Multiple Ownership Rules : Broadcast Law Blog

Posted on April 30, 2013 by David Oxenford

A Change in the FCC's Broadcast Foreign Ownership Rules In the Near Future?

Two weeks ago, comments were filed in the Commission’s proceeding examining whether to adopt a more relaxed view of the foreign ownership provisions of the Communications Act (see our article about that proceeding here). While the Communications Act limits foreign ownership in communications licensees to 20% (or 25% of a licensee holding company), the Act also allows the Commission to allow greater foreign ownership if it would not adversely affect the public interest. In areas other than broadcasting, the Commission has routinely allowed ownership of more than 25% of a communications licensee, but the limit has been strictly enforced in the broadcasting world. Many of the comments filed in response to the Commission’s request made exactly that point - that in a multimedia world, why should a wireless company or a cable programmer be allowed to be foreign owned, while a competing broadcaster can't have foreign investors holding more than 25% of its equity? In what is perhaps a telling indication of where the FCC is going, the statements of three FCC Commissioners, in connection with a recent FCC decision to further streamline the approval process for alien ownership in excess of the 25% limitations in FCC-regulated areas other than broadcasting, suggested that the relaxation of the limits should also be extended to broadcasting.

Two weeks ago, in relaxing rules on the investment of non-US companies and individuals in common carrier licensees and those in certain other non-broadcast services, the Commission vastly simplified the reporting and approval process for alien ownership in excess of the statutory limits. The Commission already had in place a policy of reviewing potential foreign ownership in non-broadcast companies where, through a petition for declaratory ruling, a company could seek FCC approval for ownership, and even control, of these entities by non-US citizens or companies. In the recent proceeding, the FCC made such investment even easier, in very general terms easing certain reporting requirements for alien ownership where the interest of a specific alien investor was less than 5% (10 % in some instances), and also allowing an alien individual or group, once approved, to increase ownership without further approval (if the interest is a minority ownership interest, to 49%, and if it was controlling, to 100%), as long as the interest in possibly doing so is revealed in the original request for approval. Allowing investments by affiliates of the foreign owner, and allowing the company that is approved to seek additional licenses, all without additional approvals, was also allowed in many instances. All these changes were allowed subject to the FCC's right to reexamine any holdings if specific issues were raised. But what was most interesting to those in the broadcasting industry were the statements of three of the Commissioners praising these relaxations, and the hopes that the examination of applying these reforms in the broadcast world would move forward quickly.

Tags: EEO Compliance/Diversity, General FCC, Multiple Ownership Rules, Public Interest Obligations/Localism, alien ownership, foreign ownership of US broadcast stations, section 310(b)

Posted on February 27, 2013 by David Oxenford

Further Delay in Multiple Ownership Proceeding as the FCC Awaits New Study on the Impact on Minority Ownership of Any Relaxation of the Cross-Interest Rules

We wrote in December about the delays in the FCC's proceeding to consider whether changes should be made to its multiple ownership rules. The December delays were to allow for public comment on ownership information obtained from broadcasters in their Form 323 Ownership Reports. Specifically, the public was asked to comment on the what the ownership information revealed about ownership of broadcast properties by members of minority groups, and whether proposed reforms in the ownership rules would affect minority ownership. Comments from certain public interest groups suggested that any relaxation of the newspaper-broadcast cross-ownership rules or the rules limiting radio-TV cross-ownership would further adversely affect minority ownership, a position that seemingly made certain of the FCC Commissioners reluctant to approve any changes in the ownership rules. This week, the Commission announced another delay in any resolution of this proceeding as the MMTC (the Minority Media and Telecommunications Council) has commissioned a study of the impact of any further consolidation in media ownership on minority broadcast operators.

The study, to be conducted by the broadcast financial analysis firm BIA Kelsey, is supposed to be conducted quickly – in the next 60 days. It is also supposed to be peer reviewed to analyze its methodology and conclusions, and will probably be subject to further public comment at the FCC once it is filed in the record of the multiple ownership proceeding. So this means that there will be likely no decision as to changes in the ownership rules for at least 3 or 4 months – and perhaps longer.

Tags: EEO Compliance/Diversity, Multiple Ownership Rules, broadcast ownership limits, minority broadcast, minority media and telecommucations council, minority media ownership, newspaper broadcast cross ownership, radio TV crossownership

Posted on February 27, 2013 by David Oxenford

FCC To Consider Allowing Alien Ownership of More Than 25% of Broadcast Licensees - Comments Due April 15

The limits on the ownership of broadcast stations by those who are not US citizens is being re-examined by the FCC according to a recent Public Notice. Under Section 310(b)(4) of the Communications Act, foreign ownership of a broadcast licensee is limited to 20% of the company's stock, or no more than 25% of a parent company of the licensee. Over the years, there has been a significant body of precedent developed about applying these caps to other business organizations, including LLCs and Limited Partnerships. But the caps remain in place, limiting foreign ownership. While the statute gives the FCC discretion to allow greater amounts of "alien ownership", the FCC has not exercised that discretion for broadcast companies (though, for non-broadcast licenses, the FCC has many times found greater percentages of foreign ownership to be permissible). A coalition of broadcast groups last year filed a request asking that the FCC exercise the discretion provided under the Act, and consider on a case-by-case basis whether alien ownership combinations in excess of 25% should be permitted. The Commission has now asked for public comment on that proposal. Comments are due on April 15, with replies due on April 30.

Why is this important? Many broadcasters have pushed for revisions in the alien ownership limits for decades – seeing foreign investors as a potential source of capital to allow new companies to buy stations or existing companies to expand their holdings. Many minority advocacy groups, too, have thought that relaxation of the alien ownership rules would provide more sources of capital for minority owners to get into the broadcast game. Spanish language broadcasters, in particular, see broadcasters and other investors from other Spanish-speaking countries as being likely sources of new investors in broadcast companies or new buyers for US broadcast stations.

Tags: Assignments and Transfers, EEO Compliance/Diversity, General FCC, Multiple Ownership Rules, Public Interest Obligations/Localism, alien ownership, foreign ownership of US broadcast stations, section 310(b)

Posted on February 14, 2013 by David Oxenford

TV Station Sued by Arbitron for Using Ratings Data to Sell Local Pandora Ads - What Does This Say About the FCC's Cross-Ownership Rules?

One of those stories on which I've been meaning to comment was the story from the week before last where trade press reports summarized a legal action being brought against a television station in Cleveland for having improperly used Arbitron information in connection with its efforts to sell local advertising time on Pandora, the Internet radio company. I don't want to write about the merits of that proceeding (though it does highlight that stations need to avoid using Arbitron information without permission, as the company is aggressive in protecting what it perceives to be its intellectual property rights), but instead to ask a broader question about what such cross-selling indicates for the FCC's ongoing analysis of the current media markets in connection with its review of the multiple ownership rules. The cross-selling between a traditional media company and a company like Pandora, which claims radio station-like ratings in many radio markets, or with any other new media company delivering audio or video, are outside of the FCC's ownership prohibitions. Thus, traditional media companies, like the TV station involved in this case, can sell the new media company's advertising, or theoretically even provide programming to the new media company, without any cross-interest implication. But a combination between a daily newspaper (no matter what its circulation) and a broadcast station is effectively prohibited under the FCC rules – even though the newspaper may have a smaller audience than the new media outlet in some markets.

As services like Pandora grow, claiming audiences for audio entertainment as large as many local radio stations, these companies could enter into agreements for cross-selling with traditional media companies, and could theoretically enter into arrangements for programming as well, with no restrictions short of those potentially imposed by antitrust laws. So a new media company can cross-sell with television stations (or newspapers, though according to an article last week, both Pandora's partnerships with television stations and newspapers for joint sales are being phased out and replaced with their own sales forces), without any FCC regulation. A service like YouTube, serving up an amazing amount of video content each day, could enter into partnerships with daily newspapers or multiple radio station owners without triggering any of the cross-interest issues raised by a similar agreement with a television station. Any of these large scale Internet audio or video services could even buy radio or television properties without triggering any FCC concern at all. Yet, we are still arguing over whether the cross-ownership of a newspaper and broadcast station should be allowed.

Tags: Multiple Ownership Rules, On Line Media, Pandora Arbitron suit, cross ownership, newspaper broadcast cross ownership

Posted on January 17, 2013 by David Oxenford

FCC Seeks Comments on Biennial Ownership Report - Seeking Social Security Numbers From All Attributable Owners - and Some Who Are Not

The FCC this week released a Public Notice announcing comment deadlines on rulemaking proposals relating to the FCC Biennial Ownership Reports. The first set of proposals deals with a Notice of Proposed Rulemaking issued earlier this month, proposing a series of changes to the process for filing these reports. The proposals include a requirement that the all persons with attributable interests in broadcast stations get a unique FCC Registration Number (an "FRN"), which will require filing their Social Security numbers with the FCC. The second proceeding is one released in 2009, but is only now being published in the Federal Register triggering the comment deadline. This proposal suggests that certain nonattributable owners be identified and reported on these Biennial Ownership Reports despite their nonattributable status. Comments on these proposals will be due on February 14, 2013, with reply comments due on March 1, 2013.

The Biennial Ownership report, in its current form, was initially adopted in 2009. The new reports were to gather information not just about the ownership of broadcasters, but also about their race, ethnicity and gender, so that the FCC could get a better handle on the presence of minority owners in broadcasting. The first report on the new form was to be filed in November 2009, but that deadline was pushed back to July 2010 when issues with the new form developed. The second Biennial Ownership report was to have been filed by commercial stations in late 2011 (two years after the original date), and the next is due later this year. The information in the first two reports was compiled into the information that formed the basis of the FCC's December request for comments on the impact of proposed changes in the multiple ownership rules on minority ownership.

Tags: EEO Compliance/Diversity, FCC registration number, General FCC, Multiple Ownership Rules, Noncommercial Broadcasting, attributable interest, biennial ownership report, social security numbers for FCC ownership reports

Posted on January 7, 2013 by David Oxenford

Gazing Into the Crystal Ball - What Washington Has In Store For Broadcasters in 2013

Every year, about this time, I dust off the crystal ball to offer a look at the year ahead to see what Washington has in store for broadcasters. This year, like many in the recent past, Washington will consider important issues for both radio and TV, as well as issues affecting the growing on-line presence of broadcasters. The FCC, Congress, and other government agencies are never afraid to provide their views on what the industry should be doing but, unlike other members of the broadcasters' audience, they can force broadcasters to pay attention to their views by way of new laws and regulations. And there is never a shortage of ideas from Washington as to how broadcasters should act. Some of the issues discussed below are perennials, coming back over and over again on my yearly list (often without resolution), while others are unique to this coming year.

Last week, we published a calendar of regulatory deadlines for broadcasters. This article looks ahead, providing a preview of what other changes might be coming for broadcasters this year – but these are delivered with no guarantees that the issues listed will in fact bubble up to the top of the FCC's long list of pending items, or that they will be resolved when we predict. But at least this gives you some warning of what might be coming your way this year. Issues unique to radio and TV, and those that could affect the broadcast industry generally, are addressed below.

General Broadcast Issues

There are numerous issues before the FCC that affect both radio and television broadcasters, some of which have been pending for many years and are ripe for resolution, while others are raised in proceedings that are just beginning. These include:

Multiple Ownership Rules Review: The FCC is very close to resolving its Quadrennial review of its multiple ownership proceeding, officially begun in 2011 with a Notice of Proposed Rulemaking. The rumors were that the FCC was ready to issue an order at the end of 2012 relaxing the rules against the cross-ownership of broadcast stations and newspapers, as well as the radio-television cross-interest prohibitions, while leaving most other rules in place. TV Joint Sales Agreements were also rumored to be part of the FCC's considerations – perhaps making some or all of these agreements attributable. But even these modest changes in the rules are now on hold, while parties submit comments on the impact of any relaxation of the ownership rules on minority ownership. Still, we would expect that some decision on changes to the ownership rules should be expected at some point this year – probably early in the year.

Posted on December 10, 2012 by David Oxenford

Multiple Ownership Decision Delayed - What Issues Are Being Debated?

The FCC's multiple ownership proceeding was going to be decided at last, before Christmas, or at least that was what was suggested by many news reports as recently as early last week. Published reports suggested that a draft proposal was circulating at the FCC, and that it was expected to be acted on in December – perhaps at or before next week's open meeting. That timetable now seems to be out the window, as the FCC has asked for additional comments on the summaries of the information gleaned from the FCC Form 323 Ownership Reports as to minority and female ownership of broadcast stations released late last month. The summary of those reports showed low levels of minority ownership in many parts of the broadcasting world. As the Third Circuit's remand of the last multiple ownership order (which we summarized here) was based in part on the Commission's failure to address the impact that its minor liberalization of the newspaper-broadcast cross-ownership rules would have on minority ownership, this request for additional comments seems addressed, at least in part, to addressing that perceived deficiency.

The request for comments gives a short deadline, with comments due the day after Christmas, and Replies on January 4. This indicates that there still is a push to get the ownership proceeding resolved early next year. With this push on, it seemed like a good time to review some of the more controversial issues likely to be addressed in the upcoming order.

The area where the most arguments seem to be centered, and the one most likely to be impacted by the data on minority ownership, is the cross-ownership rules. In the Notice of Proposed Rulemaking in this proceeding (see our summary here), the Commission proposed dropping the remaining restrictions on radio-television cross-ownership, and relaxing the newspaper-broadcast cross-ownership restrictions, which the FCC attempted to do in 2007, only to be rebuffed by the Third Circuit. We have observed how some pundits in Washington have mused that the newspaper-broadcast cross-ownership restrictions may well outlive the daily newspaper, and that seems to be the debate now, as advocates of relaxation argue that combinations will help economically challenged newspapers, while also promoting more news on broadcast stations in such combinations. Opponents, on the other hand, fear that combinations will lessen minority ownership in markets – either by foreclosing opportunities for minority buyers, or by buying minority-owned stations.

Tags: Multiple Ownership Rules, joint sales agreement, minority ownership of broadcast stations, newspaper broadcast cross ownership, quadrennial review of FCC ownership rules, radio TV cross ownership, radio sub caps, shared services agreement

Posted on June 29, 2012 by David Silverman

Supreme Court Declines Review of Janet Jackson "Wardrobe Malfunction" and Multiple Ownership Rules

The U.S. Supreme Court today denied certiorari (i.e. declined review) in two important FCC-related cases pending before it. First, following the Court's recent decision in the Fox indecency case, which we described here, the Court not surprisingly refused to review the Third Circuit's decision vacating the $550,000 FCC fine for the Janet Jackson "wardrobe malfunction" in the 2004 Super Bowl shown on CBS.

In the Fox case, the Supreme Court found that the FCC had not provided advance notice that it would prosecute cases of "fleeting" indecency. That decision essentially predetermined that the Supreme Court would deny review of the Super Bowl incident. While denying cert., however, Chief Justice Roberts issued an unusual separate opinion, noting that fleeting indecent images may have a more lasting impression than indecent words. Nevertheless, he noted that going forward, braodcasters are on notice that fleeting indecent words and images are both now subject to FCC sanctions.

Tags: Multiple Ownership Rules, indecency complaints, indecency fines, multiple ownership, newspaper broadcast cross ownership, newspaper broadcast ownership restrictions

Posted on May 29, 2012 by David Oxenford

TV Shared Services Agreements and the FCC Ownership Review Featured on the NY Times Front Page

Since the start of the FCC's examination of its multiple ownership rules in anticipation of its Quadrennial Review of these rules, the question of TV shared services agreements has been one raised by public interest groups, suggesting that combinations of local TV stations for news or sales purposes are not in the public interest, as such combinations reduce competition in the local markets. MVPDs have also suggested that these agreements are unfair in the negotiation of retransmission consent agreements. Television broadcasters, on the other hand, have pointed to the economics of the television business, especially in smaller markets, where combinations of stations are considered necessary to preserve news operations (and in some cases, the operations of the stations themselves) in these markets. The NY Times featured this issue on its front page, further indicating that this is an issue that is likely to be addressed in the FCC's decision in its ownership review - expected later this year or in 2013.

The Times report talks about how some SSAs result in newscasts covering similar stories or using the same reports on multiple stations. While some public interest advocates complain that duplicative news does not serve the public interest, the story also interviews station owners who make the very simple point that economics dictates what stations can do - that without these shared service agreements many stations that have news programs now would not have them at all without a shared services agreement being in place. Clearly, the media marketplace is changing, and all of the traditional media simply cannot operate in the way that they have in the past, with all of the new forms of competition making changes inevitable (see, e.g. the recent news about the major daily newspaper in New Orleans going to a three times a week publication schedule). After the FCC's recent decision on shared services agreements in Hawaii (see our article here), and the front page publicity that the issue has received in the Times, we are bound to see this issue addressed in the FCC's ownership proceeding whenever that is resolved (we've been predicting sometime after the November election - see our article summarizing the proceeding here), and perhaps in orders clarifying the obligations of parties in retransmission consent negotiations, also under consideration by the FCC.

Tags: Multiple Ownership Rules, quadrennial review of FCC ownership rules, retransmission consent, shared services agreement

Posted on March 27, 2012 by David Oxenford

FCC Extends Reply Comment Deadline in Multiple Ownership Proceeding

The FCC has extended to April 17 the date by which Reply Comments must be filed in the Commission's multiple ownership proceeding. Comments were to have been filed by April 3, but several public interest groups requested more time to respond to comments filed in the proceeding by media industry groups and also to see whether the Supreme Court decided to review the decision of the Third Circuit Court of Appeals decision overturning the FCC's 2007 revisions to its ownership rules (we summarized the Third Circuit decision here). The groups requesting the extension expect that, by April 13, the Supreme Court will decide whether or not to hear appeals of the Third Circuit decision filed by media companies and the NAB. While the groups asked for a 30 day extension, the Commission only granted two weeks, to April 17.

This proceeding is examining all of the FCC's ownership rules, and specifically proposes abolition of the radio-television cross-ownership rule and liberalization of the rules limiting the common ownership of broadcast stations and daily newspapers. The FCC has also indicated that it is looking closely at television shared services agreements, and at circumstances in which waivers of other local ownership rules might be appropriate. For more information about the specific proposals advanced by the FCC, see our summary of this proceeding here.

Tags: Multiple Ownership Rules, local radio ownership restrictions, newspaper broadcast cross ownership, radio television cross ownership, shared services agreement

Posted on January 19, 2012 by David Oxenford

Comment Deadline of March 5 Established on FCC Proposals for Reform of Multiple Ownership Rules

The FCC' Notice of Proposed Rulemaking in its Quadrennial Review of the Multiple Ownership Rules was published in the Federal Register today, setting the deadline of March 5 for initial comments in that proceeding. Reply comments are due on April 3. We summarized the FCC's tentative conclusions on changes to the ownership rules when the Commission first released its NPRM in late December. The issues to be considered include changes to the broadcast-newspaper cross ownership restrictions, the possible elimination of rules restricting the ownership of radio and TV in the same market, the potential attribution of TV shared services agreements (i.e. potentially making a shared services agreement "count" as an ownership interest in a multiple ownership analysis), and other possible revisions to the local radio and TV ownership limitations (or exceptions that would allow for waivers of the limits in defined circumstances). The Commission is also looking for suggestions on how these rules can be used to promote the minority ownership of broadcast stations.

As we wrote in December, this is but one more step in a long process before any new rules will be adopted. After the filing of the comments, there are bound to be many groups informally discussing proposed changes with FCC Commissioners and staffs, and much consideration before any final rules are adopted. Even these tentative conclusions took the FCC over a year and a half to produce from the date of the initial Notice of Inquiry in this proceeding. Given the upcoming elections, and the potential for just about anything to become a campaign issue, a decision like this, that may contain controversial elements, will most likely be postponed until some time after election day. And even when decided, these rules are often debated for years afterward, as this NPRM is reviewing issues that Courts have rejected from previous ownership review orders reached in 2003 and 2007. Nevertheless, look for much more debate on these issues in the coming months.

Tags: Multiple Ownership Rules

Posted on December 23, 2011 by David Oxenford

Multiple Ownership Proposals Released By FCC - Abolish Radio-TV Cross-Ownership Rules, Leave Most Other Rules In Place, Examine Shared Services Agreements

The FCC issued its Notice of Proposed Rulemaking in its reexamination of its multiple ownership rules, suggesting limited changes in its rules governing the number of interests that one person or company can have in media outlets in a particular community. The FCC's tentative conclusions leave most of the current rules in place - including rules that limit the number of radio and TV stations that one entity can own in a market, and rules prohibiting combined ownership of daily newspapers and TV stations in the same market. The Commission also proposed keeping the dual network rule, prohibiting the combination of any of the four major TV networks. Shared Services Agreements were another issue addressed by the FCC - proposing to examine SSAs and and other news and program sharing agreements between otherwise independent stations. The FCC did propose the abolition of one rule - the rule that currently limits the ownership of radio and TV stations in the same market. In the NPRM, the FCC suggested that other ownership rules could be waived in some instances, so the details of waivers and exceptions could become an important aspect of any final decision in this proceeding. All of these conclusions are tentative, and the Commission asks many questions about each of its tentative conclusions and asks for public comment on its ideas. The public can formally weigh in with comments for 45 days after the NPRM is published in the Federal Register, and file replies 30 days later. After that, there is sure to be much lobbying of the Commissioners before any final decision is made.

This proceeding combines several on-going proceedings. The Commission started its required Quadrennial Review of the ownership rules over two years ago with a series of public hearings, and a Notice of Inquiry. The Commission also is dealing with the clean-up of its last review of the ownership rules, which was embodied in a controversial decision reached late in 2007 (see our summaries here and here). The Third Circuit Court of Appeals threw out significant parts of that decision, finding that the FCC's relaxation of the newspaper-television rules had not been the subject of adequate notice to the public, and that the FCC had ignored its obligations to take steps to promote minority ownership of the media. Some parties seeking repeal of the newspaper-television cross-ownership rules have asked the Supreme Court to review the Third Circuit decision - but this NPRM looks to reexamine many of these issues in the event that the Supreme Court doesn't otherwise preempt their decision. Below we'll take a look at specific questions raised by the NPRM.

Tags: Multiple Ownership Rules, TV duopoly, media concentration, newspaper broadcast cross ownership, quadrennial review of FCC ownership rules, shared services agreement

Posted on November 27, 2011 by David Oxenford

FCC Says TV Shared Services Agreement and a Combination of Two Top 4 Network Affiliates in One Market is Permissible - For Now

In an eagerly anticipated case involving TV stations in the Honolulu market, the FCC's Media Bureau determined that a programming swap that permitted one company to hold the licenses of both the NBC and CBS affiliates in a single market, and to also provide technical and office services and news programming to a third station in the market, was permissible under current rules. However, the Commission warned that it would consider in its upcoming Notice of Proposed Rulemaking in its Quadrennial Review of the multiple ownership rules whether similar situations should be permitted in the future, and seemingly implied that even this combination could be subject to further review in future licensing proceedings. The permissibility of shared services agreements has been a question raised by public interest groups for quite some time (see our post here), and has also been raised by certain cable and satellite television operators as such combinations can result in one broadcaster negotiating carriage agreements for multiple stations in a market. Based on this case, and the issues raised in connection with previous decisions, this will no doubt be a very controversial topic when the Commission considers the upcoming multiple ownership proceeding.

The Honolulu case began with one owner - Raycom - holding two licenses in the market - one an NBC affiliate, and the other an affiliate of the MyTV Network. As there are 8 independently owned television stations serving Honolulu, the combination of these two stations, only one of which is a Top 4 station in the market, was permissible. Raycom then entered into a deal with the owner of the local CBS affiliate, where the parties swapped call letters and network affiliations. Raycom also purchased many of the non-license assets of the station, and received an option to purchase the station, and agreed to pay the licensee, over time, $22 million. Raycom also entered into a shared services agreement with the owner of the station that had become the MyTV affiliate where Raycom would provide back office services, sales personnel, and a physical location for the station's studio and transmitting antenna, in exchange for 30% of the stations revenues, and a flat monthly payment. As detailed below, the Commission determined that the swap of call letters and network affiliations was not subject to review at this time as there was no licensing transaction before the FCC, and the shared services agreement did not violate current FCC policies.

Tags: Multiple Ownership Rules, Television, joint sales agreement, quadrennial review of FCC ownership rules, shared services agreement, unauthorized transfer of control

Posted on November 21, 2011 by David Oxenford

Congress and the Commission Look to Make FCC More Responsive and to Take Costs Into Account in Making New Rules - Will It Work?

In recent weeks, there seems to be a competition to make the FCC more responsive, and to mandate that, before it adopts any new regulations, it take into account the costs of the proposed regulations and the burden that they place on those being regulated. The Communications and Technology Subcommittee of the House Energy and Commerce Committee adopted a bill (The FCC Process Reform Act of 2011) that would, if adopted by the full House and the Senate, require that the FCC, before adopting any new regulations, take several steps to make sure that regulations were really necessary (see a summary of House bill here). Before adopting any rule, the Commission would have to survey the marketplace, determine that there was a market failure or specific consumer harm, then take into account the cost of complying with regulations before the new regulations are adopted. The proposed legislation would also require that the FCC adopt deadlines on many FCC actions ("shot clocks"), perhaps in response to a Study commissioned by the House Committee looking at the length of time that many FCC proceedings take. The FCC adopted its own proposals for making its regulations less burdensome by reviewing the continuing need for existing rules, following the President's call for all agencies to take such action. The FCC report, after making the seemingly obligatory bows to broadband adoption that the Commission seeks to foster, talked about many of the same issues that the Congressional committee seemed to be addressing - deleting unnecessary regulation wherever possible. What changes will these efforts bring to the FCC?

Call me cynical, but I doubt that the proposed changes will really lead to any significant differences in the way that the FCC does business. The FCC is already bound by all sorts of laws that demand that it take into account many of the same considerations that are included in the plans of Congress and the FCC. The Paperwork Reduction Act has already stopped certain regulations from going into effect, including the Form 355 (which sat in limbo for 4 years and the FCC is only now considering reviving in a somewhat more abbreviated form). The FCC also must take into account the Regulatory Flexibility Act, looking at the impact of any regulation on small entities who would be subject to any new rule. Congress itself has already enacted other requirements that the FCC review regulations on a periodic basis - for instance the required Quadrennial Review of the FCC's multiple ownership rules. And what do these accomplish?

Tags: FCC Process Reform Act of 2011, General FCC, Multiple Ownership Rules, Paperwork reduction act, quadrennial review of FCC ownership rules, regulatory flexibility act

Posted on August 23, 2011 by David Oxenford

FCC Extends Filing Date to December 1 for 2011 Form 323 Biennial Ownership Report - New Significance After Prometheus Court Decision

In 2009, the FCC adopted a uniform deadline for all commercial broadcast licensees to file an FCC Form 323 Biennial Ownership Report. The due date for that report was supposed to be November 1 of that year, but was postponed until July of 2010 when problems popped up with the new forms. The next Biennial Ownership reporting date was scheduled to be November 1 of this year (two years after the originally scheduled date for the first report to use the new form) - but the FCC today issued a Public Notice postponing the filing deadline for one month, to December 1. This delay was justified so as to give broadcasters, especially those with many media interests held in different companies, more time to complete what can be a cumbersome process of filling out all of the reports and exhibits that need to be submitted. Reports need to be filed by December 1, but all information still needs to be reported as of October 1 of this year - a standard reporting date that will remain constant each year to give the FCC a snapshot of the composition of ownership in the broadcast world.

The revised ownership report filing processwas adopted so that the FCC could get an accurate report on the ownership of broadcast properties by minorities and women, a goal that has taken on added significance in light of the Third Circuit Court of Appeal's recent decision in Prometheus Radio Project v FCC, rejecting the FCC's efforts to diversify ownership in the media through the use of a system giving preferences to qualified entities, i.e. small businesses. As we wrote last month, the Court found that the FCC's goal was to promote minority and female ownership, which was not fostered by its concentration on small businesses. One of the issues on which the Court faulted the FCC was the lack of information about the current broadcast ownership interests of minorities and women, so that the FCC could do a "Adarand study" as to whether there are effects of past discrimination reflected in the current ownership of broadcast stations that need to be remedied by affirmative action efforts based on race or gender. These new ownership reports are designed to help to provide that information.

Tags: EEO Compliance/Diversity, FCC Form 323, General FCC, Multiple Ownership Rules, adarand study, affirmitive action on broadcast ownership, biennial ownership report, minority ownership of broadcast stations

Posted on July 31, 2011 by David Oxenford

FCC Sets Limits on Use of Divestiture Trusts When Station Purchase Would Put Buyer in Violation of Multiple Ownership Rules

When one broadcast licensee company buys another, or when there is a restructuring of a company with broadcast ownership holdings that are grandfathered under current ownership rules, there often arises a need to divest stations so that the buyer (or the new controlling parties after a restructuring) complies with the multiple ownership rules after the completion of the transaction. Often, selling the non-compliant stations quickly so as to not unduly delay the closing of the purchase or the restructuring is difficult, as it takes time to locate a buyer for the "extra" stations and to negotiate a fair sales price. In fact, a forced divestiture can artificially depress the sales price for the non-compliant stations that need to be spun off, as potential purchasers of the stations know that any delay of the principal transaction will impose costs on the buyer and seller in that deal. Thus, the parties in the principal transactions often look for ways to avoid a forced sale at a depressed price. One method is the use of a divestiture trust - letting a trustee run the stations to be divested until a suitable purchaser can be found at a reasonable price. The FCC has permitted such trusts, but in a case decided last week, it demonstrated that there were limits on their use by denying applications that the Commission deemed interests in too many stations in one area in the hands of one company. This case should provide guidance on the limits of the use of divestiture trusts for those who may consider them in future broadcast transactions.

The case involved radio stations in two smaller markets in Washington state, Yakima and the Tri-Cities. There, new Northwest Broadcasting had held full complements of stations, at or close to the ownership limits in each market. New Northwest went into bankruptcy, and a receiver was appointed to run the stations. The receiver reached a deal to sell the stations to Townsquare Media, which already held clusters of stations in these markets, also at or near the ownership limits in the markets. Townsquare proposed to cherrypick from the New Northwest cluster a few prime stations, and then to assign the remainder (and a few stations that Townsquare had itself owned) to a divestiture trust, with instructions to sell off these stations to an independent buyer. While the FCC decision does not explicitly set forth the terms of the trust, it appears that the beneficial interest in the sales price of the stations to be divested (and presumably any operating profit until the stations were sold) would be for the benefit of Townsquare. In looking at this proposed transaction, the FCC's Media Bureau determined that the proposal to use this trust would concentrate a beneficial interest in too many radio stations in the hands of one company. Thus, the applications were dismissed.

Tags: Multiple Ownership Rules, Townsquare Media washington purchase, divestiture trust, ownership of broadcast stations

Posted on July 8, 2011 by David Oxenford

Court Tells FCC to Give More Consideration to Newspaper-Broadcast Cross Ownership Rules and to Policies to Promote Broadcast Ownership By Minorities

The Third Circuit Court of Appeals has once again questioned the FCC's determinations on broadcast ownership issues. In a decision just published, Prometheus Radio Project v FCC, the Court reviewed the FCC's 2007 actions relaxing the newspaper-broadcast cross-ownership rules and adopting policies to increase diversity in broadcast ownership. These FCC decisions had followed a prior decision of the Third Circuit determining that the FCC's 2003 Ownership Order, relaxing many FCC ownership rules, was not adequately justified. The FCC's subsequent actions on cross ownership were set out in its 2007 order, relaxed the newspaper broadcast cross ownership rules in larger markets through a policy based on certain presumptions that, when met, justified the common ownership of newspapers and radio and television stations in larger markets (and, in some cases, in smaller markets too)( see our summary of this order here and here). The diversity order, released in 2008 (summarized here and here), adopted a number of rules and policies meant to encourage diversity in media ownership. In this new decision, the Court found that both the decision as to the newspaper cross ownership rules and the one dealing with diversity policies were wanting, and sent these matters back to the FCC for further consideration. At the same time, the Court upheld the FCC's decisions not to change the local television ownership rules (allowing common ownership of 2 TV stations only when there are at least 8 independently owned stations in a market, and where the combined stations are not both among the Top 4 in their markets) and to retain the sub-caps for radio ownership (the rules that allow one entity to own up to 8 stations in a single market, as long as there are no more than 5 in any single service, i.e. AM or FM).

The discussion of the newspaper-broadcast cross-ownership rules was entirely procedural. While certain public interest groups had argued that the 2007 revision to the cross ownership rules allowed too many broadcast-newspaper combinations, a number of media companies argued that it allowed too few. The Court didn't address either contention, instead focusing on the process by which the FCC adopted the rules. When the Court addressed the 2003 rule changes, it sent that decision back to the Commission questioning the basis for the "diversity index" that the FCC had adopted to measure when transactions resulted in too much concentration in a market, and specifically instructed the FCC to give the public notice and an opportunity to comment on the specifics of any new proposal that was adopted. The Court felt that there were too many obvious flaws in the diversity index which could have been discovered if the public had been given a chance to review its details before it was adopted. In asking for comments following the Court's remand, the recent decision concluded that the FCC had given the public only a cursory description of the issues that it would consider on remand with respect to the cross-ownership issue when the FCC issued its request for public comment. The substance of the Commission's policies which were adopted, setting out presumptions in favor of cross-ownership in larger markets and against it in smaller markets, was not suggested in the request for public comment, but instead was first floated in a newspaper Op-Ed by then FCC Chair Kevin Martin. While the FCC asked for comment on that proposal, parties were given less than a month to file comments, and a draft decision embodying the proposal was already circulating at the FCC before the comment period had even ended. This process prompted much outcry at the contentious FCC meeting at which these rules were adopted (see our summary here). The Court looked at this process, and determined that the public had not been given an adequate opportunity to address the specifics of the FCC proposal, and had given the appearance of having pre-judged the outcome of the case. Thus, this week's decision sent the FCC's 2007 order back to the FCC to seek more public comment, and to develop rules based on those comments.

Tags: EEO Compliance/Diversity, Multiple Ownership Rules, diversification of ownership, minority ownership of broadcast stations, newspaper broadcast cross ownership, newspaper broadcast ownership restrictions, newspaper television cross ownership, quadrennial review of FCC ownership rules, qualified small business

Posted on June 6, 2011 by David Oxenford

Future of Media Report to Be Discussed at Thursday's FCC Meeting? - Watch for Impact on Multiple Ownership and Localism Proceedings

Is the release of the long-awaited Future of Media Report at hand? Since January 2010, the FCC has been studying the Future of Media, a study conducted by a Special Advisor to the FCC Chairman who was appointed in November 2009. The study was to provide important research and analysis of how broadcasting and other media are serving the needs of local communities, particularly in light of changes in the media landscape brought about by new technologies. FCC Commissioners have suggested that these findings will influence the Commission's decisionmaking in the open proceedings on localism and on the possible revision of the multiple ownership rules - localism pending for over three and a half years, and the ownership proceeding beginning last year with a Notice of Inquiry. The Future of Media Report was supposed to have been released by the end of last year, but that date was missed, with several promises that it would be released soon. According to the Broadcasting and Cable website, it looks like the Report will be detailed at the FCC's open meeting on Thursday - though even after reading the FCC's Public Notice of the topics to be discussed at that meeting released last week, many observers (including this one) totally missed that announcement.

Why was the announcement of such an important proceeding missed? Perhaps because the reference to it is buried in the Public Notice. Most items to be discussed at an FCC meeting are listed in bold type, with the FCC Bureau or Office that will be presenting the item clearly stated. In the notice about this week's meeting, there are two items listed - one dealing with Wireline tariffs, and the other from the International Bureau dealing with satellite frequency use. But, hidden in some introductory language was the statement:

The meeting will include a presentation by the working group on the impact of technology on the information needs of communities.

There is no reference to the "Future of Media" study. This presentation was not listed as a separate item. There is just that one sentence to alert us that there will be a presentation. Does this mean, as the press reports suggest, that we will at last see the report? Or will we just get a presentation about the report (which has happened in the past), or a presentation with a promise that we'll see the report at some point in the future? We'll see on Thursday - so stay tuned for what may be a most interesting and important discussion.

Tags: Multiple Ownership Rules, Public Interest Obligations/Localism, broadcast service to communities, future of media, impact of new technology on broadcasting, localism proceeding

Posted on February 9, 2011 by David Oxenford

On the 15th Anniversary of the Telecommunications Act of 1996, The Effect on Broadcasters is Still Debated

On February 8, 1996, the Telecommunications Act of 1996 was signed into law by President Bill Clinton. While the Act had significant impact throughout the communications industry, the impact on broadcasters was profound, and is still being debated. The Act made changes for broadcasters in several major areas:

Lengthened license renewals to 8 years for both radio and TV, and eliminated the "comparative renewal"
For radio, eliminated all national caps on the number of radio stations in which one party could have an attributable interest and increased to 8 stations the number one party could own in the largest radio markets
For television, raised national ownership caps to having stations that reached no more than 35% of the national audience, with no limits on the number of stations that could be owned as long as their reach was under that cap.
Allocated spectrum that resulted in the DTV transition

Obviously, the DTV spectrum began the profound changes in the way television is broadcast, and led to the current debate as to whether over-the-air television should be further cut back in order to promote wireless broadband (see our recent post on the FCC's current proceeding on this issue). While the other changes have now been in effect for 15 years, the debate over these provisions continue. Some argue that the renewal and ownership modifications have created too much consolidation in the broadcast media and lessened the broadcaster's commitment to serving the public interest. Others argue that, in the current media world, these changes don't go far enough. Broadcasters are under attack from many directions, as new competitors fight for local audiences (often with minimally regulated multi-channel platforms, such as those delivered over the Internet) and others attack broadcasters principal financial support - their advertising revenue. Even local advertising dollars, traditionally fought over by broadcasters and newspapers (with some competition from billboards, direct mail and local cable), is now under assault from services such as Groupon and Living Social, and from other new media competitors of all sorts. With the debated continuing on these issues in the current day, it might be worth a few looking back at the 1996 changes for broadcasters, and their impact on the current broadcast policy debate.

Tags: 3 year licence renewal, General FCC, License Renewal, Multiple Ownership Rules, Public Interest Obligations/Localism, Telecommunications Act of 1996, competition to broadcasters, consolidation of media, future of media, license renewal challenge, local radio ownership rules, localism proceeding, ownership of broadcasting, public service obligations

Posted on September 23, 2010 by David Oxenford

FCC Commissioner Baker Suggests No Government Support for Media, But Possible Relaxation of Broadcast Ownership Rules

FCC Commissioner Meredith Atwell Baker recently delivered a speech in Washington, DC, where she addressed calls for the government to take action to assist the traditional media deal with the economic issues brought about by the new media. From time to time, there have been calls for the government to assist the traditional media, either through some sort of direct subsidies, or through regulatory changes that could assist in their news coverage to make these entities competitive in the new media world. While the Commissioner's speech did not detail those efforts, calls have, for the most part, not suggested direct government subsidies to support traditional news media sources. Instead, more indirect efforts have been suggested to insure that these media sources continue to serve their communities. Calls have been made to change tax laws to allow newspapers to operate as nonprofit entities (while still soliciting advertising). In a draft FTC option paper, there was a suggestion of taxing commercial media to provide more support to noncommercial public broadcasting entities. Other proposals have been more direct - simply mandating more news and public affairs programming from broadcasters (with little or no discussion of the source of the revenues for such mandates). In her speech, the Commissioner noted that some suggestions may be forthcoming from the FCC's own Future of Media report due at the end of the year (see our summary of the issues that they are exploring here), but she seemed to rule out these types of proposals, instead suggesting that the Commission could assist companies meet the new media challenge by loosening FCC restrictions on ownership.

The Commissioner suggested that no government action to bail out the media is necessary to preserve service to the public - citing the many examples of how that service is provided through new media sites that serve all sorts of communities and community groups - providing timely and detailed information on specific topics, often on a neighborhood level. We have made that same point on these pages - the new media is already filling any void that may exist in local media coverage. Some of these sites are produced by old media companies - as TV stations, newspapers and others develop microsites targeted to very local needs and interests. Other sites are totally independent - developed by local interest groups or new media entrepreneurs. So how can the Commission help these sites to develop?

Tags: Multiple Ownership Rules, On Line Media, Public Interest Obligations/Localism, future of broadcast media, local news, new media affect on FCC regulation, newspaper broadcast cross ownership, quadrennial review of FCC ownership rules, shared services agreement

Posted on June 17, 2010 by Brendan Holland

Comments Due July 12 on Multiple Ownership Notice of Inquiry - And FCC Solicits Bids for Proposed Media Ownership Studies

The FCC’s Notice of Inquiry (NOI) on Multiple Ownership has been published in the Federal Register, setting July 12, 2010 as the deadline for comments, with July 26 as the deadline for reply filings. We previously outlined many of the questions asked in the wide-ranging Notice of Inquiry. The questions deal with the entire spectrum of media ownership issues, from asking questions about how the new media landscape changes the considerations given to media ownership restrictions, to inquiries into the way in which the consumer gets needed news and information programming from broadcast outlets, and the impact of consolidation on that information. Filing comments in this proceeding before the deadline will help to shape the discussion that will occur. The FCC claims to be intent on finishing its review of the ownership during this calender year but, as the comments in this proceeding must be distilled into more specific proposals to be reflected in a subsequent Notice of Proposed Rulemaking, which must itself be subject to public comment, this would seem a very ambitious task given that there will be less than 6 months remaining after the comments are replies on the NOI are submitted. Nevertheless, the short 30 day comment period on the NOI seems designed to speed review – so time is short for interested parties to draft and submit meaningful comments on the fundamental and wide-ranging questions that are being asked..

Further highlighting the difficulty in completing the ownership review this year, is the FCC’s Public Notice that was just released - announcing that it is seeking bids for nine different studies to review various issues relevant to the media ownership proceeding. According to the Public Notice, studies will look at many of the issues on which the Commission has sought comment in the NOI, including studies of how consumers receive local news and information, the effect that media consolidation affects the diversity of programming and the degree of civic engagement in a community, and even requesting a study to design a model to be used to measure the degree of media consolidation in a market. the Commission also asked for suggestions as to other studies that it could conduct relevant to this proceeding. Comments on other potential areas of study are due by July 7.

Tags: Multiple Ownership Rules, future of broadcast media, media concentration, media ownership, newspaper broadcast cross ownership, reclaimed digital television spectrum, shared services agreement

Posted on May 25, 2010 by David Oxenford

FCC Issues Multiple Ownership Notice of Inquiry - Formally Begins Quadrennial Review With Lots of Questions To Assess the Impact of Media Consolidation

The FCC yesterday released a Notice of Inquiry, formally beginning its Quadrennial Review of the Multiple Ownership Rules. While the FCC informally began the process of the Congressionally-mandated review of the ownership rules last November through a series of informational panels and workshops, the Notice of Inquiry ("NOI") provides the first formal opportunity for the public to comment on the ownership rules. The FCC will take the comments that it receives in response to the NOI, and formulate some more specific proposals on how it plans to change the current rules (if at all), which will then be released for additional comments in a Notice of Proposed Rulemaking. The NOI is a broad-ranging document that gives little indication of the FCC's final direction in this proceeding - though it does go into detail as to how the media marketplace has changed in recent years, citing declining advertising revenues, and more media outlets providing competition to broadcasters for both audience and advertising revenues. The NOI posed dozens of detailed questions asking how the Commission should assess the various aspects of the ownership rules, and what impact the changes in the media marketplace should have on its consideration of rule changes.

The FCC is concerned with all aspects of its media ownership rules. Thus, it sets out that it will explore the following rules:

The Local Television Ownership cap, which limits owners to two stations in markets where there are at least 8 competing television owners and operators, and which forbids combinations of the top 4 stations in any market. Television operators, particularly in smaller markets, have been urging the Commission to allow more consolidation in those markets so that stations can provide better service to their communities. They argue that the current limits preclude small market consolidation, which is most needed in these markets where the costs of operation are not significantly lower than in large markets, but where revenue opportunities are far more limited.
The Local radio ownership caps, that currently limit owners to 8 stations in the largest markets, no more than 5 of which can be in any single service (i.e. AM or FM). Some radio owners contend that these limits no longer make sense given the competition for audio listening from so many sources (including satellite and Internet radio, who can provide unlimited formats in any market). Other issues include whether AM and FM still need to be treated separately, and even whether AM should be counted to the same degree as FM in a multiple ownership analysis.
The Newspaper-Broadcast cross-ownership rule, that forbids cross-ownership of broadcast stations and daily newspapers without a waiver - which, as the result of changes in the cross-ownership rules in 2007, will be granted on a more liberal basis, but only in the top 20 markets. Given the economic state of the newspaper industry, many seek the repeal of this rule in its entirety. As we have written before, will the newspaper cross-ownership rule outlive the newspaper?
The Radio-Television cross-ownership rule, which limits the number of radio and television stations that can be owned by a single party in a single market
The Dual Network Rule, that prohibits the common ownership of any of the top 4 television networks.

Each of these rules is up for review, and numerous questions have been asked, and issues identified, for consideration in this proceeding.

Tags: Multiple Ownership Rules, Public Interest Obligations/Localism, TV duopoly rules, broadcast consolidation, local radio ownership restrictions, media competition, media concentration, media diversity, newspaper broadcast cross ownership, quadrennial review of FCC ownership rules, radio television cross ownership

Posted on May 24, 2010 by David Oxenford

Congress to Rewrite the Communications Act - What Could It Mean For Broadcasters?

In a very cryptic announcement, the Chairs of the House and Senate commerce committees, and the Chairs of the subcommittees dealing specifically with communications matters, have announced that they are beginning the process of rewriting the Communications Act of 1934, the Act which governs regulation of broadcasters as well as telecommunications, satellite and mobile communications entities. The announcement, from Senator John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Commerce, Science, and Transportation Committee, Rep. Henry A. Waxman, the Chairman of the House Committee on Energy and Commerce, Senator John F. Kerry, the Chairman of the Senate Subcommittee on Communications, Technology, and the Internet, and Rep. Rick Boucher, the Chairman of the House Subcommittee on Communications, Technology, and the Internet, merely states that they will "will invite stakeholders to participate in a series of bipartisan, issue-focused meetings beginning in June" to address the issues that would be involved in such a rewrite. The announcement then says that more details will be forthcoming.

What does this mean for broadcasters? At this point, until more details are released, the issues to be addressed are anyone's guess. Much has been made in recent years of the changing nature of the media and communications industry, particularly in light of the development of the Internet. In a recent decision, the Courts have said that the FCC is limited in its ability to regulate the provision of Internet services, and the initial impetus for this rewrite proposal may well come from that decision. But these processes, once begun, often take on a life of their own, with new proposals covering issues not necessarily anticipated at the outset of the proceeding arising as the process goes on. While there are minor amendments to the Act almost every year, the last comprehensive rewrite of the Act took place in 1996. There, while much of the debate focused on telecommunications issues (which will likely be the case here as well, as there are far more dollars at stake than in the broadcast world), broadcast ownership reform emerged at the last minute - abolishing numerical caps on television ownership and all caps on radio ownership nationally, and raising the local limits on radio ownership from the 4 stations (2 AMs and 2 FMs) previously allowed to be owned in one market by any party, to the current cap allowing ownership of as many as 8 radio stations in the largest markets.

Tags: General FCC, Multiple Ownership Rules, revising broadcast regulation, revision of communications act of 1934, rewrite broadcast laws, rewrite communications laws

Posted on May 6, 2010 by David Oxenford

More Indications of FCC Review of TV Shared Services Agreements

In recent years, as competition in the video marketplace has become more intense, in a number of broadcast television markets, competing stations have teamed up to combine certain of their operations to achieve economies while still allowing for some degree of independence of programming. Under these "shared services agreements", one station will provide back-office support and often advertising sales for another station in the market. Where the station providing the support programs less than 15% of the programming hours of the station being supported, the contractual arrangement is not "attributable under the FCC's multiple ownership rules. Thus, these services can be provided in circumstances where the supported station could not be owned by the station that is providing the services. Nevertheless, a number of these arrangements have been under attack from public interest groups, and recent Commission actions indicate that the FCC may well be reviewing its position on these sorts of agreements.

A few weeks ago, in approving an application which provided for a shared service agreement between two television stations in the same market (over the objection of a competitor), the FCC noted that it was approving the deal as consistent with its rules as they are currently enforced, but warned that the arrangements would be reviewed as part of the FCC's review of its multiple ownership rules - a review which is to take place this year. This week, the FCC agreed to treat a case in Hawaii, which has generated much controversy and press coverage, as a "permit but disclose" proceeding, meaning that parties are not confined to the usual process of arguing their cases through written submissions served on all parties (or meetings at which all parties are present). Instead, interested parties can now meet with FCC decision-making staff (including FCC commissioners) on their own, as long as they file an "ex parte" notice in the record summarizing the presentations that they made. This process is usually used only for high-profile decisions with potential far-reaching impact or where new policy is potentially to be made.

Tags: Multiple Ownership Rules, Television, competition between television stations, cooperative arrangement between local television stations, joint sales agreement, ownership of television stations, quadrennial review of FCC ownership rules, shared services agreement

Posted on March 3, 2010 by David Oxenford

FCC Clarifies Application of the Multiple Ownership Rules After the Digital Transition Makes the Grade A Contour Disappear

The FCC's rules limiting the common ownership of radio and television stations, and of television stations and daily newspapers, are triggered by the Grade A contours of the television station encompassing the city of license of the radio station, or the city in which the newspaper is published. Since June, there has been one problem with the application of that rule (Section 73.3555) - television stations in the digital world no longer have Grade A contours. When adopting service contours for digital television, the FCC specified a Noise Limited Service Contour ("NLSC") as essentially the equivalent of the Grade B contour of an analog television signal - the contour at which the majority of people can receive the signal a majority of the time. The FCC also specified a principal city contour - the signal level that needed to be placed over a station's city of license. But the FCC never bothered to specify the Grade A contour, despite the fact that the cross-ownership rules were premised on that contour. In a case decided last week involving the financial restructuring of a radio company, the FCC's Media Bureau staff decided that they would use the NLSC as a proxy for the Grade A contour until such time as the full Commission otherwise directed.

This decision actually makes common ownership of television stations and either newspapers or radio stations somewhat more difficult, as the noise limited contour, approximating the old analog Grade B contour, actually extends further than where the Grade A contour would have reached (when a digital station replicated its analog service area). Thus, using this standard, the owners of a television station could be precluded from having attributable interests in radio stations or daily papers in more communities than would have been the case in the analog world. As the FCC is now embarking on its review of the multiple ownership rules (as we have written before), the FCC may well revisit this issue in the course of that review.

Tags: Digital Television, Multiple Ownership Rules, Nassau Broadcasting restructuring, broadcast foreclosure, broadcast restructuring, newspaper television cross ownership, noise limited service contour, radio television cross ownership, section 73.3555, television Grade A contour, television radio cross ownership

Posted on January 7, 2010 by David Oxenford

Looking Into the Crystal Ball - What Can Broadcasters Expect from Washington in 2010?

Another year is upon us, and it’s time for predictions as to what Washington may have in store for broadcasters in 2010. Each year, when we look at what might be coming, we are amazed at the number of issues that could affect the industry – often issues that are the same year to year as final decisions are often hard to come by in Washington with the interplay between the FCC and other government agencies, the courts and Congress. This year, as usual, we see a whole list of issues, many of which remain from prior years. But this year is different, as we have had a list topped by issues such as the suggestion that television spectrum be reallotted for wireless uses and the radio performance royalty, that could fundamentally affect the broadcast business. The new administration at the FCC is only beginning to get down to business, having filling most of the decision-making positions at the Commission. Thus far, its attention has been focused on broadband, working diligently to complete a report to Congress on plans for implementation of a national broadband plan, a report that is required to be issued in February. But, from what little we have seen from the new Commission and its employees, there seems to be a willingness to reexamine many of the fundamental tenants of broadcasting. And Congress is not shy about offering its own opinions on how to make broadcasting "better." This willingness to reexamine some of the most fundamental tenets of broadcasting should make this a most interesting, and potentially frightening, year. Some of the issues to likely be facing television, radio and the broadcasting industry generally are set out below.

Television Issues.

In the television world, at this time last year, we were discussing the end of the digital television transition, and expressing the concern of broadcasters about the FCC’s White Spaces decision allowing unlicensed wireless devices into the television spectrum. While the White Spaces process still has not been finalized, that concern over the encroachment on the TV spectrum has taken a back seat to a far more fundamental issue of whether to repurpose large chunks of the television spectrum (if not the entire spectrum) for wireless users, while compressing television into an even smaller part of what’s left of the television band – if not migrating it altogether to multichannel providers like cable or satellite, with subscription fees for the poorest citizens being paid for from spectrum auction receipts. This proposal, while floated for years in academic circles, has in the last three months become one that is being legitimately debated in Washington, and one that television broadcasters have to take seriously, no matter how absurd it may seem at first glance. Who would have thought that just six month after the completion of the digital transition, when so much time and effort was expended to make sure that homes that receive free over-the-air television would not be adversely impacted by the digital transition, we could now be talking about abolishing free over-the-air television entirely? This cannot happen overnight, and it is a process sure to be resisted as broadcasters seek to protect their ability to roll out new digital multicast channels and their mobile platforms. But it is a real proposal which, if implemented, could fundamentally change the face of the television industry. Watch for this debate to continue this year.

Posted on December 19, 2009 by Brendan Holland

FCC Continues Review of Media Ownership Rules with Workshop on Financial Issues

The Commission has announced the next in its series of media ownership workshops, this one to address financial issues facing the media industry. The workshop, part of the Commission's 2010 quadrennial review of its ownership rules, will be held on January 12, 2010 at the FCC, and will address, in the FCC's words: "the current financial and economic conditions and marketplace factors affecting the media industry and how the FCC should take these into account as it conducts its review process." While the Commission has not identified the forum participants, today's Public Notice states that the session will consist of two panels, one to hear from smaller broadcasters in smaller markets, as well as the financial institutions that serve them, and the second to address larger broadcasters in larger markets and the institutions that serve the larger broadcasters.

Given the seemingly increasing pressures on the broadcast industry, it would seem critical that broadcasters actively participate in both this workshop and the Commission's 2010 review of its ownership rules to ensure that the FCC has an accurate picture of the state of the media landscape as it reviews its ownership rules. This forum, and indeed the rule making proceeding as a whole, is meant to examine whether and how the FCC's media ownership rules affect the financial health of broadcasters, the consideration that lending institutions give to the rules when making funding determinations, and how to consider the financial conditions when setting Commission policy in this area. A copy of today's Public Notice announcing the upcoming forum can be found here.

Tags: JSA, LMA, Multiple Ownership Rules, broadcast, duopoly, media, multiple, ownership, rules

Posted on November 15, 2009 by David Oxenford

Multiple Ownership Workshops Start to Identify Issues for Quadrennial Review - Shared Services Agreements and Local Origination To Be Focus of Public Interest Groups

What will be the issues that broadcasters need to be concerned about in next year's Media Ownership proceeding? To get a clue, broadcasters should watch and listen to the second day of the FCC workshop on multiple ownership, featuring members of various public interest groups in Washington the week before last (watch it on the FCC website, here). These workshops, as we wrote here, were held to start the process on the Commission's upcoming Quadrennial Review of the multiple ownership rules. The representatives who testified on this panel discussed the issues that they thought should be reviewed, and facts that they thought should be collected, in order for the Commission to successfully complete the ownership review required by Congress. As these Washington "insiders" are sure to be the ones filing comments in the proceeding and lobbying the Commission on the issues, the agenda of these organizations are likely to set the grounds for debate in the upcoming proceeding. From watching this hearing, there are bound to be a number of contentious issues that will come up.

The panel was made up of representatives of five different Washington public interest groups - four that tend to favor more regulation and less consolidation. The representative of the fifth organization, suggesting just the opposite - that in the new media world, little or no media ownership regulation is necessary. While much of the discussion was process-oriented, there was discussion of specific issues that might come up in the review. Both the process - which included extensive discussion of the need for detailed industry information for informed regulation to take place - and the substance could cause problems for broadcasters. Substantive issues discussed included the need for more scrutiny of shared services agreements in the television world (as some saw these as a way of evading the FCC ownership regulations), and for ways to insure that there is more local programming as part of the process. One representative also mentioned the need to review noncommercial broadcasting as part of the ownership proceeding - which is usually restricted to a review of commercial operations.

Tags: FCC Form 324, FCC Form 355, Multiple Ownership Rules, Public Interest Obligations/Localism, dark broadcast station, economic condition of broadcasters, local programming, localism proceeding, public service programming, quadrennial review, shared services agreement, silent broadcast station, surrender of broadcast license, turning in broadcast license

Posted on October 22, 2009 by David Oxenford

FCC Releases Agenda for First Workshop on Revisions to its Multiple Ownership Rules - Localism and Economic Competition Issues Included

The FCC has released the agenda for its Workshop on the multiple ownership rules (about which we wrote here). The workshop will span three mornings (November 2-4), and will include live testimony from a different panel each morning. The first panel will include the academic perspective on ownership rules, the second the view from "public interest organizations", and the third from industry representatives, though the participants on that panel are, at this point, the most unsettled. The Commission also requests written comments from the public, which can be filed through November 20. As we wrote when this topic first came up last month, these workshops are the first step in the FCC's consideration of the multiple ownership rules - a review that it is required to conduct once every 4 years - with 2010 being the year in which such review is required.

The Commission sets out a series of questions that it would like to have addressed. These questions include:

The FCC is required by statute to consider the rules governing local radio ownership, local television ownership, radio-TV cross-ownership, broadcast-newspaper cross-ownership and the dual network rule. The Commission asks if it should consider other rules in the context of this proceeding.
In assessing ownership rules, should the Commission treat each rule in isolation, or should it look at all media together and attempt to craft more general rules addressing media consolidation as a whole in relevant markets?
Should rules that are adopted be "bright line" rules, that limit entities to specific numbers of stations, or should the Commission make a case by case determination of whether a combination is in the public interest, subject to some general principles?
Should the Commission address the traditional concepts of competition, diversity and localism to this proceeding, or come up with new ways of looking at these concepts, or different concepts to assess ownership goals?
How should the FCC analyze competition, localism and diversity in today's marketplace? What are the relevant markets for analysis? What metrics should be used?
What studies or analysis should the FCC use to inform its decisions on these topics.

Tags: FCC workshops on multiple ownership, Multiple Ownership Rules, broadcast competition rules, broadcast consolidation, broadcast diversity programs, cross ownership, fcc analysis of media consolidation, media competition, media concentration.media ownership, media consolidation, media ownership diversity, newspaper broadcast cross ownership, newspaper broadcast ownership restrictions, newspaper television cross ownership, radio ownership rules

Posted on October 18, 2009 by Brendan Holland

FCC Provides Further Guidance and Seeks Additional Input on Media Ownership Reporting

On Friday the Commission released a further Order confirming certain recent changes to its ownership reporting requirements for commercial broadcast stations and soliciting additional input on the reporting of certain non-attributable interest holders. Earlier this year, the Commission revised its rules regarding the reporting of ownership interests by commercial broadcasters. The FCC also recast its FCC Form 323 Ownership Report to collect and organize the ownership data in a more useful manner. (Our earlier summary of those changes can be found here.) By its Order last week, the Commission denied a Petition for Reconsideration filed by the National Association of Broadcasters and reiterated that sole proprietors must file an FCC Form 323 biennially to report on their ownership interests.

In addition, the Commission ratified the Media Bureau's recent decision to push back the filing deadline for the FCC Form 323 from November 1st to no earlier than 30 days after the Office of Management and Budget (OMB) approves the modifications to the Form 323. The revisions to the FCC Form 323 are still under consideration and it is not clear when the OMB will approve the collection of the information required by the new version of the Form. (See our earlier posts here and here regarding the OMB's review of the Form 323 under the Paperwork Reduction Act.) The Commission also noted its agreement with the Media Bureau's decision to require that each and every filing entity obtain an FCC Registration Number ("FRN") in order to complete the ownership reporting, and that each officer, director, and shareholder disclosed on the report also have an FRN.

With respect to the reporting of certain non-attributable interests, the Commission's Order granted the NAB's request for reconsideration and deleted the previously adopted requirement that entities with a single majority shareholder disclose all minority shareholders (despite the single majority shareholder exemption) and that "eligible entities" disclose otherwise non-attributable investors. The NAB had argued, and the FCC agreed, that the logic for requiring the reporting of these two types of non-attributable interest holders was ill defined and that the intention to impose this requirement was not explicitly stated or developed in the record leading up to the rule change this past May. Accordingly, the Commission has opened a further comment period to address the specific question of whether these two types of non-attributable interest holders should be divulged on commercial broadcasters' biennial ownership reports. Comments on this narrow topic will be due within 30 days of when this Order and Further NPRM are published in the Federal Register, with Reply Comments due within 45 days of publication. A full copy of the Commission's Order and NPRM, including details on how comments can be filed in this proceeding, is available here.

Tags: 323, FCC, Form, General FCC, Multiple Ownership Rules, holders, interest, nonattributable, ownership, reports

Posted on September 30, 2009 by David Oxenford

FCC Plans Public Workshops to be Held in Connection with Its Review of Broadcast Ownership Rules

In a Public Notice issued yesterday, the FCC announced that it would do a series of open "workshops" in connection with its review of the broadcast multiple ownership rules - the rules that restrict the number of radio or television stations which one party can own and which restrict the cross-ownership of radio and TV stations and newspapers in the same market. The FCC is poised to begin its quadrennial review of the ownership rules in 2010. The open proceedings just announced (without details of how many workshops will be held) will be used to gather information for the Commission's review of the rules. According to the public notice "the Commission will seek viewpoints and information from a broad range of experts; consumers; public interest and trade associations; labor unions; media industry representatives, both traditional and new; and other interested persons," as the first step in this review process. So what is this all about?

As part of the Telecommunications Act of 1996, the FCC was instructed to do a regular review of broadcast multiple ownership rules, seemingly with the intent of reducing the prohibitions of those rules as part of the general deregulatory spirit of that Act. Originally, proceedings were to review the rules every two years, a Biennial Review. However, those reviews kept dragging on and becoming consolidated with each other so Congress eventually amended the law to require that the review take place only once every four years. But each time the FCC has taken action on the rules, especially any time there has been any liberalization, there has been a major outcry from consumer groups that they were left out of the process. Perhaps the just announced hearings are an attempt to short circuit that protest by getting the public involved even before the process begins.

Tags: Multiple Ownership Rules, TV newspaper cross ownership, cross ownership, fcc media ownership rules, ownership hearings, public hearings on broadcast ownership, television cross ownership

Posted on September 1, 2009 by David Oxenford

David Oxenford Updates Kansas Broadcasters on Washington Legal Issues

David Oxenford provided a legal update on Washington issues to the Kansas Association of Broadcasters Annual Convention in Topeka on October 19, 2009. His presentation - What Broadcasters Need to Know About What to Expect from Washington in 2009-2010 - discussed issues including the proposed broadcast performance royalty, localism and multiple ownership proceedings at the FCC, LPFM changes, and advertising and sponsorship identification policies.

A copy of Dave's PowerPoint presentation is available here.

Tags: Appearances, Broadcast Performance Royalty, Kansas Association of broadcasters, Multiple Ownership Rules, Public Interest Obligations/Localism, broadcast, legal issues for broadcasters, ownership hearings, performance royalty, performance tax, radio station laws, rule for broadcast stations

Posted on May 18, 2009 by David Oxenford

FCC Begins Formal Inquiry Into Arbitron PPM Audience Measurement

The FCC today issued a Notice of Inquiry into the use of the Portable People Meter technology of radio audience measurement now being rolled out by Arbitron in radio markets throughout the country. Several months ago, various groups petitioned the FCC for an inquiry into the PPM, contending that it has certain methodological flaws that undercounted particular groups, including minority groups, and thus could have an impact on the financial viability of the stations listened to by such groups (see our summary of the petitions and the issues raised by these petitions). The Notice of Inquiry asks about those perceived flaws, about the potential impact of any flaws on the use of Arbitron market definitions for purposes of the FCC radio multiple ownership rules, and on the more general question of whether the FCC even has the jurisdiction to regulate the use of the PPM.

Specific questions on which the FCC seeks comments include:

Does the use of this technology really undercount minority populations?
If so, what has been the impact on the economics of minority-formatted stations in markets where the system is in use?
Are there specific information gathering techniques that should be improved in the PPM system?
What has been the effect on the PPM system of settlements between Arbitron and the Attorneys General of several states - where Arbitron promised to change its sampling process?
What is the impact of Media Ratings Council accreditation for the PPM in certain markets, and its lack of accreditation in others?
Do the questions about PPM reliability have any impact on the use of Arbitron to define radio markets for FCC multiple ownership purposes?
What is the FCC's jurisdiction to review Arbitron's practices in connection with the PPM?

Details of these questions can be found in the FCC's Notice of Inquiry at pages 12-17.

Tags: Arbitron, EEO Compliance/Diversity, FCC investigates Arbitron, General FCC, Multiple Ownership Rules, PPM, minority audience surveys, portable people meter, radio audience measurement, radio market definition

Posted on March 26, 2009 by David Oxenford

FCC to Revisit Newspaper-Broadcast Cross Ownership Restrictions - Maybe the Rule Will Die Before the Newspaper Does

A few weeks ago, we wrote about just how outmoded the FCC's prohibitions on the cross ownership of newspapers and broadcast stations were in an era when newspapers seem to be going out of business at an alarming rate. We quoted a DC trade press reporter who had mused that the newspaper-broadcast cross-ownership rule could well outlast the newspaper itself. According to a report in Bloomberg News today, the Commission may well be revisiting the issue, according to statements made by Chairman Copps, in light of the economic turmoil in the newspaper industry. But what would a review of the issue bring from the FCC? That is unclear from the article - and unclear from the prior statements of the Acting Chairman.

In late 2007, Acting Chairman Copps was active in his opposition to the Commission's very limited relaxation of the cross-ownership prohibitions. See our summary of the FCC debate on that relaxation, here. But would he take the same position today in light of the current economic climate for newspaper publishers? As the Bloomberg article pointed out, House of Representatives Speaker Nancy Pelosi has suggested that the Justice Department might want to relax antitrust review of newspaper combinations given their economic plight. Other legislative fixes have been suggested - including allowing papers to operate as non-profit, tax-exempt entities to which charitable contributions could be made. With these kinds of legislative efforts underway, perhaps a change in direction at the FCC is indeed possible. One more issue to watch in the coming months.

Tags: FCC and newspaper bankruptcy, FCC and newspaper economics, FCC and newspaper failures, Multiple Ownership Rules, fcc media ownership rules, newspaper broadcast cross ownership

Posted on March 2, 2009 by David Oxenford

Will the Newspaper-Broadcast Cross Ownership Rules Outlive the Newspaper?

At the end of last year, we wrote about the decision of the Detroit newspapers to go to a 3 day a week publication schedule, and asked the question that we had heard posed by a writer for one of the communications trade publications - "will the FCC rules limiting the cross-ownership of broadcast stations and daily newspapers outlive the newspaper itself." In the last few weeks, that question has become even more relevant. The FCC's decision to relax the cross-ownership restrictions in December 2007 drew widespread condemnation from many big-media opponents, and even attempts to overturn the decision, even though its direct effect was limited to the nation's largest markets. One now wonders whether, with the current economic condition of newspapers and broadcast stations, the rules should not be revisited, for purposes of further relaxing those rules, not tightening them.

In the last few weeks, we've seen a major newspaper in Denver stop its presses for the last time, and companies owning papers in many major markets, including Minneapolis, Philadelphia and New Haven, all declare bankruptcy. At the same time, papers in San Francisco and Seattle have warned that they may also shut down if there are not significant savings found or new buyers. Even venerable papers like the New York Times have been the subject of shut-down rumors, and the Wall Street Journal and other papers in the Rupert Murdoch empire have been said to be dragging down the profits of the News Corporation.

Tags: FCC media concentration rules, Multiple Ownership Rules, TV newspaper cross ownership, can newspaper and TV station be co-owned, can radio owner also own newspaper

Posted on January 14, 2009 by David Oxenford

Julius Genachowski as New FCC Chair - What Will It Mean to Broadcasting's Future?

The press was abuzz yesterday with the news that Julius Genachowski is apparently the pick of the Obama Administration for the position of FCC Chairman. Mr. Genachowski was at the FCC during the Reed Hundt Administration, and has since worked in the private sector in the telecommunications industry, including work with Barry Diller and running a DC-based venture capital fund. From the positive reactions that the appointment has received from all quarters, the choice would seem to be a great one. But, in looking at some of the reactions, you have to question whether everyone has to be reading what they want to see into the new Commission. For instance, while the NAB has praised the choice of Genachowski (stating that he "has a keen intellect, a passion for public service, and a deep understanding of the important role that free and local broadcasting plays in American life"), so too did media-reform organization Free Press ("This moment calls for bold and immediate steps to spur competition, foster innovation and breathe new life into our communications sector. With his unique blend of business and governmental experience, Genachowski promises to provide the strong leadership we need.") What will this appointment really mean for broadcasters?

In short - who knows? When Kevin Martin was appointed Chairman of the FCC, few would have imagined that a former communications attorney, a person deeply involved in the Bush campaign, and a former staffer of FCC Commissioner Harold Furtchgott-Roth (perhaps the most free market Commissioner ever) would have supported sustained, wide-reaching inquiries into the underbrush of FCC regulation - e.g. localism, embedded advertising, indecency. So we can't really know what a Chairman will do until he does it. The Washington Post and the Wall Street Journal both suggest that the new chairman will be focused on Internet issues, and may be less interested in indecency - but who knows?

Tags: Democrats on FCC, General FCC, Internet Radio, Internet Video, Multiple Ownership Rules, Obama FCC Chairman, Public Interest Obligations/Localism, financial issues in media, future of FCC, julius genachowski, localism, media competition, media economy, mobile internet, multiple ownership, new FCC Chairman

Posted on January 1, 2009 by David Oxenford

Gazing Into the Crystal Ball - The Outlook for Broadcast Regulation in 2009

Come the New Year, we all engage in speculation about what’s ahead in our chosen fields, so it’s time for us to look into our crystal ball to try to discern what Washington may have in store for broadcasters in 2009. With each new year, a new set of regulatory issues face the broadcaster from the powers-that-be in Washington. But this year, with a new Presidential administration, new chairs of the Congressional committees that regulate broadcasters, and with a new FCC on the way, the potential regulatory challenges may cause the broadcaster to look at the new year with more trepidation than usual. In a year when the digital television transition finally becomes a reality, and with a troubled economy and no election or Olympic dollars to ease the downturn, who wants to deal with new regulatory obstacles? Yet, there are potential changes that could affect virtually all phases of the broadcast operations for both radio and television stations – technical, programming, sales, and even the use of music – all of which may have a direct impact on a station’s bottom line that can’t be ignored.

With the digital conversion, one would think that television broadcasters have all the technical issues that they need for 2009. But the FCC’s recent adoption of its “White Spaces” order, authorizing the operation of unlicensed wireless devices on the TV channels, insures that there will be other issues to watch. The White Spaces decision will likely be appealed. While the appeal is going on, the FCC will have to work on the details of the order’s implementation, including approving operators of the database that is supposed to list all the stations that the new wireless devices will have to protect, as well as “type accepting” the devices themselves, essentially certifying that the devices can do what their backers claim – knowing where they are through the use of geolocation technology, “sniffing” out signals to protect, and communicating with the database to avoid interference with local television, land mobile radio, and wireless microphone signals.

Posted on December 17, 2008 by David Oxenford

Detroit Newspapers Cut Back on Publishing and Home Delivery - What's the Impact on FCC Ownership Regulation?

Yesterday, the Detroit Free Press and the Detroit Morning News, which operate their publication and distribution operations through a joint operating agreement, announced that they will cut back on the physical publication of their papers - publishing full editions delivered to homes only three days a week. On other days, the papers will publish an abbreviated version, available only on newsstands. The papers will not abandon news coverage the remainder of the week, but will instead concentrate on their on-line presence, showing the power of the Internet to disrupt traditional media. As we said years ago in one of our first posts on this blog - New Media Changes Everything, and it seems that this is just another indication of how true that is. The broadcast media, particularly radio, has often looked at the advertisers served by the daily paper as a ripe source of new business, and may well see the Detroit change as a major business opportunity. But does it also change the FCC's consideration of the multiple ownership rules applicable to radio and television cross-ownership with newspapers?

The FCC's multiple ownership rules prohibit the ownership of a broadcast station and a "daily" newspaper that serve the same area. The rules define a daily paper as one that is "published" at least four days each week, and is circulated "generally in the community." Here, the Detroit papers arguably will not meet that 4 day a week requirement - at least for a publication that is generally circulated throughout the community. Of course, some may argue that the abbreviated newsstand copy constitutes a daily publication but one would assume that, sooner or later, even that will disappear. Thus, while there has been so much controversy about the Commission's decision of one year ago (summarized here) deciding that combinations of broadcast properties and newspapers in Top 20 markets were presumed to be permissible, while those in smaller markets were not, one questions whether this still makes any sense in today's marketplace where seemingly few can profitably publish a daily paper in most markets, and no one seems to want to rescue the many papers that have fallen on hard times.

Tags: Detroit newspapers three day publication, FCC ownership rules, Multiple Ownership Rules, On Line Media, TV newspaper ownership, cross ownership, multiple ownership, new media competition, newspaper broadcast ownership restrictions, radio newspaper ownership

Posted on July 29, 2008 by David Oxenford

FCC Releases Public Notice of Decision Approving XM-Sirius Merger - Precedent for Broadcast Ownership Not Yet Clear

The FCC has released a Public Notice announcing its approval of the XM and Sirius satellite radio merger. The public notice is only two pages long, with a four page appendix providing very brief summaries of the conditions imposed on the two companies which a majority of the Commissioners found sufficient to protect consumers from harm from the merged entity. The full text of the decision, providing the full reasoning of the Commission on its approval, has not yet been released. Until it is, the impact for broadcast ownership and the treatment of broadcast consolidation set by the precedent of this decision remains unclear.

The conditions placed on the merger and outlined by the decision include some surprising ones beneficial to broadcasters, including that the merged company not use its terrestrial repeaters to originate local broadcasts and that the company not enter into exclusive agreements precluding the broadcast of local sporting events by over-the-air broadcast stations. The decision also imposed price caps on the service for three years, and set out conditions to open the manufacturing of satellite radio receivers to more companies and prohibiting any restriction on combining the radio receiver with other audio devices including digital radio receivers. No condition requiring that satellite radio receivers be capable of picking up over-the-air digital radio ("HD Radio") was imposed, though the FCC promised to issue a Notice of Inquiry to review that issue. Specific programming channels will be made available for noncommercial educational use and for leased access. The FCC also made clear that satellite radio will be subject to the FCC's EEO rules.

Tags: Digital Radio, Multiple Ownership Rules, Sirius, XM, music royalties, satellite merger conditions, satellite radio

Posted on May 29, 2008 by Brendan Holland

REVISED Comment Date for FCC Diversity Proceeding -- Comments now due June 30th

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.

Tags: AM Radio, AM expanded band, EEO Compliance/Diversity, FM Radio, FM Translators and LPFM, Low Power Television/Class A TV, Multiple Ownership Rules, designated entities, diversification of ownership

Posted on May 21, 2008 by David Oxenford

Comment Date Set for FCC Diversity Proceeding - Including Proposals on Expanding the FM Band and the Expanded AM Band

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.

Tags: AM Radio, AM expanded band, EEO Compliance/Diversity, FCC Form 314, FCC form 315, FM Radio, FM channel 6, Multiple Ownership Rules, broadcast diversity, designated entities, no urban no spanish

Posted on May 20, 2008 by David Oxenford

Senate Resolution of Disapproval on Multiple Ownership - What Does it Mean?

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.

Tags: Multiple Ownership Rules, TV duopoly, TV newspaper cross ownership, arbitron markets, broadcast consolidation, media ownership, multiple ownership, resolution of disapproval

Posted on May 15, 2008 by David Oxenford

Broadcasters and the Regulatory Pendulum - Swinging Toward More Regulation

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.

Tags: Advertising Issues, Digital Television, EEO Compliance/Diversity, EEO regulation, FM Translators and LPFM, Form 395, General FCC, Multiple Ownership Rules, Programming Regulations, Public Interest Obligations/Localism, broadcast regulation, enhanced disclosure, main studio, marketplace regulation, media business, media competition, public inspection file, public interest, reregulation

Posted on April 7, 2008 by David Oxenford

Adverse Change in Arbitron Market Blocks Radio Acquisition Under Multiple Ownership Rules

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.

Tags: 2003 ownership rules, FCC, Multiple Ownership Rules, arbitron markets, consolidation, multiple ownership, owership restrictions, radio ownership

Posted on March 29, 2008 by David Oxenford

FCC's Acts to Increase Diversity in Media Ownership - Part 2, The Proposals for Future Actions - Channel 6 for FM, AM Expanded Band, Definition of Designated Entity, Must Carry for Class A TV and Others

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.

Tags: EEO Compliance/Diversity, FCC Form 316, FCC Form 323, FM Radio, Low Power Television/Class A TV, Multiple Ownership Rules, Public Interest Obligations/Localism, broadcast diversity, broadcast ownership, channel 6, class A TV, designated entity, expanded band AM, incubator program, minority ownership, new radio station, ownership diversity, ownership report

Posted on March 15, 2008 by David Oxenford

FCC Takes Actions to Increase Diversity in Broadcast Ownership

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.

Tags: Advertising Issues, EEO Compliance/Diversity, Equity Debt Plus, Multiple Ownership Rules, TV duopoly, advertising discrimination, broadcast diversity, construction permit, designated entity, distress sale, grandfathered combination, multiple ownership, no Spanish dictate, no urban dictate, ownership fraud, small business

Posted on February 4, 2008 by David Oxenford

FCC Issues Text of Its Multiple Ownership Decision - New Combinations for Newspapers and TV, No Ownership Changes for Radio

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.

Tags: FCC ownership rules, Multiple Ownership Rules, TV duopoly, arbitron markets, broadcast diversity, joint sales agreements, multiple ownership, newspaper broadcast cross ownership

Posted on January 27, 2008 by David Oxenford

Does the FCC's Approval of the Clear Channel Transfer of Control Provide a Window Into the Future?

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.

Tags: Advertising Issues, Clear Channel, Multiple Ownership Rules, Public Interest Obligations/Localism, advertising regulation, broadcast ownership, media consolidation, ownership rules, private equity

Posted on January 12, 2008 by David Silverman

FCC to Hold Open Meeting Featuring Bureau Chief Presentations - While Congress Investigates

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.

Tags: Congressional investigation of FCC, FCC meeting, General FCC, Multiple Ownership Rules, multiple ownership

Posted on January 10, 2008 by David Oxenford

FCC Clarifies Permissible Activities of Nonattributable Investors

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

Tags: Equity Debt Plus, FCC attribution rules, Multiple Ownership Rules, attribution, broadcast control, broadcast investment, multiple ownership, nonattributable interests

Posted on December 18, 2007 by David Oxenford

FCC Adopts Changes in Newpaper-Broadcast Cross Ownership Rules - No Relief For Broadcasters Under Other Ownership Rules

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.

Tags: Multiple Ownership Rules, TV duopoly, failed station, failing station, media consolidation, media ownership, multiple ownership, newspaper broadcast cross ownership, radio cross ownership, television cross ownership

Posted on December 11, 2007 by David Oxenford

FCC Meeting Agenda for December 18 - Potentially One of the Most Important in Recent Memory - Multiple Ownership, Localism, Minority Ownership, Product Placement and Cable TV National Ownership Caps

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.

Tags: Advertising Issues, FCC meetings, Multiple Ownership Rules, Payola and Sponsorship Identification, Public Interest Obligations/Localism, TV duopoly, cable ownership, cable television ownership, cross ownership, embedded advertising, localism, minority ownership, newspaper broadcast, ownership rule, product placement, sponsorship ID, sponsorship identification

Posted on December 1, 2007 by David Oxenford

Ownership Waivers All Around - FCC Approves Sales of Tribune and Clear Channel TV

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)

Tags: Multiple Ownership Rules, broadcast control, broadcast ownership, cross ownership, media consolidation, multiple ownership, newspaper broadcast interests, ownership waivers, private equiy

Posted on November 20, 2007 by David Oxenford

FCC Meeting to Consider LPFM Reform, Public Interest Requirements for TV Stations, and Minority Ownership Proposals

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.

Tags: EEO Compliance/Diversity, FM Translators and LPFM, LPFM, Multiple Ownership Rules, Programming Regulations, Public Interest Obligations/Localism, Quarterly Issues Programs List, broadcast ownership, minority ownership, new entrants, public file, public interest obligations

Posted on November 14, 2007 by David Oxenford

What Chairman Martin's Multiple Ownership Proposals Omit - No Relief for Radio and TV

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.

Tags: Multiple Ownership Rules, TV duopoly, arbitron markets, city of license change, contour overlap, grandfathered ownership, joint sales agreements, media consolidation, multiple ownership, notice of proposed rulemaking, radio ownership, television ownership

Posted on November 13, 2007 by David Silverman

Chairman Martin Proposes His Multiple Ownership Modifications - Only Proposing to Change Newspaper-Broadcast Cross-Ownership

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.

Tags: FCC ownership rules, Multiple Ownership Rules, media concentration.media ownership, multiple ownership, newpaper broadcast ownership, newspaper cross interest

Posted on November 2, 2007 by Brendan Holland

Multiple Ownership Heats Up - Final FCC Public Hearing Set for Nov. 9th

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.

Tags: Multiple Ownership Rules

Posted on October 28, 2007 by David Oxenford

Copps Calls for FCC Proceeding to Consider News Corporation's Acquisition of Wall Street Journal

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.

Tags: FCC cross ownership, Multiple Ownership Rules, license renewal, media concentration, media consolidation, multiple ownership, newspaper cross ownership, newspaper television ownership, radio television ownership

Posted on October 25, 2007 by Brendan Holland

FCC Open Meeting and Localism Hearing Set for Oct. 31

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.

Tags: General FCC, Multiple Ownership Rules

Posted on October 18, 2007 by David Oxenford

Push to Complete Multiple Ownership Overhaul By the End of the Year

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.

Tags: Digital Radio, FCC localism hearings, Multiple Ownership Rules, broadcast consolidation, broadcast ownership, localism, media consolidation, multiple ownership, newspaper broadcast cross ownership, ownership hearings, radio multicasting, radio ownership, television ownership, xm sirius merger

Posted on September 28, 2007 by Brendan Holland

Deadline for Comments on FCC Media Ownership Studies Extended until Oct. 22

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.

Tags: Multiple Ownership Rules

Posted on September 24, 2007 by David Oxenford

One Sign That Broadcasters Are About to Become Political Footballs - Obama Suggests Shorter Broadcast License Terms and Less Consolidation

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.

Tags: Advertising Issues, Children's Programming and Advertising, FCC EEO regulation, Indecency, LPFM, Multiple Ownership Rules, Programming Regulations, Public Interest Obligations/Localism, barack obama, broadcast consolidation, broadcast ownership, junk food advertising, license renewal, media consolidation, multiple ownership, public service, unhealthy food ads, violent television

Posted on September 21, 2007 by David Oxenford

A New Push to Address Multiple Ownership?

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.

Tags: FCC ownership hearing, FCC ownership rules, Multiple Ownership Rules, broadcast ownership, future of music, media consolidation, media ownership, minority broadcast, minority ownership, multiple ownership, newspaper broadcast cross ownership, radio ownership, television ownership

Posted on August 5, 2007 by David Oxenford

An Option, A Guaranty, and a Shared Services Agreement - OK By the FCC

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.

Tags: FCC ownership restrictions, Multiple Ownership Rules, broadcast guaranty, broadcast loans, joint sales agreement, shared services agreement, television ownership

Posted on August 4, 2007 by David Oxenford

FCC Proposes Multiple Ownership Exceptions to Foster Minority Ownership

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)

Tags: :broadcast ownership, EEO Compliance/Diversity, Multiple Ownership Rules, alien ownership, attributable interest, broadcast ownership, broadcast tax credits, construction permit expiration, distress sale, minority broadcast ownership, minority tax certificate, small business broadcasters

Posted on July 23, 2007 by David Oxenford

5 of 6 - The Next Multiple Ownership Public Hearing

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?

Tags: FCC ownership hearings, FCC ownership rules, Multiple Ownership Rules, multiple ownership, radio ownership, television ownership

Posted on July 14, 2007 by David Oxenford

Congress Asks FCC to Answer Questions about Private Equity Ownership of Media Properties

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.

Tags: Equity Debt Plus, General FCC, Multiple Ownership Rules, Public Interest Obligations/Localism, broadcast localism, broadcast private equity

Posted on June 11, 2007 by David Oxenford

Another Localism Hearing and Service to America

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

Tags: FCC localism, General FCC, LPFM, Multiple Ownership Rules, Programming Regulations, Public Interest Obligations/Localism, Television public affairs rules, broadcast PSA rules, broadcast public service, broadcaster community service, localism hearing, localism notice of inquiry, localism proceeding, localism task force, payola rules, political broadcasting obligations, radio public affairs rules, radio public service, television public service

Posted on June 7, 2007 by David Oxenford

Study Released Showing Effects of Broadcast Consolidation - Broadcasters Should Pay Attention

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.

Tags: FCC ownership rules, Multiple Ownership Rules, media consolidation, media ownership diversity, minority media ownership, multiple ownership

Posted on May 31, 2007 by David Oxenford

FCC Issues Rules on Digital Radio - With Some Surprises that Could Eventually Impact Analog Operations

The FCC today issued the long-awaited text of its decision on Digital Audio radio - the so-called IBOC system. As we have written, while adopted at its March meeting, the text of the decision has been missing in action. With the release of the decision, which is available here, the effective date of the new rules can be set in the near future - 30 days after its publication in the Federal Register. With the Order, the Commission also released its Second Further Notice of Proposed Rulemaking, addressing a host of new issues - some not confined to digital radio, but instead affecting the obligations of all radio operations.

The text provides the details for many of the actions that were announced at the March meeting, including authorizing the operation of AM stations in a digital mode at night, and the elimination of the requirements that stations ask permission for experimental operations before commencing multicast operations. The Order also permits the use of dual antennas - one to be used solely for digital use - upon notification to the FCC. In addition, the order addresses several other matters not discussed at the meeting, as set forth below.

Posted on May 13, 2007 by David Oxenford

Debate Over Newspaper-Broadcast Cross Ownership Rule Heats Up

While the FCC continues its series of public hearings on possible revisions to its multiple ownership rules, the issue of newspaper-broadcast cross ownership is now squarely before the FCC in a number of proceedings. For instance, in the applications proposing a transfer of control of the Tribune Company, waiver requests have been filed in the markets where the company owns both newspaper and broadcast properties. These markets include some of the largest television markets in the country including Los Angeles, Chicago and New York. As the current rules prohibit the ownership of a daily paper and either a radio or television station in the same market, Chicago, where Tribune owns radio, TV and newspaper properties and has done so for many years, asks for waivers for both stations. The FCC just designated the application for transfer of control of the Tribune Company as a permit but disclose proceeding, meaning that parties can talk to the FCC decision makers about the case, as long as they file a written disclosure statement with the FCC for inclusion in the record of the case.

Also, press reports note that the petitions to deny have been filed against applications for the renewal of Fox's television stations in New York, arguing that the combination of Fox's television stations in the market with the ownership of the New York Post is not in the public interest.

Seemingly, the proposed purchase of the Wall Street Journal by News Corporation, the owners of Fox, if it were to ever come to fruition, would at least be reviewed by the FCC, as the Journal is published in New York, where Fox owns television stations. However, FCC precedent established when Gannett purchased a Washington, DC TV station, in the same market where USA Today is published, would seem to set a precedent for the treatment of a specialized national newspaper like the Journal. While published in New York, the Journal really is national in scope - and not focused on local news, sports, entertainment or advertisers in the same manner that a local newspaper would be.

Tags: FCC multiple ownership rules, FCC ownership waivers, Multiple Ownership Rules, media consolidation, newspaper broadcast cross ownership, newspaper television cross ownership

Posted on April 13, 2007 by Brendan Holland

Details on Tampa-St. Petersburg Multiple Ownership Hearing

This article is no longer available. For more information on this topic, see Multiple Ownership Decision Delayed - What Issues Are Being Debated?

Tags: Multiple Ownership Rules

Posted on April 8, 2007 by David Oxenford

A Public Multiple Ownership Proceeding - Leading to a Different Decision?

Today's Los Angeles Times contains an article about FCC Chairman Kevin Martin's policy of holding a series of open hearings on possible changes to the FCC's multiple ownership rules. The article contrasts this policy to that of previous Chairman Michael Powell, who held only one hearing and was criticized by many "public interest" groups for a lack of openness in the proceeding when the 2003 ownership proceeding loosened the ownership rules in several respects. The article notes that times have changed in many respects - that many companies previously interested in a relaxation of the rules now no longer care - citing divestitures of Disney/ABC and CBS of broadcast holdings in recent months. Of course, the Tribune Company may still have newspaper-broadcast cross ownership issues that need to be resolved (particularly as grandfathering issues may well come to the forefront as the company seeks FCC approval for its planned transfer of control), and other newspaper companies have similar interests. The article does not mention the other area where many broadcasters are still very interested in regulatory relief - the extension of TV duopoly into smaller markets where the economics of TV station operation, and the increased costs of the digital conversion, have caused many to desire a relaxation of the prohibitions against owning more than one TV station in these markets.

The other issue not addressed by the article is the timing of any decision on the ownership rules. While the Commission has committed to the public hearings, they are supposed to continue for the remainder of 2007, thus putting any decision off until 2008. And will the FCC want to risk a possibly controversial decision in a Presidential election year? We think not - so a decision postponed until after the election may well be one decided by a different Commission.

Tags: Multiple Ownership Rules

Posted on March 28, 2007 by David Oxenford

Follow the Money and Find the Public Interest?

The FCC yesterday approved the sale of the stock of Univision Communications to a consortium of private equity companies. In order to approve the deal, the FCC agreed to a $24 million dollar payment to the US Treasury by Univision as part of a consent decree for alleged violations of the children's television rules. The consent decree, attached to the FCC decision on the sale, while providing for one of the largest fines ever paid to the FCC, provides little guidance to broadcasters on what constitutes educational and informational programming directed to children, the source of the violation found by the FCC. But the separate Statement of Commissioner Copps raises a new issue - one he looks for the FCC to study and report on - the effect of private equity and debt on the ability of broadcasters to operate in the public interest.

The Copps opinion suggests that the debt incurred in connection with acquisitions by private equity companies may impair the ability of broadcast stations to operate in the public interest, as money needed for operations is instead funneled into debt repayment. Of course, private equity firms are not the first owners of broadcast companies to incur debt, nor is there any evidence that I have seen that private equity companies which own broadcast companies have proportionally more debt than other broadcast owners. What would the FCC hope to accomplish through such an investigation? I can't see the FCC evaluating each transaction that comes before it to determine if the proposed debt structure would be too much of a burden on the operations of a station. Nor could I foresee the FCC putting broadcast ownership restrictions on certain classes of otherwise qualified potential broadcast owners.

Tags: Children's Programming and Advertising, Multiple Ownership Rules

Posted on March 14, 2007 by Brendan Holland

Multiple Ownership - One More for the Road

This article is no longer available. For more information on this topic, see Multiple Ownership Decision Delayed - What Issues Are Being Debated?

Tags: General FCC, Multiple Ownership Rules

Posted on March 3, 2007 by David Oxenford

More on the Copyright Royalty Board Decision on Internet Radio Music Royalties

As we wrote on Friday, the Copyright Royalty Board released to the parties their decision setting the sound recording music royalties for Internet radio for the years 2006-2010 - and the rates will be increasing significantly (absent success on appeal or in settlement discussions). The rates and appeal process are set out in our post on Friday. The parties have until Monday, March 5 at noon, to request that the Board keep portions of the decision that contain confidential proprietary information out of the public record. Thus, the text of the decision is not yet public. Nevertheless, many parties are asking for more specific information about the decision and its impact. Certainly, when the decision is public, everyone will want to make their own judgments. But, until that time (which should be soon as the Board was careful to avoid using any significant amount of confidential information), I offer some observations about the decision (from my vantage point as a party who represented some of the webcasters involved in the proceeding), as well as thoughts on some of the questions that I have seen posted on various discussion boards this weekend.

First, it is essential to understand exactly what this decision covers. The Board’s decision covers only non-interactive webcasters operating pursuant to the statutory license. Our memo, here, discusses the statutory licensing scheme, and what a webcasting service must do to qualify to pay the royalties due under this statutory license. Essentially, a webcaster covered by this decision is one which operates like a radio station – where no listener can dictate which artists or songs he or she will hear (some limited degree of consumer influence is permitted, but a webcaster must comply with the restrictions set out in our memo). Also, the webcaster cannot notify their listeners when any specific song will play. The decision does cover the Internet transmissions of the over-the-air content of most broadcast stations.

The royalties are paid to SoundExchange – a nonprofit corporation with a Board made up of representatives of artists and the record companies. The royalties go to the copyright holders in Sound Recordings and the performers on those recordings ( the copyright holder is usually the record label. Royalties are split 50/50 – and the artist royalties are further divided 45% to the featured artist and 5% to any background musicians featured on the recording).

The decision by the Board was the result of a long proceeding – which began in 2005. A summary of the proceeding can be found in our posting, here. Satellite radio also has to pay similar royalties, as do services that provide background music to businesses ("business establishment services"). Separate proceedings are underway to determine rates for these services.

With that background – here are some more thoughts on the decision – obviously in very summary form. The Board is charged with determining the royalty rates that would be determined by a willing buyer and a willing seller in a marketplace transaction. The Board was clear in the decision that it would look simply for evidence of what such a deal would be – it would not look at policy reasons why certain groups of webcasters (including small commercial webcasters or noncommercial webcasters) should get some special rate.

Tags: FM Translators and LPFM, Intellectual Property, Internet Radio, Multiple Ownership Rules, On Line Media

Posted on February 27, 2007 by David Oxenford

Congress to Review the State of Radio

At the NAB Broadcast Leadership Conference in Washington today, Congressman Ed Markey, Chairman of the House of Representatives Telecommunications and Internet Subcommittee of the Energy and Commerce Committee, announced that the subcommittee would hold hearings on the state of radio. These hearings would examine not only over-the-air radio, but also Internet radio, HD radio, satellite radio and other related businesses. This comprehensive review seems to be different from the previously announced hearing by the new Congressional task force on antitrust issues which had announced plans to review the proposed XM-Sirius merger.

While Congressional hearings often lead to nothing other than an airing of the issues and information for future legislative efforts, they do indicate areas of interest that could eventually mature into Congressional legislative proposals. A comprehensive hearing on radio issues could end up providing Congress with the information that could send it in several directions - perhaps weighing in on multiple ownership issues or on the digital radio transition, and could even prompt Congress to review any action taken on Internet radio royalties. As we've written before, the Copyright Royalty Board is expected to release its ruling on the royalties for 2006-2010 in the next week. The direction of this Congressional hearing, when it occurs, will be worth watching.

Tags: Digital Radio, Internet Radio, Multiple Ownership Rules

Posted on February 23, 2007 by David Oxenford

What's An FCC Commissioner Like You Doing In a Place Like This?

While the FCC Commissioners are in Harrisburg, Pennsylvania today holding the third of the Commission's promised six field hearings on multiple ownership, an interesting story was published yesterday, announcing an unofficial "town meeting" of consolidation critics in Columbus, Ohio on March 7. While these unofficial meetings have become a staple of the broadcast landscape, they traditionally feature one or both of the FCC's Democratic Commissioners. What makes this upcoming hearing unique is that Commissioner McDowell, one of the Republican Commissioners, will also be in attendance.

Perhaps Commissioner McDowell is simply a fan of the ambiance of the Ohio state capital, but his attendance could signal something more. The appearance of a Republican Commissioner at one of these events is rare. Commissioner McDowell has established a bit of a reputation as an independent thinker, holding out from participation in the FCC's consideration of the AT&T/Bell South merger despite intense pressure from his Republican colleagues to ignore what he perceived as a potential conflict that he had from previous employment, and reportedly showing reluctance to back the Chairman on television multicast must-carry rules. Does his participation at this meeting signal anything on his position on the multiple ownership proceeding other than curiosity and open mindedness on his part? Only time will tell.

Tags: Multiple Ownership Rules

Posted on February 22, 2007 by David Oxenford

XM and Sirius - The Issues Beyond the Issues

By now, everyone knows that XM and Sirius have announced plans to merge into a single nationwide satellite radio service provider. This plan is, of course, subject to approval of the FCC. The NAB has announced plans to oppose the merger, and Congress today scheduled hearings on the matter, to be held next week. The obvious issues to be considered by the Department of Justice and the FCC will be whether the merger will be anti-competitive and whether it will serve the public interest. But there are numerous other legal issues, possibly affecting other FCC proceedings, that may well come out of the consideration of this merger.

For instance, the merger raises the question of whether satellite radio is a unique market that should not be allowed to consolidate into a monopoly, or whether there is a broader "market" for audio programming encompassing not only satellite radio, but also traditional over-the-air radio, iPods, Internet radio, and other forms of audio entertainment. While the opponents of the merger may argue that satellite radio is a unique market, such a finding may affect the broadcast multiple ownership proceeding, where some broadcasters are advancing arguments similar to the satellite companies in hopes that the FCC will loosen multiple ownership restrictions.

Another issue that seemingly will be raised by the merger is how important a la carte programming is to FCC Chairman Martin. The Chairman has been pushing both satellite and cable television companies to allow consumers to purchase only the channels that they want rather than whole packages of channels. He has argued that consumers could save money by buying only the channels that they want, and consumers could also avoid programing that they don't want (like adult oriented content). Service providers have countered that forcing the unbundling of program tiers will make it economically unfeasible to offer many of the more niche program channels. Published reports indicate that part of the merger proposal to be advanced by the satellite companies may include a proposal for a la carte pricing. Thus, this case may show how important the Chairman really believes such offerings are - and whether that offering may help tilt the public interest considerations in the proceeding.

Tags: Cable Carriage, Digital Radio, Internet Radio, Multiple Ownership Rules, Programming Regulations

Posted on February 15, 2007 by David Oxenford

Clear Channel Radio Sales Continue - What's the Effect on FCC Proceedings?

Trade press reports yesterday and today announced that the Clear Channel spin-off of a number of its small market radio properties is continuing, with bids due on February 23. While this is not the end of the process, as the bids will have to be analyzed, and then the high bidders will have further diligence and bidding opportunities before any sale is complete, it does demonstrate that the process is moving forward, and that the 448 stations that Clear Channel plans to spin off will be sold later this year. As has been announced, there may well be additional spin-offs of larger market stations that cannot be held by Clear Channel under the revised multiple ownership rules when and if its transfer of control to the private equity buyers takes place. What impact will these sales have on the FCC's on-going proceedings - particularly the multiple ownership proceeding?

Whenever media consolidation critics discuss the consolidation that has occurred over the last 10 years, one of the biggest issues is always the 1000 plus stations owned by Clear Channel. If a significant number of those stations are divested, and some end up in the hands of new owners, how will the critics react? While, as we have written here before, the multiple ownership proceeding is not one we expect to be resolved any time soon, these sales, and those that we have seen in recent weeks by of other large radio and television companies spinning off non-core stations in smaller markets, may even reduce the pressure on the FCC to act on the multiple ownership proceeding - as more owners will have more opportunities to bid and perhaps buy broadcast stations. Once again, a reason to conclude that we should not look for any decision in the multiple ownership proceeding any time soon.

Tags: Multiple Ownership Rules

Posted on February 8, 2007 by Brendan Holland

The Media Ownership Road Show Continues

This article is no longer available. For more information on this topic, see Another Localism Hearing and Service to America

Tags: Multiple Ownership Rules

Posted on January 28, 2007 by David Oxenford

The Fairness Doctrine - Prescription for Bland Broadcasting

The new Congress has started its oversight of the FCC, and one of the first topics to be brought up is the reintroduction of the Fairness Doctrine. Presidential candidate and head of the House of Representatives Domestic Policy Subcommittee of the House Government Reform Committee, Dennis Kucinich, was the first to call for hearings about the reintroduction of the doctrine. Others have joined in that cry, including it in a bill introduced in the House and Senate to reform the media ownership rules. But do these perhaps well-intentioned Congressmen really remember what the Fairness Doctrine meant? Basically, bland broadcasting.

The Fairness Doctrine was, for the most part, declared unconstitutional by the FCC in the late 1980s (though some limited aspects of the policy have persisted until very recently). The Commission decision finding the Doctrine to be unconstitutional made sense, as its application clearly abridged the free speech rights of broadcasters. Basically, the Fairness Doctrine required fair and balanced coverage of all controversial issues of public importance. While that may sound like a good goal (one good enough to be adopted by Fox News), in fact it resulted in bland programming.

Tags: Fairness Doctrine, General FCC, Multiple Ownership Rules, Political Broadcasting, Programming Regulations

Posted on January 21, 2007 by David Oxenford

What's Up in Washington for 2007?

About this time every year, predictions are offered as to what will happen in the coming year. Since everyone else does it, we've offered our own predictions as to what Washington has in store for the broadcast industry in 2007. Find a copy of our predictions in the memo on our firm website, here. The advisory offers our thoughts on many of the regulatory issues affecting broadcasters that may well come out of Washington this year. Our observations are offered on the status of considerations including multiple ownership, the digital television transition, payola, indecency, Internet radio and even the political broadcasting rules.

Let us know if you think our crystal ball is a little cloudy.

Tags: Advertising Issues, Digital Television, General FCC, Internet Radio, Multiple Ownership Rules, Payola and Sponsorship Identification

Posted on January 1, 2007 by David Oxenford

3-2 - A Split Commission

Two recent decisions show a stark divide in the approach of the Democratic and Republican FCC Commissioners which may indicate the difficulty of reaching consensus on any of the pressing issues which will be facing the FCC in this new year. The FCC decision on the AT&T acquisition of BellSouth, approved by FCC action on Friday, was a result of AT&T throwing in the towel, surrendering to the demands of the two Democratic Commissioners who were seeking greater consumer protections before voting to approve the acquisition. In that case, as one of the Republican Commissioners had removed himself from consideration of the matter due to a conflict from a previous job, the Democrats had an effective veto over any FCC decision.

In the decision reached right before Christmas, requiring local municipalities to act quickly on new video franchise applications and restricting the conditions that could be put on such approvals, the Commissioners again split on party lines. The three Republicans argued that the restrictions were necessary to encourage the entry of new competition in the multi-channel video world, resulting in the potential of lower prices to consumers. Democrats, on the other hand, contended that the rules were beyond the FCC's power. Beyond what some might see as the role reversal represented by the votes (the Republicans looking out for consumer interests while the Democrats were protecting states rights, with Commissioner Adelstein even quoting Ronald Reagan in his dissent), one wonders why these positions broke down on party line. If the proposal really did exceed the Commission's power, shouldn't Republicans and Democrats alike refrain from acting? And if the result of this action was really a benefit to consumers, shouldn't Commissioners of both parties have looked for ways that the rules could be adopted within legal bounds?

The seeming inability of the Commissioners to reach consensus on most big issues does not bode well for prompt action on some of the major broadcast issues facing the FCC. We've already seen a decision on adopting final standards on digital radio (including authorizing nighttime digital operations for AM stations) postponed for over 6 months, reportedly based on arguments over the public service obligations of multicast channels. And how will the contentious multiple ownership debate be resolved? And what will happen should one of the Republican Commissioners leave the Commission during the course of the year? It certainly will be interesting to see these issues play out during the course of this new year.

Tags: Cable Carriage, Digital Radio, General FCC, Multiple Ownership Rules

Posted on December 29, 2006 by Brendan Holland

Media Bureau Ownership Studies Released

This article is no longer available. For more information on this topic, see Study Released Showing Effects of Broadcast Consolidation - Broadcasters Should Pay Attention

Tags: Multiple Ownership Rules

Posted on December 18, 2006 by David Oxenford

FCC Extends Filing Date for Multiple Ownership Reply Comments

In an Order released today, the FCC extended the time for filing reply comments in its multiple ownership proceeding to January 16. Those comments were initially due later this week.

The extension came in response to a seemingly reasonable request filed by Media General, asking that the comment deadline be extended until after the FCC issues the results of the studies that it is conducting on various issues associated with the proceeding, assessing the impact of media consolidation on the public interest. Seemingly, that would make sense - to give the parties the opportunity to comment on the findings of these studies and what impact these findings would have on the issues at stake in this proceeding. But the Commission denied that request, but nevertheless extended the filing period until January 16.

No doubt, even though the comment date was not extended, comments will still be filed on the studies - though they may have to be submitted as "ex parte" filings - informal comments that can be submitted throughout the course of the proceeding, even after the formal comment deadlines have passed.

Tags: Multiple Ownership Rules

Posted on December 4, 2006 by David Oxenford

Localism Grows - Online

Two articles published today talk about on-line media, and the growing importance of local content in advertising and audience growth. These articles emphasize the long-term importance for broadcasters to capture the local audience that they have controlled over-the-air for so long as that audience makes the transition to the world of Internet media. This growth of on-line media covering local events and issues, and chasing local advertising dollars, may also figure into the current multiple ownership debate as it tries to assess the dominance of the broadcast media, the new competitive forces, and how much ownership regulation is still necessary.

One article, in today's Washington Post, explores the transition of certain Gannett newspapers to on-line sources of micro-news covering all sorts of community events that the printed paper and the broadcast news programs would usually ignore. The broad coverage of very local events in the community, together with user-generated content posted to the site, and reader contributions to investigative journalism conducted by the paper, are intended to involve the whole community in the web version of the paper.

The second article, from today's New York Times, talks about how search engine Ask.com is introducing a service called AskCity, using search technology on a local basis to highlight local business and events, and to tap into local advertising dollars. These two articles highlight how the Internet can and will be a local medium, with which the broadcaster will have to compete to an even greater degree in coming years.

Tags: Multiple Ownership Rules, On Line Media

Posted on December 3, 2006 by David Oxenford

FCC Announces Details of Multiple Ownership Field Hearing

The FCC on Friday announced the details of the next multiple ownership field hearing to be held in Nashville on December 11. As in the October hearing in Los Angeles, the hearing focuses both on the specifics of the local market, as well as an industry segment and how consolidation has affected that segment. In Los Angeles, the hearing focused on television program production companies. In Nashville, the focus will be on the music industry, and the impact that media consolidation has on that industry.

As many will remember, after the FCC adopted its short-lived relaxation of the ownership rules in 2003, many in the music community argued that media consolidation adversely affected the ability of new artists to get their music played on the radio. In the localism proceeding which followed the 2003 order, the FCC asked questions about whether local artists were able to get airplay on radio stations, and whether stations should be required to include some amount of local music content on their stations. These questions are sure to be aired in Nashville at the December 11 hearing.

Tags: Multiple Ownership Rules

Posted on November 17, 2006 by David Oxenford

2006 - Shrinking Big Media - Without Ownership Reform

For the last 10 years, since the liberalization of ownership rules under the 1996 Telecommunications Act, the broadcast industry has been in the process of putting together cross-market platforms in radio, television and newspapers in markets across the country. In the flap over media ownership that began with the FCC's 2003 multiple ownership decision, and which continues through the current proceeding, media critics have sought the shrinking of big media companies, which they hold responsible for everything from violence and indecency on the airwaves to the lack of new music on radio. Now, suddenly, 2006 has brought a restructuring of big media, without any government intervention whatsoever. What impact will this restructuring have on the current proceeding?

The announcement by Clear Channel Communications that it is being sold, and at the same time it's selling all of its television stations and over 400 of its radio stations in 90 smaller markets, is but the most recent example of that emerging trend. CBS, which itself was split off from Viacom, is in the process of selling off a number of its radio properties in smaller markets. ABC also has a deal to sell off the bulk of its radio properties, and announced in its comments in the current multiple ownership proceeding that it did not care what the FCC did, as it had no intent of acquiring any additional broadcast stations or newspaper properties. Similarly, Tribune is exploring strategic options that reportedly include splitting its broadcast and newspaper properties. The New York Times has also announced that its exploring spinning off its television properties.

All of this unforced media divestiture should have an impact on the current multiple ownership proceeding. On a practical level, who is going to push for the current proceeding to be completed? Many of the players who were active in the past no longer seem like they will care about the outcome of this proceeding, and others seem like they will be preoccupied, at least in the short term, with their business deals. While the FCC has announced the scheduling of its second field hearing (in Nashville on December 11), it still has 4 more promised hearings to hold at some point in the future. Unless these are scheduled quickly, and without the big players pushing the FCC to move quickly, the decision could easily drag.

So who is left to actively push the FCC to reach a decision in this proceeding? On the TV side, Fox and Sinclair seem likely to be the most active proponents of great deregulation - and, based on past history, most likely to pursue court actions to obtain ownership relief if the FCC does not move quickly on the current proceeding. Gannett and the Journal Corporation own newspaper and TV stations and may push for more relief. Clear Channel had been the major proponent of further radio deregulation. Will their activity continue?

Tags: Multiple Ownership Rules

Posted on October 29, 2006 by David Oxenford

Multiple Ownership - Still Relevant?

In Today's New York Times, a columnist concludes that the FCC's multiple ownership proceeding is "yesterday's news." Looking at the Tribune Company's recent financial issues and possible sale, the column asks whether anyone should really care about ownership issues in the light of the rapid changes in the media landscape brought about by the digital revolution. Whether or not anyone cares, the changes in media competition, and potentially in the political landscape after next week's election, may well mean that there will be no significant ownership reform for quite some time, perhaps not until 2009 - after the next Presidential election.

The Times column talks about Tribune's discussions of selling off its television stations as part of a financial restructuring. (The article does not mention that the New York Times itself is considering the sale of its television stations). Tribune has certainly been one of the parties pushing newspaper-television cross-ownership relief. As they look at restructuring, will they pay attention to the FCC's proceedings? And Clear Channel was one of the parties in the forefront of attempts to further loosen radio ownership restrictions. They, too, are reportedly considering a financial restructuring or sale. Will these actions distract two of the most active proponents of relaxing the ownership rules?

In the comments in this proceeding filed last week, ABC Disney essentially took itself out of the proceeding saying that they did not advocate changes in the ownership rules, as they are selling their primary radio assets, are out of newspapers, and are investing in new technologies to get their message out. With the opportunities of the Internet distribution of video and audio programming, are there other broadcasters, anxious to own more traditional media, who will take the lead in this proceeding? With over-the-air digital radio and digital television both offering multicast opportunities, do these technologies themselves take some of the urgency out of ownership relief?

Tags: Multiple Ownership Rules

Posted on October 19, 2006 by Brendan Holland

Reminder -- Comments due Oct. 23rd in Multiple Ownership Rule Making

This article is no longer available. For more information on this topic, see FCC Extends Filing Date for Multiple Ownership Reply Comments

Tags: Multiple Ownership Rules

Posted on October 16, 2006 by David Oxenford

Telco Merger Setting a Model for the Ownership Rules Process?

Last week, the FCC had on its open meeting agenda the approval of AT&T's acquisition of BellSouth. After the Democratic Commissioners were not ready to vote for approval of the transaction, the Commission delayed approval of the deal to give the public the opportunity to comment on some possible conditions to be put on the merger. Does the process followed in this major Telco merger set a precedent that might be used in major broadcast proceedings, including the current multiple ownership proceeding?

In the AT&T/Bell South merger, the two Democratic Commissioners objected to approving the deal without conditions. As AT&T was willing to accept some conditions on the merger, the Chairman decided to ask for public comments on those conditions (see FCC public notices here and erratum here). This was much the same process that the Democratic Commissioners complained was not followed in the summer of 2003, when the Commission tried to adopt revisions to the multiple ownership rules that were later largely thrown out by the Third Circuit Court of Appeals. The Democratic Commissioners had contended that the rules adopted in July 2003 should have been been put out for public comment before becoming final - in which case some of the issues that came up in the Third Circuit, such as questions about the Diversity Index, would have been avoided.

As the Commission has now used this process in a major Telco merger, might it follow the same process before adopting any final rules in the Multiple Ownership proceeding? In many ways, it was the process that the FCC used in adopting the new rules on children's television issues (though the FCC actually adopted new rules, the effect of the rules were stayed, while the Commission considered revisions proposed by major stakeholders before it adopted its revised set of rules late last month). The Democrats reportedly asked for assurance that, before the Notice of Proposed Rulemaking was adopted in the multiple ownership proceeding, public comment would be sought on any final rules. As there were three Republicans on the Commission who outvoted the Democrats on the ownership issues (while there were only two Republicans voting on the Telco merger as Commissioner McDowell recused himself ), no assurance of public comment on draft final rules was provided. But perhaps, as the ownership Notice of Proposed Rulemaking had so few concrete proposals (see our summary of the proposals), this Telco case will signal a new procedure for dealing other major controversial issues.

Tags: Multiple Ownership Rules

Posted on September 18, 2006 by Brendan Holland

Deadline for Comments in Multiple Ownership Rule Making Extended until Oct. 23rd

This article is no longer available. Fior more information on this topic, see FCC Extends Filing Date for Multiple Ownership Reply Comments

Tags: Multiple Ownership Rules

Posted on September 14, 2006 by David Oxenford

Flurry Over Consolidation Study

With only a week to go before comments are due in the FCC proceeding to determine whether or not to change the Multiple Ownership Rules (our summary of the issues on which the Commission sought comment can be found here), a controversy has arisen over a 2004 study concerning the effects of local ownership on news programming. During the confirmation hearing on Chairman Martin's second term on the Commission, soon after the Chairman expressed his open mind about the outcome of the multiple ownership proceeding, California Senator Barbara Boxer produced a surprise. She produced a report written by FCC economists purporting to show that television stations that are locally owned air more local news programming. This report, though written in 2004, had never been released to the public.

The clear implication was that the Commission had tried to bury the report though as it contradicted FCC proposals to loosen ownership restrictions. According to a report in TV Newsday, the Chairman today sent a letter to Senator Boxer stating that neither he nor any of the other Commissioners knew of the existence of the report or any efforts to suppress its release. However, in another news report released today, a former FCC attorney said that senior managers at the Commission ordered "every last piece" of the report destroyed.

Tags: Multiple Ownership Rules

Posted on July 31, 2006 by David Oxenford

Revised Summary of Multiple Ownership Proceeding

As we noted last week, the Commission finally released the text of the multiple ownership rulemaking proceeding. Comments in the proceeding are due on September 22, with reply comments due on November 21. A revised summary of the issues raised in the proceeding is now available on our website.

Tags: Multiple Ownership Rules

Posted on July 25, 2006 by David Oxenford

FCC Releases Text of Multiple Ownership Rulemaking

Yesterday, the FCC released its text of the Notice of Proposed Rulemaking on Multiple Ownership. The text summarizes the findings of the Commission in its 2003 multiple ownership proceeding, the questions about those decisions that were raised by the Third Circuit Court of Appeals, and then basically asks for public comments - without making any specific proposals on how to deal with the issues that have been raised.

With so little guidance from the FCC, this is going to be a wide-open process. The FCC doesn't give any hint on how it is leaning on any issue, nor even suggest how to address many of the open issues. Given the issues that were remanded by the Third Circuit to the FCC, and the broad spectrum of issues raised in the Petitions for Reconsideration (all of which will be considered in this proceeding, but on none of which the FCC made any comment or suggested any way in which they would treat the issues raised), there is almost no ownership rule that is off limits in this proceeding. In fact, the FCC could quite well revisit all the ownership rules decided in the 2003 Order, with the possible exception of the Television national ownership limits which have now been set by statute (though the FCC again raises the question of the "UHF discount" that goes into computing the national cap - asking if that discount should be retained).

A summary of some of the issues involved in this proceedings is contained in our client advisory - Multiple Ownership, Yet Again - sent out after the FCC meeting last month that announced the initiation of the new proceeding.

With so much to consider and so little guidance, this will be a long process.

Tags: Multiple Ownership Rules

Posted on June 24, 2006 by David Oxenford

Multiple Ownership and Digital Media

On Friday, June 23, several of our attorneys attended the Digital Media Conference at Tysons Corner, Virginia. Tysons is in suburban Washington DC, and is at the center of Northern Virginia's technology corridor. The Conference was excellent, bring together well over 300 people to discuss various topics relating to the media industry.

Bob Corn-Revere of our office spoke on a panel dealing with government content regulation of the media, including a discussion of indecency. I was on a panel dealing with other FCC matters that will affect the media. One topic that I was addressing was the FCC proceeding, begun only two days before the Conference, reopening the debate over the media ownership rules. A summary of the issues to be considered in this proceeding is available on our website.

In preparing for the Conference, it occurred to me that the debate over the multiple ownership rules really ties into the discussions of the broader media marketplace, and the other issues and debates going on in that marketplace. Everything from net neutrality to the setting of music royalties for webcasters operating Internet radio stations tie affect the debate on multiple ownership. Continue Reading...

Tags: Multiple Ownership Rules