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.
The philosophical issue of whether or not regulation was necessary, and whether regulation can be accomplished in a manner that avoids constitutional issues, was a focus of much back and forth. All panelists seem to concede that it was problematic for government to regulate content directly. Several of the panelists suggested that the structural rules embodied in the multiple ownership restrictions were necessary to accomplish the ends that could not be directly mandated consistent with the First Amendment, like encouraging more local programming and more coverage of local issues. Ken Ferree, the former head of the Media Bureau and now affiliated with the Progress and Freedom Foundation, asked some of the more regulatory-minded panelist how, if the purpose of this structural regulation was to accomplish goals that could not be directly mandated, could the indirect regulation be justified when done for a purpose that admittedly was prohibited. That question did not seem to have a direct answer.
The Media Bureau representatives who were conducting the panel asked whether regulation should take into account the current economic conditions of broadcasting. The more regulatory public interest members suggested that the current economic problems of broadcasters were not an intrinsic problem with the industry. Instead, these representatives suggested that broadcasting, on a cash flow basis, was still a successful business, and that the current problems of broadcasters were due to their high debt loads. Based on this belief, the representatives of several of the groups felt that, because broadcast owners had put themselves in the situation that they are in, the Commission should not concern themselves with their current economic plight when making regulatory decisions. One panelist went so far as to say that, if broadcasters don't like the regulations that may be adopted, they don't have to operate under them - they can sell their stations or turn in their licenses.
While there is no doubt some truth to the contention that high debt burdens have caused some broadcasters current economic issues, it seems that these public interest representatives far understate the structural issues facing broadcasters. We have written about the licenses for television stations which have been surrendered because there is no one who was willing to face the costs of the digital conversion, and of AM stations that simply can no longer make a go of their operations. These are not imagined problems, or problems caused by debt burdens, but instead real economic issues that have caused stations to go dark and licenses to be surrendered due to changes in the media marketplace.
Several of the panelists suggested that the decisions made by the Commission be data driven - based on research and factual data. However, many complained that sufficient data was no available to make the necessary determinations. Suggestions on data accumulation included the Commission's rapid implementation of the Form 355 for television (which it has already been approved but not yet implemented) and for radio (where it was proposed as part of the localism proceeding). There was other discussion about bringing back FCC Form 324, which required the reporting of annual financial information about the costs and revenues of broadcasters until the form was abolished in the early 1980s. When asked about the paperwork burden of requiring this information, the suggestion was made that this was simply a cost of doing business in a regulated industry, and broadcasters needed to provide the information for the FCC to make good decisions. Clearly, these individuals have never run a small market radio station, where such burdens can be crushing.
These proposals don't reflect anything more than the views of the parties who were represented. But, as referenced above, these are parties active in Washington and accustomed to dealing with the FCC. They will be filing comments in the Quadrennial Review and lobbying the Commission on these matters. And, from the fact that they were included on the panels, they have at least some attention of those within the FCC. So broadcasters must note their concerns, and be prepared to respond to these issues when they are formally presented to the Commission.
