In the United States, owned-and-operated television stations (frequently abbreviated as O&Os) constitute only a portion of their parent television networks' station bodies, due to ownership limits imposed by the Federal Communications Commission (FCC). Previously, the total number of television stations owned by any company (including a television network) can only reach a maximum of 39% of all U.S. households; in the past, the ownership limit was much lower, and was determined by a specific number of television stations rather than basing the limits on total market coverage. The new rules replace the defined cap with a case-by-case review that prioritizes public interest.
Distribution At the dawn of the American television industry, each company was only allowed to own a total of five television stations around the country. As such, when the networks launched their television operations, they found it more advantageous to put their five owned-and-operated stations in large media markets that had more households (and therefore, denser populations) on the belief that it would result in higher revenue. In other markets, they opted to run their programming on stations through contractual arrangements, making them affiliates instead.
The five-station limit posed a problem for the DuMont Television Network, the first attempt at a "fourth" television network. Paramount Pictures, which had owned KTLA (channel 5) in Los Angeles and WBKB (channel 4, now WBBM-TV on channel 2) in Chicago, owned a share of the network. However, the FCC declared that Paramount controlled DuMont and thus forbade the network and the studio from acquiring any more stations. This was one of the factors that led to DuMont shutting down in August 1956.
For much of the era from 1958 to 1986, the major network-owned stations were distributed as follows: ABC, CBS and NBC each owned stations in the top three markets (New York City, Los Angeles and Chicago). Between 1958 and 1965, fourth-ranked Philadelphia housed CBS-owned WCAU-TV (channel 10) and NBC-owned WRCV-TV (channel 3, now KYW-TV), a station which NBC had acquired two years earlier through a trade with Westinghouse Broadcasting in return for NBC's television and radio stations in Cleveland. The FCC reversed the trade in 1965 and NBC regained control of the Cleveland television station, which is today known as WKYC. Each network owned stations in other markets where the other networks did not: in addition to Cleveland, these were ABC's KGO-TV (channel 7) in San Francisco and WXYZ-TV (channel 7) in Detroit, NBC's WRC-TV (channel 4) in Washington, D.C., and CBS' KMOX-TV (channel 4, now KMOV) in St. Louis.
As a result of a revision to the FCC's media ownership rules in 1999, a company can now own any number of television stations with a combined market reach of less than 39% of the country, but cannot own two of the four highest-rated stations in any market. Still, O&Os in the United States are primarily found in large markets such as New York City, Los Angeles and Chicago, among others. Despite that, network-owned stations can still be found in smaller markets (for example, KFSN-TV (channel 30) in Fresno, California is an ABC O&O; WOGX (channel 51) in Ocala, Florida, is technically a Fox O&O, but is operated out of the studios of and serves as a semi-satellite of the network's Orlando O&O WOFL).
UHF vs. VHF
Early development Local television stations in the United States were concentrated on the VHF dial (channels 2–13) in the early days of the industry. However, it soon became apparent that the twelve channels available on the VHF dial would not be sufficient to meet the demands of the growing industry. As a result, in 1952, the FCC opened up a new spectrum of frequencies on the UHF dial (channels 14–83) for terrestrial television. As an incentive for companies to operate UHF stations, the FCC relaxed the ownership limit for a given entity from five to seven stations, provided that no more than five were on the VHF dial.
With this opportunity to expand its roster of O&Os, NBC bought WBUF-TV (channel 17) in Buffalo in 1955 and WKNB-TV (channel 30) in New Britain, Connecticut (near Hartford) in 1957, and changed WKNB's call letters to WNBC-TV (the present-day WNBC in New York City used the WRCA-TV callsign from 1954 to 1960). The network wanted to see if a UHF station could effectively compete against VHF stations, and attempted to make the stations more competitive by investing in significant equipment upgrades. However, WBUF consistently ranked behind its VHF competitors, WGR-TV (channel 2, now WGRZ) and WBEN-TV (channel 4, now WIVB-TV). Similarly, WNBC consistently rated behind VHF competitor WNHC-TV (channel 8, now WTNH); WNBC faced an additional problem as its signal was not strong enough to cover New Haven and western Connecticut (nearly all of Connecticut is part of the Hartford-New Haven market).
By the time the FCC allocated additional VHF stations to Buffalo (WKBW-TV, channel 7) and Hartford (WTIC-TV channel 3, now WFSB), NBC decided that its experiment was a lost cause, and put WBUF and WNBC up for sale. While it found a buyer for WNBC (which retained its NBC affiliation), there were no takers for WBUF, and it went off the air in 1958. NBC then affiliated with WGR-TV, where it remains to this day. NBC donated WBUF's license and some of its equipment to PBS member station WNED-TV, which took over the channel 17 frequency in 1959 (due to a number of transactions, the WBUF-TV license is now held by WNLO and the channel 17 frequency was later held by WBXZ-LD; WNED still holds the virtual channel 17 in the Buffalo market, but has not advertised it since the early 2000s).
Similarly, CBS bought UHF stations WGTH-TV (channel 18) in Hartford and WOKY-TV (channel 19, later on channel 18) in Milwaukee in 1955, and changed their call letters to WHCT-TV and WXIX-TV, respectively. However, CBS' ratings were astonishingly low in those markets. In 1959, CBS decided to move its Hartford and Milwaukee affiliations to VHF stations WTIC-TV and WITI-TV (channel 6) respectively, and sold off what became WHCT (now Univision affiliate WUVN) and WXIX (now CW affiliate WVTV) – ironically, CBS was sent back to the UHF dial in Milwaukee following an affiliation switch in December 1994, which saw WITI becoming a Fox station, while its former CBS affiliation moved to WDJT-TV (channel 58).
1980s and beyond The underperformance of early UHF O&Os (and UHF stations in general) was primarily attributed to the fact that manufacturers were not required to equip new television sets with UHF tuners until 1964, following the 1961 passage of the All-Channel Receiver Act. While the technical problems which plagued early UHF stations had largely disappeared by the 1980s with the spread of UHF tuners and (in particular) cable television, UHF stations in many television markets continued to be compared unfavorably against their VHF counterparts, often simply by virtue of viewer loyalty. As such, the "Big Three" networks (ABC, NBC, and CBS) were still not inclined to acquire UHF stations as network-owned outlets; however, ABC did keep Fresno's KFSN (which was a CBS affiliate at the time the deal was reached) after the network merged with Capital Cities Communications in 1986, as KFSN was the highest-rated station in a market where all of the full-power television stations were on the UHF band, along with the fact it saw the advantage of having a statewide network to share California news coverage and events with, using the resources of KFSN, KGO-TV, and KABC-TV.
By the time the Fox network launched in October 1986, many of the nation's VHF stations were already affiliated with one of the "Big Three" networks. As a result, Fox had little choice but to affiliate with UHF stations in most markets upon its launch (the few VHF outlets that the network initially affiliated with, a few of which were owned by Fox itself, were in a handful of large and mid-sized markets; however, Fox was forced to align with a UHF outlet in a few markets where it initially approached a VHF independent station for an affiliation offer and was turned down). The network even had UHF O&Os in markets like Chicago (WFLD, channel 32), Houston (KRIV, channel 26), and Dallas (KDAF, channel 33). However, by the time that the National Football League awarded Fox the rights to broadcast games from the National Football Conference in 1993, it became convinced that the network would not be viable without more VHF affiliates. As such, in May 1994, the network arranged a deal with New World Communications, which saw nearly all of that group's stations (most of which were VHF outlets) becoming Fox affiliates. Fox then acquired New World Communications outright in July 1996, and those VHF stations (including one in Dallas) became Fox owned-and-operated stations in the process. The network, however, did acquire more UHF O&Os in subsequent years, including Philadelphia's WTXF-TV (channel 29) in 1995, Orlando's WOFL (channel 35) in 2002, and Charlotte's WJZY (channel 46) in 2013.
As a result of the New World deal, CBS lost its longtime Detroit affiliate WJBK (channel 2) to Fox. CBS then unsuccessfully sought to affiliate with other stations in the market before it eventually purchased low-rated ethnic independent WGPR-TV (channel 62) and changed the station's callsign to WWJ-TV (a callsign once used by one of the stations that CBS approached for an affiliation, WDIV-TV) in 1995. The station continues to receive low ratings, and after a brief attempt at running an 11:00 p.m. newscast from 2001 to 2002 that was produced by sister station WKBD-TV (which voluntarily shut down its news department shortly afterward to enter into a short-lived news share agreement with WXYZ-TV), was the only CBS owned-and-operated station without a local news presence until 2009, when a morning newscast produced by the Detroit Free Press premiered (that program, First Forecast Mornings, was canceled in 2012). CBS also bought KEYE-TV (channel 42) in Austin, Texas from the Granite Broadcasting Corporation in 2000, five years after that station took the CBS affiliation from KTBC, another former New World station that switched to Fox.
NBC would not buy a UHF O&O again until 1995, when it acquired WNCN (channel 17) in Goldsboro, North Carolina (part of the Raleigh–Durham market). It subsequently purchased KNSD (channel 39) in San Diego in 1996, and it repurchased channel 30 in Hartford, now WVIT, in 1997.
Currently, most American networks have at least one owned-and-operated station on a UHF frequency (which now usually corresponds to the station's physical digital channel, particularly in cases where a station previously operated on a VHF channel, which now corresponds to its virtual channel, prior to the 2009 digital television transition). Newer networks, such as Univision and Ion Television, even have mostly UHF O&Os.
Ownership and network changes Mergers, acquisitions, and other business deals between television networks and other companies sometimes require a network to sell off an O&O, in order to stay under the ownership cap. In addition, networks may choose to sell off O&Os in smaller markets in order to concentrate on their stations in larger markets, or to give themselves leeway to purchase stations in other growing markets. The following are examples of transactions involving owned-and-operated stations in the United States:
DuMont Television Network The DuMont network found itself in financial trouble in 1954, and decided to sell off its Pittsburgh owned-and-operated station, WDTV (channel 2), which was the only commercial VHF station in what was then a top ten television market in the United States. Westinghouse Electric Corporation bought the station for $6.75 million, and changed its call letters to KDKA-TV (that station now operates as a CBS O&O, as a result of the network's 1995 merger with Westinghouse).