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.

 

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. 

Splitting a Television Station License - Ion and Robert Johnson Propose a Unique Concept for Increaing Media Ownership

This week, an interesting concept has been advanced in a series of applications filed with the FCC.  Ion Media Networks, the successor to Paxson Television, has proposed to transfer some of its broadcast stations to a new company, Urban Television LLP, to be owned 51% by Robert Johnson, the former owner of BET, and 49% by Ion itself.  But, when we say that they are transferring "some" of its stations, we don't mean that any of its stations are being transferred, but instead only that a piece of its stations are proposed to be transferred.  Ion proposes to continue to own and operate stations in every market where it currently operates, but proposes to sell digital multicast channels to Johnson. Unlike any LMA or other programming agreement, the proposal is to actually take one 6 MHz television channel and break it up so that Ion continues to program one channel with its programming and the Urban Television will program the other channel with its programming, and become the actual license of that portion of the spectrum.  The FCC has accepted the applications and issued a Public Notice, giving parties 30 days to file comments on the proposal. 

It is not unheard of for two licensees to share the same channel - though where it is currently occurs most frequently is in connection with noncommercial broadcasters who share a single radio or TV channel, they divide it by time, so that one licensee operates, say midnight to noon and the other operates from noon to midnight.  Obviously, in these shared-time arrangements, both broadcasters are not operating on the same channel at the same time.  This new proposal, though, does not come out of the blue.  The idea of allowing a broadcaster to sell a digital channel to a different company, has been proposed before, for both Digital Television and Digital HD Radio channels when the original station is multicasting, as a way to increase diversity of ownership.

For instance, the Diversity and Competition Supporters Coalition, a group of national organizations who promote the increase in opportunities for new entrants into broadcast ownership, proposed to the FCC such arrangements as ways to increase minority ownership and ownership by other new entrants.  DCS made these proposals several times, commenting in support of the concept in the Commission's proceeding to encourage Diversity in media ownership.  In the Diversity proceeding, the Commission specifically made the proposal to allow shared time arrangements to operate in both digital radio and television, though the Notice of Proposed Rulemaking focused on HD Radio digital multicast channels, rather than digital television multicast channels.  The Commission has yet to rule on this proposal.

In the past, Chairman Martin had indicated his interest in this type of arrangement.  While the split in ownership is probably not terribly controversial in and of itself, what may well be likely to draw objection is the associated request for must-carry rights for both the existing "main" station and the new "station" that would be spun off to the new licensee.  Chairman Martin has many times been seen as being in favor of multi-cast must carry rights for television broadcasters, though he has not yet been able to convince a majority of the other Commissioners to back such a proposal.  Cable and satellite television interests would, of course, be concerned about such an expansion of must-carry obligations.  The ability to sell digital subchannels and to create new television stations with must-carry rights could substantially multiply the number of television stations that cable systems would have to carry.  This could well be an issue that will be challenged.  And, with this specific proposal now before the FCC, the Commissioners may finally have to rule on the issue, though when such a ruling might come is anyone's guess.