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In assessing the continued effectiveness of its rules or, as the Communications Act puts it, whether these rules "are necessary in the public interest as the result of competition," the Commission set out the multiple goals that these rules are supposed to serve, and asked for comments as to how each such goal should be assessed, and how conflicts between these goals should be resolved.  The goals which the Commission seeks to serve by its ownership rules, and some of the issues addressed in connection with each of those goals, include:

• Competition - the Commission asks for comments on how to measure whether competition exists in a marketplace, how to define the market in which the competition is being evaluated, and what sort of competition it should be assessing.  The Commission suggests many different types of competition which may be relevant to its analysis, including: 
  • Competition between stations for the same viewers or listeners
  • Competition between services (e.g. radio, TV, etc) for the attention and time of the audience
  • Competition between stations for advertising revenue
  • Competition as it affects program providers
• Localism - the Commission asks many questions about localism and the impact of media ownership regulation on localism, including:
  • Whether the traditional focus of localism - the selection of programming responsive to local needs and interests and the quantity and responsiveness of local news - are all that the Commission should look at in assessing localism.  The Commission even asks how "news" should be defined, if news is indeed the appropriate measure of localism.
  • What other metrics can be used to asses localism?
  • Should the Commission attempt to measure the consumer's interest in "local" programming in making its decisions as to whether goals of localism are met by particular rules?
  • Should the Internet and other sources of information be assessed in determining local needs for programming from broadcasters?
  • How exactly do structural ownership regulations contribute to assuring localism?
  • Are the needs of advertisers and program content creators relevant to an analysis of the localism factor?
  • Whether minorities and other identifiable groups within a community are served by local stations, and to what extent each such group needs a separate voice in order to be served
• Diversity - many of the same questions that are considered under the Competition and Localism factors are also discussed under the Diversity criterion.  The Commission asks about various kinds of diversity, and seeks comments on how these various measures of diversity can be assessed, and which are the most important to the FCC's analysis.  Some of the differing diversity issues include:
  • Program diversity - maximizing the difference in programming on stations, which might actually be aided by common ownership, as a common owner is likely to program different things so as to not compete with itself
  • Viewpoint diversity - getting independent viewpoints on important issues to a community
  • Source diversity - whether the source of viewpoints needs to itself be different to serve the public interest, e.g. the same owner could program a conservative talk radio station and a modern rock radio station that might have different viewpoints on issues, but does the fact that one company is behind both have a public interest impact?
  • Outlet diversity - should the Commission be looking to maximize the number of independently owned stations in a market, and should diversity of the owners of these stations be an important goal (i.e. should minority ownership be a goal of the ownership rules)?

These are but highlights of the issues raised in connection with each of the Commission's identified goals.  Many more specific questions about how each of these goals can be best achieved, how to measure the achievement of the goals, and what factors need to be considered in connection with each of these goals, are all part of the NOI.  To get the full impact of the questions being asked, you need to read the full NOI.

The Commission also recognizes that these goals may at times conflict, and asks how these conflicts should be resolved.  It also asks what other issues should be considered.  For instance, should the impact of ownership rules on the status of "investigative journalism" be an important goal in the proceeding?  If so, how is this to be measured and defined. 

The Commission asks what kinds of rules are best to achieve the FCC's goals.  Which of the following types of rules should it choose?

• Bright line rules - these would be rules like those currently in place for local ownership.  If you meet certain numerical limits, your application is granted, no matter what other factors may be in place.  It has the advantage of ease of application and certainty for the parties, but may not take into account all public interest factors
• Case-by-case analysis - this would require that the FCC adopt policies, but not specific numerical rules.  The FCC would have to evaluate each proposed combination on its own merits, and independently assess whether that combination would serve the public interest.  While having the advantage of being flexible enough to catch any issues, it would also be time-consuming and costly, both for applicants and the Commission, and outcomes would not be certain
• Hybrid approach - this approach would use bright line limits, but allow public interest factors to be applied in certain cases to permit or deny certain combinations, regardless of their compliance with the numerical limits, if there are special circumstances.

In addition, that FCC asks if it should apply a broad, cross-media approach - looking at all media in a market, not just analyzing radio with other radio, or TV with other TV.  If so, how would a broader analysis work?

Two other questions were tossed into the end of the NOI.  One asked how the transition to digital operations should affect the rules, as TV no longer has the Grade A and Grade B contours that are specified in the current rules.  The Commission also asks about the National Broadband Plan, and how the FCC's interest in reclaiming some of the TV spectrum, and in the expansion of broadband generally, should impact the multiple ownership analysis.

This is obviously a very broad inquiry, requiring very detailed analysis and much thought to answer the many questions raised by the Commission, but which we have only touched on here. Yet the FCC provides only 30 days for comments, and 15 days for replies (all dates measured from the Federal Register publication, which will occur at some point in the near future).  So get your thinking caps on, and let the FCC know your opinions, so they can figure out where to go from here. 

It will be fascinating to watch this procedure unfold.  When one looks at the panels that the FCC has assembled, you will no doubt see positions being staked out that are at opposite ends of the spectrum.  For instance, on the panel of "public interest groups," you will have the former head of the Media Bureau at the time of the FCC's 2003 Multiple Ownership decision which dramatically loosened ownership restrictions, only to have that relaxation overturned by the Courts, on the same panel as several speakers who seem to oppose consolidation reflexively - no matter where it comes up.  How can both poles of the debate be representative of "the public"?  If I had to guess, I would bet that the public really falls somewhere in between - not all that concerned about most consolidation as long as it does not severely affect their media choices.

As we have written before, in today's media world, there has never been so much choice (see, e.g., our articles here and here).  The effect of competition from the Internet and other new media must be taken into account in this analysis as it has so profoundly affected the current media landscape.  While in 2003, the new media was mentioned as partial justification for the relaxation that was fleetingly adopted, who could have imagined only 6 short years ago, the impact that new media could have on "traditional" media, like the newspaper, once the dominant advertising medium in most local markets and now imperiled in many of those same markets.  As we have written before, it is quite possible at this point in time to imagine the rules against media consolidation with newspapers outliving the newspaper itself.  One hopes that this is not true for other forms of traditional media as well, though recent articles about the FCC potentially moving toward limiting or ending over-the-air television so that the spectrum can be freed for other uses suggest that there are other moves afoot that undermine concerns about the power of big media as regulated by the FCC.  This proceeding is one that all broadcasters should watch carefully, and in which they should participate aggressively, to make sure that your voice is heard when the FCC shapes that rules that will affect media ownership in the next five years - years that may well affect the very survival of many traditional media outlets. 

The broadcast industry is in an interesting position with respect to this decision.  While broadcasters do believe that, given the competitive pressures, there is a need for greater ownership deregulation such as that approved by the FCC in December, many do not believe that the deregulation has gone far enough.  There were some concerns by radio broadcasters that the December decision did not in any way relax ownership even in the largest markets, nor did it correct any of the anomalies created by the switch to a markets based on Arbitron definitions rather than contour overlap for use in computing the number of stations that one party can own in any radio market.

Perhaps most disappointed by the decision were small market TV operators, who were hoping for duopoly relief, allowing owners to operate more than one television station in the smallest markets, where the cost efficiencies of such operations would be the most beneficial.  There is an interesting article in today's tvnewsday, interviewing Bill Duhamel, a television station owner in small market Rapid City, South Dakota, about the operational and economic concerns that arise in that size market.  If the December decision stands, it will take a whole new FCC proceeding and the years of litigation that follow before there can be expected to be any relaxation of the local television duopoly rules in these small markets.

The resolution of disapproval is not the only avenue pending by which the December decision could be changed.  Parties on both sides of the issue have filed appeals and petitions for reconsideration that are still to be resolved.  Thus, no matter what happens in Congress, we have not heard the end of the multiple ownership debate. 

While the Commission's direction on newspaper cross ownership seems clear, less certain is the final result on the issues of the local ownership of broadcast stations.  While some television stations have pushed for greater ability to combine the ownership of local television stations, especially in smaller markets where such combinations can now only be established through waivers based on severe financial hardship (which take a very long time to process) or through arrangements that stop short of complete ownership or even direct combination of programming (see our description of one such shared service agreement, here).  With the increased costs of digital operations and other business challenges, many small market stations have been hoping for some regulatory relief, though convincing the Commission to allow less ownership diversity in small markets is always a difficult sell - no matter how good the economic justifications. 

Following the Commission's 2003 multiple ownership decision, the only significant portion of the decision to become effective was the tightening of the radio ownership rules.  While there have been some calls to relax the local ownership rules for radio, these calls seems somewhat muted -especially when contrasted with the calls from newspaper owners to be allowed back into broadcasting, and even when compared with the pleas of small market television for more ability to combine operations.  But, in connection with recent transfers of control of several large radio companies, there are numerous radio stations held in trust, awaiting disposition.  These trusts were formed because, after the 2003 tightening of the rules, certain local radio clusters were no longer in compliance with the rules.  The transfers of control triggered a divestiture requirement.  Could companies look to relief from the divestiture requirements through these upcoming rule changes?  And could the outcome of the proposed XM-Sirius merger affect the decision on local radio ownership?  If the Department of Justice and the Commission allow the merger by finding that these companies are not forming a monopoly in the satellite radio market because they are instead part of a larger market for audio services, wouldn't radio also be part of that greater market, and wouldn't that call for allowing more consolidation?  If one company can own 300 channels in a market, why should another be restricted to 8 (or maybe 13 or 18 should one consider what would happen if FM multicasting in the new IBOC digital radio format becomes more prevalent)?

Already, the anti-consolidation forces are beginning to muster opposition to any rapid resolution of the proceeding.  According to yesterday's Broadcasting and Cable report, the Senate Commerce Committee promised a hearing on the plans to bring the case to a close, while at least two Senators (a Democrat and a Republican) have already written the FCC a letter asking for a delay in the proceeding.   The anti-consolidation forces are also rallying to stop the decision (see the Press Release from the Stop Big Media Coalition, here). 

With so many questions to be answered, and the opposition that is already forming, we will see if the December decision is a real target - or but a trial balloon floated to see if anyone was paying attention.

But indecency and ownership are not the only broadcast issues on the Congressional agenda.  Bills to regulate violence on television are pending (see our post here).  Proposals have been made to regulate the advertising of unhealthy food to children, which have been stayed off temporarily by a government commission to study the issue and suggest voluntary guidelines, but at least one Presidential candidate has suggested (as we wrote here) that legislation is an option if the voluntary reforms don't go far enough and move fast enough.  And LPFM, about which we wrote here, also may rise on the Congressional agenda. 

The FCC may itself feel the heat to do something (almost anything) in the election year, and in the last days of the Presidential term and perhaps the last days of the terms of some of the sitting Commissioners (as there is usually substantial FCC turnover after an election, no matter which party wins).  Many FCC issues, from rumored new rules on payola and sponsorship identification, to old issues long waiting for resolution, like the taping of broadcast programs and the extension of broadcast EEO rules to part-time employees and the return of Form 395 all await action.  So, in the crazy days before the election, watch carefully to see what surprises your government has in store.