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Minority and Women’s Ownership – New Opportunities in UHF-TV

October 14, 2013

On September 26 the FCC voted to eliminate a rule called “the UHF discount”. The rule had allowed TV station owners to count only 50% of a UHF station's audience toward the FCC’s 39% cap on a station group's total audience reach. The 39% refers to the amount of the nation’s population that was allowed to be reached by that company’s stations.
UHF stands for ultra high frequency and refers to channels above 13.  With analog technology, the UHF signal was a weaker signal than the VHS (very high frequency), which accommodates channels 2-13.  The FCC, which licenses all broadcast stations, always treated UHF stations differently than VHS as far as defining its service area because of the signal difference. 
With the leap into the digital technology age, a UHF signal is now stronger than VHS.
Thus, the change in valuation of UHF licenses may discourage broadcast owners from grabbing up such stations as part of their efforts to monopolize ownership within the industry.  Concentration of ownership is a pattern that has accelerated through deregulation since passage of the Telecommunications Act of 1996. The new FCC policy will have an effect in determining whether a broadcaster is in compliance with TV ownership rules.
The item to eliminate the UHF discount was approved by the FCC 2-1, with Republican commissioner Ajit Pai dissenting. It allows the grandfathering in of deals currently in the pipeline, but not for those struck after the September 26 ruling. Henceforth, when grandfathered UHF's are sold, the discount will not transfer with them.
Acting FCC chair Mignon Clyburn considers the change noncontroversial. In her statement, she noted that the 2009 change to digital technology obviated any technical justification for the discount and that its elimination has been anticipated as far back as 1998. Therefore, she said, no market participant should be surprised.
(Summarized from articles in the Los Angeles Times, September 26, 2013, and other sources)