Posted on July 30, 2009 by David Oxenford

FCC Chairman Confirms Proceeding to Review the State of Journalism, And Expresses Views on Content Regulation

An interview with FCC Chairman Julius Genachowski has just been released by Broadcasting and Cable magazine.  In that interview, the Chairman confirms press reports (which we cited here) that there is a planned FCC Notice of Inquiry to look into the news media in the digital world - the first public confirmation of this inquiry from on-the-record FCC sources that I've seen. The Chairman stated, however, that there was no timetable for the initiation of this proceeding.  He also confirmed that he believes that broadcast content regulation is justified given that many Americans still rely on over-the-air television as their only source of video programming.  The interview touches on the children's television rules, indecency enforcement, diversity in the media and even FCC delays in processing applications for the sale of stations against which petitions have been filed.

We suggest reading this interview, as it is the first extensive discussion we've seen by the new Chairman of his views on regulation of the broadcast media.  And, for anyone who had hopes that broadcast regulation would simply fade away, it looks like there may be some FCC proceedings to slog through before those hopes are met. 

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Posted on July 29, 2009 by David Oxenford

A Full Five Person FCC - What's Next For Broadcasters?

For the first time since the term of FCC Commissioner Tate expired and Chairman Martin resigned, the FCC will be back to full strength with the Senate's approval of new FCC Commissioners Mignon Clyburn and Meredith Attwell Baker.  What issues of importance to broadcasters will the Commission, now headed by Chairman Julius Genachowski, take up in coming months?   The new Chairman, who gave a number of interviews last week with the trade and popular press, emphasized the importance of the broadband rollout.  Beyond that, his priorities for the broadcast media were not detailed.  He did, however, emphasize, that any broadcast regulation (specifically referencing the mandatory review of the broadcast ownership rules that must begin next year), would have to take into account the realities of the marketplace - including the current economic conditions.

Beyond that, there were few clues as to the new FCC's priorities in the broadcast world.  But, even though there are no indications of the FCC's priorities, there are many open broadcast issues that the Commission will, sooner or later, need to resolve.  Some involve fundamental questions of priorities - trying to decide which user of the spectrum should be preferred over others.  Other issues deal with questions of what kind of public service obligations broadcasters will face.  And yet another set of issues deal with just the nitty gritty technical issues with which the FCC is often faced.  Let's look at some of these open issues that may affect the broadcast industry. 

In the first category - the issues of priorities of one type of service over another, issues include the following:

  • The priorities between LPFM stations and FM translators and full power stations (see our posts here and here on that issue)
  • Final resolution of the White Spaces issues - implementing the FCC's decision to make TV spectrum available for use by wireless devices, or reconsidering that decision based on the pending appeals by the television industry
  • Deciding whether to take TV channels 5 and 6 and change them into radio channels (see our post here), when a limited number of full power TV stations, as well as a number of LPTV stations are currently using the channels
  • Making a decision about increased HD radio power, which some other FM stations that rely on service at the fringes of their protected contours or or beyond worry would interfere by such power increases

In the second category of issues - the question of what public interest regulations the Commission should impose on broadcasters, issues include:

  • Dealing with the Petitions for Reconsideration of the FCC's decisions to require TV stations to put their public files on line and to complete the Form 355 detailing all of their public service programming in minute detail - rules adopted in late 2006 but never implemented or even sent to the Office and Management and Budget for review of their compliance with the Paperwork Reduction Act
  • Resolution of the FCC's localism proceeding proposing regulations including:
    • A return to mandatory main studios in the station's city of license
    • Manned main studios during all hours of station operations
    • Mandatory public service obligations for broadcasters
    • Consideration of the process for the selection of music on broadcast stations and whether more local music should be required
    •   Potential extension of the TV public file and Form 355 obligations set out above to radio
  • Issues about the Arbitron PPM and whether it discriminates against minority owned stations
  • Resolution of the rural radio proceeding which includes questions about what kind of service stations need to provide to their city of license
  • Decisions on the proposals to mandate stricter sponsorship identification rules allegedly to protect the consumer from being influenced by undisclosed sponsors

Other more technical or procedural issues are also pending before the Commission, including:

And, of course, there are those issues that never go away.  Indecency cases are still pending before the Courts, so the Commission may once again have to face that issue.  And there is that little question of the Fairness Doctrine that just refuses to go away.  I'm sure that there are other issues that have escaped my mind while I'm writing this - but even if there were not, it is clear that the new Commission has plenty to keep it busy without even needing to bring up any new issues for the broadcaster.  And Congress can always give the FCC new things to do, like reregulating children's television programming or restricting prescription drug advertising.  Let's hope that these keep the Commission plenty busy for now, and that they don't have time to start anything new. 
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Posted on January 24, 2009 by David Oxenford

Commissioner Michael Copps Named As Acting FCC Chairman - What Does It Mean for Broadcasters?

On Thursday, the Obama administration appointed FCC Commissioner Michael Copps to be the Acting FCC Chairman until the administration selects its permanent Chairman, and that person is confirmed by the Senate.  As we've written, the rumors are that the permanent Chair will be Julius Genachowski, a former classmate of the President.  But, as far as we know (and according to the White House website's list of appointments made so far), that appointment has not yet been formally made and sent to the Senate Commerce Committee for the initiation of hearings on the qualifications of the nominee.  Commissioner Copps is the most senior of the remaining three Commissioners (Democrat Jonathan Adelstein and Republican Robert McDowell being the other two remaining Commissioners), and has been an outspoken advocate of more stringent regulation of the public interest performance of broadcasters (see, for instance, our posts here and here).  What will his appointment as interim FCC chairman mean for broadcasters?

Initially, it would seem reasonable to assume that the Acting Chair will be principally occupied with the DTV transition, as least for the next few weeks, and perhaps longer if the pending legislation to delay the transition deadline until June 12 is adopted.  It would also seem reasonable to assume that the Commission, at least for the short term, will not be tackling major regulatory initiatives (like the localism proceeding), until the permanent FCC Chair has taken office.  One of the initial Executive Orders that was issued by the Obama administration was to freeze the actions of administrative executive agencies until the political appointments made by the administration have been confirmed and taken their places, so that the new administration is not saddled by regulations that don't fit with its overall political agenda.  While many in DC believe that this order does not apply to an "independent agency" like the FCC (which technically does not report to the administration, but instead to Congress), it would be reasonable to assume that the spirit of the order would be followed by the FCC.

In addition, one would hope that the changes in the business outlook for the advertising supported media brought on by the current economic climate would change some of the Commissioner's past positions on some of the issues facing broadcasters (see this Hollywood Reporter article on a Stanford Group analysis of public media companies, including a sell recommendation on "just about anything related to radio.")  Just as the Obama administration has recognized that the economic conditions have meant that it must postpone some of its legislative initiatives (like tax increases on high income individuals), it would seem that imposing additional costs on broadcasters when their revenues are on a dramatic downturn, when their staffs are being cut, and when a number of major broadcasters have already declared bankruptcy and others have current stock values far less than their outstanding obligations, would not bring about increased public service, but instead might well bring about more station's going off the air or further limiting their service.  Now is not the time to be counterproductive by damaging the economic health of an industry that, more than just about any other, produces virtually all of its jobs here in the United States.
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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?

I've seen some speculation in various reports that the new Commission will roll back the 1996 Telecommunications Act broadcast ownership reforms (which are, for the most part, statutory, so that they can only be undone by an act of Congress, not by the FCC), or at least that the Commission will roll back the limited multiple ownership relief granted to newspaper owners in the largest broadcast markets, allowing combinations with broadcast stations in those markets (see our summary here).  Those beliefs seem far-fetched, given the state of the broadcast industry.  And not only far-fetched but unnecessary, as there are few newspaper companies that have the financial ability to buy a daytime-only AM station much less a TV in their markets, and radio group ownership similarly seems to be coming undone by the workings of the market, as many aggregators are selling off stations - many at prices unheard of a year ago.  We've previously quoted the musings of a broadcast trade-press reporter, who stated "I often wonder if the newspaper-broadcast cross-ownership rules will outlive newspapers themselves."  With the news of the cut-backs in the publication of the Detroit Newspapers, the announcements of sales or shut-downs of competitive newspapers in Seattle and Denver, and even an article speculating on the potential bankruptcy of the New York Times (since disputed by the Times ), the fear of the power of the old media simply does not cut it in today's media world. 

In fact, a Commission focused on the future will be looking at what the real state of media competition is and will be in the future.  in the last week, we seen multiple reports from the Consumer Electronics Show, all about the Internet connectivity of all sorts of devices.  New devices, like TVs with built-in connectivity, so that you can watch your YouTube videos (or those from Hulu or other sites with aggregated television programming) on your wide-screen TV, will no doubt further erode the market share of television stations.  Radio, too, was greeted with articles about mobile Internet receivers, bringing Internet radio and other Internet audio sources to cars and even bedside clock radios - meaning more competition.  In this environment - does the FCC need to regulate broadcast localism?  Not when broadcasters will be doing it out of self-defense, as localism will truly be the only way that broadcasters can distinguish themselves from the flood of other media coming to every consumer.  The government does not need to tell broadcasters how to serve their communities - they will be or they will be gone.

So, we too will be hopeful for the future, and will welcome the new Chairman and will here watch the actions that he takes that will help to shape the future of the broadcast industry. 
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