Last April, Trump-appointed Federal Communications Commission chairman Ajit Pai eliminated a restriction that had previously capped how many stations media companies could own. Interestingly, weeks laters, Sinclair Broadcast Group announced (long-suspected) a deal to acquire Tribune Media for $3.9 billion.
Now, the deal isn’t the interesting part here but rather the timing of it. For two months, the FCC’s internal watchdog has been investigating whether Pai and his aides had improperly pushed to change the rules and timed it to purposefully help Sinclair push for the merger. Representative Frank Pallone (D-NJ) confirmed the news to The New York Times.
For months I have been trying to get to the bottom of the allegations about Chairman Pai’s relationship with Sinclair Broadcasting. https://t.co/JGmRQp4VoN
— Rep. Frank Pallone (@FrankPallone) February 15, 2018
At this time, it’s unclear how far the investigation has gone and what the results could be. The office of the FCC’s nonpartisan inspector general didn’t comment on “the existence or the non existence of an investigation” to The New York Times. Aside form Pallone, two aides to Democratic lawmakers also confirmed the investigation but required the condition to remain anonymous.
Prior to removal of the rule, it prevented one company from owning stations that captured more than 39 percent of the US households. The goal of this was to prevent monopolies taking over markets. Since Sinclair was able to go through with the deal, it added Tribune’s 42 American TV stations to the company’s 173, which would reportedly reach 72 percent of the country. That’s far above the 39 percent limit that was previously set, but since the rule was removed, there was nothing to stop Sinclair from pursuing the acquisition.
The FCC’s investigation is now looking to whether Pai removed the rules purposefully to easy the way for Sinclair to pursue Tribune. According to an investigation from New York Times that was published last August, Sinclair chairman met with Pai days before he was named FCC commissioner in January 2017. Reportedly, Sinclair chairman requested Pai to reduce crackdowns on media consolidation. After this meeting took place, Pai eased the first of what many regulations affecting ad revenue and growth limited imposed on media companies.