Vladislav Zaimov is a seasoned telecommunications specialist whose career has tracked the seismic shifts in the U.S. media landscape. With deep expertise in enterprise telecommunications and the risk management of vulnerable networks, he offers a unique perspective on the intersection of broadcast regulation, business strategy, and technological evolution. Today, he joins us to dissect the contentious debate surrounding the potential merger of broadcast giants Nexstar and Tegna, a deal that has ignited a firestorm of controversy at the Federal Communications Commission.
Our conversation will explore the fierce legal and competitive battle lines drawn over the 39% broadcast ownership cap, examining the arguments from independent media outlets fearing their extinction and legacy broadcasters who claim they face an “existential crisis” from Big Tech. We will delve into the tangible effects this consolidation could have on consumer cable bills, the unusual public maneuvering by FCC leadership, and the transformative technological promise of the next-generation broadcast standard, ATSC 3.0. Finally, we’ll weigh the competing demands for broadcast spectrum in an era dominated by streaming and mobile services.
Newsmax’s CEO has threatened to litigate if the 39% ownership cap is raised, calling it a violation of congressional law. Could you walk us through the specific legal arguments against the FCC modifying this cap and explain how such a change could practically harm independent media companies?
The core of the argument, as voiced by Chris Ruddy, is that the 39% national ownership cap is not just a regulatory guideline but a limit established by Congress. The position is that an administrative agency like the FCC doesn’t have the authority to unilaterally circumvent a law passed by the legislative branch. To do so would be a “blatant violation.” From a practical standpoint, the harm to an independent company like Newsmax is quite direct. A combined Nexstar-Tegna would control a massive number of local stations, giving it immense power in carriage negotiations with cable operators. This new giant could dictate prices and programming terms, and if negotiations go south, they have the leverage to pull their signal, affecting millions of viewers. For a smaller, independent player, this creates a marketplace where it’s much harder to secure favorable carriage deals and compete for viewers against a consolidated, powerful entity that can control the flow of content.
The NAB describes an “existential crisis” for local broadcasters facing competition from Big Tech. What specific competitive disadvantages do current ownership rules create, and what metrics show that greater scale would directly translate into better local news and programming for communities?
The National Association of Broadcasters paints a stark picture. They see the current ownership rules as “outdated” relics from an analog era, rules that keep broadcasters “artificially small.” The disadvantage is a matter of scale. A local station group, even a large one, is David competing against a host of Goliaths like Amazon, Google, and Netflix. These tech giants operate on a global scale, with massive budgets for creating original programming, securing exclusive sports rights, and dominating the digital advertising market. Local broadcasters, hobbled by the cap, argue they lack the financial muscle and national footprint to effectively compete for that same content and advertising revenue. The argument for how this translates to better local news is that greater scale generates more revenue, which can then be reinvested directly into local newsrooms—hiring more journalists, upgrading equipment, and expanding coverage. The warning is clear: without the ability to consolidate and achieve this scale, local stations will go the way of thousands of local newspapers, leaving communities without a vital source of information.
Greater broadcaster consolidation has been linked to rising retransmission fees, which can increase pay-TV bills. How might a combined Nexstar-Tegna entity alter carriage negotiations, and what specific safeguards could prevent increased costs from being passed on to consumers?
A combined Nexstar-Tegna would fundamentally alter the balance of power in carriage negotiations. Right now, a cable operator negotiates with different station groups. If this merger happens, you’re creating a single entity with an enormous footprint of highly-rated local stations, many of which are network affiliates that viewers demand. This gives them unprecedented leverage to demand higher retransmission consent fees, the per-subscriber fees cable operators pay to carry their signals. The fear is that these operators, facing the threat of a massive blackout of key channels, will have no choice but to concede to higher rates, and those costs are almost always passed directly to consumers in the form of higher monthly bills. In terms of safeguards, the deal would still face a competition review at the Department of Justice and a public interest review at the FCC. These bodies could, in theory, impose conditions on the merger, such as setting limits on retransmission fee increases for a certain period or requiring arbitration in negotiation disputes to prevent blackouts. However, the effectiveness of such safeguards is always a major point of debate.
FCC Chairman Brendan Carr publicly endorsed the Nexstar-Tegna deal, leading to criticism that he is bypassing a standard public process. Could you describe the typical steps for a merger review and explain why this level of public involvement from a chairman is considered unusual?
Typically, a major merger like this undergoes a rigorous, multi-stage review. It’s not a backroom decision. It involves a formal public interest review at the FCC, where various stakeholders can file comments and objections, and a separate antitrust and competition review at the Department of Justice. This is designed to be a transparent and evidence-based process. What’s so unusual here is seeing the Chairman of the FCC, Brendan Carr, so publicly and forcefully endorse the deal before that process has fully played out. Citing the former President’s endorsement on social media and arguing the deal is necessary to create “real competition” gives the impression that the decision is pre-ordained. It fuels fears, like those expressed by Newsmax’s CEO, of a “stealth approval” that bypasses the formal public process. A regulator is expected to be an impartial arbiter, but this kind of public advocacy from the very top is seen by critics as thumbing the scale and undermining the integrity of the established review procedures.
Beyond its impact on news, the Nexstar-Tegna merger could accelerate the rollout of the ATSC 3.0 standard. Can you detail the specific technological and business opportunities this unlocks for datacasting, and what are the main hurdles to building out a national hybrid broadcast-broadband network?
This is the big technological undercurrent to the business deal. ATSC 3.0, or “NextGen TV,” is a massive leap forward from our current broadcast standard. It’s IP-based, meaning it speaks the same language as the internet. While it brings consumer-facing benefits like 4K video and advanced advertising, its most transformative potential is in datacasting. This technology allows broadcasters to use a portion of their spectrum to transmit data to a huge number of devices simultaneously—think of it as a one-to-many data firehose. A combined Nexstar-Tegna would have a larger, more coordinated station footprint to deploy this technology faster. A venture like EdgeBeam, which Nexstar backs, is already planning a national hybrid network using ATSC 3.0 for the main data delivery and 4G for the return path. The opportunities are vast: firmware updates for cars, content delivery for remote learning, public safety alerts, and more. The main hurdle is coordination. Building a truly national network requires stitching together the spectrum of dozens of different station owners, which is a complex technical and business challenge. A larger, consolidated entity simplifies that puzzle significantly.
The Consumer Technology Association suggests that as viewership moves to streaming, broadcast spectrum is increasingly underused. How does this argument complicate the push for broadcaster consolidation, and what are the potential trade-offs between expanding broadcast scale and reallocating spectrum for other mobile services?
The CTA’s argument throws a wrench into the broadcasters’ narrative. They are essentially asking: why should we change the rules to help an industry consolidate and control a resource—broadcast spectrum—that is becoming less relevant to consumers? Their data suggests that fewer and fewer people are watching over-the-air TV, choosing streaming and on-demand platforms instead. From this perspective, that valuable spectrum is being underutilized. This creates a fundamental policy trade-off. On one hand, you can allow consolidation to help broadcasters build the scale they say they need to survive and deploy new services like ATSC 3.0. On the other hand, you could look at that same spectrum and decide it would better serve the public good if it were reallocated for other high-demand services, like expanding 5G mobile broadband. So, the debate becomes not just about the business of television, but about the most efficient and beneficial use of a finite public resource in the 21st century.
What is your forecast for the future of local broadcast television in the face of both Big Tech competition and potential regulatory changes?
My forecast is that local broadcasting is at a critical inflection point, and its future path will be determined almost entirely by regulatory action in the near term. If the ownership cap is raised and consolidation is allowed, we will see a smaller number of much larger, more powerful broadcast companies emerge. These entities will have the scale to negotiate more aggressively, invest in next-generation technologies like ATSC 3.0, and potentially create a more stable financial footing to support local news. However, this will come at the cost of diversity in media ownership and likely higher cable bills for consumers. Conversely, if the regulatory environment remains unchanged, the “existential crisis” the NAB speaks of could very well become a reality. Without the ability to scale, local broadcasters will continue to lose ground to Big Tech in the battle for advertising dollars and audience attention, mirroring the slow decline we’ve witnessed in the local newspaper industry. The future is a choice between a more consolidated, but perhaps more viable, broadcast industry and a more fragmented one that risks being slowly squeezed into irrelevance.
