FCC chairman Ajit Pai is an ideologue who enthusiastically endorsed the dismantling of net neutrality based on the idea that in the corporate media world, bigger is better. Perhaps most auspiciously, Pai approved rules a year ago that allowed broadcasters to own own far more stations than they were allowed previously, a regulation that seemed designed, to a suspicious degree, to help Sinclair. And as noted by The Hill, a similar move in 2011 by then-FCC Chairman Julius Genachowski effectively killed a proposed merger between AT&T and T-Mobile.
FCC officials said one problematic deal was the plan to sell Chicago station WGN to Steven Fader, a Maryland business associate of Sinclair Executive Chairman David Smith who oversees vehicle dealerships. Sinclair had boosted President Trump before the 2016 election, lending it credibility within the administration.
"Too many of this agency's media policies have been custom built to support the business plans of Sinclair Broadcasting", Rosenworcel said in a statement.
These are like sale-leasebacks, where Sinclair retained ownership though it would not operate the stations and would have the right to buy them back if the regulatory rules changed.
Sinclair's proposed sales of some stations to meet media ownership limits "would allow Sinclair to control those stations in practice, even if not in name, in violation of the law", Pai in an emailed statement Monday.
"I applaud Chairman Pai's decision today to designate the Sinclair-Tribune transaction for further review and hearings", Chris Ruddy, CEO of the conservative media platform Newsmax said in a statement.
Wood added that perhaps "the most interesting part of Pai's announcement is his recognition that several of the divestitures Sinclair proposed are a sham that would leave the company in control of stations it purportedly sells off to relatives and cronies of Sinclair executives". Brendan Carr, a Republican FCC member, likewise voted yes, said an FCC official who spoke on condition of anonymity because the tally hadn't been made public.
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But Pai said in a statement he's not convinced Sinclair would be giving up control of those stations.
The $3.9 billion deal would have allowed Sinclair, which was already the largest station owner in the USA, to add 42 Tribune stations in such major markets as NY and Chicago, giving it more than 200 stations and access to 70 percent of American households.
Sinclair didn't respond to requests for comment. Gary Weitman, a Tribune spokesman, declined to comment.
In his memo Monday, Pai said: "The law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues".
Criticism has arrived from groups including the American Civil Liberties Union, which in an FCC filing called the proposed deal "anti-competitive to its core". Though a judge allowed that deal to proceed, the Justice Department said last week that it would seek an appeal of the decision.
The $3.9 billion transaction that would create an unprecedented giant in local broadcasting, as Sinclair would be the largest owner of stations with a reach of nearly 59 percent of the country. "With this hearing designation order, the agency will finally take a hard look at its proposed merger with Tribune".