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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. 

We are certainly not advocating the adoption of such programming requirements.  In fact, we believe that such standards would be constitutionally suspect and would end up forcing all stations into cookie-cutter images of each other - at a time when the plethora of media choices now available demands that each station adopt a targeted identity catering to the needs of a unique and specific audience.  And in tailoring its service to specific audiences, a station cannot be constrained by specific program percentages, as each audience may have the same needs - some will not sit still for traditional news and public affairs programming, while others will demand it.  Forcing all stations to provide the same program choices simply leaves some audiences unserved.  While this may be most evident in radio, television will adapt too as there are more and more outlets for video programming.   TV will have to seek out the niches at which it will direct its programming.  Mandating a specific percentage of news, public affairs, election coverage, religious programming or anything else simply will not serve the public's interest in receiving wide and diverse programming choices.  For the individual consumer, having the programming that he or she wants when they want it is more important than insuring that some percentage of that station's programming is made up of local news.

As one broadcaster observed to me, these rules may have made some sense when broadcasters were all mass market stations, providing "full service" programming to their communities.  That was a time when there were few media outlets in each market, and to maximize audience, each station had to try to serve all elements of the community.  Now, as broadcast stations compete against programming coming from cable, satellite, Internet, mobile and other platforms, there really are few if any full-service stations, particularly in large broadcast markets.  Even broadcasters themselves, as they adapt to the multicast opportunities that are presented by digital transmission, will provide more competition in a marketplace, and hasten the need for focusing on the superserving the needs of particular audiences.

For now, the NAB is challenging in Court the implementation of the Form 355.  How the Commission will justify its retreat from the deregulation of the 1980s when it admits that this form currently serves no regulatory purpose is hard to imagine.  In the interim, comments on the potential for the adoption of specific quantitative programming obligations, as part of the Localism proceeding (see our summary here), are due on April 28.  Broadcasters should file comments to make sure that the Commission understands the current competitive marketplace, and how their programming will be constrained if they were all forced to adhere to the same arbitrarily set programming obligations for various categories of various types of programming.  It is a crucial proceeding that could determine the future of the broadcast industry - be sure to participate.

While some renewal applications did receive more scrutiny during the 1980s, the Commissioner forgets the abuses that the process permitted.  The old license renewal process allowed the filing of applications by third parties which would propose that the third party would be able to better serve the public interest than the incumbent licensee who was filing for license renewal. In other words, a third party's paper promises were weighed against a licensee's past service to the public.  This often led to decade-long litigation battles for the renewal of station licenses in major markets around the country.  This process spurred the growth of a cottage industry of companies that would submit competing applications against license renewals, often settling at the end of the day for a private pay-off to walk away from their challenges and dismiss their applications.  While virtually none of these challenges were successful absent some significant other wrongdoing by a licensee, the process was extremely costly for licensees and it added an element of uncertainty to the renewal process which served to restrict financing available to the broadcast industry.  Who wanted to loan to an industry where the principal asset was subject to being revoked every three years?  While Commissioner Copps seems to suggest that it would be no big deal if more broadcasters lost their licenses for not adequately serving the public interest, in fact it would make it even harder for new entrants to the broadcast industry to obtain the financing necessary to enter the business.

Some of the specifics of the public interest obligations suggested in the editorial also seem to ignore the realities of today’s entertainment marketplace. For instance, the Commissioner suggests that broadcasters should be obligated to cover much of the party Presidential nominating conventions – even though these events have in recent years become little more than several days worth of commercials for the parties involved with little real drama, debate or presentation of much more than political platitudes. This suggestion seems to stem from the Commission’s concern 8 years ago when the Fox network covered a baseball playoff game instead of a Presidential debate. To me, when you have 3 other broadcast networks and numerous cable channels covering the debate, isn’t the public interest better served by providing diversity of programming? Unless we are prepared to mandate that every citizen watch Presidential debates or party conventions, mandating that all stations cover any particular event accomplishes nothing, as airing anything on every station can’t guarantee that everyone will watch. By lessening choice, you probably also contribute to a decrease in the ability of television stations to provide important information to the public, as you encourage those who don’t want to watch the event for which you mandate coverage to seek out other media, lessening television in the long run.

In fact, in today’s Washington Post, there is a story on how the audience for television news in decreasing for many reasons, including the other available media choices. In fact, as these other media choices increase, broadcast stations will, of necessity have to provide more local programming, as that is where they will differentiate themselves from the national programming that comes in from cable, satellite, Internet and other digital providers. It should be incumbent of the FCC to allow these stations to find their own way in this new media landscape, rather than having the government mandate what programming people will see on their televisions or hear on their radio. The government may be able to force certain programming to be available, but they can’t make people view it.  Until the government can make people watch “what’s good for them,” and make decisions as to exactly what that is, they should regulate with a very light hand.