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No doubt some will say that the new rules are necessary not to regulate those broadcasters that responded in the ways that I set forth above, but for those who do not.  But that, to me, seems to beg the question of how you make rules about what is important to listeners.  While the national TV news reports may have made it seem like all of Iowa was underwater, in fact life went on as normal in many parts of the state, including the portions of Des Moines where I was.  People in those areas, while inconvenienced by road closures and while concerned about the plight of others in their community and their state, went about their lives.  And many stations continued with their normal programming, interrupting only as necessary with news and alerts - including EAS alerts about severe weather.  It seems to me that this was entirely appropriate - you don't want or need every station to be going wall-to-wall flood coverage when the majority of the people were not affected, when information about weather issues was available on many media outlets, and when emergency updates were given on virtually all outlets through EAS activations when National Weather Service or other sources indicated that severe weather threatened a particular community.  But for the vast majority of people, there was nothing wrong with providing them entertainment, sports, national news or spiritual programming serving their non-weather related needs.  In fact, I'm sure that some of the normal programming gave residents the ability to preserve somewhat of a normal life, without making the existing severe problems seem so all-encompassing that normal life would cease entirely.  All of these stations are serving their audiences. 

Broadcasters know their service areas, and they know their audiences.  They know what their audience wants to hear, and their stations are programmed to meet the needs of that audience.  People in larger cities know where to get wall-to-wall news, and they know where to get entertainment or other programming.  They don't go to the rock radio station to get full information about the governor's press conference any more than they go to the news-talk station to get information about concerts at the local civic center or music club.  In smaller towns, they know which station will have the information about their communities.  All broadcast stations are not, and cannot be, all things to all people.  But that is the beauty of the American system of broadcasting - station owners can choose how to serve their audiences, and by allowing that choice, audiences of virtually all interests can be served in the ways most relevant to them.  And broadcasters can freely adapt to changes in their audiences or changes in their markets, without needing government approval.

Broadcasters serve these communities, even if their main studio is two miles outside the city limits.  And they don't need to have some minimum wage employee babysitting the transmitter in the middle of the night.  As more than one Iowa Broadcaster told me, if there was a real emergency, their regular employees will cover it, even if it is in the middle of the night, as so many of the broadcasters in the hardest hit communities have been doing this last week.  They are not going to trust some low-wage overnight board operator with gathering and distributing important information.  In fact, many of the rural stations said that, if a rule was adopted requiring that they be manned during every hour of operation, their stations would probably be silent during overnight hours, eliminating EAS sources that run regardless of whether or not the station is manned, and abandoning the audience that now knows that they can rely on 24 hour service from virtually all broadcast stations.

At Monday's 10th Annual Service to America Awards - an award ceremony held in Washington DC each year to honor achievements in community service by broadcast stations - Commissioner Robert McDowell was presenting an award to a station that had performed a litany of public service programs for its community.  He marveled, in a way that was clearly a message to fellow Commissioners in the audience, how this kind of public service was all done without government mandate or intervention.  Broadcasters are serving their communities every day, as I witnessed in Iowa, and they don't need to have the FCC regulations telling them how.

So what is going on? There was an interesting article in the Wall Street Journal several weeks ago discussing the cyclical nature of government regulation. While the article focused on the financial industry and the calls for re-regulation in light of the subprime mortgage problems, the thesis of the story is equally applicable to the broadcast industry. After almost 25 years of gradual deregulation by the FCC under both Republican and Democratic administrations, where the general consensus was that the less government regulation was better and more reliance on marketplace forces would insure service to the public, the regulatory pendulum has swung back with a vengeance in broadcasting, paralleling moves in almost every industry toward a more aggressive role of the Federal government. Proposals for regulation of broadcasting are simply falling into line with proposals for greater regulation of financial institutions and mortgage companies, airlines, consumer product safety matters, and environmental regulation, just to name a few.

Soon after I graduated law school and started representing broadcasters in 1980, the FCC began the deregulatory progression. Many of the issues that I dealt with in the first few years of my legal practice disappeared – ascertainment, quantitative program obligations, the regulatory “underbrush” (regulations governing many very specific advertising and operational practices of broadcast stations – from restrictions on horse racing ads to FCC enforcement of fraudulent billing practices of some radio stations and even the regulation of whether a station used accurate coverage maps in its promotional materials). At that point in my career, a senior lawyer told me that this was all part of a regulatory cycle that swung from more regulation to less than back again. While I was skeptical at that time, it appears that these statements are now, some 25 years later, being borne out. So, for what little comfort this may provide, the cycle will no doubt at some point run its course and the pendulum will begin to swing back in a more deregulatory direction at some point in the future. Let’s hope that this point is not too far in the future and, during this more regulatory phase, the regulators take the reality of the business into account, and don’t take actions that could, during this time of increasing turmoil in the business, jeopardize the robust over-the-air broadcast business that we have enjoyed for so long .

In the 1980s, the FCC looked at the competitive marketplace as justification for deregulation - finding that broadcasters, as a matter of self-preservation, would find their own ways of competing in their local markets, or they would perish.  Now, when the marketplace is so much more competitive, the FCC is proposing to bring back archaic regulations potentially requiring all stations in all markets to identical amounts of news, public affairs and local programs.  As we wrote recently, this simply does not make sense in a incredibly competitive media marketplace, where each station is looking to serve a unique audience that may or may not have interest in any specific category of programming.  Does it really make sense for an all sports station to have to do specific amounts of electoral coverage?  Or for their to be local music requirements - but only on those stations that choose to play music? 

And, as we wrote just last week, the burden of any paperwork requirement falls most heavily on the small broadcaster.  While dealing with mandatory paperwork burdens imposed by community advisory boards, mandatory focus groups, and quantitative programming obligations may be something that can be absorbed by a New York City station with 100 employees, how will it be handled by a station in some small town in Oklahoma that may have only 3 or 4 full-time employees? 

The real, practical effects of these rules simply have not been evaluated by the FCC.  While the rules may sound good in theory to those isolated inside the Beltway, how they will function in practice needs to be made clear to the Commission.  So file your comments by April 28th to be heard on the direction that the FCC will take for the future of broadcast regulation. 

In addition to these specific proposals to be considered in this proceeding, the Commission mentions a number of other proceedings that are either underway or which will be initiated to consider other issues relevant to the consideration of localism in broadcasting.  The new proceedings to begin include:

Embedded Advertising.  The Commission specifically states in the NPRM that it believes that there are a number of broadcast practices that violate the spirit of the Commission's sponsorship identification rules.  On one of these issues, the Commission plans to launch a proceeding to investigate 'embedded advertising," commercial messages that are contained in program content (e.g. when the hero of a TV program sips a recognizable can of Coke or drives a Ford or goes to see a specific new movie).  That proceeding was on the Commission's agenda in December, but was pulled at the last minute but apparently will return in the near future.

Network-Affiliate Issues.  The Commission for years has had pending before it a petition by a group of owners of network affiliated television stations arguing that network affiliation agreements gave the networks too much power, effectively precluding affiliates from making programming choices that might better serve the interests of their communities.  It appears that the Commission will be resolving those issues, perhaps in a new proceeding to specifically consider some of those issues.

In-State Television Signal Availability.  The Commission promises to initiate a proceeding to determine if cable and satellite carriers should be permitted (or required) to provide subscribers with service from an in-state television station, even if the subscriber lives in a DMA where all the television stations originate in another state. 

FM Channel Availability.  The FCC has instructed its staff to come up with a tool to make it easier for the public to determine (on their own without hiring a consulting engineer) if a new FM station can be allotted at a particular community.  Look for this tool to appear on the FCC's website in the future. 

Other issues will be decided as part of other on-going proceedings.  These include:

Enhanced Disclosure Obligations.  In a simultaneously released Order, the FCC imposes certain enhanced disclosure obligations on television broadcasters - requiring that new forms be completed quarterly by broadcasters reporting on the types of programming that they broadcast, and requiring that public file information be maintained on the station's website (if the station has a website).  The imposition of similar requirement for radio is already under consideration in the Digital Radio proceeding.

Emergency Communications.  The obligations of broadcasters to communicate with their audiences in times of emergency, including communications with the hearing impaired and with audience members who do not speak English, are to be considered in an Emergency Communications docket that the Commission states will be decided soon

LPFM Issues.  Issues about providing LPFM stations with more protections from interference from full power stations, and a potential preference against FM translator stations, will be addressed in a Further Notice of Proposed Rulemaking in which the Commission will soon be receiving comments (see our post here)

Payola, Video News Releases and Sponsorship Identification.  The Commission currently has proceedings underway to enforce its payola rules in specific cases, and to gather more information about the use of Video News Releases (VNRs) by broadcasters, as well as certain specific enforcement actions.  The Commission intends to pursue these issues

Increase Opportunity for New Entrants.  In a separate proceeding adopted at the December meeting, the Commission adopted an order containing specific rules to enhance the opportunities for new entrants into broadcast ownership, thus increasing local media diversity.  That proceeding will also raise a number of new issues.  The text of the new rules adopted in that proceeding, and its proposals for other new rules, has not yet been released, but a number of localism related issues will be discussed in that proceeding.

Comments on this extensive list of proposals for new rules are due only 30 days after a summary of this proceeding is published in the Federal Register.  The Commission has given the public only 30 days to comment on proposals to return the broadcast industry to the regulatory structure of the 1980s.  All broadcasters should be paying attention to these proposals, as they will have a direct impact on their bottom line, and will also create numerous traps into which a broadcaster can fall at renewal time.  The five and ten thousand dollar fines that we saw in the last renewal cycle for stations that did not complete all of their quarterly issues programs lists may well be nothing compared to fines for violating some or all of these new standards if adopted.  Pay attention to this proceeding!

The proposal for the establishment of a community advisory board would mark a return to the "ascertainment" process - a process that resulted in much litigation in the 1970s and early 1980s before it was done away with in 1984.  That process required that each broadcast licensee meet with specific, identifiable groups of community leaders every six months to assess the needs of the community so that those needs could be addressed in public service programs.  When the process was abolished in 1984, the Commission noted that it had produced much litigation over whether the mandatory details of the process were observed by licensees, but it never resulted in any significant sanction for a broadcaster.  It is curious that now, 24 years later, the FCC seems to think that the same type of process will produce a different result.

Similarly, the quantitative public interest requirements that mandated specific amounts of news and public affairs programs to avoid special scrutiny of a license renewal application, were also done away with in 1984.  These rules were abolished in the belief that marketplace competition would insure that each station served the community in its own way to avoid becoming irrelevant and being replaced by a marketplace competitor.  Now, the FCC is thinking of reimposing requirements on broadcasters, though it is thus far unclear what those requirements would be.  There was some discussion at the FCC meeting that the requirements would include a mandatory amount of local programming, though whether that would be further broken down to require specific amounts of news and public affairs programming seemed to be open to comment.

 At the meeting and at the Press Conference following the meeting, there was also discussion of other issues that would be addressed in the Notice of Proposed Rulemaking.  These apparently include some requirement for broadcasters to report on their music selection process.  Though not outlawing national playlists (if such things exist), the FCC seemed intent on seeing how radio broadcasters select the music that they play, and on possibly mandating that some local music be played on each radio station.  Issues of payola may also be considered in the Notice.  The FCC was also concerned about the responsiveness of broadcasters to local emergencies.  To address that perceived concern, the FCC seems to be proposing to require main studios in the station's community of license and to require that these studios be manned whenever a station is in operation.  A decade ago, when the rules required manned main studios during all hours of operations were abolished, many stations started round-the-clock operations, freed from the cost of having to man the studio during the "graveyard shift" during overnight hours.  Would new rules bringing back the requirements that stations be manned during all hours actually result in less programming being aired?  That may be one issue that the FCC is forced to address as this proceeding continues.

This proceeding will seemingly hit hardest at smaller, local stations. While some broadcast critics seem to think that these proposals can easily be addressed by broadcasters, often their focus is on big market, big media stations.  Small "Mom and Pop" stations are often ignored in the calculus used to weigh such regulatory proposals.  Often Mom and Pop barely have the staff to keep the station in operation, much less to deal with paperwork and processes that don't contribute to meeting payroll or the over-the-air product.  Hopefully, once the Commission provides the specifics of its proposals and the deadlines for comment on these proceedings, stations of all kinds will make clear to the Commission the impact that these proposals will have on their operations. 

The Chairman's statement makes much of the efforts of the Commission to promote new entrants into broadcast ownership, citing efforts to bring back a tax certificate for minority ownership, efforts to allow minority groups to acquire and construction unbuilt stations even if they may have expiring construction permits, and waiving Equity Debt Plus requirements (allowing more financing by companies that might be prohibited by the ownership rules from providing more than 1/3 of the financial backing to an applicant)(see our summary of some of the pending proposals to enhance minority ownership, here).   However, some of his other proposals actually make ownership by new entrants problematic.

On the radio side, requiring the manning of a studio 24 hours a day for stations operating full time may be an expense that a multi-station cluster in a large market would have no trouble handling.  However, the costs that the adoption of such a proposal would entail for a small, stand-alone station in a small market could be prohibitive.  The financial return in a small market from operating all night is slight, but stations continue such operations as a service to their listeners.  Years ago, when the FCC required manned main studios, many smaller stations would sign off in late evenings and overnight hours to avoid the costs of such operations.  Re-imposing a requirement that the station be manned whenever it is operated might bring back such limited service during overnight hours, or force smaller stations to consolidate so that the costs of overnight operations could be spread over multiple stations.  And to what end?  The rules already require that stations be controlled during all hours of operation.  With modern technology, the FCC recognized a decade ago when doing away with the requirement that studios be manned, control can be exerted without someone sitting at the studio, and can even originate programming without physically having someone present at the station.  And stations should be able to provide contact information to emergency officials so that they can respond to any overnight developments that might take place during unmanned hours. 

Communications with emergency officials is really the key - not whether the station has someone sitting at a studio.  The proposed new requirements seems to stem from the notorious "Minot" incident, when local authorities made claims that the largest cluster of radio stations in that community were not manned at night and could not respond to an emergency when a rail car carrying dangerous chemicals derailed creating a toxic cloud in parts of the city.  In fact, I have heard that general manager of those stations state that the stations were manned, and quickly had reporters covering the story, but that local officials simply did not know the how to activate their EAS system, and thus their phones were flooded by calls, which prevented them from reaching the station (which was in fact trying to call the police to obtain updated official information but prevented by the same overloaded phone system).  See Clear Channel's press release on the matter, here . 

The DMA (Designated Market Area - the area defined by the Nielsen ratings service as being the primary service area of a television station) issue is another concern to small market operators.  A number of Congressional bills started popping up early in the year, seeking to either permit or require cable and satellite operators to carry in-state television stations to all counties in a state, even if those counties fell within a DMA where the television service originated from stations in a different state.  While that sounds like a noble idea -giving viewers access to news from an in-state TV station - it caused major consternation among many stations who operate in markets straddling a state border.  Especially in small markets, many station operators felt that such a rule would only expand the power of large market stations that would be imported into the market, while cutting into audiences of the small market stations and making their existence more difficult.  Some of these stations felt that, in the long term, such rules might cause the disappearance of some small markets as the big-market stations gained statewide carriage.  The disappearance of small market stations would then cause a loss in real local news in exchange for some degree of state-wide news coverage.  Again, a seemingly simple idea that can cause many real world problems.

The FM translator issue while, again seeming like a simple issue, could cause many problems.  The FCC received thousands of applications for new FM translators when it opened a filing window in 2003.  While many hundred were processed and granted, in 2004 the FCC put a 6 month moratorium on further processing, while the Commissars considered the relationship of FM translators to LPFM stations.  That 6 month moratorium has now effectively been in place for over 3 years, with no end in sight.  While the Chairman's proposal to limit the number of applications that will be processed may seem like a good idea, it may well cause problems.  First, there are a number of applicants with many pending applications who spent considerable sums to file applications (including clients of our firm).  Is it fair to change the rules on these applicants in mid-stream, after these applications were filed in good faith?  And what will the impact of the limitation be - especially on the efforts to provide AM stations with FM translators?  With so many translator applications, if these were processed and granted, there would no doubt be a secondary market in excess construction permits that would allow AM stations to acquire FM translators for their use (which is being permitted on a temporary basis now, see our post here).  If these applications are dismissed or strictly limited, there will likely be a much more limited secondary market, and AM stations may well end up having to fight LPFM applicants for rights to use this spectrum.  With the potential of a preference for LPFM applicants, this could seriously curtail the ability of AM operators to obtain FM translators for their use.

All in all, this goes to show that there are no easy answers to the complex problems of the broadcast world.  The FCC's seeming interest in intervening in the markets to force the coverage of local issues, and to mandate what it perceives to be in the public interest, may well lead to significant unintended results that actually harm those efforts.  Watch these efforts closely.