Media Consolidation Improves Broadcasting

• Donald Trump entered the picture as president and threw his weight behind the Nexstar-TEGNA merger, declaring it beneficial for the industry and the public. He saw consolidation as a straightforward way to modernize local broadcasting and cut through what he viewed as outdated restrictions. His administration's support helped push the deal toward federal approval despite mounting antitrust warnings. The move aligned with a broader push to relax rules that had long limited how many stations one company could own. In the end his endorsement gave the assumption fresh momentum at the highest levels of government. ^[1]
• Brendan Carr served as FCC chair under Trump and moved quickly to greenlight the Nexstar-TEGNA merger while pursuing broader rule changes to make such deals easier. He argued that lifting ownership caps would bring efficiency and better service to consumers. Carr's decisions reflected the long-standing belief that fewer restrictions meant stronger broadcasters and lower costs for viewers. His actions drew praise from industry executives who had waited years for such relief. Yet the approvals he granted soon faced legal challenges from multiple states. ^[1]
• Bruce Owen worked as an economist at the Stanford Institute for Economic Policy Research and spent years examining the FCC's media ownership rules. He concluded that the restrictions duplicated existing antitrust protections and offered no clear benefit to competition or the First Amendment. Owen's analysis questioned the core idea that limiting ownership preserved diversity or localism. He called for the rules to be abolished, noting that economic evidence had never strongly supported them. His work represented an early and persistent challenge to the consensus that had guided policy for decades. ^[3]

Nexstar and TEGNA consolidated local TV affiliates through a series of acquisitions that federal regulators approved, giving the combined company dominance in dozens of markets. The deals allowed them to demand higher retransmission fees from cable and satellite providers while exerting tighter control over news content. Executives insisted the moves would improve efficiency and deliver better programming to viewers. Instead the consolidation produced centralized newsrooms and staff reductions that reduced local coverage. By the late 2010s the two companies together reached a substantial share of American households. ^[1]

The Federal Communications Commission lifted ownership caps over time, operating under the assumption that consolidation would modernize broadcasting and benefit consumers. Regulators approved larger groups on the grounds that market forces would ensure quality and competition. The agency had enforced limits since the 1920s but gradually relaxed them in response to industry pressure and technological change. These decisions reflected the widespread belief that fewer owners would produce stronger, more efficient stations. The changes cleared the way for deals that would have been impossible a generation earlier. ^[1][4]

The U.S. Congress enacted the Telecommunications Act of 1996, embedding the assumption that deregulation and reduced ownership limits would promote competition across telecom, broadcast, and cable services. Lawmakers described the legislation as a necessary update to the Communications Act of 1934 that would deliver lower prices, higher quality, and faster innovation. The act created new provisions for competitive markets, interconnection, and regulatory forbearance. It amended broadcast ownership rules to allow greater consolidation and gave broadcasters more flexibility with spectrum. For years afterward the law stood as the central legal foundation for the belief that bigger broadcasters served the public interest. ^[2]

Lawmakers and regulators justified consolidation by pointing to expected efficiencies that would supposedly improve content quality and lower costs for consumers. They relied on the idea that larger station groups could share resources and invest more in programming. Yet past mergers by Nexstar showed retransmission fees rising dramatically, climbing from $1.04 to $23.21 per subscriber as the company grew. The pattern contradicted the claim that consumers would benefit. Centralized news production and layoffs followed many deals, reducing the diversity of local coverage rather than enhancing it. ^[1][2]

Media ownership policy rested on the belief that limiting common ownership would ensure a diversity of viewpoints, programming choices, and greater participation by minorities and women while promoting localism and competition. The Federal Communications Commission had promoted these goals for decades, arguing that ownership caps protected both economic welfare and First Amendment values. Growing evidence suggests these assumptions were flawed. Declining local TV news viewership and widespread loopholes undermined the intended outcomes. Economic analysis later showed that many rules simply duplicated antitrust law without delivering measurable benefits. ^[3][4]

The assumption that concentrated ownership would harm consumers drew support from theoretical concerns about collusion and leveraging. Group owners were expected to use their buying power to disadvantage independent stations in program purchases and advertising sales. Studies, however, found no significant differences in rates linked to ownership structure. Similarly the idea that fewer owners would homogenize viewpoints lacked empirical backing. A substantial body of experts now view these theoretical fears as overstated, especially as new technologies increased competition. ^[5]

Nexstar spread the assumption by requiring its 160 stations to air stories that favored cable deregulation and portrayed consolidation as beneficial. The company used its growing network of local outlets to shape public perception in markets across the country. These mandates turned newsrooms into vehicles for the very policy changes that expanded corporate power. The practice illustrated how the assumption became self-reinforcing once large groups controlled multiple affiliates. Critics later pointed to these directives as evidence that consolidation reduced rather than enhanced editorial independence. ^[1]

The assumption gained traction through federal legislation that amended the Communications Act of 1934 and embedded principles of deregulation across multiple sectors. The Telecommunications Act of 1996 presented consolidation as a natural step toward competition and consumer welfare. It required periodic reviews of ownership rules but retained many of the original assumptions about the benefits of fewer restrictions. Policymakers and industry voices repeated the talking points that bigger broadcasters would deliver better service. The law helped normalize the idea that ownership concentration served the public. ^[2][3]

The Federal Communications Commission propagated the belief through administrative enforcement and congressionally mandated quadrennial reviews that adjusted rules based on changing market conditions. Regulators cited declining viewership and competitive pressures from cable and satellite as reasons to relax limits. These reviews kept the core assumption alive even as evidence accumulated that consolidation produced higher fees and less local news. The process created an impression of careful oversight while steadily enabling larger deals. A growing number of observers now see the reviews as having prolonged a policy framework that no longer matched market realities. ^[4][5]

The Federal Communications Commission relaxed ownership rules repeatedly since the 1990s, allowing companies to exceed earlier limits and raising the national audience reach cap beyond the previous 39 percent threshold. These changes reflected the persistent belief that consolidation would bring efficiencies and better programming. Federal regulators approved multiple Nexstar mergers despite antitrust concerns, clearing the path for further concentration in local television. The approvals were justified by the same arguments that larger groups would serve consumers more effectively. In practice the policies enabled the very dominance that later produced sharp increases in retransmission fees. ^[1]

The Telecommunications Act of 1996 created new regulatory frameworks focused on developing competitive markets, including interconnection obligations, removal of entry barriers, and universal service provisions. Title II of the act reformed broadcast services by amending ownership rules to permit greater consolidation and providing broadcasters with more spectrum flexibility. Title IV introduced regulatory forbearance and required biennial reviews to eliminate unnecessary rules once competition appeared. Congress presented these measures as essential to lower prices and faster innovation. The legislation became the primary vehicle through which the assumption about beneficial consolidation was translated into law. ^[2]

The FCC maintained a national ownership cap at 39 percent of U.S. households while applying a UHF discount that effectively halved the counted reach of certain stations. Local rules restricted duopolies, radio-television cross-ownership, and newspaper-broadcast combinations until many of those limits were repealed or relaxed in 2017. Earlier restrictions had included the group ownership rule that capped stations at seven per service, the duopoly rule, and the one-to-a-market rule, all justified as necessary to prevent concentration and promote diversity. These policies were grounded in both antitrust principles and separate First Amendment considerations. Significant evidence now challenges the idea that such limits delivered the promised benefits. ^[4][5]

Eight state attorneys general led by California's Rob Bonta filed suit to block the Nexstar-TEGNA merger, challenging the federal approval on antitrust grounds and arguing that the deal would harm competition and consumers. DirecTV brought a parallel lawsuit focused on the pricing power the merged company would possess. These legal actions marked a turning point in which the long-accepted assumption faced organized resistance from both states and major distributors. The cases highlighted how consolidation had produced higher costs rather than the promised efficiencies. Growing evidence suggests the assumption was flawed, though debate continues over the extent of the damage. ^[1]

Economic analysis had already begun to expose the ownership rules as largely redundant with standard antitrust law. Bruce Owen and others argued that abolishing the FCC's separate regime would not harm First Amendment values or consumer welfare. The Telecommunications Act of 1996 had started a process of review that slowly revealed weaknesses in the original rationale. By the 2010s a number of studies questioned the theoretical foundations that had supported decades of policy. These critiques gained traction as new technologies further eroded the case for strict ownership limits. ^[3]

The FCC repealed several local ownership rules in 2017, relaxed restrictions on top-four television station combinations in the same markets, and opened proceedings to consider eliminating the national cap or the UHF discount. Review of the Sinclair-Tribune transaction exposed sham arrangements that allowed companies to evade limits on control. Empirical studies dating back to the 1970s, including work by Peterman, Cherington, and Fournier and Martin, had found no clear evidence that group ownership led to collusion or higher advertising rates. Emerging cable, satellite, and digital competitors made the old rules seem increasingly irrelevant. An influential minority of analysts now argues that the entire framework rested on assumptions that never held up under scrutiny. ^[4][5]

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