FCC regulates many aspects of television and radio station ownership. Laws and regulations limit the ownership of television stations, both nationwide and locally, and limit the ownership of radio stations locally. Since the 1970s, the number of media outlets has increased dramatically, with large increases in the number of television and radio stations; additionally, the number of broadcast networks has increased. More recently however, some segments of the media industry have undergone consolidation, with a few companies acquiring a significant number of outlets. Through provisions in the Communications Act of 1934, as amended, FCC regulates various aspects of television, radio, cable, and satellite service. FCC has three policy goals for media ownership: competition, diversity, and localism; in the case of diversity, FCC identified viewpoint, outlet, program, source, and minority and female diversity. On December 18, 2007, FCC took action on a number of items impacting media ownership. FCC revised its ban on the ownership of a newspaper and broadcast station in the same market. FCC set a cap on the number of subscribers that a cable operator can serve nationwide and sought comments on vertical ownership limits and cable and broadcast attribution rules. FCC also adopted rules to help new entrants and small businesses, including minority- and women-owned businesses with access to financing, such as modifying the commission’s construction permit deadlines, and adopted a notice of proposed rule making that, among other things, sought comment on how best to improve collection of data regarding the gender, race, and ethnicity of broadcast licenses. Finally, FCC adopted a report on broadcast localism and a notice of proposed rule making. Six restrictions on the ownership of television stations, radio stations, and broadcast networks follow: National television ownership cap. A single entity can own any number of television stations nationwide as long as the stations collectively reach no more than 39 percent of national television households. For purposes of calculating the 39 percent limit, ultra-high frequency (UHF) television stations are attributed with 50 percent of the television households in their market, which FCC refers to as the UHF discount. Local television ownership limit. A single entity can own two television stations in the same DMA if (1) the “Grade B” contours of the stations do not overlap or (2) at least one of the stations is not ranked among the top four stations in terms of audience share and at least eight independently owned and operating full-power commercial or noncommercial television stations would remain in the DMA. Local radio ownership limit. A single entity can own up to 5 commercial radio stations, not more than 3 of which are in the same service (that is, AM or FM), in a market with 14 or fewer radio stations, except that an entity can not own, operate, or control more than 50 percent of the stations in a market; up to 6 commercial radio stations, not more than 4 of which are in the same service, in a market with 15 to 29 radio stations; up to 7 commercial radio stations, not more than 4 of which are in the same service, in a market with 30 to 44 radio stations; and up to 8 commercial radio stations, not more than 5 of which are in the same service, in a market with 45 or more radio stations. Newspaper-broadcast cross-ownership ban. Following the effective date of a new approach released by FCC on February 4, 2008, the commission will presume that a proposed newspaper-broadcast transaction is in the public interest if it meets the following test: (1) the market at issue is one of the 20 largest DMAs; (2) the transaction involves the combination of only 1 major daily newspaper and only 1 television or radio station; (3) if the transaction involves a television station, at least 8 independently owned and operating major media voices would remain in the DMA following the transaction; and (4) if the transaction involves a television station, that station is not among the top 4 ranked stations in the DMA. All other proposed newspaper-broadcast transactions would be presumed not in the public interest. This new approach will replace an absolute ban, which prohibits a single entity from having common ownership of a full-power television or radio station and a daily newspaper if the television station’s “Grade A” contour or the radio station’s principal community service area completely encompasses the newspaper’s city of publication. Television-radio cross-ownership limit. A single entity can own up to 2 television stations (if permitted under the local television multiple ownership cap) and up to 6 radio stations (if permitted under the local radio multiple ownership cap) or 1 television station and 7 radio stations in a market with at least 20 independently owned media voices remaining post merger; up to 2 television stations and up to 4 radio stations in a market with at least 10 independently owned media voices remaining post merger; and 1 television station and 1 radio station regardless of the number of independently owned media voices. Dual network rule. A single entity can own multiple broadcast networks, but cannot own two or more of the top four networks (that is, ABC, CBS, FOX, and NBC). In its December 18, 2007, action, FCC adopted rules limiting the number of subscribers that a cable operator can serve nationwide. While FCC first set limits on the number of subscribers that a cable operator could serve in 1993 and later modified its rules in 1999, the Court of Appeals for the District of Columbia Circuit reversed and remanded those rules. FCC’s new rules set the number of subscribers that a cable operator can serve at 30 percent nationwide. Since the 1970s, the number of media outlets has increased dramatically, with large increases in the number of television and radio stations. In the case of television, the number of full-power television stations increased from 875 in 1970 to 1,754 in 2006; this increase occurred in both commercial and noncommercial educational television stations. Moreover, the number of broadcast networks that supply programming to stations across the country increased from three major networks (ABC, CBS, and NBC) to four major networks (ABC, CBS, FOX, and NBC) and several smaller networks, such as The CW Television Network, MY Network TV, and ION Television Network. In the case of radio, the number of full-power radio stations more than doubled, from 6,751 stations in 1970 to 13,793 stations in 2006, with increases in AM, FM, and FM educational stations. Daily newspapers illustrate a different trend—decreasing from 1,763 in 1970 to 1,447 in 2006. While the number of morning newspapers increased from 334 in 1970 to 833 in 2006, the number of evening newspapers decreased by more than half, from 1,429 to 614. Table 1 illustrates the trends in television and radio stations and newspapers. Since the 1970s, the number of households subscribing to a multichannel video program distributor (MVPD) has increased significantly, thereby increasing the programming options available to many households. The two most prominent MVPD platforms are cable and direct broadcast satellite (DBS) services. Since 1975, the number of households subscribing to cable service has increased from approximately 10 million to nearly 66 million in 2006, and since 1995, the number of households subscribing to DBS service has increased from 2.2 million to over 29 million in 2006. Table 2 illustrates the number of cable and DBS subscribers. According to FCC’s most recent report on cable industry prices, the average cable operator provided over 70 channels of programming, thereby expanding the programming options available to subscribers of these services. These nonbroadcast networks include a variety of national outlets—such as CNN, Discovery Channel, ESPN, and FOX News—as well as regional outlets—such as the California Channel, Comcast SportsNet Chicago, and New England Cable News. While the number of media outlets has increased, the ownership of outlets has evolved. In 1995, FCC eliminated the Financial Interest and Syndication Rules, which had limited the ability of broadcast networks to have ownership interest in programming broadcast on their network. Subsequently, the broadcast networks increasingly became affiliated with companies providing program production services. The Walt Disney Company acquired ABC, Viacom acquired CBS, and NBC joined forces with Universal Pictures. News Corporation—which launched the Fox Broadcasting Network in 1986—also owns several production studios, including 20th Century Fox. Each of the four major broadcast networks owns television stations that reach more than 20 percent of the nation’s television households. Other significant owners of television stations include ION Media Networks, Tribune Company, and Broadcasting Media Partners, Inc. Following passage of the 1996 Act, several companies acquired a large number of radio stations. Clear Channel owned over 1,000 radio stations throughout the United States, and Cumulus Broadcasting and Citadel Communications each owned over 200 stations. The cable industry also experienced evolution in the ownership of some properties. Cable operators, who distribute programming to subscribers, are pursuing a strategy of regional clustering; this strategy involves acquiring the cable systems throughout a geographic region. In its most recent report on video competition, FCC estimated that there were 118 clusters with approximately 51.5 million subscribers. Comcast and Time Warner Cable have emerged as the largest cable operators, with 26.8 and 16.6 million subscribers, respectively. While cable operators provide many nonbroadcast networks to their subscribers, many nonbroadcast networks are owned by cable operators or broadcast networks. For example, among the nonbroadcast networks with the most subscribers, CNN and TNT are affiliated with Time Warner, ESPN is affiliated with Disney, USA Network is affiliated with NBC-Universal, and Discovery Channel is affiliated with Cox, a large cable operator. On December 18, 2007, FCC adopted a further notice that seeks comment on vertical ownership limits and cable and broadcast attribution rules, including for example, the extent to which vertical integration can lead to foreclosure of entry by unaffiliated programmers. In recent years, some companies have taken steps to sell assets. In 2005, Viacom split into two separate companies: Viacom and CBS Corporation.