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The Federal Communications Commission is moving to preserve a rule that, if revoked, could force large television companies to sell stations. At issue is the so-called UHF discount, an FCC regulation that effectively allows TV companies to skirt a federal limit on the number of U.S. viewers they may serve. In applying the rule to broadcasters and UHF stations, FCC regulators count only half the national audience when determining if they comply with the TV ownership cap. A source said the FCC is in “damage control mode” after the 3rd U.S. Circuit Court of Appeals, which is reviewing a slew of agency media rules, raised questions about the UHF discount. The agency began reviewing the UHF rule shortly after the court’s Feb. 11 hearing on media ownership. The FCC on Feb. 20 also asked the court to delay its decision on the UHF rule in light of the new review. “After hearing what they heard at the court, the FCC began efforts to try and minimize any possible disruptive action the court might take,” said Dana Frix, a partner at law firm Chadbourne & Parke LLP in Washington who specializes in media and telecom issues. Harold Feld, director of the Media Access Project, a Washington advocacy group that has challenged the media rules, said the FCC is worried that the court will either nullify the UHF discount or ask the agency to change it. The agency is revisiting the rule to bolster its case for keeping it, he argued. But Michelle Russo, spokeswoman for the FCC’s media bureau, said the agency is simply responding to a new congressional law, passed in January, that establishes a 39 percent cap on the national viewing audience a TV company may reach. She said the FCC needs input on how that new limit affects the UHF discount. �Copyright 2004, The Deal, LLC. All rights reserved.

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