Broadcast Law Blog

The Commission today published notice in the Federal Register revising the dates for submitting comments in its rule making "In the Matter of Promoting Diversification of Ownership in the Broadcasting Services."  If you will recall, this is the rule making proceeding that seeks comment on a number of new proposals, including whether to revise the definition of "Designated Entities", possibly expanding the FM band to include TV channels 5 and 6, possibly adopting rules to allow AM expanded band stations to retain those stations or transfer them to Designated Entities, and whether Class A LPTV stations should be afforded must-carry rights on cable systems. 

Although the FCC had initially pegged the comment date at July 15th when it first published notice a couple of weeks ago, apparently that date was a miscalculation.  Thus, the dates for commenting have now been revised, and Comments in the proceeding are now due on or before June 30, 2008, and Reply Comments are due on or before July 14, 2008.  This means that interested parties have a couple of weeks less than initially thought to prepare and file comments in this proceeding, so start drafting now.  See our earlier summary of this proceeding for more information.  A copy of today's Federal Register notice can be found here. 

Posted By Brendan Holland In AM Radio , EEO Compliance , FM Radio , FM Translators and LPFM , Low Power Television/Class A TV , Multiple Ownership Rules | Permalink | 0 Comments | Email entry

UPDATE  5-29-2008-  Please note, the Commission has revised the dates for submitting comments in this rule making proceeding.  Comments in the proceeding are now due on or before June 30, 2008, and Reply Comments are due on or before July 14, 2008.  This means that interested parties have a couple of weeks less than initially thought to prepare and file comments in this proceeding, so start drafting now.  A copy of the Federal Register correction notice can be found here. 

The FCC has published its Further Notice of Proposed Rulemaking on its efforts to encourage diversity in the broadcast media in the Federal Register, thus setting the dates for public comments.  The FCC is seeking comment on a number of ideas – some to restrict the definition of the Designated Entities that are eligible to take advantage of the rules promote diversity to minority groups and perhaps women, others to expand the universe of media outlets available to potential broadcast owners – including proposals to expand the FM band onto TV channels 5 and 6, and proposals to allow certain AM stations, which were to be returned to the FCC after their owners received construction permits for expanded band stations, to retain those stations or transfer them to Designated Entities.  There are numerous other issues to be considered that we summarized in detail here.  Check out the details, and file your comments, which are due on June 30. 

The Federal Register publication also sets the effective date for the Diversity rules that the FCC did adopt.  These rules will become effective on July 15.  We summarized the new rules here.  While many of these new rules are relatively uncontroversial, allowing certain limited exceptions to the multiple ownership rules for companies that help minority ownership, some have imposed new obligations that, in some cases, are not easily defined.  For instance, while no one would argue with the proposition that parties who discriminate based on race or gender should be penalized, the FCC adopted some rules that may need further clarification.  For instance, the FCC adopted new rules to require certifications that there has been no discrimination in all FCC applications seeking approval for the sale of a station (FCC Forms 314 and 315).  The FCC also adopted rules prohibiting dictates by advertisers that their advertising not run on urban or Spanish formatted stations ('no urban, no Spanish" dictates).  Yet, on neither of these rules did the FCC provide any specificity as to what they were prohibiting, or what the Commission would look at in enforcing these rules.  Watch for potential requests for reconsideration or clarification of these and perhaps other rules - which are due on June 15. 

Posted By David Oxenford In AM Radio , EEO Compliance , FM Radio , Multiple Ownership Rules | Permalink | 1 Comments | Email entry

Last week, the US Senate passed a resolution of disapproval, which seeks to overturn the FCC's December decision relaxing the multiple ownership rules to allow newspapers and television stations to come under common ownership in the nation's largest markets (see our summary of the FCC decision here).  This vote, by itself, does not overturn that decision.  Like any other legislation, it must also be adopted by the House of Representatives, and not vetoed by the President, to become law.  In 2003, the last time that the FCC attempted to relax its ownership rules, the Senate approved a similar resolution, but the House never followed suit (perhaps because the decision was stayed by the Third Circuit Court of Appeals before the House could act).  In this case, we will have to see whether the House acts (no dates for its consideration have yet been scheduled).  Even if the House does approve the resolution, White House officials have indicated that the President will veto the bill, meaning that, unless there is a 2/3 majority of each house of Congress ready to override the veto, this effort will also fail.

The reactions to this bill passing the Senate have been varied.  The two FCC Democratic Commissioners, who both opposed any relaxation of the ownership rules, each issued statements praising the Senate action (see Commissioner Copps statement here and that of Commissioner Adelstein here).  The NAB, on the other hand, opposed the action, arguing that the relaxation was minimal, that it was necessary given "seismic changes in the media landscape over the last three decades" (presumably referring to including the economic and competitive pressures faced by the broadcast and newspaper industries in the current media environment), and that it ought not be undone by Congressional actions.   

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

In recent months, the broadcast industry has experienced one of the most active periods of regulatory activity in recent memory. Since November, the FCC has adopted enhanced disclosure obligations concerning the public interest programming of television broadcasters and requirements for an on-line public inspection file; rejected most calls for increased deregulation of broadcast ownership (allowing only the cross-ownership of broadcast stations and newspapers in the largest markets); established specific prohibitions against advertising practices that involved “no Spanish, no urban dictates”; placed mandatory disclosure obligations on television broadcasters in connection with promotion of the DTV transition; proposed rules that could favor low power FM stations over improvements in full-power broadcast services and existing FM translator licensees; and proposed sweeping regulation of broadcasters which could potentially require specific amounts of nonentertainment programming by all stations, restrict the flexibility of broadcasters' location of their main studios, require 24-7 live staffing for all stations that operate on that basis, and perhaps even evaluate the music selection process of radio operators. Rumored to be in the offing are proposals to regulate embedded advertising, to adopt enhanced rules on sponsorship identification in connection with video news releases and payola-like practices, and perhaps even expand EEO reporting requirements (as the FCC recently asked for public comment on the employee-classification information for its long-suspended requirements for the filing of FCC Form 395 – the Annual Employment Report in which stations categorize all their employees by their employment duties, race and gender). And Congress has not been idle, with proposals introduced for the adoption of a performance royalty on over-the-air radio for the use of sound recordings, hearings about potential restrictions on prescription drug advertising, and a proposal to roll back the limited ownership reform adopted by the Commission in December.

With all this activity in a six month period under a Republican administration with a Republican majority on the FCC, during a time of great turmoil in the broadcast industry itself, as television prepares for the digital transition and broadcast revenue growth is slow or nonexistent (based on a variety of factors including general economic conditions and competition from the plethora of new media choices), many broadcasters are wondering what’s going on? And some fear even more changes could come about in any new administration that may come to Washington after the November elections, no matter what the result of that election. The one candidate with the most experience in the regulation of broadcasting, Senator McCain who has chaired the Senate Commerce Committee which regulates the broadcast industry, has by no means been a captive of the broadcast industry – leading efforts to enhance the use of LPFM and at one point pushing a spectrum tax proposal for television broadcasters for the use of the digital spectrum.

Posted By David Oxenford In Advertising Issues , Digital Television , EEO Compliance , FM Translators and LPFM , General FCC , Multiple Ownership Rules , Programming Regulations , Public Interest Obligations/Localism | Permalink | 3 Comments | Email entry

In a recent decision, the FCC interpreted its radio multiple ownership rules in a case involving changes in an Arbitron market.  The FCC's rules restrict the number of radio stations that one company can own in a market based on how many stations are in that radio market.  In situations where stations are rated in an Arbitron market, the number of stations is determined by how many stations are in that Arbitron market, as determined by data compiled by the financial analysis firm BIA.  In this case, while the application to acquire the station was pending, BIA came out with its first list of stations that it considered to be in the newly created Arbitron market.  That list showed that, in the new market, the Buyer already owned more stations than allowed by the rules, so acquisition of this additional station was prohibited.  The case stands for the proposition that, while changes in Arbitron markets that allow an acquisition to take place must have been in place for two years to become effective (to prevent owners from gaming the system by making short-term changes), changes that adversely affect the ability of an owner to acquire a station become effective immediately.

According to the decision, at the time that the application in question was filed, the station to be bought was listed by BIA as being in the Manchester, New Hampshire Arbitron market.  The number of stations owned by the Buyer in Manchester was such that the acquisition of the station was permissible at the time the application was filed.  However, Arbitron announced the creation of a new Concord radio market just before the filing of the FCC application for approval of the transfer of control of the radio station.  Soon after the filing of the application, BIA released its list of stations in the new Concord market, and it included a number of the stations owned by Buyer, including the station it was proposing to acquire.  In the new Concord market, the Buyer would have too many stations to permit the acquisition of this station under the restrictions set out in the multiple ownership rules.

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 1 Comments | Email entry

We recently wrote about the Federal Communications Commission’s actions in their Diversity docket, designed to promote new entrants into the ranks of broadcast station owners. In addition to the rules adopted in the proceeding, the FCC is seeking comment on a number of other ideas – some to restrict the definition of the Designated Entities that are eligible to take advantage of these rules, others to expand the universe of media outlets available to potential broadcast owners – including proposals to expand the FM band onto TV channels 5 and 6, and proposals to allow certain AM stations, which were to be returned to the FCC after their owners received construction permits for expanded band stations, to retain those stations or transfer them to Designated Entities. The proposals, on which public comment is being sought, are summarized below.

Definition of Designated Entity. The first issue raised by the Commission deals with whether the class of applicants entitled to Designated Entity status and entitled to take advantage of the Commission’s diversity initiatives should be restricted. One proposal is to restrict the Designated Entity status to companies controlled by racial minorities. The Commission expressed skepticism about that proposal, noting that the courts had throw out several versions of the FCC’s EEO rules, finding that there was insufficient justification offered by the FCC to constitutionally justify raced-based preferences. The Commission asked that proponents of such preferences provide a “compelling” showing of needed, as necessary for a constitutional justification for governmental race-based discrimination.

Posted By David Oxenford In EEO Compliance , FM Radio , Low Power Television/Class A TV , Multiple Ownership Rules , Public Interest Obligations/Localism | Permalink | 0 Comments | Email entry

At its December meeting, at the same time as it adopted rules relaxing the newspaper-broadcast cross-ownership rules, the FCC adopted new rules to expand diversity in the ownership of broadcast stations, encouraging new entrants into such ownership.  The full text of that decision was just released last week, providing a number of specific rule changes adopted to promote diverse ownership, as well as a number of proposals for changes on which it requests further comment.  Comments on the proposed changes will be due 30 days after this order is published in the Federal Register.  As this proceeding involves extensive changes and proposals, we will cover it in two parts.  This post will focus on the rule changes that have already been made - a subsequent post will cover the proposed changes.  The new rules deal not only with ownership rule modifications, but also with issues of discrimination in the sale of broadcast stations and in the sale of advertising on broadcast stations, new rules that leave some important unanswered questions. 

The rules that the Commission adopted were for the benefit of "designated entities."  Essentially, to avoid constitutional issues of preferences based on race or gender, the definition of a designated entity adopted by the Commission is based on the size of the business, and not the characteristics of the owners.  A small business is one designated as such by the Small Business Administration classification system.  Essentially, a radio business is small if it had less than $6.5 million in revenue in the preceding year.  A television company is small if it had less than $13 million in revenues.  These tests take into account not only the revenue of the particular entity, but also entities that are under common control, and those of parent companies.  For FCC purposes, investment by larger companies in the proposed FCC licensee is permissible as long as the designated entity is in voting control of the proposed FCC licensee and meets one of three tests as to equity ownership: (1) the designated entity holds at least 30% of the equity of the proposed licensee, or (2) it holds at least 15% of the equity and no other person or entity holds more than 25%, or (3) in a public company, regardless of the equity ownership, the designated entity must be in voting control of the company.

Posted By David Oxenford In Advertising Issues , EEO Compliance , Multiple Ownership Rules | Permalink | 2 Comments | Email entry

The FCC this week released the full text of its decision on the revision of the multiple ownership rules that it adopted at its December 18 meeting.  While the text goes into great detail on the decision to relax the newspaper-television cross ownership restrictions (causing the ruling to be condemned by consolidation critics), the order is very brief in addressing the numerous other issues with the multiple ownership rules that were raised in this proceeding.  Television broadcasters sought greater opportunities to consolidate in local markets, and radio broadcasters requested reconsideration or clarification of various aspects of the Commission's 2003 decision adopting Arbitron market definitions as the basis of the determining how many radio stations are in a particular market.  These requests were all rejected, some summarily.  Will these parties who were denied relief from the FCC protest as loudly as the critics of the decision with respect to the relaxation of the TV-newspaper cross ownership limits?

We summarized the decision with respect to the newspaper television rules here.  That summary was based on the statements made at the December 18 meeting and on the press release issued that day which provided a brief summary of the Commission's decision.  The outline we provided in December was basically accurate, and there were few surprises about the newspaper-television cross ownership rules in the text.  The Commission was very thorough in documenting the basis for its decision that newspapers and television stations could be commonly controlled without adversely affecting the public interest, citing a legion of studies supporting their decision, while carefully refuting the studies supplied by consolidation critics.  However, the remainder of the decision, dealing with other aspects of the multiple ownership rules which the Commission refused to change, contained reasoning which was far more limited.  In some cases, particularly dealing with radio issues, the reasoning was almost absent.

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

Last week, the FCC approved the long-pending application for the transfer of control of Clear Channel Broadcasting from its public shareholder to several private equity funds. Even though the application had been pending at the FCC for over a year, the Commission’s decision was notable for the paucity of issues that were discussed. The decision approves the transfer, conditioned on certain divestitures by the Company and by the equity funds that will control the new company, including divestitures previously ordered by the Commission in connection with the investment of one of these funds in Univision Broadcasting but not yet completed, and rejects three petitions that, from the Commission’s description, did not involve fundamental issues about the nature of the overall transaction, but were instead devoted to certain limited issues, in two cases involving actions in a single market. The divestiture conditions were approved seemingly as a matter of course, and do not provide any new insights into the law concerning the FCC’s attribution rules (unlike the recent decision approving the transfer of control of Ion Television, about which we wrote here, which contained an extensive detailed discussion of what it takes to make an ownership interest “nonattributable” for purposes of the FCC multiple ownership rules). Given the lack of controversy in the Commission's order, what is perhaps most noteworthy about the decision are the concurring statements of the two Democratic Commissioners, which may provide some indication of the concerns of the Commission should we have a Democratic-controlled Commission following this year’s Presidential election.

Of course, as we’ve described in our posts about the FCC’s Localism Notice of Proposed Rulemaking (here), and the new rules regarding Enhanced Disclosure requirements for television broadcasters (here), the Commission has already begun to act in a far more regulatory manner than any other Commission in the past 20 years. Yet the issues raised by the Democrats in this decision are in areas not yet considered by the Commission. Commissioner Copps expresses his concern about the role of private equity in broadcast ownership, and whether such ownership is in the public interest. In numerous proceedings and in response to the presentation made at the FCC’s January meeting by the Media Bureau, Copps has suggested that private equity should be investigated, both to determine whether the Commission is fully aware of all ownership ties of the companies involved, and also (as emphasized in this case) for the potential economic impact on the operations of the broadcast stations caused by the new debt involved in the acquisition. Here, Commissioner Copps questions whether the announcement of a potential downgrade of the bonds of the Company if these deals occur should have been of more concern to the Commission. Private equity should be aware that, in a future FCC, an investigation of the economics of their operations should be expected.

Posted By David Oxenford In Advertising Issues , Multiple Ownership Rules , Public Interest Obligations/Localism | Permalink | 0 Comments | Email entry

The FCC has released the agenda for its first open meeting of the year, scheduled for this Thursday, January 17, 2008.  The agenda consists solely of presentations by the various Bureau Chiefs discussing their various policies and procedures in implementing the agency's "strategic plan."  Such an agenda, while not common, is not unheard of, especially for the first meeting of the year, and especially after so many controversial decisions were made in the last two meetings at the end of 2007.  

This agenda was released a few days after House Energy and Commerce Committee Chairman John Dingell announced an investigation of the Commission's rulemaking procedures and management practices.  FCC Chairman Kevin Martin has been under fire from Republicans and Democrats alike in both the House and Senate, especially following the agency's December meeting in which the newspaper/broadcast cross-ownership ban was modified, as we discussed here.  Congress has criticized the agency's lack of transparency, and infighting among the Commissioners has become open and much talked about in Washington, as reflected in meetings that are often delayed by hours and in Commissioner's Copps' vitriolic dissenting statement read aloud at the December meeting. 

Posted By David Silverman In General FCC , Multiple Ownership Rules | Permalink | 0 Comments | Email entry

Investors in broadcast properties often seek to have their interests "insulated" from "attribution"   meaning that the interests do not count in a multiple ownership analysis.  In other words, if a party has an attributable interest in a company owning a broadcast station, that interest counts in determining whether the party can, under the FCC's multiple ownership rules, own an interest in another station in the same market.  The FCC has extensive case law describing when an interest is non-attributable and does not count in a multiple ownership review.  In most cases, a non-attributable interest is one that does not hold voting rights on most company decisions.  However, the Commission has always recognized that the non-attributable, non-voting equity owner may retain certain voting rights when dealing with certain fundamental company actions, as necessary to protect the fundamental integrity of their investment.  In the recent decision approving the transfer of the Ion Media Network broadcast stations, the FCC clarified some of the permissible voting rights of nonattributable shareholders.

In the past, the FCC has permitted nonattributable owners to vote on certain fundamental actions of a company without threatening the owner's nonattributable status.  Such fundamental actions included changes in the articles of organization or the by-laws of the company, a sale of more than 10% of the assets of the company, a merger or transfer of control of the company, a declaration of bankruptcy, or the issuance of new stock.  As these actions could all affect the fundamentals of the economic interests of the nonattributable owners, votes on these actions was permitted.  In the Ion Media case, new rights were found to not affect the non-attributable status of their investments

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

The FCC today adopted Commissioner Martin's proposal for limited multiple ownership relaxation, adopting a presumption in favor of approving the common ownership of a broadcast station and a daily newspaper in the Top 20 television markets (we wrote about that proposal here).  But the grant of such combinations would not be automatic, but instead would be considered on a case-by-case basis, so opposition to any merger could be submitted to the FCC.  Under the rules announced today, newspaper-television combinations would not be entitled to the presumption in favor of grant if they involved one of the Top 4 ranked television stations in a market, or if there would be fewer than 8 independent media voices (full power TV or significant daily newspapers that are not commonly controlled) after the combination.  As for the other multiple ownership rules, from what was said at the meeting, no change at all will be made.  We addressed some of the many multiple ownership issues before the Commission that were apparently either not addressed or will not be changed in our post, here. 

As the full text of the decision has not been released, details of how the Commission addressed every issue are not available.  From the comments of the Democratic Commissioners who dissented from the decision, changes were being made to the standards adopted today throughout the night and as early as an hour before the meeting was held (see Commissioner Copps' impassioned statement against the new rules, here, where he details the last minute revisions).  Given the last minute nature of the final order, it may be a while before the full text is released.  However, from statements made today and from the Commission's press release, some details of the decision are known.  They are summarized below.

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

The FCC has released its agenda for its December 18 meeting - and it promises to be one of the most important,and potentially most contentious, in recent memory.  On the agenda is the Commission's long awaited decision on the Chairman's broadcast multiple ownership plan relaxing broadcast-newspaper cross-ownership rules (see our summary here).  Also, the FCC will consider a Further Notice of Proposed Rulemaking on Localism issues (pending issues summarized here) following the conclusion of its nationwide hearings on the topic, as well as an Order and Further Notice of Proposed Rulemaking on initiatives to encourage broadcast ownership by minorities and other new entrants (summary here).  For cable companies, the Commission has scheduled a proposed order on national ownership limits.  And, in addition to all these issues on ownership matters, the FCC will also consider revising its sponsorship identification rules to determine if new rules need to be adopted to cover "embedded advertising", i.e. product placement in broadcast programs.  All told, these rules could result in fundamental changes in the media landscape.

The broadcast ownership items, dealing with broadcast-newspaper cross-ownership, localism and diversity initiatives, all grow out of the Commission's attempts to change the broadcast ownership rules in 2003.  That attempt was largely rejected by the Third Circuit Court of Appeals, which remanded most of the rules back to the FCC for further consideration, including considerations about their impact on minority ownership.  The localism proceeding was also an outgrowth of that proceeding, started as an attempt by the Commission to deal with consolidation critics who felt that the public had been shut out of the process of determining the rules in 2003, and claiming that big media was neglecting the needs and interests of local audiences.

Posted By David Oxenford In Advertising Issues , Multiple Ownership Rules , Payola and Sponsorship Identification , Public Interest Obligations/Localism | Permalink | 0 Comments | Email entry

With a possible decision looming on December 18 on the Chairman's proposal to loosen the newspaper-broadcast cross-ownership rules (see our summary here and here), the FCC this week granted two applications involving the sales of the Tribune Company and of the Clear Channel television stations, where the decisions focused on the application of the multiple ownership rules - and where the Commission granted multiple waivers of various aspects of those rules - some on a permanent basis and many only temporarily.  And, in the process, both of the Commission's Democratic Commissioners complained about the apparent prejudgment of the cross-ownership rules and one complained about the role of private equity in broadcast ownership.  Both decisions are also interesting in their treatment of complicated ownership structures and, at least under this administration, evidence the Commission's desire to stay out of second guessing these structures. 

In the Clear Channel decision, the Commission reviewed the proposed ownership of the new licensee by an affiliate of Providence Equity Partners.  As there were no objections to the proposed sale, the FCC approval process was somewhat easier than it might have been - though the Commission did seem to be somewhat troubled by the fact that Providence was already a shareholder with an interest attributable under the multiple ownership rules in Univision Communications, which had stations in a number of markets in which the Clear Channel television stations operate.  The Commission approved the sale, giving Providence 6 months to come into compliance with the ownership rules - and conditioning the initial closing of the Clear Channel sale on Providence meeting divestiture requirements that it had promised to observe in connection with the Univision acquisition, and had not yet complied with (in fact the Commission recently asked for comments on a proposal by Providence to come into compliance in the Univision case by simply converting their interest in Freedom Communications, which has interests in Univision markets, into a nonvoting interest which would not be attributable under Commission rules)

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

The FCC has released the agenda for its Open Meeting to be held on Tuesday, November 27.  The agenda is full of issues of importance to broadcasters, and several items may resolve issues that may be troubling - including issues relating to low power FM stations (LPFM) and resolving a long outstanding proceeding concerning the possibility of mandatory public interest obligations for TV stations.  The Commission also has on tap initiatives to encourage the entry of minorities and other new entrants into the broadcast business - even though comments on the Commission's proposals on this matter were received just a month ago.

First, the Commission is to release an Order on Low Power FM.  We have written about some of the issues that could be decided previously - including issues of whether or not to allow the assignment and transfer of such stations (here) and whether to give these stations preferences over translators and even improvements in full power stations (here and here).

On the TV side, the Commission seems ready to issue an order on the public interest obligations of television operators.  We wrote about the proposals - made as part of the Commission's DTV proceedings (though to be applicable to all TV stations), here.  Proposed rules included the standardization of quarterly issues programs lists, making station's public fies available on the Internet, and quantifying other public interest obligations. 

Posted By David Oxenford In EEO Compliance , FM Translators and LPFM , Multiple Ownership Rules , Programming Regulations , Public Interest Obligations/Localism | Permalink | 0 Comments | Email entry

Yesterday's unique Public Notice outlining Chairman Martin's proposals for reform of the multiple ownership rules (which we summarized here) is a surprisingly restrained and limited approach to relaxation of the ownership rules - proposing to relax only the newspaper-broadcast cross-ownership prohibitions, and only in the Top 20 TV markets.  Moreover, the reform would only allow the combination of a daily newspaper and a single radio or TV station, and the newspaper-TV combination would only be allowed if the TV station is not one of the Top 4 ranked stations in the market.  While the extremely limited nature of the proposed relief has not stopped critics of big media from immediately condemning the proposal (see the joint statement of Commissioners Copps and Adelstein, here), much less attention has been paid to those multiple ownership issues that the Chairman's proposal does not seem to address - including TV duopoly relief in small markets and clarifications to the radio ownership rules requested by a number of broadcasters who sought reconsideration of the changes that arose from the 2003 ownership reforms. 

The Chairman's Public Notice is itself a new approach to regulation - putting out for public comment (due by December 11) an action of the Commission just before that action is to be taken.  Usually, the Commission proposes a set of rule changes in a Notice of Proposed Rulemaking, and the Notice provides time for interested parties to comment and then reply to each other's comments.  Once all the written comments are submitted to the Commission, parties and their representative often make informal visits to the FCC to argue about the suggestions that have been made, and eventually, after much consideration, the Commission's staff writes up a decision which is vetted by the Commissioners and their staff, and voted on by the full FCC.  Usually, these final decisions are shrouded in secrecy - though outlines of the proposals are often the subject of informed gossip and rumor, rarely does anyone see the full set of rules that the Commission is considering until after the decision is made. 

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

In a Public Notice released today, FCC Chairman Kevin Martin announced his intention to modify only the newspaper-broadcast cross-ownership rule, among all of the multiple ownership rules under consideration.  That rule prohibits ownership of a broadcast station and daily newspaper in the same market.   Somewhat surprisingly, Martin proposes to leave all other multiple ownership rules untouched.  And his proposal only suggests clearing the combination of a newspaper and either a television station or a radio station in the Top 20 markets, and only if the TV station is not among the Top 4 rated stations in the market.  Any other combination would be presumed to be prohibited, though a showing could be made to rebut that presumption. 

As we have previously written, Chairman Martin has long signaled his desire to modify or eliminate the newspaper-broadcast cross-ownership rule.  His specific proposal was also described in an op-ed piece he wrote for today's NY Times, and which is attached to the FCC Public Notice.  It would allow ownership of a daily newspaper and one broadcast station (radio or TV, but not both) in the top 20 DMAs (i.e. TV markets).  Even then, Martin would prohibit common ownership of a newspaper and any of the top four TV stations in that market, and would require that there be at least eight independently owned media voices (daily newspapers and full-power TV stations) following the transaction. 

Martin does not otherwise propose any changes to the other multiple ownership rules currently under consideration, including limits on local TV and radio ownership, as well as the national TV ownership cap that counts UHF stations at 50% of their actual audience.  Martin's editorial makes clear that he would also scrap the Commission's former "cross media" limits that were remanded back to the FCC by the U.S. Court of Appeals in the 2004 Prometheus decision.  The "cross media" limits would have weighted various media within a market to determine what level of media ownership would be permitted in that market.

Posted By David Silverman In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

This afternoon the Commission announced that it will hold its sixth and final public hearing on media ownership issues in Seattle, Washington on Friday, November 9, 2007.  The hearing will be held from 4 to 11 PM at the Town Hall in Seattle, and will conclude the Commission's tour around the country to gather information on media ownership to assist it in reworking its media ownership and cross-ownership rules.  A copy of today's public notice is available here.  More importantly, the timing of this final public hearing seems consistent with Chairman Martin's publicly announced target of wrapping up the Commission's reconsideration of the multiple ownership rules by the end of the year. 

The Chairman apparently remains undeterred by congressional calls to slow the rule making process down.  Yesterday, the Senate Commerce Committee announced that it would hold a hearing on media ownership on Tuesday November 6th, and today the House Energy & Commerce Committee has followed suit by announcing that it will hold its own hearing on the issue on December 6th.  While these hearings may put more pressure on the Commission to refrain from enacting new rules this year, by concluding its ownership tour next week, the Commission appears to still be aiming for a December action on the issue.  And according to at least one news article, the Chairman is aiming to publicly outline his media-ownership proposals by November 13th, in theory to advance those proposals before a vote at the next FCC Open Meeting tentatively set for December 18th.  Stay tuned.

Posted By Brendan Holland In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

In an unusual action, Commissioner Michael Copps last week publicly released a letter he wrote to Chairman Martin ( whose office is just down the hall from Copps' office on the Eighth Floor of the FCC's headquarters in Washington) urging the Chairman to initiate a proceeding to determine if the News Corporation's acquisition of the Wall Street Journal is in the public interest.  Copps points to the fact that the company currently owns another daily newspaper published in New York (the New York Post) as well as two full power television stations (WWOR and WNYW) in the market.  While recognizing that the FCC has previously ruled that national newspapers should not be counted for purposes of the FCC's newspaper- broadcast cross ownership limitations which currently bar local ownership of broadcast stations and daily newspapers in the same area.  This exception for national papers was principally decided in connection with Gannett's USA Today, headquartered in the Washington DC area, where Gannett also owns a TV station.  Copps argues that, despite the USA Today precedent, this situation nevertheless demands further review for two reasons: 1) the local concentration of two TV stations and two widely-read local newspapers and 2) the national concentration that will result in two of the five most widely read newspapers in the country being commonly owned with one of the four major television networks, as well as the owner of many other outlets of communication spread throughout the country.

One seemingly unique aspect of the Copps request is that he is asking that the FCC investigate the acquisition of a newspaper, over which the FCC has no direct jurisdiction.  In fact, in the past, TV companies have purchased newspapers that they could not own consistent with the cross-ownership rules, with the understanding that they would divest one of these interests by the time that the next license renewal for the television station came up (or ask for a waiver of the rules at that time).  This would be necessary as the FCC would have jurisdiction over the duopoly through the renewal application.  In recent years, there have been companies which have bought newspapers in their television markets, taking the risk that, by the time the television station renewal was filed, the FCC's cross-ownership rules would have changed.  And they are now left pursuing waivers in connection with their renewal applications.  In this case, while the FCC would not have jurisdiction over the acquisition of the Journal, they would have jurisdiction over the pending TV renewal applications.

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

The FCC announced Wednesday that it will hold an open meeting and its Sixth Localism Hearing on October 31, 2007 at the Commission in Washington, DC.  Combining its standard agenda with a further hearing on localism, the Commission intends to begin its meeting at 9 AM and conclude by 2PM.  A copy of the FCC's public notice is available here. 

The Localism Hearing portion of the program continues the string of hearings conducted around the country in recent years.  As we've written earlier, the Localism Hearings were part of a larger proceeding begun in response to the controversy after the 2003 multiple ownership rules and seek to gather input on how well broadcasters are serving the needs of their local communities .  The Oct. 31st meeting will include a presentation by the Media Bureau summarizing the record that the FCC has compiled thusfar on localism, as well as a period for comment by the public.  Commissioners Copps and Adelstein issued a press release on Wednesday, denouncing the hearing as last minute and unfair, stating:  "This is unacceptable and unfair to the public.  And it makes putting together an expert panel nearly impossible.  Is the Commission serious about allowing the public to participate in the agency’s decisionmaking?  Or is the goal to be able to claim that hearings have been held, even if the public has not had a chance to fully participate?”  It will be even more unacceptable and unfair if the meeting gets delayed and keeps folks from trick-or-treating with their kids. 

With respect to the agenda items on tap for the open meeting portion of the program, the Commission appears ready to act on a Report and Order concerning exclusive contracts for the provision of video services to multiple dwelling units, and a Second Report and Order regarding local franchising authorities and the awarding of cable franchises. 

Posted By Brendan Holland In General FCC , Multiple Ownership Rules | Permalink | 0 Comments | Email entry

According to an article yesterday in Broadcasting and Cable Online, and another article in the New York Times today, Chairman Martin of the FCC is looking to complete the multiple ownership proceeding (which we summarized here) by the middle of December.  According to the Times article, the Chairman is looking for relaxation of the current newspaper-broadcast cross ownership rules - the prohibition on the ownership of a broadcast station and a daily newspaper in the same market.  What the Chairman has in mind for the rules regarding local radio and television ownership is less clear.  But, no matter what is planned, forces are already mustering to attempt to delay the Commission action.

Contemplating a December action is certainly aggressive.  The Commission had promised to complete the two sets of public hearings - one on the ownership rules and a second on the localism provided by broadcasters - before reaching conclusions in this case.  Each set of hearings still has a final hearing to be held.  The Commission has yet to officially announce the date and location of either of these final hearings - though press reports have indicated that the Commission may look to hold one at the end of the month on the West Coast, and the final hearing in Washington, DC in early November.  In addition, the Commission has just received the final set of comments on the proposals to foster minority ownership, which the Third Circuit had indicated was to be part of the analysis in this proceeding when it stayed the effect of most of the Commission's 2003 multiple ownership decision and remanded that decision to the FCC for further consideration.  With the comments on minority ownership just having been filed, and comments on the Commission's own studies on the effect of consolidation not not due until next week (see details), and replies due early next month, does the Commission really have time to consider the issues raised in these comments in this proceeding and reach a December decision, or will some issues need to be delayed for independent consideration?  Seldom has the FCC finished any proceeding within a month and a half of the end of the public comment period - much less an important and controversial one like multiple ownership.

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

The FCC today extended the deadline for submitting comments on the voluminous media ownership studies released by the Commission late this summer in connection with the ongoing review of the Media Ownership Rules.  Comments on the studies were originally due by October 1st, with Reply comments due by October 16th.  At the request of several parties, the Commission has now extended the time to comment until October 22nd, with Reply Comments now due by November 1st. 

The Commission's media ownership studies were released as part of the FCC's comprehensive quadrennial review of its media ownership rules.  Specifically, the ten research studies were designed to inform its decisions in the proceeding.  In today's extension, available here, the Commission recognized that "there is a large amount of material to be reviewed and that some parties may need additional time to complete their review and analysis."  Further information on the ongoing multiple ownership rule making proceeding can be found in our earlier blogs, including this recent posting. 

Posted By Brendan Holland In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

At last Thursday's Public Hearing on multiple ownership in Chicago, about which we wrote here, a statement was read by a spokesman for Presidential candidate Barack Obama.  According to press reports, the statement expressed the candidate's positions favoring shorter license renewal terms for broadcasters so that they would be subject to more public scrutiny, as well as criticizing the FCC for allowing broadcast consolidation.  These thoughts essentially echo the comments of FCC Commissioner Copps, especially on the subject of license renewal terms, whose views we wrote about here.  While many press reports have asked if this statement by Senator Obama foreshadows the broadcast ownership debate becoming part of the presidential campaign issues, we worry that it may signal a far broader attack on broadcasters during the upcoming political year.  The statement by Senator Obama is but one of a host of indications that broadcasters may face a rash of legislative issues that are now on the political drawing boards.

Broadcasters make easy targets for politicians as everyone is an expert on radio and television - after all, virtually everyone watches TV or listens to the radio and thus fancies themselves knowledgeable of what is good and bad for the public.  But those in Congress (and on the FCC) have the ability to do something about it.  And, with an election year upon us, they have the added incentive to act, given that any action is bound to generate at least some publicity and, for some, this may be their last opportunity to enact legislation that they feel important.  We've already written about the renewed emphasis, just last week, on passing legislation to overturn the Second Circuit's decision throwing out the FCC's fines on "fleeting expletives" and making the unanticipated use of one of those "dirty words" subject again to FCC indecency fines.  Clearly, no Congressman wants to be seen as being in favor of indecency (look at the rise in the indecency fines to $325,000 per occurrence which was voted through Congress just before the last election), and First Amendment issues are much more nuanced and difficult to explain to the voter, so watch this legislation.

Posted By David Oxenford In Advertising Issues , Children's Programming and Advertising , Indecency , Multiple Ownership Rules , Programming Regulations , Public Interest Obligations/Localism | Permalink | 0 Comments | Email entry

Over a year ago, the FCC released its Notice of Proposed Rulemaking on amendments to the FCC's multiple ownership rules.  Issues from newspaper-broadcast cross-ownership, to local TV and radio ownership limits are all being considered.  Our summary of the issues raised in the NPRM is available here.  The FCC has been holding field hearings throughout the country on its proposals, gathering public comment on the proposals - the most recent having been held in Chicago last night.  Only one more field hearing to go and the Commission will have conducted the six hearings that it promised.  Many, including me, had felt that the timing was such that no decision in this proceeding could be reached until 2008 and, as that is an election year, the decision could quite well be put off until after the election to avoid making it a political issue.  However, there are now signs that some at the FCC are gearing up to try to reach a decision late this year or early next - presumably far enough away from the election for any controversy to quiet before the election.  With this push, others are expressing concern about a rush to judgment on the issues, and may well seek to delay it further.

Evidence of the FCC's increasing attention to the multiple ownership issues include the recent Further Notice of Proposed Rulemaking, asking questions about minority ownership and making proposals on how that ownership can be encouraged (proposals we summarized here).  The FCC has also asked for comment on several studies that it commissioned to look at the effects of ownership consolidation in the broadcast media (the public notice asking for comments is here, and the studies can be found here).  Comments on the Further Notice and the ownership studies are due on October 1, with replies due on October 15.  Some have suggested that this time table is unnecessarily accelerated, especially as certain peer review documents on the ownership studies were just recently released.

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

The FCC last week approved two television "Shared Services Agreements," here and here, each between the proposed Buyer of a television station and a company that owns another television station in the same market.  In each case, the existing owner would sell advertising time for the station being purchased, as well as provide a loan guaranty for the funds necessary for the purchase of the station.  And the station already in the market would receive from the purchaser of the new station an option to purchase the station in the future, if that purchase is permitted under some future set of multiple ownership rules.  It is interesting that these decisions were released in the same week as the FCC issued two requests for public comment on the multiple ownership rules (see our post here).

These decisions probably mark the outside limit of what two stations can do in a television market where they cannot be co-owned without triggering multiple ownership concerns.  In the radio world, such agreements would not be possible to the same extent.  A radio licensee who provides sales services for another station in the same market, where more than 15% of the advertising time on the station is sold pursuant to such an agreement, would result in an "attributable interest," meaning that such services could only be provided to a station that could be owned under the multiple ownership rules. 

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

In a Further Notice of Proposed Rulemaking, the FCC last week asked for public comment on a series of initiatives to promote the ownership of broadcast stations by minorities and other Socially Disadvantaged Businesses ("SDBs").  These proposals, which include the potential for the sale without requiring any divestitures of clusters of radio stations which exceed the multiple ownership rules now in effect, and the potential for investors to invest in stations controlled by SDBs, even if such investment would otherwise violate the existing multiple ownership rules.  The Further Notice was issued in response to a petition filed over a year ago by the Minority Media Telecommunications Council, which asked for a withdrawal of the FCC's Notice of Proposed Rulemaking on the Multiple Ownership Rules (which we summarized here) because that Notice did not address the promotion of minority ownership of broadcast stations.  MMTC claimed that the Third Circuit's remand of the 2003 Multiple Ownership decision mandated that consideration.  Comments on the Further Notice, which will be resolved as part of the current multiple ownership proceeding, are due on October 1, and replies on October 15. 

The Notice raises a number of suggestions for regulatory changes to foster the ownership of broadcast stations by minority owners and other SDBs.  In addition to allowing the transfer of grandfathered radio clusters that no longer comply with the multiple ownership rules, these include specific proposals that would accomplish the following:

• Allowing investment by exiting broadcasters and others with attributable media interests into companies controlled by minorities without the investment being counted against the ownership holdings of the investing company
• Allowing minority groups to purchase unbuilt construction permits, and get sufficient time to construct those stations, even if the construction permit is otherwise to expire as it has been outstanding and unbuilt for over three years
• Granting some non-minority owned companies waivers to exceed the multiple ownership limits if they sell stations to SDBs (including a proposal to create tradable credits for creating minority-owned stations)
• Allowing for the waiver of the alien ownership limits if the investment by foreign companies would assist a minority-owned company in getting into the broadcast business.
• Revival of the policies permitting minority distress sales (where a broadcaster against whom there were issues pending which could lead to a revocation of a license could sell their station to a minority group and avoid the revocation proceeding) and minority tax credits  (where a broadcaster who sells to a minority group could defer gains on sale if the money was reinvested into any broadcast company in the future)

Posted By David Oxenford In EEO Compliance , Multiple Ownership Rules | Permalink | 0 Comments | Email entry

The FCC on Friday announced the time and location for the fifth of its planned six multiple ownership hearings.  The hearing will be held in Chicago on Thursday, September 20.  Exact times, location and topics will be announced later.  The public notice does indicate that the meeting will begin in the afternoon and continue through the evening - so the Commissioners look like they are expecting a full day.  As we have written before, this would seem to mean that the last hearing will not be held until late in the year (and a final localism hearing is also expected as well), so any decision in multiple ownership proceeding could not take place until the information from the hearings is reviewed and digested - so that puts a decision into 2008, at the earliest.  With that being an election year, does anyone really expect a potentially controversial decision to come out in the midst of a likely contentious political season?

In 2000, after the last transfer of the Presidency from one political party to another, a multiple ownership ruling was released by the lame duck Democratically-controlled FCC in January, just before the new administration was inaugurated.  Could we be looking at a rerun in late 2008 or early 2009?

Posted By David Oxenford In Multiple Ownership Rules | Permalink | 0 Comments | Email entry

In March, we wrote about the concurring opinion of Commissioner Copps in connection with the sale of Univision Communications, where the Commissioner asked whether it was in the public interest to allow the sale of broadcast companies to private equity firms.  That theme has now been picked up by Congress, as Congressman John Dingell, Chairman of the House Energy and Commerce Committee, and Ed Markey, Chairman of the Telecommunications Subcommittee, jointly sent a letter to the FCC asking for answers to a series of questions about the impact of private equity ownership of media and telecommunications facilities.  The letter, here, cites the Univision case, the acquisition of Clear Channel and the sale of a number of Radio One radio stations to private equity firms, and suggests that these firms may be more interested in cutting expenses and maximizing profits to the detriment of the public interest.  The letter asks a number of questions about whether the FCC has adequate information about such ownership to assess its impact on the public interest.

The questions posed by the letter include the following:

• Whether the FCC currently tracks ownership of media properties by private equity companies.
• Whether the FCC has assessed the impact of private equity ownership on localism and, if it has not, should it
• Whether the FCC has adequate information to assess the impact of media ownership by these companies on multiple ownership considerations
• Whether the Commission's Equity-Debt Plus rules need to be revised to take account of private equity ownership
• If the ownership of these entities is sufficiently public and transparent for the Commission to review that ownership.

The letter was addressed to Chairman Martin, and he was given until July 20 in which to respond.

Posted By David Oxenford In General FCC , Multiple Ownership Rules , Public Interest Obligations/Localism | Permalink | 0 Comments | Email entry

The FCC, after taking two years off, is looking to finish their field hearings on Localism by scheduling a hearing in Portland, Maine on June 29.  This hearing is not one of the six hearings to discuss possible new multiple ownership rules, but instead a continuation of the hearings started by Chairman Powell after public controversy over the 2003 multiple ownership rules.  In an ironic twist of fate, this public notice was released on the Friday before the National Association of Broadcasters Educational Foundation hosts their Service to America Awards Dinner to honor broadcasters and the public service commitment that they have to their communities.  Thus, while the FCC is looking in the hinterlands for evidence of the responsiveness of the broadcast industry to the needs of their listeners, some of the best evidence of that service was on display some 12 blocks from the FCC's headquarters.

The Localism hearings were part of a larger proceeding begun in response to the controversy after the 2003 multiple ownership rules.  When the Democratic Commissioners, Congressional legislators from both parties, and a variety of citizen's groups from across the political spectrum complained about how the public's input was not sought before the rules were adopted, the FCC tried to respond to some of those complaints by putting out a Notice of Inquiry on Localism.  The proceeding was to assess how well broadcasters were serving their communities, and the Notice asked for public comment on a grab bag of issues including the following:

• whether a broadcaster's public interest obligations should be quantified (bringing back obligations abolished in the 1980s that required specific amounts of the programming of broadcast stations to be devoted to news and public affairs programming), 
• should broadcasters be required to play specific amounts of local music,
• is payola a major issue,
• whether more programming should be devoted to political campaigns, 
• whether the voices of minorities were being heard on the airwaves.
• if the FCC should authorize more LPFM stations and take other steps to make airtime available to new entrants

Posted By David Oxenford In General FCC , Multiple Ownership Rules , Programming Regulations , Public Interest Obligations/Localism | Permalink | 0 Comments | Email entry

In the last few months, attention of the broadcast press has been focused on the pressing regulatory issues of the day - matters such as content regulation (indecency, violence and junk food advertising), the digital conversion of radio and TV, and the new digital media landscape and its impact on broadcasters (XM/Sirius, You Tube and Internet video, and Internet radio).  Almost forgotten is the multiple ownership proceeding that began in earnest last summer when the FCC issued its Notice of Proposed Rule making (see our summary here), but which has really been pending in front of the Commission since the US Court of Appeals issued its Stay of the FCC's 2003 Order adopting "new" ownership rules.  This week, at least some attention was brought back to the issue following the release by the organization Free Press of a study  that purports to document the effects that consolidation has had on minority and female ownership in the broadcast media.  Coupled with an electronic press conference featuring the two Democratic FCC Commissioners, the report merited an article in the Los Angeles Times and other mainstream press outlets.  It is a study that should be read by broadcasters, as it will likely form part of the debate on this most important issue.

While studies have been issued on and off throughout the debate over the multiple ownership rules, seemingly proving almost whatever the party providing the study wants to prove, this study should not be ignored.  Executive summaries and a full copy of the report can be found here.  The report purports to show that consolidation in the media holds down minority and female ownership.  And, unlike many other studies that have obvious design flaws and seem to be based on faulty assumptions, this one considers many of the obvious objections.  It does not under count minority ownership - in fact it takes the FCC to task for under counting such ownership, and actually reports higher amounts of minority and female ownership than the FCC itself had acknowledged.  The report also addresses the usual response to such studies - that it is a question of access to capital that results in the disparities - by doing a comparison of minority and female ownership in broadcasting to that ownership in other industries, and finding broadcasting very close to the bottom in diverse ownership.