Localism Without Government Regulation

This past week, I attended the BIAfn Winning Media Strategies Conference in Washington, DC.  During the course of the conference, there was much talk about how broadcasters and publishers need to provide unique service to their communities in order to survive in the competitive media marketplace.  The point was made over and over again that, in each market there are unique attributes and personalities that a station should be covering in its programming, and should be exploiting even more broadly through their digital assets, to tie it to its community.  Only by doing so will the station be able to survive in the new media environment - and by doing so, the station may be able to thrive.  In fact, I was stuck by a statement by USC's Adam Clayton Powell III that domination of the local online and digital media marketplace was "the broadcasters to lose."  In other words, the broadcaster has such unque promotional abilities with its current audience that it can establish its brand in the online and in the mobile world far easier than other media players.  But there were also the repeated warning that there is more and more competition for this local digital market from new entrants and other media entities and that, if the broadcasters did not take advantage of their current advantage, the local service would come from someone else.  What most stuck me was that there was no question that the superservice to local needs would be coming from someone - broadcaster or not - as a result of marketplace developments, not because of any government mandate.  The broadcaster has to adapt to and compete in this new media marketplace or become culturally and economically irrelevant.  The broadcaster needs to serve the local market to meet these challenges, not because some Washington agency has ordered him to do so.  And the broadcaster needs to serve his community in a way that the public will find compelling, not in a way that the government thinks is best.

At BIAfn, the presentation that made the greatest impact was probably that of Greenspun Media from Las Vegas, which has reinvented a secondary newspaper and a Low Power TV station as an on-line powerhouse, uncovering the aspects of the community that would draw the largest audience and covering that information in great detail.  The Las Vegas Sun site not only covers hard news, but also the gaming industry, University of Las Vegas sports and even state government issues in a way that its audience seems to find interesting.  Even a history of Las Vegas, in great detail, is included.  And video plays a big part of the site, with the company in development of a hip news and events program, 702.tv, that will soon be a daily program on the television station and online (featuring local "celebrities" doing the weather, including strippers and Neil Diamond sound-alikes).  While some attendees at the conference thought that Las Vegas presented unique opportunities that might not be available in all communities, many were immediately speculating on the opportunities in their own communities to find unique personalities and events that could be developed on-air and on-line in ways to maximize their connection with their audience. 

After the conference on Friday, I found two emails waiting in my inbox from broadcast industry pundits, both echoing the same sentiment that was reflected at the conference - that broadcasters need to take advantage of their current connection with their markets to grow their digital platforms, or someone else will come along and preempt the opportunity.  See the comments from Hear 2.0 and Inside Music Media - both making the case that broadcasters must change to serve their communities to meet the new competitive threats.  The message seems clear - broadcasters need to serve their communities or someone else will (see this blog post by USC Professor David Westphal, cited by Powell in his remarks, about how these other new media entrants can micro-target audiences and survive economically) .

All of these commentators seem to agree that there will be more and more service to local communities - either provided by broadcasters or by someone else.  And this service will be provided without the need for any FCC mandates.  The service will come if there is a market for that service - a need that can't be artificially manufactured by government fiat.  The FCC in the mid-1980s recognized that a broadcaster would either provide local service or be replaced by someone else who would, justifying the abolition of detailed public interest requirements.  This was a full decade before the service that is now provided by the Internet was even a possibility.  To now talk about reviving those detailed localism mandates, when the competition is far greater than anything imagined in the 1980s, seems almost impossible to justify.  We'll see what happens as the FCC deals with its localism proceeding in the near future.

Even Though Old Media May Be Dying - Let's Regulate Them While We Can - Broadcast License Renewals Every Three Years?

In a speech to the Free Press Summit, Acting FCC Chairman Michael Copps suggested that broadcast license renewals should no longer be a "postcard", but instead should be a real test of the broadcaster's service to the public interest - and should happen every three years, rather than on the eight year renewal cycle that is currently provided for by the law.  While the Chairman acknowledged that many suggest that the old media are in troubled times and may well be supplanted by new forms of communications, "If old media is going to be with us a while still...we still need to get serious about defining broadcasters’ public interest obligations and reinvigorating our license renewal process."  In other words, while broadcasters may be dying, we should regulate them while we can.

First, it should be pointed out that the broadcast license renewal is no longer a postcard, and really hasn't been for almost 20 years.  The current renewal forms require certifications on many matters demonstrating a broadcaster's service to the public and its compliance with the rules, and additional documentation on EEO performance and other matters.  TV broadcasters also have substantial renewal submissions on their compliance with their obligations under the Children's television rules.  Issues of noncompliance with the rules resulted in many fines in the last renewal cycle, demonstrating that this is not a process where the FCC is without teeth.  Yet most of these fines were for paperwork violations (e.g. not keeping detailed records of EEO outreach or quarterly issues programs lists demonstrating the public interest programming broadcast by a station), not for any substantive claims that station licensees were fundamentally unqualified and should forfeit their licenses.  In fact, the Acting Chairman's speech recognizes that most broadcasters do a fine job serving their communities, yet he believes that more regulation is necessary to police those that don't.  But is this the time to be imposing additional regulatory burdens on all of the industry, for the actions of a few.  Will the overall public interest be served by such actions?  .

As we wrote years ago when this proposal was proposal was previously floated by Commissioner Copps, the license renewal process was lengthened based on findings that the old process was cumbersome and unnecessary - often provoking litigation and delay, but only rarely uncovering any real evidence of serious problems with a licensee warranting Commission action.  There simply were no benefits to the substantially increased costs of the 3 year license term.  Moreover, the processing of the applications imposed a substantial burden on an already overworked FCC staff that took their attention off of the processing of the many other matters already before them. 

The period was gradually extended - going to 5 years for TV and 7 years for radio, and reaching its current 8 year term as part of the Telecommunications Act of 1996.  The Act specifies that the license renewal term shall be for "not more than 8 years," theoretically leaving the FCC with the flexibility to decide on some term less than 8 years.  However, when the Commission decided in 1997 to extend the renewal term to the full 8 years, it did so relying on statements of Congressional intent that Congress had expected to lighten the regulatory burden on broadcasters by extending the term for the full period.  Thus, were the FCC to try to shorten this period, it would have to explain why these findings were no longer relevant.

According to Broadcasting and Cable, Commissioner Copps later stated that he did not expect to rule on localism issues, or presumably raise this license renewal extension, during his interim chairmanship.  And the NAB immediately objected to the proposal.  Yet, as this issue has been raised by the Acting Chairman before, and as he will remain on the Commission even when the permanent Chair is seated, we can no doubt expect to hear this proposal raised yet again, perhaps in a formal setting, in the near future.  Broadcasters should be prepared to address any such formal proposal.