockets8466the FCC has opened in this area have invited extensive public8467participation with divergent views on issues including whether to keep8468the cap at the current level, eliminate the cap entirely, or set the8469cap at a different level; various proposals on the appropriate cap8470level; whether to keep or eliminate the discount for UHF stations;8471whether to adopt a separate discount for VHF stations; and other8472issues. The number and complexity of competing proposals and the8473frequency with which FCC leadership rotates with changes in8474administration may have contributed to the numerical cap remaining at847539 percent.8476    As I testified, I hope that current FCC leadership will finally8477repeal the national television audience reach cap and the remainder of8478the FCC's outdated, prescriptive ownership rules.8479                                 ______84808481 Response to Written Questions Submitted by Hon. John Hickenlooper to8482                             Thomas Johnson8483    Ownership Cap: Your testimony before the committee argues the FCC8484has the authority to issue a waiver around a broadcast ownership cap8485established by Congress in law.8486    While there is no doubt today's media sector continues to rapidly8487evolve, it is imperative that Congress works in a bipartisan manner to8488address new challenges head-on.84898490    Question 1. If the FCC were to simply ``waive'' a broadcast rule8491without input from Congress, what is to stop a station group from8492eventually controlling the primary news signal for every household in8493the Mountain West?8494    Answer. There would be several protections against this degree of8495media consolidation. First, the FCC's waiver authority is transaction-8496specific and requires a showing that good cause supports grant of a8497waiver. If the FCC were to waive a rule in the context of a specific8498transaction, that is no guarantee it would grant such a waiver in8499another context. The effect on the competitive marketplace is a fact-8500specific inquiry the FCC could consider in determining whether good8501cause for a waiver exists.8502    Second, as I testified at the hearing, the FCC's public interest8503standard includes competition as a core consideration. As a competition8504agency, the FCC considers the impact of approving a transaction8505involving license transfers on the choices available to consumers in a8506given market.8507    Third, as I also testified, FCC licensees, including broadcasters,8508may be unique in having to clear two levels of competition review at8509the Federal government--before the FCC and the Department of Justice.8510Even without any FCC review of a transaction, the Department of Justice8511would still conduct its normal competition review to ensure that any8512media transaction complies with the antitrust laws.8513    Fourth, and finally, government oversight is not the only factor8514that influences media consolidation. Market forces and consumer8515preferences also play a prominent role. Indeed, as this hearing showed,8516competition in the media ecosystem is so fierce and fast developing--8517including a dizzying array of cable, satellite, and streaming and other8518online options--that broadcasters face existential headwinds. It is8519precisely because consumers in areas outside large coastal cities (like8520the Mountain West) have so many global and national media behemoths8521vying for their attention that Congress and the FCC should remove8522unnecessary barriers on local broadcasters to give them a chance to8523compete and effectively serve their local communities.85248525    Merger Review & Political Influence: Every state values the8526importance of independent, diverse, and community-based media.8527    In every issue for which the FCC has jurisdiction-it is essential8528every decision be made solely based on the facts, to benefit the public8529interest, and be free of political influence. The President recently8530stated:85318532        ``We need more competition against THE ENEMY, the Fake News8533        National TV Networks. Letting Good Deals get done like8534        Nexstar--Tegna will help knock out the Fake News because there8535        will be more competition, and at a higher and more8536        sophisticated level,'' the president wrote. ``Those that are8537        opposed don't fully understand how good the concept of this8538        Deal is for them, but they will in the future. GET THAT DEAL8539        DONE! PRESIDENT DJT.''85408541    Question 2. While the President is free to express his views, does8542the President publicly advocating for or against a merger create an8543appearance of political influence?8544    Answer. I have no opinion on how others may perceive the President8545advocating for or against a merger.8546    As a legal matter, however, the appearance or reality of political8547influence is not inherently impermissible under the Communications Act.8548Congress contemplated that democratically accountable, political actors8549would exercise some degree of oversight over the Commission's8550operations and decisionmaking. Congress, for example, sets the limits8551on the Commission's authority and supervises the Commission's8552activities through appropriations and oversight--including the critical8553work of this Committee. Article II of the U.S. Constitution, meanwhile,8554vests the President with the Executive Power of the United States, and8555the Communications Act provides the President with the authority to8556designate a Chair of the FCC and to select Commissioners, by and with8557the advice and consent of the Senate. Indeed, there are prominent8558recent past examples of Presidential involvement in Commission8559decisionmaking.\1\8560---------------------------------------------------------------------------8561    \1\ Ryan Knutson, FCC Chairman Says Obama's Net Neutrality8562Statement Influenced Rule, Wall. St. J. (Mar. 17, 2015), https://8563tinyurl.com/3ahad58k; John Eggerton, Biden Executive Order Has8564Plenty of Advice for FCC, Multichannel News (July 9, 2021), https://8565tinyurl.com/9zmzfrub.8566---------------------------------------------------------------------------8567    As I testified at the hearing, the Communications Act's ``public8568interest'' standard has historically involved the Commission making8569public policy determinations about how best to promote competition,8570localism, and viewpoint diversity, given the facts of a specific case.8571The best way to promote these policies is heavily contested, as this8572hearing demonstrates, and benefits from some degree of accountability8573to the people's elected representatives in the political branches.85748575    Question 3. Does the term ``Fake News Media'' appear in the8576Communications Act? Please answer yes or no.8577    Answer. No.8578                                 ______85798580Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to85818582                             Thomas Johnson8583    Question 1. Mr. Johnson, you warned that AI could take even more8584money out of local news by using local reporting to answer questions8585without sending readers to the original outlet. You also raised8586solutions like compensation and community-benefit approaches, including8587contributions tied to data centers and a mitigation fee. But I want to8588know specific details on how to design these ideas so smaller local8589outlets benefit too, not just the biggest companies.85908591    a. What concrete design choices would make sure AI compensation8592reaches small and mid-sized local outlets, and how would you stop the8593biggest publishers from taking most of the money?85948595    b. If Congress doesn't pursue mandatory compensation, what8596specific, checkable alternative should it require from AI companies and8597platforms to support local reporting?8598    Answer. Respectfully, I believe that Mr. Waldman testified on these8599issues. I do not have an opinion on them.8600                                 ______86018602      Response to Written Questions Submitted by Hon. Ted Cruz to8603                             Steve Waldman8604    Question 1. What have you seen, including from prior mergers, about8605how increased consolidation has influenced editorial diversity,8606localism, and the availability of a broad range of Viewpoints?8607    Answer. Prior mergers offer a clear warning about what increased8608consolidation can do to editorial diversity, localism, and the range of8609viewpoints available to communities.8610    In both newspapers and local television, consolidation and8611nationalization have in many cases aggravated the local news crisis,8612leading to fewer reporters in communities and less, or more8613superficial, coverage of school boards, economic development,8614elections, social problems, and civic life.\1\8615---------------------------------------------------------------------------8616    \1\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''8617(PDF), https://www.freepress8618.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed Feb.86196, 2026).8620---------------------------------------------------------------------------8621    In the broadcast television space, when a company owns multiple8622stations in the same market, the evidence shows that consolidation of8623newsroom operations is already occurring at significant scale.8624Duplication is already occurring in exactly two-fifths of U.S.8625television markets, and the average duplication rate among those8626markets is 65 percent.\2\ As a result, many communities are not8627receiving local news but the mirage of it--the appearance of diverse8628voices delivering less and less original reporting. And that is before8629any further consolidation has occurred. A recent DirecTV filing with8630the FCC examining all Big Four duopolies and triopolies found that 98.28631percent share news directors and 97.3 percent share news talent,8632meaning that in nearly every case where one company owns multiple8633stations in a market, those stations are not maintaining separate8634reporting staffs.\3\8635---------------------------------------------------------------------------8636    \2\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:8637Duplicating Local TV Content,'' Biden School of Public Policy & Public8638Administration, University of Delaware, August 2025. https://8639udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-86409b317fdbe02b/content8641    \3\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves8642Markets With Less Local News, According to New Study That DirecTV Has8643Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/8644tv/news/directv-fcc-filing-local-news-station-consolidation-12366786451877/.8646---------------------------------------------------------------------------8647    As for coverage levels, studies have shown that Sinclair8648acquisitions were associated with a roughly 10 percent decline in local8649and political coverage. On the other hand, while Nexstar acquisitions8650were associated with an approximately 8 percent increase (while Gray8651acquisitions showed minimal change).8652    In other words, while consolidation occasionally does help local8653news, it often doesn't, and indeed sometimes undermines it. For that8654reason, we favor either keeping the caps or loosening them but with8655requirements that the merged entities increase the number of local8656journalists in a community.\4\8657---------------------------------------------------------------------------8658    \4\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua8659McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://8660papers.ssrn.com/sol3/papers.cfm?abstract_id=49586611078.8662---------------------------------------------------------------------------8663    The evidence is even more worrisome when it comes to newspapers. As8664local papers were bought up by hedge funds or private equity firms,8665they cut reporters across the country.\5\ Mega-mergers financed with8666massive debt compounded the damage, as news organizations used profits8667to service loans rather than invest in digital transformation or local8668coverage. We have even seen the rise of local newspapers with no local8669reporters at all. In a filing to the Department of Justice and Federal8670Trade Commission we outlined the evidence there:8671---------------------------------------------------------------------------8672    \5\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local8673Journalism under Private Equity Ownership,'' NBER Working Paper 297438674(2022), https://doi.org/10.3386/w297438675; Steven Waldman, ``The local news crisis illustrates the8676inadequacy of the current antitrust approach,'' Rebuild Local News, May86778, 2024, https://www.rebuildlocalnews.org/the-local-news-crisis-8678illustrates-the-inadequacy-of-the-current-antitrust-approach/86798680    Media consolidation was not the primary cause of the collapse of8681local news--but in many cases it has seriously intensified the harm,8682promises to make the situation worse in coming years, and has limited8683the ability of communities to address the crisis.8684    The crisis in local news stems primarily from the Internet8685undercutting the traditional business models. Specifically, many8686advertisers reduced or eliminated their spending in local newspapers8687and instead placed ads on websites, search engines or social platforms.8688The combination of factors led to a dramatic drop in revenue in the8689newspaper industry--a staggering 81 percent decline in ad revenue from86902000 to 2020.8691    The nature of newspaper consolidation has changed in the past few8692decades as acquisitions by private equity and hedge funds have8693increased, and made matters worse. From 2004 to 2016, more than 3008694newspapers had been sold or traded. In 2004, the 25 largest chains8695owned less than one third of the daily newspapers. By 2020, they owned869670 percent. In the past 15 years, as a result of serial acquisitions,8697the number of newspaper owners has dropped from about 4,000 to 2,400.8698``Massive consolidation in the newspaper industry has shifted editorial8699and business decisions to a few large corporations without strong ties8700to the communities where their papers are located,'' concluded the8701major study of news deserts completed by Professor Penny Muse8702Abernathy, when she was at the University of North Carolina school of8703communications.8704    Many of these transactions involve private equity firms or hedge8705funds. ``At their peak in 2016, six of the 10 largest newspaper chains8706were owned and operated by private equity firms or other investment8707entities,'' the same study found. Since then some of the iconic8708newspapers--the Chicago Tribune, the Baltimore Sun, the New York Daily8709News and dozens of others--have also been acquired by private equity or8710hedge funds. The study also found that more than 1,000 newspapers are8711now controlled by ``hybrid'' companies that are both publicly traded8712and yet controlled by financial institutions.8713    These mergers have likely accelerated and intensified harm to8714communities. A recent study by Michael Ewens, Arpit Gupta, and Sabrina8715T. Howell found that newspapers acquired by private equity firms were8716more likely to cut the number of reporters and the amount of local8717coverage. ``The composition of news shifts away from local governance,8718the number of reporters and editors falls, and participation in local8719elections declines,'' they concluded.8720    The number of reporters fell from 6.2 to 3.8 at newspapers that8721were acquired by a private equity firm. By comparison, for other types8722of newspapers, the number of reporters fell far more modestly, from 7.38723to 6.1. The number of editors at these papers fell from 9.1 to 6.1,8724compared to a drop of just 5.7 to 5.4 at other papers.8725    The number of articles about local government at newspapers8726acquired by private equity firms fell from 5,700 to 2,500 after an8727acquisition, ``a significant negative effect.'' For those newspapers8728not owned by private equity firms, the drop was smaller, from 5,200 to87294,400. They even found that these changes in coverage led to lower8730voting turnout and a greater percentage of residents having no opinion8731about their member of Congress.8732    By contrast, the study showed that family-owned newspapers were8733more likely to maintain higher levels of local news coverage and8734reporting staff. An increasing number of local news organizations, both8735nonprofit and commercial, have been able to achieve financial8736sustainability when they don't have the burden of debt payments or high8737EBITDA goals required by publicly-traded companies.8738    The Ewens, Gupta and Howell study did not consider Alden Global8739Capital to be a private equity firm. Alden has cut reporting staff more8740than other companies. So their inclusion could make the numbers even8741more alarming. Abernathy in 2018 found that newspapers owned by Alden8742cut staff at roughly twice the rate of the national average.8743    Another study by Benjamin LeBrun, Kaitlyn Todd and Andrew Piper8744looked at 130,000 articles at 31 corporate-owned local newspapers. They8745concluded that ``corporate acquisition leads to a significant reduction8746in the amount of local news disseminated by affected publications.''8747    In some cases, a central problem is that the mergers were financed8748with large amounts of debt at a time when newspaper revenues were8749declining. For instance, the 2019 acquisition of Gannett by Gatehouse,8750a smaller company, was financed through $1.8 billion in debt financing.8751The firm now owns 479 newspapers. Since 2019, the company has shed8752almost half of its staff. During much of that period it was managed by8753the private equity firm Fortress, and much of its debt is held by the8754private equity firm Apollo Capital Management. Even if managers are8755well intentioned, their options are limited. In its 2021 annual 10k8756filing with the Securities and Exchange Commission, Gannett declared8757that one of its risk factors was that ``we are required to dedicate a8758substantial portion of cash flow from operations to fund interest8759payments.''8760    Of course, these are general tendencies. There are exceptions and8761nuances. For instance, there may be some instances in which a local8762newspaper is on the edge of closing and an acquisition by a private8763equity firm is, in the short term, the only way to keep the newsroom8764open. The Ewens-Gupta-Howell study found that while newspapers bought8765by private equity firms were more likely to cut the number of local8766stories, they were less likely to shut down the newspaper. The8767McClatchy newspaper chain, now owned by the private equity firm Chatham8768Capital, has stated that it is maintaining or growing staffing levels.8769It could well be that the problem is not bigness per se but mergers8770involving particular types of entities (with particular ROI needs) and/8771or involving particular types of financing, especially in an8772economically declining sector.8773    In some cases, the loss of newspaper reporters might be offset by8774the growth of robust nonprofit local news organizations. Although this8775scenario is currently rare, they could become more common over time,8776and should be considered as part of an analysis of whether a merger8777would harm a community.8778    The acquisition of a newspaper by a chain controlled by a financial8779institution does not make it more likely that a newspaper will have8780local monopoly status, but it does make it more likely that that8781newspaper will use its monopoly status in a way that harms the8782community and reduces the availability of certain types of8783information--local reporting.8784    Beyond civic and social impacts, communities suffer economic harm.8785Research suggests that consolidation-driven reductions in local8786business coverage cause measurable declines in local information8787search, institutional portfolio investment, and retail trading.8788Information asymmetries due to the loss of local news leave corporate8789borrowers facing higher costs and stricter lending conditions and8790ripple effects go beyond even the community itself spreading through8791supply chains to businesses with no direct connection to a closure.\6\8792Communities with less local news had higher financing costs and taxes,8793more government corruption, secrecy and more government waste.\7\ At8794the individual level, residents in news-depleted communities face8795higher loan denial rates, elevated mortgage costs, and greater exposure8796to discriminatory pricing as well as higher levels of financial advisor8797misconduct suggesting that the erosion of local oversight leaves8798ordinary borrowers with less protection and less recourse.\8\8799---------------------------------------------------------------------------8800    \6\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and8801suppliers' investment efficiency. European Journal of Finance, 31(12),88021529-1550. https://doi.org/10.1080/1351847X.2025.88032513500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank pages,8804heavy pockets: The impact of local U.S. daily newspaper closures on8805corporate cash holdings. SSRN Working Paper 4690974. https://ssrn.com/8806abstract=4690974; Kang, J., & Nam, Y. (2025). Do local newspapers8807matter to institutional investors? Contemporary Accounting Research.8808https://doi.org/10.1111/1911-3846.13049; Allee, K. D., Cating, R., &8809Rawson, C. (2023/2025). No News is Bad News: Local News Intensity and8810Firms' Information Environments. Review of Accounting Studies, 30(1),88111-32. URL: https://link.springer.com/article/10.1007/s11142-023-09811-88127; Ma, Z., Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper8813Closures and Bank Loan Contracts. Journal of Contemporary Accounting8814Research. https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe,8815J., & Wulff, A. (2025). Local Newspaper Closures and their Effect on8816Lending Discrimination. TRR 266 Accounting for Transparency Working8817Paper Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,8818T. (2025). Lending in the Dark: Local Newspaper Closures and8819Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/8820Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-Zhong8821Zhang. ``When Spotlights Fade: Local Newspaper Closures and Financial8822Advisor Misconduct.'' Journal of Financial and Quantitative Analysis,88232025. https://doi.org/10.1017/S0022109025101749; Chen, Jie, Yang Gao,8824and Cheng Zeng. ``Inequality Grows in Silence: The Impact of Newspaper8825Closures on CEO-Worker Pay Disparity.'' SSRN, January 2025. https://8826ssrn.com/abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media8827Conglomeration, Local News, and Capital Market Consequences.''8828Management Science, November 12, 2024. https://doi.org/10.1287/8829mnsc.2023.02247.8830    \7\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in8831Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal8832of Financial Economics 135, no. 2 (February 2020): 445-467, https://8833doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun8834Oh. ``Media Conglomeration, Local News, and Capital Market8835Consequences.'' Management Science, November 12, 2024. https://doi.org/883610.1287/mnsc.2023.02247.Matherly, T., & Greenwood, B. N. (2024). No8837news is bad news: The internet, corruption, and the decline of the8838Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/8839MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital8840Cities, Accountability, and Corruption: Evidence from U.S. States,''8841American Economic Review 104, no. 8 (August 2014): 2456-81, https://8842doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier, D.8843(2025). Dark deserts: Newspaper decline and its relation to government8844non-compliance with public records laws. News Research Journal, 46(3),8845427-445. https://doi.org/10.1177/30497841251357976.8846    \8\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is8847Bad News: Local News Intensity and Firms' Information Environments.8848Review of Accounting Studies, 30(1), 1-32. URL: https://8849link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z., Stice,8850D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and Bank8851Loan Contracts. Journal of Contemporary Accounting Research. https://8852doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., & Wulff, A.8853(2025). Local Newspaper Closures and their Effect on Lending8854Discrimination. TRR 266 Accounting for Transparency Working Paper8855Series No. 195. SSRN. https://ssrn.com/abstract8856=5319025; Huynh, T. (2025). Lending in the Dark: Local Newspaper8857Closures and Discrimination in Mortgage Lending. https://oweb.b67.uni-8858jena.de/Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-8859Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and8860Financial Advisor Misconduct.'' Journal of Financial and Quantitative8861Analysis, 2025. https://doi.org/10.1017/S0022109025101749.88628863    Question 2. It's been 22 years since Congress last weighed in on8864the national ownership cap. Is 39 percent still the right threshold?8865And is a national ownership cap the best way to safeguard viewpoint8866diversity and competition--or could harmful concentration be better8867managed with market-by-market or alternative protections?8868    Answer. Our coalition has not taken a position on the specific8869threshold or on the FCC's statutory authority to modify it. But we do8870believe that localism--and specifically the provision of local8871reporting and coverage--should be the primary lens through which this8872policy and individual mergers should be viewed. We are in the midst of8873a dramatic collapse of local news. We've seen a 75 percent drop in the8874number of local reporters since 2002. Ill conceived ownership rules8875could make the problem worse. We should not just lift the caps and hope8876for the best.8877    Policies could be considered that would put teeth in these8878concepts:88798880    For instance, one could keep the 39 percent cap and provide8881individualized exemptions if the specific merger met certain8882conditions. The conditions could include a net increase in the total8883number of local reporters and producers at the combined entities.8884    More creatively, the FCC could consider allowing stations to ``buy8885out'' of that requirement by making a comparable donation to a8886community foundation to establish perpetual endowments for the purpose8887of adding a comparable number of local reporters within the community8888even if it is not at the TV station. If a broadcaster decides that in8889the long run, their financial viability requires them to cut the size8890of their newsroom by 10 people, then they would write a check to allow8891for the permanent hiring of 10 local reporters deployed elsewhere. The8892stations get more flexibility to scale, while the community maintains8893or grows its local coverage.8894    Another idea to consider would be requiring that TV set8895manufacturers carry local news being provided by local broadcasters on8896the main screen. This is akin to the ``AM Radio for Every Vehicle8897Act.'' It gives meaning to the repeated desire of Congress to encourage8898localism, including the provision of community news.8899    We do have sympathy for the broadcasters' argument that they work8900under regulatory constraints that streamers and other Big Tech8901companies do not. One way of dealing with that would be to assess a8902mitigation fee against Big Tech companies and use the money for a8903politically-neutral, First-Amendment-friendly effort to support local8904news. For instance, it could help pay for legislation like that8905currently being pushed by Republican lawmakers in New Hampshire to give8906tax relief to small businesses that advertise in local news. Or one8907could consider legislation like that proposed by Republican Rep.8908Claudia Tenney and Sen. Cantwell, an employment credit for local news8909outlets that retain or hire local reporters. This can be available for8910local TV stations too, providing incentives and resources for them to8911invest more in local coverage, as many of the great local stations8912would like to do.8913                                 ______89148915   Response to Written Questions Submitted by Hon. Maria Cantwell to8916                             Steve Waldman8917    Media Consolidation and Journalism. In the last fifteen years, the8918five largest station groups have added over 500 stations to their8919ownership portfolios. That market concentration could grow even more,8920with the Nexstar-Tegna merger and Sinclair's hostile takeover attempt8921of Scripps.8922    Researchers from the University of Chicago looked at how increased8923consolidation impacts the content and coverage of local newscasts.8924    They found that when Sinclair acquired a station, coverage of local8925events and local politics declined by about 10 percent. A 2025 study by8926the University of Delaware found that in nearly two-fifths of TV8927markets, stations controlled by the same company air newscasts that are8928word-for-word identical more than 50 percent of the time.89298930    Question 1. Mr. Waldman, do you expect further consolidation to8931lead to further reductions in local newsroom jobs and locally-produced8932content?8933    Answer. With both newspapers and local television, consolidation8934and nationalization have in many cases aggravated the local news8935crisis, leading to fewer reporters in communities and less, or more8936superficial, coverage of school boards, economic development,8937elections, social problems, and civic life.\1\8938---------------------------------------------------------------------------8939    \1\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''8940(PDF), https://www.free8941press.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed8942Feb. 6, 2026).8943---------------------------------------------------------------------------8944    In the broadcast television space, when a company owns multiple8945stations in the same market, the evidence shows that consolidation of8946newsroom operations is already occurring. Duplication is already8947occurring in two-fifths of U.S. television markets, and the average8948duplication rate among those markets is 65 percent.\2\ As a result,8949many communities are not receiving local news but the mirage of it, the8950appearance of diverse voices along with less and less original8951reporting. A recent DirecTV filing with the FCC examining all Big Four8952duopolies and triopolies found that 98.2 percent share news directors8953and 97.3 percent share news talent, meaning that in nearly every case8954where one company owns multiple stations in a market, those stations8955are not maintaining separate reporting staffs.\3\8956---------------------------------------------------------------------------8957    \2\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:8958Duplicating Local TV Content,'' Biden School of Public Policy & Public8959Administration, University of Delaware, August 2025. https://8960udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-89619b317fdbe02b/content8962    \3\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves8963Markets With Less Local News, According to New Study That DirecTV Has8964Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/8965tv/news/directv-fcc-filing-local-news-station-consolidation-12366718966877/.8967---------------------------------------------------------------------------8968    As for whether consolidation leads to less local coverage, studies8969are mixed. Sinclair acquisitions were associated with a roughly 108970percent decline in local and political coverage. On the other hand,8971Nexstar acquisitions were associated with an approximately 8 percent8972increase (while, and Gray acquisitions showed minimal change.)8973    Our takeaway: while consolidation occasionally does help local8974news, it often doesn't. For that reason, we favor either keeping the8975caps or loosening them but with requirements that the merged entities8976increase the number of local journalists in a community.\4\8977---------------------------------------------------------------------------8978    \4\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua8979McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://8980papers.ssrn.com/sol3/papers.cfm?abstract_id=49589811078.8982---------------------------------------------------------------------------8983    The evidence is even more worrisome when it comes to newspapers. As8984local papers were bought up by hedge funds or private equity firms,8985they cut reporters across the country.\5\ Mega-mergers financed with8986massive debt compounded the damage, as news organizations used profits8987to service loans rather than invest in digital transformation or local8988coverage. We have even seen the rise of local newspapers with no local8989reporters at all.8990---------------------------------------------------------------------------8991    \5\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local8992Journalism under Private Equity Ownership,'' NBER Working Paper 297438993(2022), https://doi.org/10.3386/w29743; Steven Waldman, ``The local8994news crisis illustrates the inadequacy of the current antitrust8995approach,'' Rebuild Local News, May 8, 2024, https://8996www.rebuildlocalnews.org/the-local-news-crisis-illustrates-the-8997inadequacy-of-the-current-antitrust-approach/8998---------------------------------------------------------------------------8999    In a filing to the Department of Justice and Federal Trade9000Commission, we outlined the evidence:90019002    Media consolidation was not the primary cause of the collapse of9003local news--but in many cases it has seriously intensified the harm,9004promises to make the situation worse in coming years, and has limited9005the ability of communities to address the crisis.9006    The crisis in local news stems primarily from the Internet9007undercutting the traditional business models. Specifically, many9008advertisers reduced or eliminated their spending in local newspapers9009and instead placed ads on websites, search engines or social platforms.9010The combination of factors led to a dramatic drop in revenue in the9011newspaper industry--a staggering 81 percent decline in ad revenue from90122000 to 2020.9013    The nature of newspaper consolidation has changed in the past few9014decades as acquisitions by private equity and hedge funds have9015increased, and made matters worse. From 2004 to 2016, more than 3009016newspapers had been sold or traded. In 2004, the 25 largest chains9017owned less than one third of the daily newspapers. By 2020, they owned901870 percent. In the past 15 years, as a result of serial acquisitions,9019the number of newspaper owners has dropped from about 4,000 to 2,400.9020``Massive consolidation in the newspaper industry has shifted editorial9021and business decisions to a few large corporations without strong ties9022to the communities where their papers are located,'' concluded the9023major study of news deserts completed by Professor Penny Muse9024Abernathy, when she was at the University of North Carolina school of9025communications.9026    Many of these transactions involve private equity firms or hedge9027funds. ``At their peak in 2016, six of the 10 largest newspaper chains9028were owned and operated by private equity firms or other investment9029entities,'' the same study found. Since then some of the iconic9030newspapers--the Chicago Tribune, the Baltimore Sun, the New York Daily9031News and dozens of others--have also been acquired by private equity or9032hedge funds. The study also found that more than 1,000 newspapers are9033now controlled by ``hybrid'' companies that are both publicly traded9034and yet controlled by financial institutions.9035    These mergers have likely accelerated and intensified harm to9036communities. A recent study by Michael Ewens, Arpit Gupta, and Sabrina9037T. Howell found that newspapers acquired by private equity firms were9038more likely to cut the number of reporters and the amount of local9039coverage. ``The composition of news shifts away from local governance,9040the number of reporters and editors falls, and participation in local9041elections declines,'' they concluded.9042    The number of reporters fell from 6.2 to 3.8 at newspapers that9043were acquired by a private equity firm. By comparison, for other types9044of newspapers, the number of reporters fell far more modestly, from 7.39045to 6.1. The number of editors at these papers fell from 9.1 to 6.1,9046compared to a drop of just 5.7 to 5.4 at other papers.9047    The number of articles about local government at newspapers9048acquired by private equity firms fell from 5,700 to 2,500 after an9049acquisition, ``a significant negative effect.'' For those newspapers9050not owned by private equity firms, the drop was smaller, from 5,200 to90514,400. They even found that these changes in coverage led to lower9052voting turnout and a greater percentage of residents having no opinion9053about their member of Congress.9054    By contrast, the study showed that family-owned newspapers were9055more likely to maintain higher levels of local news coverage and9056reporting staff. An increasing number of local news organizations, both9057nonprofit and commercial, have been able to achieve financial9058sustainability when they don't have the burden of debt payments or high9059EBITDA goals required by publicly-traded companies.9060    The Ewens, Gupta and Howell study did not consider Alden Global9061Capital to be a private equity firm. Alden has cut reporting staff more9062than other companies. So their inclusion could make the numbers even9063more alarming. Abernathy in 2018 found that newspapers owned by Alden9064cut staff at roughly twice the rate of the national average.9065    Another study by Benjamin LeBrun, Kaitlyn Todd and Andrew Piper9066looked at 130,000 articles at 31 corporate-owned local newspapers. They9067concluded that ``corporate acquisition leads to a significant reduction9068in the amount of local news disseminated by affected publications.''9069    In some cases, a central problem is that the mergers were financed9070with large amounts of debt at a time when newspaper revenues were9071declining. For instance, the 2019 acquisition of Gannett by Gatehouse,9072a smaller company, was financed through $1.8 billion in debt financing.9073The firm now owns 479 newspapers. Since 2019, the company has shed9074almost half of its staff. During much of that period it was managed by9075the private equity firm Fortress, and much of its debt is held by the9076private equity firm Apollo Capital Management. Even if managers are9077well intentioned, their options are limited. In its 2021 annual 10k9078filing with the Securities and Exchange Commission, Gannett declared9079that one of its risk factors was that ``we are required to dedicate a9080substantial portion of cash flow from operations to fund interest9081payments.''9082    Of course, these are general tendencies. There are exceptions and9083nuances. For instance, there may be some instances in which a local9084newspaper is on the edge of closing and an acquisition by a private9085equity firm is, in the short term, the only way to keep the newsroom9086open. The Ewens-Gupta-Howell study found that while newspapers bought9087by private equity firms were more likely to cut the number of local9088stories, they were less likely to shut down the newspaper. The9089McClatchy newspaper chain, now owned by the private equity firm Chatham9090Capital, has stated that it is maintaining or growing staffing levels.9091It could well be that the problem is not bigness per se but mergers9092involving particular types of entities (with particular ROI needs) and/9093or involving particular types of financing, especially in an9094economically declining sector..9095    In some cases, the loss of newspaper reporters might be offset by9096the growth of robust nonprofit local news organizations. Although this9097scenario is currently rare, they could become more common over time,9098and should be considered as part of an analysis of whether a merger9099would harm a community.9100    The acquisition of a newspaper by a chain controlled by a financial9101institution does not make it more likely that a newspaper will have9102local monopoly status, but it does make it more likely that that9103newspaper will use its monopoly status in a way that harms the9104community and reduces the availability of certain types of9105information--local reporting.9106    Beyond civic and social impacts, communities suffer economic harm.9107Research suggests that consolidation-driven reductions in local9108business coverage cause measurable declines in local information9109search, institutional portfolio investment, and retail trading.9110Information asymmetries due to the loss of local news leave corporate9111borrowers facing higher costs and stricter lending conditions and9112ripple effects go beyond even the community itself spreading through9113supply chains to businesses with no direct connection to a closure.\6\9114Communities with less local news had higher financing costs and taxes,9115more government corruption, secrecy and more government waste.\7\ At9116the individual level, residents in news-depleted communities face9117higher loan denial rates, elevated mortgage costs, and greater exposure9118to discriminatory pricing as well as higher levels of financial advisor9119misconduct, suggesting that the erosion of local oversight leaves9120ordinary borrowers with less protection and less recourse.\8\9121---------------------------------------------------------------------------9122    \6\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and9123suppliers' investment efficiency. European Journal of Finance, 31(12),91241529-1550. https://doi.org/10.1080/1351847X.2025.25139125500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank pages, heavy9126pockets: The impact of local U.S. daily newspaper closures on corporate9127cash holdings. SSRN Working Paper 4690974. https://ssrn.com/9128abstract=4690974; Kang, J., & Nam, Y. (2025). Do local newspapers9129matter to institutional investors? Contemporary Accounting Research.9130https://doi.org/10.1111/1911-3846.13049; Allee, K. D., Cating, R., &9131Rawson, C. (2023/2025). No News is Bad News: Local News Intensity and9132Firms' Information Environments. Review of Accounting Studies, 30(1),91331-32. URL: https://link.springer.com/article/10.1007/s11142-023-09811-91347; Ma, Z., Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper9135Closures and Bank Loan Contracts. Journal of Contemporary Accounting9136Research. https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe,9137J., & Wulff, A. (2025). Local Newspaper Closures and their Effect on9138Lending Discrimination. TRR 266 Accounting for Transparency Working9139Paper Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,9140T. (2025). Lending in the Dark: Local Newspaper Closures and9141Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/9142Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-Zhong9143Zhang. ``When Spotlights Fade: Local Newspaper Closures and Financial9144Advisor Misconduct.'' Journal of Financial and Quantitative Analysis,91452025. https://doi.org/10.1017/S0022109025101749; Chen, Jie, Yang Gao,9146and Cheng Zeng. ``Inequality Grows in Silence: The Impact of Newspaper9147Closures on CEO-Worker Pay Disparity.'' SSRN, January 2025. https://9148ssrn.com/abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media9149Conglomeration, Local News, and Capital Market Consequences.''9150Management Science, November 12, 2024. https://doi.org/10.1287/9151mnsc.2023.02247.9152    \7\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in9153Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal9154of Financial Economics 135, no. 2 (February 2020): 445-467, https://9155doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun9156Oh. ``Media Conglomeration, Local News, and Capital Market9157Consequences.'' Management Science, November 12, 2024. https://doi.org/915810.1287/mnsc.2023.02247. Matherly, T., & Greenwood, B. N. (2024). No9159news is bad news: The internet, corruption, and the decline of the9160Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/9161MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital9162Cities, Accountability, and Corruption: Evidence from U.S. States,''9163American Economic Review 104, no. 8 (August 2014): 2456-81, https://9164doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier, D.9165(2025). Dark deserts: Newspaper decline and its relation to government9166non-compliance with public records laws. News Research Journal, 46(3),9167427-445. https://doi.org/10.1177/30497841251357976.9168    \8\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is9169Bad News: Local News Intensity and Firms' Information Environments.9170Review of Accounting Studies, 30(1), 1-32. URL: https://9171link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z., Stice,9172D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and Bank9173Loan Contracts. Journal of Contemporary Accounting Research. https://9174doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., & Wulff, A.9175(2025). Local Newspaper Closures and their Effect on Lending9176Discrimination. TRR 266 Accounting for Transparency Working Paper9177Series No. 195. SSRN. https://ssrn.com/abstract=91785319025; Huynh, T. (2025). Lending in the Dark: Local Newspaper9179Closures and Discrimination in Mortgage Lending. https://oweb.b67.uni-9180jena.de/Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-9181Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and9182Financial Advisor Misconduct.'' Journal of Financial and Quantitative9183Analysis, 2025. https://doi.org/10.1017/S00221090251017499184---------------------------------------------------------------------------9185    AI Investment in Local Journalism. AI companies are training their9186models on decades of quality journalism. The New York Times and Wall9187Street Journal have the resources to fight back--and they are, in9188court. But what about the Yakima Herald-Republic? Or the Spokesman-9189Review in Spokane? They don't have the resources for this.9190    Some licensing deals are getting done--OpenAI and the Associated9191Press, for example. But there is far more litigation than there are9192agreements, and local outlets are being left out entirely.9193    Journalists deserve compensation and attribution for the content9194they produce. That's why Senator Blackburn and I introduced the9195bipartisan COPIED Act to keep AI companies from using journalists'9196content without consent.9197    Local news is the supply chain that AI companies are using to train9198their models and improve their products. If they use it all up and9199don't replenish it with new local content, there won't be any quality,9200local information for their models.92019202    Question 1. Should AI companies contribute to preserving and9203rebuilding local journalism?9204    Answer. Yes. The framing in your question that local news is the9205supply chain AI companies are using to train their models is exactly9206right, and it points to what I described in my written testimony as a9207vicious cycle. AI undermines local news; the lack of local news, in9208turn, makes AI's quality worse. Fortunately, a virtuous circle can be9209created: if AI helps revive local news, it will make AI results higher9210quality. The AI industry ought to view itself as having a stake in9211reviving local news.9212    We know AI struggles when there's a dearth of information on a9213topic.\9\ It is more likely to be inaccurate and spread misinformation.9214Many communities similarly suffer from this ``information scarcity.''9215We've invented whole new terms--``news deserts'' and ``ghost9216newspapers''--to capture how barren the local news ecosystems in some9217of these areas are. Not surprisingly, AI has struggled to get local9218information right. Studies have found that AI assistants often9219flubbed\10\ information about local elections,\11\ including how to9220register, where to vote,\12\ the positions of candidates,\13\ and how9221disabled people\14\ could vote.9222---------------------------------------------------------------------------9223    \9\ Philip M. Napoli, ``AI Needs Us More Than We Need It,''9224Washington Monthly, Oct. 29, 2024, https://washingtonmonthly.com/2024/922510/29/ai-needs-us-more-than-we-need-it/9226    \10\ Democracy Reporting International, ``Are Chatbots Misinforming9227Us About the European Elections? Yes,'' by Austin Davis, Michael Meyer-9228Resende, Duncan Allen and Ognjan Denkovski, March 2024, https://9229democracyreporting.s3.eu-central-1.amazonaws.com/pdf/6628b70e0b1249230.pdf.9231    \11\ David Ingram, ``AI chatbots got questions about the 20249232election wrong 27 percent of the time, study finds,'' NBC News, June 5,92332024, https://www.nbcnews.com/tech/tech-news/ai-chatbots-got-questions-92342024-election-wrong-27-time-study-finds-rcna155640.9235    \12\ Matt O'Brien and Ali Swenson, ``AI chatbots provide many wrong9236answers about elections, report says,'' Associated Press, Feb. 27,92372024, https://apnews.com/article/ai-chatbots-elections-artificial-9238intelligence-chatgpt-falsehoods-cc50dd0f3f4e7cc322c7235220fc4c699239    \13\ Felix M. Simon, Sacha Altay, and Richard Fletcher, ``The role9240and reliability of AI chatbots during the 2024 UK general election,''9241Reuters Institute for the Study of Journalism, Sept. 2024, https://9242reutersinstitute.politics.ox.ac.uk/sites/default/files/2024-09/9243Simon%20et%20al%20Chatbots%20and%20UK%20Elections.pdf.9244    \14\ Benjamin Freed, ``Chatbots often give wrong voting info for9245people with disabilities, research finds,'' StateScoop, July 18, 2024,9246https://statescoop.com/chatbots-voting-disabilities-information-wrong-9247research-2024/9248---------------------------------------------------------------------------9249    At the same time, AI companies extract tremendous value from local9250news content to train and ground their models. Their AI assistants then9251provide full answers to users rather than linking prominently to the9252original publisher websites. That kills the referral traffic that local9253news outlets depend on for revenue. Weakened local newsrooms produce9254less original reporting. And that information scarcity, in turn, makes9255AI systems less accurate and more prone to error on local matters,9256which studies have already documented extensively with respect to local9257elections, candidates, and civic information.9258    The AI companies are, in effect, depleting the very resource they9259depend upon. That is not a sustainable model for them or for9260communities. We support the COPIED Act's core principle that consent9261and agreements for compensation must precede use. Beyond that9262legislative framework, I would suggest additional mechanisms.9263    First, consider ideas like those proposed by the Center for9264Journalism and Liberty such as allowing small publishers to bargain9265collectively and requiring AI companies to provide detailed summaries9266of training data sources.\15\9267---------------------------------------------------------------------------9268    \15\ Courtney C. Radsch, ``Frenemies: Global approaches to9269rebalance the Big Tech v journalism relationship,'' Brookings9270(TechTank), August 29, 2022, https://www.brookings.edu/articles/9271frenemies-global-approaches-to-rebalance-the-big-tech-v-journalism-9272relations hip/ (accessed 02/06/2026) and Gordon Institute of Business9273Science (GIBS), ``Big Tech and Journalism--Principles for Fair9274Compensation,'' GIBS, adopted July 14, 2023, https://www.gibs.co.za/9275news/big-tech-and-journalism--principles-for-fair-compensation9276(accessed 02/06/2026)9277---------------------------------------------------------------------------9278    Second, local efforts around the construction of data centers9279should include the health of local information and journalism in the9280discussions, one option could be to consider setting up an endowment to9281fund reporters, see my response below for additional information. For9282instance, we have proposed that as part of Community Benefit9283Agreements, each data center could make a lump-sum donation to a9284community foundation to establish an endowment that would support the9285hiring of two local journalists. Those journalists would help with the9286information shortages in general, and also make sure that the data9287centers kept the commitments they made about electricity costs, water9288usage, housing and other areas of concern.9289    Lastly, applying a mitigation fee on the largest AI and technology9290platforms could fund journalism support programs. For instance, it9291could fund a version of the refundable employment tax credit that Sen.9292Cantwell proposed earlier. These approaches have already proved9293effective at the state level, including the employment tax credits9294pioneered in Illinois that have now reached 120 newsrooms, two-thirds9295of which have six or fewer employees.9296    Those credits can be made available to local TV stations too, so9297they would have extra incentives and resources to invest in9298communities, as many in the local TV industry are eager to do.9299    Or, it could finance tax relief for small businesses that advertise9300in local news, an approach being advocated by New Hampshire Republicans9301right now.9302    The AI industry should want to be part of solving this problem.9303Higher quality local journalism means higher quality AI outputs on9304local matters. The virtuous circle is available to them if they choose9305to pursue it.9306    It is true that regulatory policies that only try to squeeze more9307local news out of one sector--broadcast--would not achieve the goals of9308a more robust community news system. Big technology firms that benefit9309from this new system--and which have no localism requirements--should9310pay a mitigation fee or tax to pay for efforts to underwrite the hiring9311of more reporters in communities and other programs that revive9312community news.93139314    Question 2. Mr. Waldman, do you see a role for AI and data center9315companies to play in funding local journalism?9316    Answer. Yes, communities across the country are currently9317negotiating with AI and technology companies over data center siting.9318Some\16\ are trying to block data centers entirely, which is their9319right.\17\ For those that want to welcome them but want something9320meaningful in return, local journalism belongs in that negotiation.9321Specifically, each data center could make a one-time contribution to an9322endowment at a local community foundation, which would fund reporters9323placed in local newsrooms with full editorial independence. There is a9324logic to it: the reporters funded through this mechanism could cover9325whether the technology company is actually delivering on its9326commitments to hire locally and manage its infrastructure impacts9327responsibly. The accountability function and the funding mechanism9328reinforce each other.9329---------------------------------------------------------------------------9330    \16\ NAACP, ``Advocacy in Action: Artificial Intelligence Data9331Centers in Our Communities,'' May 2025, https://naacp.org/sites/9332default/files/documents/Advocacy%20in%20Action%20AI%933320Data%20Centers%20.pdf; MediaJustice, ``The People Say No: Resisting9334Data Centers in the South,'' September 2025, https://mediajustice.org/9335wp-content/uploads/2025/09/MediaJustice-Data-Centers-Report.pdf9336    \17\ Mijin Cha, ``The real race for an AI moratorium: stopping data9337centers,'' Tech Policy Press, April 4, 2024, https://9338www.techpolicy.press/the-real-race-for-an-ai-moratorium-stopping-data-9339centers/93409341    Declining Local Journalism. We've heard about AI companies training9342on journalism produced by newsrooms that are barely surviving. Let me9343put that in context. In my state of Washington, the Daily Herald in9344Everett laid off half its news staff last year after an out-of-state9345chain bought the paper. The press corps in Olympia has gone from 199346full-time reporters to eight.9347    KWSU-TV in Pullman went dark after Federal funding was cut.9348Nationally, more than 130 newspapers closed last year. One in three9349counties doesn't have the equivalent of a single full-time local9350reporter. As newspapers disappear, local television is increasingly the9351last professional news source standing.9352    Congress understood broadcasting was special--we gave broadcasters9353the public airwaves, and in return, we expected them to serve their9354communities with news and information.9355    Mr. Waldman, you wrote the FCC's landmark report on communities'9356information needs, you founded Report for America, and you now lead the9357Rebuild Local News coalition.9358    Your research documents what happens when local news disappears--9359more corruption, higher taxes, lower civic engagement.9360    You've also proposed concrete solutions: payroll tax credits for9361newsrooms, tax incentives for small businesses to advertise locally,9362and redirecting government advertising toward community news.93639364    Question 1. Given what your research shows about the consequences9365of losing local news, what is at stake if we allow broadcast newsrooms9366to be hollowed out through consolidation?9367    Answer. Nearly two-thirds of Americans, 64 percent, say they at9368least sometimes get local news from a TV station, making it the most9369common institutional source of local news in the country. For the9370communities that have already lost their local newspapers, and there9371are thousands of them, broadcast television is often the last9372professional news source that remains.\18\9373---------------------------------------------------------------------------9374    \18\ Shearer, Elisa, et al., ``Americans' Changing Relationship9375With Local News.'' Pew Research Center, May 7, 2024. https://9376www.pewresearch.org/journalism/2024/05/07/americans-changing-9377relationship-with-local-news/.9378---------------------------------------------------------------------------9379    Communities with less local news had higher financing costs and9380taxes, more government corruption, secrecy and more government9381waste.\19\ Communities that suffer from a loss of local news are also9382linked to increased regulatory violations and organizational wrongdoing9383violations including measurable increases in toxic chemical emissions;9384although these effects are moderated by the degree of community social9385connectedness.\20\ The damage does not stay local: consolidation-driven9386reductions in local business coverage cause measurable declines in9387local information search, institutional portfolio investment, and9388retail trading with the sharpest effects on small firms and spread9389through supply chains to businesses with no direct connection to a9390closure, leaving corporate borrowers facing higher costs and stricter9391lending conditions.\21\ At the individual level, residents in news-9392depleted communities face higher loan denial rates, elevated mortgage9393costs, and greater exposure to discriminatory pricing as well as higher9394levels of financial advisor misconduct suggesting that the erosion of9395local oversight leaves ordinary borrowers with less protection and less9396recourse.\22\9397---------------------------------------------------------------------------9398    \19\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in9399Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal9400of Financial Economics 135, no. 2 (February 2020): 445-467, https://9401doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun9402Oh. ``Media Conglomeration, Local News, and Capital Market9403Consequences.'' Management Science, November 12, 2024. https://doi.org/940410.1287/mnsc.2023.02247.Matherly, T., & Greenwood, B. N. (2024). No9405news is bad news: The internet, corruption, and the decline of the9406Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/9407MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated Capital9408Cities, Accountability, and Corruption: Evidence from U.S. States,''9409American Economic Review 104, no. 8 (August 2014): 2456-81, https://9410doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier, D.9411(2025). Dark deserts: Newspaper decline and its relation to government9412non-compliance with public records laws. News Research Journal, 46(3),9413427-445. https://doi.org/10.1177/30497841251357976.9414    \20\ Heese, Jonas & Perez-Cavazos, Gerardo & Peter, Caspar David,94152022. ``When The Local Newspaper Leaves Town: The Effects Of Local9416Newspaper Closures On Corporate Misconduct,'' Journal of Financial9417Economics, Elsevier, vol. 145(2), pages 445-463. Choi, T. J., &9418Valente, M. (2022). The crisis in local newspapers and organizational9419wrongdoing: The role of community social connectedness. Management9420Science. https://pubsonline.informs.org/doi/10.1287/orsc.2022.16449421Jiang, J. X., & Kong, J. (2024). Green dies in darkness? Environmental9422externalities of newspaper closures. Review of Accounting Studies,942329(4), 3564-3599. https://doi.org/10.1007/s11142-023-09786-59424    \21\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and9425suppliers' investment efficiency. European Journal of Finance, 31(12),94261529-1550. https://doi.org/10.1080/1351847X.20259427.2513500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank pages,9428heavy pockets: The impact of local U.S. daily newspaper closures on9429corporate cash holdings. SSRN Working Paper 4690974. https://ssrn.com/9430abstract=4690974; Kang, J., & Nam, Y. (2025). Do local newspapers9431matter to institutional investors? Contemporary Accounting Research.9432https://doi.org/10.1111/1911-3846.13049; Allee, K. D., Cating, R., &9433Rawson, C. (2023/2025). No News is Bad News: Local News Intensity and9434Firms' Information Environments. Review of Accounting Studies, 30(1),94351-32. URL: https://link.springer.com/article/10.1007/s11142-023-09811-94367; Ma, Z., Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper9437Closures and Bank Loan Contracts. Journal of Contemporary Accounting9438Research. https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe,9439J., & Wulff, A. (2025). Local Newspaper Closures and their Effect on9440Lending Discrimination. TRR 266 Accounting for Transparency Working9441Paper Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,9442T. (2025). Lending in the Dark: Local Newspaper Closures and9443Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/9444Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-Zhong9445Zhang. ``When Spotlights Fade: Local Newspaper Closures and Financial9446Advisor Misconduct.'' Journal of Financial and Quantitative Analysis,94472025. https://doi.org/10.1017/S0022109025101749; Chen, Jie, Yang Gao,9448and Cheng Zeng. ``Inequality Grows in Silence: The Impact of Newspaper9449Closures on CEO-Worker Pay Disparity.'' SSRN, January 2025. https://9450ssrn.com/abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media9451Conglomeration, Local News, and Capital Market Consequences.''9452Management Science, November 12, 2024. https://doi.org/10.1287/9453mnsc.2023.02247.9454    \22\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is9455Bad News: Local News Intensity and Firms' Information Environments.9456Review of Accounting Studies, 30(1), 1-32. URL: https://9457link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z., Stice,9458D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and Bank9459Loan Contracts. Journal of Contemporary Accounting Research. https://9460doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., & Wulff, A.9461(2025). Local Newspaper Closures and their Effect on Lending9462Discrimination. TRR 266 Accounting for Transparency Working Paper9463Series No. 195. SSRN. https://ssrn.com/abstract9464=5319025; Huynh, T. (2025). Lending in the Dark: Local Newspaper9465Closures and Discrimination in Mortgage Lending. https://oweb.b67.uni-9466jena.de/Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-9467Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and9468Financial Advisor Misconduct.'' Journal of Financial and Quantitative9469Analysis, 2025. https://doi.org/10.1017/S00221090251017499470---------------------------------------------------------------------------9471    Beyond the clear economic harm, there are civic and social effects.9472Those who follow local news closely are more likely to engage in9473activities with civic organizations such as sports leagues, church9474groups or charity organizations' civic activities.\23\ Evidence also9475suggests that the decline of local news is linked to higher loneliness,9476especially in rural communities.\24\ The basic health of the political9477system declines. Declines in local news result in less knowledge about9478public officials and less civic knowledge,\25\ voters are less likely9479to have an opinion about their member of Congress,\26\ less likely to9480be able to name things they like or dislike about their9481representative.\27\ In 1966, 70 percent of voters could name their9482mayor. In 2016 only 40 percent of voters could.\28\ Communities with9483less local news have lower voting rates, and those that do regularly9484vote are more likely to follow local news.\29\ The members of Congress9485who get less coverage in the local press are less likely to appear as a9486witness before a congressional committee to advocate for their9487district.\30\ In communities with less local news, voters are more9488likely to vote on a party line basis.\31\9489---------------------------------------------------------------------------9490    \23\ Michael Barthel et al., ``Civic Engagement Strongly Tied to9491Local News Habits,''.9492    \24\ Hayes, Danny and Trivedi, Anusha, Loneliness and the Local9493News Environment (February 05, 2026). Available at SSRN: https://9494papers.ssrn.com/sol3/papers.cfm?abstract_id=61831829495    \25\ Danny Hayes and Jennifer L. Lawless, ``As Local News Goes, so9496Goes Citizen Engagement: Media, Knowledge, and Participation in U.S.9497House Elections,'' The Journal of Politics 77, no. 2 (April 2015): 447-949862, https://doi.org/10.1086/679749.9499    \26\ Danny Hayes and Jennifer L. Lawless, ``The Decline of Local9500News and Its Effects: New Evidence from Longitudinal Data,'' The9501Journal of Politics 80, no. 1 (October 18, 2017): 332-36, https://9502doi.org/10.1086/694105.9503    \27\ James Snyder Jr. and David Stromberg, ``Press Coverage and9504Political Accountability,'' Journal of Political Economy 118, no. 29505(April 2010): 355-408, https://doi.org/10.1086/652903.9506    \28\ Hayes and Lawless, News Hole, 2.9507    \29\ Jessica Bruder, ``Is the Death of Newspapers the End of Good9508Citizenship?,'' Christian Science Monitor, November 11, 2012, https://9509www.csmonitor.com/USA/Society/2012/1111/Is-the-death-of-newspapers-the-9510end-of-good-citizenship.; Michael Ewens, Arpit Gupta, and Sabrina T.9511Howell, ``Local Journalism under Private Equity Ownership,'' SSRN, Oct.951211, 2021, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3939405.9513Michael Barthel et al., ``Civic Engagement Strongly Tied to Local News9514Habits,'' Pewresearch.org (Pew Research Center, November 1, 2016),9515https://www.pewresearch.org/journalism/wp-content/uploads/sites/8/2016/951611/PJ_20951716.11.02_Civic-Engagement_FINAL.pdf.9518    \30\ Snyder, Stromberg, ``Press Coverage and Political9519Accountability,'' 355-408.9520    \31\ Daniel J. Moskowitz, ``Local News, Information, and the9521Nationalization of U.S. Elections,'' American Political Science Review9522115, no. 1 (February 2021): 114-29, https://doi.org/10.1017/9523s0003055420000829; Joshua P Darr, Matthew P Hitt, and Johanna L9524Dunaway, ``Newspaper Closures Polarize Voting Behavior,'' Journal of9525Communication 68, no. 6 (November 5, 2018): 1007-28, https://doi.org/952610.1093/joc/jqy051.9527---------------------------------------------------------------------------9528    Finally, communities with less local news are more polarized.\32\9529The vacuum created by the contraction is filled by social media and9530national media, which is more divisive. As Senator Moran recently said,9531in speaking movingly about its recently-merged local newspaper, the9532Plainville Times, ``I saw first-hand how the newspaper supported the9533community and brought neighbors, friends and even strangers together.9534Community journalism pulls us together. National journalism has the9535habit of tearing us apart.''9536---------------------------------------------------------------------------9537    \32\ Darr JP, Hitt MP, Dunaway JL. Home Style Opinion: How Local9538Newspapers Can Slow Polarization. Cambridge University Press; 2021.95399540    Question 2. What can Congress do to turn the tide and rebuild local9541news?9542    Answer. The evidence base for effective intervention is now well9543established. States have piloted concrete approaches that can serve as9544models for Federal action. We have seen a variety of approaches work:95459546    Tax subsidies for employing local journalists. Illinois enacted9547such a credit, which has reached 120 newsrooms, two-thirds with six or9548fewer employees. New York has followed, and Republican legislators in9549Kansas and New Hampshire are advancing comparable measures. Senator9550Cantwell and Representative Tenney have each proposed Federal versions9551that would scale this impact nationally. This could be made available9552for local TV newscasts too, providing incentives and resources for them9553to invest more in community coverage.9554    Tax relief for small businesses that advertise locally. This was9555also proposed by Rep. Tenney and Sen. Cantwell and is now being pushed9556by Republican legislators in New Hampshire and Illinois.9557    Push more government advertising toward community media. New York9558City has shifted $72 million toward community news by requiring that9559half its spending go to local organizations rather than national media9560or social media.9561    Fellowships for local reporting. In Washington, New Mexico and9562California, the state is helping to support the salaries for fellowship9563programs run by the journalism programs at state universities.9564    Other possibilities include the state providing funding through9565independent 501c3 (e.g., New Jersey's Civic Information Consortium);9566tax credits for buying subscriptions or making donations to local news;9567loan guarantees for banks or other lending institutions to support9568local news outlets.95699570    Broadcast Triopolies and Duopolies. The Nexstar-Tegna merger would9571create unprecedented consolidation in broadcast TV.9572    Nationally, Nexstar stations would reach 80 percent of U.S.9573households. Nexstar and Tegna overlap in 35 markets.9574    Nexstar is seeking local ownership waivers in those markets to form9575new duopolies and triopolies. We have already seen what happens. When9576Nexstar acquired two stations in Indianapolis, it laid off newsroom9577staff, moved the remaining reporters into a single newsroom producing9578content for both stations under the same news director.9579    They have said their plan is to ``repeat that time and again across9580the 35 overlap markets.''9581    And they can because in 2017, the FCC eliminated the main studio9582rule--the requirement that every station maintain a physical studio in9583or near the community it serves. That rule had been on the books since95841940.9585    Without it, a station group can own multiple stations in a market9586and not have a single journalist on the ground.95879588    Question 1. When a company owns two or three stations in the same9589market, what happens to the individual newsrooms? Are they maintaining9590separate reporting staffs, or are we seeing consolidation of those9591operations?9592    Answer. When a company owns multiple stations in the same market,9593consolidation of newsroom operations does occur at a significant scale.9594Duplication is already occurring in two-fifths of U.S. television9595markets, and the average duplication rate among those markets is 659596percent.\33\ As a result, many communities have the appearance of9597diverse voices while delivering less and less original reporting. A9598recent DirecTV filing with the FCC examining all Big Four duopolies and9599triopolies found that 98.2 percent share news directors and 97.39600percent share news talent, meaning that in nearly every case where one9601company owns multiple stations in a market, those stations are not9602maintaining separate reporting staffs.\34\9603---------------------------------------------------------------------------9604    \33\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:9605Duplicating Local TV Content,'' Biden School of Public Policy & Public9606Administration, University of Delaware, August 2025. https://9607udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-96089b317fdbe960902b/content9610    \34\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves9611Markets With Less Local News, According to New Study That DirecTV Has9612Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/9613tv/news/directv-fcc-filing-local-news-station-consolidation-12366718961477/.9615---------------------------------------------------------------------------9616    The evidence about the effect of consolidation on local Tv coverage9617is mixed. Sinclair acquisitions were associated with a roughly 109618percent decline in local and political coverage, while Nexstar9619acquisitions were associated with an approximately 8 percent increase,9620and Gray acquisitions showed minimal change.\35\9621---------------------------------------------------------------------------9622    \35\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua9623McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://9624papers.ssrn.com/sol3/papers.cfm?abstract_id=96254951078.9626---------------------------------------------------------------------------9627    That is why it cannot be left to chance. Our attention should9628remain focused on ensuring enforceable commitments to maintain or9629increase the number of journalists working in affected communities.9630    The same pattern has played out in print. As local papers were9631bought up by hedge funds or private equity firms, they cut reporters9632across the country.\36\ Mega-mergers financed with massive debt9633compounded the damage, as news organizations used profits to service9634loans rather than invest in digital transformation or local coverage.9635We have even seen the rise of local newspapers with no local reporters9636at all. In both newspapers and local television, consolidation and9637nationalization have in many cases aggravated the local news crisis,9638leading to fewer reporters in communities and less, or more9639superficial, coverage of school boards, economic development,9640elections, social problems, and civic life.\37\9641---------------------------------------------------------------------------9642    \36\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local9643Journalism under Private Equity Ownership,'' NBER Working Paper 297439644(2022), https://doi.org/10.3386/w29743; Steven Waldman, ``The local9645news crisis illustrates the inadequacy of the current antitrust9646approach,'' Rebuild Local News, May 8, 2024, https://9647www.rebuildlocalnews.org/the-local-news-crisis-illustrates-the-9648inadequacy-of-the-current-antitrust-approach/9649    \37\ Free Press, ``Redacted Copy of NXST/TGNA Petition to Deny''9650(PDF), https://www.free9651press.net/download/redacted-copy-nxst-tgna-petition-deny-pdf (accessed9652Feb. 6, 2026).9653---------------------------------------------------------------------------9654    In the long run, Congress should pass a version of the legislation9655sponsored by Republican Claudia Tenney and Sen.Cantwell--refundable9656employment credits tied to the number of local reporters, including at9657local TV news broadcasts. That would give extra incentives for the9658local station groups to increase local reporting rather than cutting9659back.9660    There is another potential risk to TV consolidation: an undermining9661of the freedom of the press. When most of the local TV stations are9662owned by a few companies, that gives tremendous power to whatever party9663is in the White House at that moment. They can leverage the FCC's9664authority to advance their political goals, and the station groups are9665extremely vulnerable to such pressure. Right now, it is the Democrats9666who are ringing this alarm, because Sinclair and Nexstar deferred to9667the Trump White House during the Jimmy Kimmel controversy. But this9668vulnerability would apply under any administration. When Democrats take9669over the White House and the FCC, they would have the same power to9670pressure most of the local TV stations by using the merger review and9671licensing powers to influence a small number of companies. In that9672sense, consolidation increases this type of First Amendment risk.96739674    Question 2. The FCC eliminated the main studio rule in 2017. What9675has been the impact on local news production, particularly in smaller9676markets?9677    Answer. The elimination of the main studio rule in 2017 removed a9678structural safeguard requiring physical presence in a community.9679Without it, a company can consolidate all news operations into a single9680facility and present the result as independent local coverage.9681                                 ______96829683   Response to Written Questions Submitted by Hon. Tammy Baldwin to9684                             Steve Waldman9685    Question 1. During your testimony, you noted approximately 3,5009686newspapers have closed in the past 20 years, warning that increased9687consolidation of newsrooms reduces staffing and coverage of local news.96889689    a. How would lifting the national ownership cap impact communities'9690ability to receive local news coverage?9691    Answer. Consolidation of newsroom operations is already occurring9692at a significant scale. Duplication is occurs in two-fifths of U.S.9693television markets, and the average duplication rate among those9694markets is 65 percent.\38\ As a result, many communities have the9695appearance of diverse voices delivering less and less original9696reporting. A recent DirecTV filing with the FCC examining all Big Four9697duopolies and triopolies found that 98.2 percent share news directors9698and 97.3 percent share news talent, meaning that in nearly every case9699where one company owns multiple stations in a market, those stations9700are not maintaining separate reporting staffs.\39\9701---------------------------------------------------------------------------9702    \38\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:9703Duplicating Local TV Content,'' Biden School of Public Policy & Public9704Administration, University of Delaware, August 2025. https://9705udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-97069b317fdbe970702b/content9708    \39\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves9709Markets With Less Local News, According to New Study That DirecTV Has9710Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/9711tv/news/directv-fcc-filing-local-news-station-consolidation-97121236671877/.9713---------------------------------------------------------------------------9714    As for coverage levels, studies have shown that Sinclair9715acquisitions were associated with a roughly 10 percent decline in local9716and political coverage.9717    On the other hand, Nexstar acquisitions were associated with an9718approximately 8 percent increase (while, and Gray acquisitions showed9719minimal change.)9720    In other words, while consolidation occasionally does help local9721news, it often doesn't. For that reason, we favor either keeping the9722caps or loosening them but with requirements that the merged entities9723increase the number of local journalists in a community.\40\9724---------------------------------------------------------------------------9725    \40\ Gregory Martin, Arianna Ornaghi, Nicola Mastrorocco and Joshua9726McCrain, ``Media Consolidation,'' working paper, May 28, 2024, https://9727papers.ssrn.com/sol3/papers.cfm?abstract9728_id=4951078.9729---------------------------------------------------------------------------9730    The evidence is even more worrisome when it comes to newspapers. As9731local papers were bought up by hedge funds or private equity firms,9732they cut reporters across the country.\41\ Mega-mergers financed with9733massive debt compounded the damage, as news organizations used profits9734to service loans rather than invest in digital transformation or local9735coverage. We have even seen the rise of local newspapers with no local9736reporters at all.9737---------------------------------------------------------------------------9738    \41\ Michael Ewens, Arpit Gupta, and Sabrina T. Howell, ``Local9739Journalism under Private Equity Ownership,'' NBER Working Paper 297439740(2022), https://doi.org/10.3386/w29743&9741#x003B; Steven Waldman, ``The local news crisis illustrates the9742inadequacy of the current antitrust approach,'' Rebuild Local News, May97438, 2024, https://www.rebuildlocalnews.org/the-local-news-crisis-9744illustrates-the-inadequacy-of-the-current-antitrust-approach/9745---------------------------------------------------------------------------9746    In a filing to the Department of Justice and Federal Trade9747Commission, Rebuild Local News outlined the evidence:97489749    Media consolidation was not the primary cause of the collapse of9750local news--but in many cases it has seriously intensified the harm,9751promises to make the situation worse in coming years, and has limited9752the ability of communities to address the crisis.9753    The crisis in local news stems primarily from the Internet9754undercutting the traditional business models. Specifically, many9755advertisers reduced or eliminated their spending in local newspapers9756and instead placed ads on websites, search engines or social platforms.9757The combination of factors led to a dramatic drop in revenue in the9758newspaper industry--a staggering 81 percent decline in ad revenue from97592000 to 2020.9760    The nature of newspaper consolidation has changed in the past few9761decades as acquisitions by private equity and hedge funds have9762increased, and made matters worse. From 2004 to 2016, more than 3009763newspapers had been sold or traded. In 2004, the 25 largest chains9764owned less than one third of the daily newspapers. By 2020, they owned976570 percent. In the past 15 years, as a result of serial acquisitions,9766the number of newspaper owners has dropped from about 4,000 to 2,400.9767``Massive consolidation in the newspaper industry has shifted editorial9768and business decisions to a few large corporations without strong ties9769to the communities where their papers are located,'' concluded the9770major study of news deserts completed by Professor Penny Muse9771Abernathy, when she was at the University of North Carolina school of9772communications.9773    Many of these transactions involve private equity firms or hedge9774funds. ``At their peak in 2016, six of the 10 largest newspaper chains9775were owned and operated by private equity firms or other investment9776entities,'' the same study found. Since then some of the iconic9777newspapers--the Chicago Tribune, the Baltimore Sun, the New York Daily9778News and dozens of others--have also been acquired by private equity or9779hedge funds. The study also found that more than 1,000 newspapers are9780now controlled by ``hybrid'' companies that are both publicly traded9781and yet controlled by financial institutions.9782    These mergers have likely accelerated and intensified harm to9783communities. A recent study by Michael Ewens, Arpit Gupta, and Sabrina9784T. Howell found that newspapers acquired by private equity firms were9785more likely to cut the number of reporters and the amount of local9786coverage. ``The composition of news shifts away from local governance,9787the number of reporters and editors falls, and participation in local9788elections declines,'' they concluded.9789    The number of reporters fell from 6.2 to 3.8 at newspapers that9790were acquired by a private equity firm. By comparison, for other types9791of newspapers, the number of reporters fell far more modestly, from 7.39792to 6.1. The number of editors at these papers fell from 9.1 to 6.1,9793compared to a drop of just 5.7 to 5.4 at other papers.9794    The number of articles about local government at newspapers9795acquired by private equity firms fell from 5,700 to 2,500 after an9796acquisition, ``a significant negative effect.'' For those newspapers9797not owned by private equity firms, the drop was smaller, from 5,200 to97984,400. They even found that these changes in coverage led to lower9799voting turnout and a greater percentage of residents having no opinion9800about their member of Congress.9801    By contrast, the study showed that family-owned newspapers were9802more likely to maintain higher levels of local news coverage and9803reporting staff. An increasing number of local news organizations, both9804nonprofit and commercial, have been able to achieve financial9805sustainability when they don't have the burden of debt payments or high9806EBITDA goals required by publicly-traded companies.9807    The Ewens, Gupta and Howell study did not consider Alden Global9808Capital to be a private equity firm. Alden has cut reporting staff more9809than other companies. So their inclusion could make the numbers even9810more alarming. Abernathy in 2018 found that newspapers owned by Alden9811cut staff at roughly twice the rate of the national average.9812    Another study by Benjamin LeBrun, Kaitlyn Todd and Andrew Piper9813looked at 130,000 articles at 31 corporate-owned local newspapers. They9814concluded that ``corporate acquisition leads to a significant reduction9815in the amount of local news disseminated by affected publications.''9816    In some cases, a central problem is that the mergers were financed9817with large amounts of debt at a time when newspaper revenues were9818declining. For instance, the 2019 acquisition of Gannett by Gatehouse,9819a smaller company, was financed through $1.8 billion in debt financing.9820The firm now owns 479 newspapers. Since 2019, the company has shed9821almost half of its staff. During much of that period it was managed by9822the private equity firm Fortress, and much of its debt is held by the9823private equity firm Apollo Capital Management. Even if managers are9824well intentioned, their options are limited. In its 2021 annual 10k9825filing with the Securities and Exchange Commission, Gannett declared9826that one of its risk factors was that ``we are required to dedicate a9827substantial portion of cash flow from operations to fund interest9828payments.''9829    Of course, these are general tendencies. There are exceptions and9830nuances. For instance, there may be some instances in which a local9831newspaper is on the edge of closing and an acquisition by a private9832equity firm is, in the short term, the only way to keep the newsroom9833open. The Ewens-Gupta-Howell study found that while newspapers bought9834by private equity firms were more likely to cut the number of local9835stories, they were less likely to shut down the newspaper. The9836McClatchy newspaper chain, now owned by the private equity firm Chatham9837Capital, has stated that it is maintaining or growing staffing levels.9838It could well be that the problem is not bigness per se but mergers9839involving particular types of entities (with particular ROI needs) and/9840or involving particular types of financing, especially in an9841economically declining sector..9842    In some cases, the loss of newspaper reporters might be offset by9843the growth of robust nonprofit local news organizations. Although this9844scenario is currently rare, they could become more common over time,9845and should be considered as part of an analysis of whether a merger9846would harm a community.9847    The acquisition of a newspaper by a chain controlled by a financial9848institution does not make it more likely that a newspaper will have9849local monopoly status, but it does make it more likely that that9850newspaper will use its monopoly status in a way that harms the9851community and reduces the availability of certain types of9852information--local reporting.9853    Beyond civic and social impacts, communities suffer economic harm.9854Research suggests that consolidation-driven reductions in local9855business coverage cause measurable declines in local information9856search, institutional portfolio investment, and retail trading.9857Information asymmetries due to the loss of local news leave corporate9858borrowers facing higher costs and stricter lending conditions and9859ripple effects go beyond even the community itself spreading through9860supply chains to businesses with no direct connection to a closure.\42\9861Communities with less local news had higher financing costs and taxes,9862more government corruption, secrecy and more government waste.\43\ The9863absence of local journalism raises the cost of doing business: without9864press scrutiny, CEO-to-worker pay disparities widen, managers engage in9865financial behavior that would otherwise be checked, information9866asymmetry grows, and markets become less efficient. At the individual9867level, residents in news-depleted communities face higher loan denial9868rates, elevated mortgage costs, and greater exposure to discriminatory9869pricing as well as higher levels of financial advisor misconduct9870suggesting that the erosion of local oversight leaves ordinary9871borrowers with less protection and less recourse.\44\9872---------------------------------------------------------------------------9873    \42\ Le, T. D., & Trinh, T. (2025). Local newspaper closures and9874suppliers' investment efficiency. European Journal of Finance, 31(12),98751529-1550. https://doi.org/10.1080/1351847X.2025.25198763500; Almamlouk, I., Buckle, M., & Hoque, H. (2024). Blank9877pages, heavy pockets: The impact of local U.S. daily newspaper closures9878on corporate cash holdings. SSRN Working Paper 4690974. https://9879ssrn.com/abstract=4690974; Kang, J., & Nam, Y. (2025). Do local9880newspapers matter to institutional investors? Contemporary Accounting9881Research. https://doi.org/10.1111/1911-3846.13049; Allee, K. D.,9882Cating, R., & Rawson, C. (2023/2025). No News is Bad News: Local News9883Intensity and Firms' Information Environments. Review of Accounting9884Studies, 30(1), 1-32. URL: https://link.springer.com/article/10.1007/9885s11142-023-09811-7; Ma, Z., Stice, D., Stice, H., & Zhang, Y.9886(2025). Local Newspaper Closures and Bank Loan Contracts. Journal of9887Contemporary Accounting Research. https://doi.org/10.1111/1911-98883846.13046; Baker, A., Riepe, J., & Wulff, A. (2025). Local9889Newspaper Closures and their Effect on Lending Discrimination. TRR 2669890Accounting for Transparency Working Paper Series No. 195. SSRN. https:/9891/ssrn.com/abstract=5319025; Huynh, T. (2025). Lending in the9892Dark: Local Newspaper Closures and Discrimination in Mortgage Lending.9893https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2025_002.pdf;9894Li, Zhi, Qiyuan Peng and Rui-Zhong Zhang. ``When Spotlights Fade: Local9895Newspaper Closures and Financial Advisor Misconduct.'' Journal of9896Financial and Quantitative Analysis, 2025. https://doi.org/10.1017/9897S0022109025101749; Chen, Jie, Yang Gao, and Cheng Zeng.9898``Inequality Grows in Silence: The Impact of Newspaper Closures on CEO-9899Worker Pay Disparity.'' SSRN, January 2025. https://ssrn.com/9900abstract=5123844. Dyer, Travis, Mark Lang, and Jun Oh. ``Media9901Conglomeration, Local News, and Capital Market Consequences.''9902Management Science, November 12, 2024. https://doi.org/10.1287/9903mnsc.2023.02247.9904    \43\ Pengjie Gao, Chang Lee, and Dermot Murphy, ``Financing Dies in9905Darkness? The Impact of Newspaper Closures on Public Finance,'' Journal9906of Financial Economics 135, no. 2 (February 2020): 445-467, https://9907doi.org/10.1016/j.jfineco.2019.06.003. Dyer, Travis, Mark Lang, and Jun9908Oh. ``Media Conglomeration, Local News, and Capital Market9909Consequences.'' Management Science, November 12, 2024. https://doi.org/991010.1287/mnsc.2023.02247. Matherly, T., & Greenwood, B. N. (2024). No9911news is bad news: The internet, corruption, and the decline of the9912Fourth Estate. MIS Quarterly, 48(2), 699-714. https://doi.org/10.25300/9913MISQ/2023/17869; Filipe R. Campante and Quoc-Anh Do, ``Isolated9914Capital Cities, Accountability, and Corruption: Evidence from U.S.9915States,'' American Economic Review 104, no. 8 (August 2014): 2456-81,9916https://doi.org/10.1257/aer.104.8.2456. Posner-Ferdman, B., & Cuillier,9917D. (2025). Dark deserts: Newspaper decline and its relation to9918government non-compliance with public records laws. News Research9919Journal, 46(3), 427-445. https://doi.org/10.1177/30497841251357976.9920    \44\ Allee, K. D., Cating, R., & Rawson, C. (2023/2025). No News is9921Bad News: Local News Intensity and Firms' Information Environments.9922Review of Accounting Studies, 30(1), 1-32. URL: https://9923link.springer.com/article/10.1007/s11142-023-09811-7; Ma, Z.,9924Stice, D., Stice, H., & Zhang, Y. (2025). Local Newspaper Closures and9925Bank Loan Contracts. Journal of Contemporary Accounting Research.9926https://doi.org/10.1111/1911-3846.13046; Baker, A., Riepe, J., &9927Wulff, A. (2025). Local Newspaper Closures and their Effect on Lending9928Discrimination. TRR 266 Accounting for Transparency Working Paper9929Series No. 195. SSRN. https://ssrn.com/abstract=5319025; Huynh,9930T. (2025). Lending in the Dark: Local Newspaper Closures and9931Discrimination in Mortgage Lending. https://oweb.b67.uni-jena.de/9932Papers/jerp2023/wp_2025_002.pdf; Li, Zhi, Qiyuan Peng and Rui-9933Zhong Zhang. ``When Spotlights Fade: Local Newspaper Closures and9934Financial Advisor Misconduct.'' Journal of Financial and Quantitative9935Analysis, 2025. https://doi.org/10.1017/S002210902510174999369937    Question 2: In today's diversifying media landscape, Americans are9938consuming local news and entertainment across broadcast, cable,9939streaming and broadband platforms. Should Congress and the FCC evaluate9940each proposed consolidation transaction individually, or is a broader,9941cross-platform assessment of cumulative media concentration necessary9942to protect competition and consumer access to local news coverage?9943    Answer. Our coalition has not taken a position on the specific9944threshold or on the FCC's statutory authority to modify it. But we do9945believe that localism--and specifically the provision of local9946reporting and coverage--should be the primary lens through which this9947policy and individual mergers should be viewed. We are in the midst of9948a dramatic collapse of local news. We've seen a 75 percent drop in the9949number of local reporters since 2002. Ill-conceived policies could make9950that worse. We should not just lift the caps and hope for the best.9951    Policies could be considered that would put teeth in these9952concepts:99539954    For instance, one could keep the 39 percent cap and provide9955individualized exemptions if the specific merger met certain9956conditions. The conditions could include a net increase in the total9957number of local reporters and producers at the combined entities.9958    More creatively, the FCC could consider allowing stations to ``buy9959out'' of that requirement by making a comparable donation to a9960community foundation to establish perpetual endowments for the purpose9961of adding a comparable number of local reporters within the community9962even if it is not at the TV station.9963    The reason we emphasize the number of reporters rather than the9964number of hours is that longer news shows with fewer reporters often9965means more superficial news, or more newscasts that copy reports from9966other stations in the market.9967    In the long run, Congress should pass a version of the legislation9968sponsored by Republican Claudia Tenney and Sen.Cantwell--refundable9969employment credits tied to the number of local reporters, including at9970local TV news broadcasts. That would give extra incentives for the9971local station groups to increase local reporting rather than cutting9972back.9973    Policies that only try to squeeze more local news out of one9974sector--broadcast--would not achieve the goals of a more robust9975community news system. Big technology firms that benefit from this new9976system--and which have no localism requirements--should pay a9977mitigation fee or tax to pay for efforts to underwrite the hiring of9978more reporters in communities.9979                                 ______99809981 Response to Written Questions Submitted by Hon. John Hickenlooper to9982                             Steve Waldman9983    News Deserts: Vibrant journalism ecosystem engrained in our First9984Amendment's rights to freedom of speech and the freedom of the press.9985However, in Colorado, we have seen a tragic decline in the amount of9986local newspapers covering stories in their communities. Since 2005,9987Colorado has lost at least 52 local newspapers and more than half of9988Colorado's counties only have 1 local newspaper. 3 counties in Colorado9989-Cheyenne, Mineral, and Conejos-don't have a single local newspaper.99909991    Question 1. For communities in news deserts that are no longer9992served by local newspapers, what impact would additional local9993broadcast tv stations merging have on their ability to get local news9994coverage?9995    Answer. For communities that have already lost their local9996newspapers, local broadcast television is often the last professional9997news source standing. That makes the stakes of further broadcast9998consolidation particularly acute since there is no remaining backstop.9999In many cases, lifting the national ownership cap will deleteriously10000impact local news coverage. When a company owns multiple stations in10001the same market, the evidence shows that consolidation of newsroom10002operations occurs at significant scale. Duplication is already10003occurring in two-fifths of U.S. television markets, and the average10004duplication rate among those markets is 65 percent.\45\ A recent10005DirecTV filing with the FCC examining all Big Four duopolies and10006triopolies found that 98.2 percent share news directors and 97.310007percent share news talent, meaning that in nearly every case where one10008company owns multiple stations in a market, those stations are not10009maintaining separate reporting staffs.\46\10010---------------------------------------------------------------------------10011    \45\ Danilo Yanich and Benjamin E. Bagozzi, ``Reusing the News:10012Duplicating Local TV Content,'' Biden School of Public Policy & Public10013Administration, University of Delaware, August 2025. https://10014udspace.udel.edu/server/api/core/bitstreams/414834a9-fa05-4be0-a5cd-100159b317fdb10016e02b/content10017    \46\ Andreeva, Nellie. ``TV Station Group Consolidation Leaves10018Markets With Less Local News, According to New Study That DirecTV Has10019Filed With the FCC.'' Variety, February 2026. https://variety.com/2026/10020tv/news/directv-fcc-filing-local-news-station-consolidation-123667100211877/.10022---------------------------------------------------------------------------10023    The evidence about consolidation and coverage levels is mixed.10024Sinclair acquisitions were associated with a roughly 10 percent decline10025in local and political coverage, while Nexstar acquisitions were10026associated with an approximately 8 percent increase, and Gray10027acquisitions showed minimal change. This is why we believe that caps10028should either be maintained or liberalized only when accompanied by10029rock-solid commitments that the combined entities would increase the10030investment in community coverage (as measured by number of reporters10031and producers, not in the number of hours).10032    Merger Review/Political Influence: Every state values the10033importance of independent, diverse, and community-based media. In every10034issue for which the FCC has jurisdiction--it is essential every10035decision be made solely based on the facts, to benefit the public10036interest, and be free of political influence.10037    The President recently stated:1003810039        ``We need more competition against THE ENEMY, the Fake News10040        National TV Networks Letting Good Deals get done like Nexstar--10041        Tegna will help knock out the Fake News because there will be10042        more competition, and at a higher and more sophisticated10043        level,'' the president wrote. ``Those that are opposed don't10044        fully understand how good the concept of this Deal is for them,10045        but they will in the future. GET THAT DEAL DONE! PRESIDENT10046        DJT.''1004710048    Question 2. While the President is free to express his views, does10049the President publicly advocating for or against a merger creates an10050appearance of political influence?10051    Answer. The integrity of the FCC's merger review process depends on10052decisions being made through a transparent, public process based solely10053on the facts and the public interest standard established by Congress.10054That principle applies regardless of administration or the specific10055transaction under review. The Communications Act establishes a clear10056framework for how transactions of this magnitude are to be evaluated--10057their impact on localism, viewpoint diversity, competition, and the10058communities affected. That framework has value only when it is applied10059consistently and visibly through proper process. This is why I stated10060at the hearing that decisions of this import should be made at the10061commission level, through full public process and a transparent record.10062A bureau-level determination on a transaction of this scale and10063consequence would be difficult for the public, affected communities,10064and Congress to evaluate and trust, regardless of the outcome.1006510066    Question 3. Does the term ``Fake News Media'' appear in the10067Communications Act? Please answer yes or no.10068    Answer. No.10069                                 ______1007010071   Response to Written Questions Submitted by Hon. John Fetterman to10072                             Steve Waldman10073    Question 1. Mr. Waldman, thank you for your work promoting local10074journalism. I started my public service career as a mayor, so I know10075how important local coverage is. I appreciate your testimony and10076recommendations on improving local journalism. Within FCC jurisdiction,10077how could the Commission consider local journalism impacts when10078reviewing mergers? What would this mean for local journalism?10079    Answer. The FCC already has authority to consider localism in its10080public interest review which states that the FCC should consider the10081``public interest, convenience, and necessity'' \47\; what has been10082missing is a concrete definition of what localism actually requires--10083especially when it comes to the provision of local news.10084---------------------------------------------------------------------------10085    \47\ Sections 303, 309 and 310 of the Communications Act of 193410086(47 U.S.C. 303, 309, 310)10087---------------------------------------------------------------------------10088    The Commission could center its analysis on a specific, measurable10089standard: whether a proposed transaction maintains or increases the10090number of journalists working in affected communities. Not station10091count, not hours of airtime, but professional reporters living in and10092accountable to the communities they cover. Congress could reinforce10093this by directing the FCC statutorily to include local journalism10094capacity as a core component of the localism standard, ensuring it is10095applied consistently across transactions and administrations.1009610097    Question 2. Lifting the ownership cap and allowing the deal to10098proceed will put more than 265 stations reaching 80 percent of10099Americans in the hands of a single company--a major blow to local10100control of news. How does it serve Americans and the public interest at10101large to have their news media run by a distant corporate conglomerate10102instead of locally owned families and companies with a stake in the10103community?10104    Answer. In most cases, it does not, and the evidence bears that10105out. A locally owned news organization has its reputation and economic10106future tied to the community it covers, its owners live there, know the10107local officials, and are accountable to their neighbors. When ownership10108moves to a distant corporate headquarters, editorial and staffing10109decisions often get made through a financial lens rather than a10110community lens, and that shift shows up in reduced reporting capacity10111and eroded public trust. Research on both newspaper and broadcast10112consolidation consistently confirms this pattern. Our coalition's view10113is that local news in local hands usually works best, and that whenever10114possible public policy should gravitate toward ownership structures10115that are diffuse, independent, and rooted in the communities being10116served rather than concentrated in a small number of national10117companies.10118    We accept that there might be some instances when mergers might10119provide more local news. We believe there are mechanisms to allow10120mergers in those cases, when accompanied by rock-solid commitments to10121maintain local reporting staffs.10122    For instance, one could keep the 39 percent cap and provide10123individualized exemptions if the specific merger met certain10124conditions. The conditions could include a net increase in the total10125number of local reporters and producers at the local entity being10126acquired, maintained for at least ten years.10127    More creatively, the FCC could consider allowing stations to ``buy10128out'' of that requirement by making a comparable donation to a10129community foundation to establish perpetual endowments for the purpose10130of adding a comparable number of local reporters within the community10131even if it is not at the TV station.10132    In the long run, Congress should pass a version of the legislation10133sponsored by Republican Claudia Tenney and Sen.Cantwell--refundable10134employment credits tied to the number of local reporters, including at10135local TV news broadcasts. That would give extra incentives for the10136local station groups to increase local reporting rather than cutting10137back.10138    The reason we emphasize the number of reporters rather than the10139number of hours is that longer news shows with fewer reporters often10140means more superficial news, or more newscasts that copy reports from10141other stations in the market.10142                                 ______1014310144Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to1014510146                             Steve Waldman10147Congressional Intent10148    Question 1. When Congress enacted the 39 percent national ownership10149cap, it sought a limit that would protect consumers, ensure10150affordability, and promote a fair, unbiased media market.1015110152    a) What is the significance of a congressional directive10153establishing this cap and maintaining it rather than deferring changes10154to the FCC?1015510156    b) In addition to enacting the cap, Congress intentionally excluded10157it from consideration in the FCC's broadcast ownership rule review10158process. Does the FCC have the authority to lift the cap unilaterally,10159or is it violating the congressional directive as it appears to be?1016010161    c) The current administration has continued to challenge regulatory10162norms, especially at the FCC. In this regulatory environment, what are10163the broader implications of the FCC acting outside of the authority it10164was explicitly granted by Congress?10165    Answer. We have not taken a position on whether the FCC has the10166authority to make these moves without Congressional approval. However,10167we do believe that any consideration--by the FCC or Congress--should10168place localism, and specifically the health of local news--at the10169center of the decision making process. We are in the midst of a10170dramatic collapse of local news. We've seen a 75 percent drop in the10171number of local reporters since 2002.10172    So policies should be focused on reversing that catastrophe. That10173means that any merger exceptions should be contingent on rock-solid10174commitments that the combined entities would increase the number of10175local news reporters and producers (not just the number of hours).10176    For instance, one could keep the 39 percent cap and provide10177individualized exemptions if the specific merger met certain10178conditions. The conditions could include a net increase in the total10179number of local reporters and producers at the combined entities,10180maintained for 10 years.10181    More creatively, the FCC could consider allowing stations to ``buy10182out'' of that requirement by making a comparable donation to a10183community foundation to establish perpetual endowments for the purpose10184of adding a comparable number of local reporters within the community10185even if it is not at the TV station.10186    The reason we emphasize the number of reporters rather than the10187number of hours is that longer news shows with fewer reporters often10188means more superficial news, or more newscasts that copy reports from10189other stations in the market.10190    In the long run, we need something like the legislation proposed by10191Sen. Cantwell and Republican Rep. Claudia Tenney to provide tax10192subsidies to local news outlets that retain or hire local reporters.10193This could be available to local TV news stations too, providing both10194incentives and resources for them to invest in more local coverage. Or,10195Congress could consider legislation to provide tax relief to small10196businesses that advertise in local news. These could be paid for by10197fees assessed against Big Tech.10198Defining ``Localism'' in Law and Making It Enforceable10199    Question 2. Mr. Waldman, at the hearing, you said the debate can't10200just be about the national cap, because the real issue is whether the10201FCC is truly centering local news and the number of local reporters10202when it reviews mergers. You also suggested Congress could write into10203law that the health of local news is part of ``localism'' and should be10204at the core of merger review.1020510206    a) If Congress were to put this into statute, what specific, plain-10207English definition of ``localism'' would you recommend that clearly10208includes local newsroom capacity, and what minimum metrics should the10209FCC be required to measure in every merger review?1021010211    b) If Congress does not act and the FCC keeps using its current10212approach, what is the most likely real-world outcome for local10213newsrooms over the next 3-5 years, and what ``red flags'' should10214Congress watch for that show merger review is missing the localism10215problem?10216    Answer. Localism should include the demonstrated capacity of a10217licensee to produce original news and information about the community10218it is licensed to serve, generated by journalists who live and work10219within that community. In plain English: are there enough professional10220reporters on the ground, close enough to actually know the place they10221are covering, to hold local institutions accountable?10222    The FCC could consider measuring at minimum: the number of full-10223time journalists employed in each affected market before and after a10224transaction; the percentage of news content that is locally originated10225versus centrally produced; and whether journalists are physically based10226within a reasonable proximity to the communities they cover, for10227example, the 50-mile standard embedded in Rebuild Local News's model10228local journalism tax credit legislation. Commitments on these metrics10229could be enforceable conditions of approval, not aspirational10230statements in a merger application.10231    Congress needs to take action not only on the broadcast issue but10232the local news crisis in general. We need legislation like those10233proposed by Republican Claudia Tenney and Sen. Cantwell that would10234provide refundable employment credits to local news outlets that hire10235or retain local reporters. This could be available for local TV10236stations, too, providing incentives for them to invest in community10237news.10238    They also proposed tax relief for small businesses that advertise10239in local news, an approach now being considered in New Hampshire10240Congress could require that a greater percentage of Federal government10241advertising go through local media rather than social media or search.10242    It could help fund fellowships that place reporters into local10243newsrooms, administered by state university journalism school programs.10244That is happening in California, New Mexico and Washington.10245Emergency Communications and Consolidated Newsrooms10246    Question 1. I know that my constituents depend on local10247broadcasters for urgent, life-saving information, and the hearing10248discussed how consolidation could affect coverage. But I want to know10249what specific baseline expectations should apply if ownership limits10250are loosened and newsrooms are combined.1025110252    a) If one company owns multiple stations in a market and combines10253news operations, what specific, checkable expectations should apply to10254make sure emergency coverage stays strong?1025510256    b) If you don't support new requirements, what measurable items10257should Congress require stations to report so communities can confirm10258consolidation isn't weakening emergency response?10259    Answer.10260    a) Any consolidation that results in combined news operations10261should be subject to enforceable baseline requirements. The public10262demand is clear and unmet: a recent survey found that 44 percent of10263Americans report difficulty getting information about their own10264neighborhood compared to just 26 percent for national news. On risks10265and emergencies specifically, 95 percent of Americans said local10266information on this topic is important to them, yet only 58 percent10267reported being satisfied with what is available, a gap of 37 percentage10268points.\48\ That unmet need will not be addressed by consolidated10269newsrooms producing identical content across commonly-owned stations.10270Each market should be required to maintain a minimum number of10271journalists physically based within the community, consistent with the1027250-mile proximity standard in Rebuild Local News's model legislation,10273with sufficient staffing to deploy reporters to multiple locations10274simultaneously during declared emergencies. These commitments should be10275filed publicly, verified annually, and tied to license renewal.10276---------------------------------------------------------------------------10277    \48\ Civic Information Needs Census, National Survey (Wave 2),10278February 2026. infocensus.org10279---------------------------------------------------------------------------10280    b) Congress should require consolidated station groups to publicly10281report: the number of full-time journalists employed in each market10282before and after a transaction; the percentage of locally originated10283versus centrally produced content; the physical location of reporting10284staff relative to the communities they serve; and documented response10285capacity during declared local emergencies. These disclosures should be10286standardized, publicly accessible, and submitted to the FCC annually.10287Without that transparency, neither Congress nor affected communities10288can assess whether consolidation is weakening the emergency coverage10289function that broadcast licenses exist to provide or whether the10290stations are fulfilling the commitments they should make toward growing10291local coverage.1029210293                               [all]