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Four U.S. states urge regulator to reject Sinclair Tribune deal

By David Shepardson

WASHINGTON, Nov 3 (Reuters) - Four state attorneys general urged the Federal Communications Commission to reject Sinclair Broadcast Group Inc's proposed $3.9 billion acquisition of Tribune Media Co, marking the latest hurdle for the controversial tie-up.

Sinclair, the largest U.S. television broadcast group 92 stations, announced plans in May to acquire Tribune's 42 TV stations in 33 markets as well as cable network WGN America, extending its reach to 72 percent of American households. The deal has been criticized by Democrats, Dish Network Corp and some conservative media outlets.

The attorneys general of Illinois, Maryland, Massachusetts and Rhode Island said in a filing with the FCC made public Friday that the deal "fails to further the public interest by allowing for increased consolidation that will decrease consumer choices and voices in the marketplace."

Sinclair did not immediately respond to a request for comment, but in August said the deal "will advance the public interest by helping to shore up an industry buffeted by well-known economic challenges." The merger would allow the company to “invest deeply in the free over-the-air delivery of local news, sports, and entertainment."

Advocacy group Free Press said Sinclair forces its stations to "air pro-Trump propaganda and then seeks favors from the Trump administration." Sinclair in April hired a former Trump campaign adviser, Boris Epshteyn, as a commentator.

Last week, Federal Communications Commission Chairman Ajit Pai said the regulator would vote to eliminate the ban on cross-ownership of a newspaper and TV station in a major market and make it easier for media companies to buy additional TV stations in the same market, or for local stations to jointly sell advertising time.

FCC Commissioner Jessica Rosenworcel, a Democrat, has questioned what she said were a string of decisions made by Republicans that benefit Sinclair.

The deal must win approval from the Justice Department. The company has said it expects the transaction to close in early 2018 after completing regulatory reviews.

In 2004, Congress said no company could own stations reaching more than 39 percent of U.S. households. In April, the FCC reversed a 2016 decision limiting the number of television stations some broadcasters can buy, paving the way for the Sinclair-Tribune tie-up. That allows Sinclair to only partially count some stations toward the cap - a distinction critics say no long has any technological basis.

Sinclair would have to divest stations in Seattle, St. Louis, Salt Lake City and Oklahoma City as part of the Tribune acquisition under current rules, but hopes FCC rule changes will allow them to avoid such sales. (Reporting by David Shepardson; Editing by Andrew Hay)