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In assessing the continued effectiveness of its rules or, as the Communications Act puts it, whether these rules "are necessary in the public interest as the result of competition," the Commission set out the multiple goals that these rules are supposed to serve, and asked for comments as to how each such goal should be assessed, and how conflicts between these goals should be resolved.  The goals which the Commission seeks to serve by its ownership rules, and some of the issues addressed in connection with each of those goals, include:

• Competition - the Commission asks for comments on how to measure whether competition exists in a marketplace, how to define the market in which the competition is being evaluated, and what sort of competition it should be assessing.  The Commission suggests many different types of competition which may be relevant to its analysis, including: 
  • Competition between stations for the same viewers or listeners
  • Competition between services (e.g. radio, TV, etc) for the attention and time of the audience
  • Competition between stations for advertising revenue
  • Competition as it affects program providers
• Localism - the Commission asks many questions about localism and the impact of media ownership regulation on localism, including:
  • Whether the traditional focus of localism - the selection of programming responsive to local needs and interests and the quantity and responsiveness of local news - are all that the Commission should look at in assessing localism.  The Commission even asks how "news" should be defined, if news is indeed the appropriate measure of localism.
  • What other metrics can be used to asses localism?
  • Should the Commission attempt to measure the consumer's interest in "local" programming in making its decisions as to whether goals of localism are met by particular rules?
  • Should the Internet and other sources of information be assessed in determining local needs for programming from broadcasters?
  • How exactly do structural ownership regulations contribute to assuring localism?
  • Are the needs of advertisers and program content creators relevant to an analysis of the localism factor?
  • Whether minorities and other identifiable groups within a community are served by local stations, and to what extent each such group needs a separate voice in order to be served
• Diversity - many of the same questions that are considered under the Competition and Localism factors are also discussed under the Diversity criterion.  The Commission asks about various kinds of diversity, and seeks comments on how these various measures of diversity can be assessed, and which are the most important to the FCC's analysis.  Some of the differing diversity issues include:
  • Program diversity - maximizing the difference in programming on stations, which might actually be aided by common ownership, as a common owner is likely to program different things so as to not compete with itself
  • Viewpoint diversity - getting independent viewpoints on important issues to a community
  • Source diversity - whether the source of viewpoints needs to itself be different to serve the public interest, e.g. the same owner could program a conservative talk radio station and a modern rock radio station that might have different viewpoints on issues, but does the fact that one company is behind both have a public interest impact?
  • Outlet diversity - should the Commission be looking to maximize the number of independently owned stations in a market, and should diversity of the owners of these stations be an important goal (i.e. should minority ownership be a goal of the ownership rules)?

These are but highlights of the issues raised in connection with each of the Commission's identified goals.  Many more specific questions about how each of these goals can be best achieved, how to measure the achievement of the goals, and what factors need to be considered in connection with each of these goals, are all part of the NOI.  To get the full impact of the questions being asked, you need to read the full NOI.

The Commission also recognizes that these goals may at times conflict, and asks how these conflicts should be resolved.  It also asks what other issues should be considered.  For instance, should the impact of ownership rules on the status of "investigative journalism" be an important goal in the proceeding?  If so, how is this to be measured and defined. 

The Commission asks what kinds of rules are best to achieve the FCC's goals.  Which of the following types of rules should it choose?

• Bright line rules - these would be rules like those currently in place for local ownership.  If you meet certain numerical limits, your application is granted, no matter what other factors may be in place.  It has the advantage of ease of application and certainty for the parties, but may not take into account all public interest factors
• Case-by-case analysis - this would require that the FCC adopt policies, but not specific numerical rules.  The FCC would have to evaluate each proposed combination on its own merits, and independently assess whether that combination would serve the public interest.  While having the advantage of being flexible enough to catch any issues, it would also be time-consuming and costly, both for applicants and the Commission, and outcomes would not be certain
• Hybrid approach - this approach would use bright line limits, but allow public interest factors to be applied in certain cases to permit or deny certain combinations, regardless of their compliance with the numerical limits, if there are special circumstances.

In addition, that FCC asks if it should apply a broad, cross-media approach - looking at all media in a market, not just analyzing radio with other radio, or TV with other TV.  If so, how would a broader analysis work?

Two other questions were tossed into the end of the NOI.  One asked how the transition to digital operations should affect the rules, as TV no longer has the Grade A and Grade B contours that are specified in the current rules.  The Commission also asks about the National Broadband Plan, and how the FCC's interest in reclaiming some of the TV spectrum, and in the expansion of broadband generally, should impact the multiple ownership analysis.

This is obviously a very broad inquiry, requiring very detailed analysis and much thought to answer the many questions raised by the Commission, but which we have only touched on here. Yet the FCC provides only 30 days for comments, and 15 days for replies (all dates measured from the Federal Register publication, which will occur at some point in the near future).  So get your thinking caps on, and let the FCC know your opinions, so they can figure out where to go from here. 

It will be fascinating to watch this procedure unfold.  When one looks at the panels that the FCC has assembled, you will no doubt see positions being staked out that are at opposite ends of the spectrum.  For instance, on the panel of "public interest groups," you will have the former head of the Media Bureau at the time of the FCC's 2003 Multiple Ownership decision which dramatically loosened ownership restrictions, only to have that relaxation overturned by the Courts, on the same panel as several speakers who seem to oppose consolidation reflexively - no matter where it comes up.  How can both poles of the debate be representative of "the public"?  If I had to guess, I would bet that the public really falls somewhere in between - not all that concerned about most consolidation as long as it does not severely affect their media choices.

As we have written before, in today's media world, there has never been so much choice (see, e.g., our articles here and here).  The effect of competition from the Internet and other new media must be taken into account in this analysis as it has so profoundly affected the current media landscape.  While in 2003, the new media was mentioned as partial justification for the relaxation that was fleetingly adopted, who could have imagined only 6 short years ago, the impact that new media could have on "traditional" media, like the newspaper, once the dominant advertising medium in most local markets and now imperiled in many of those same markets.  As we have written before, it is quite possible at this point in time to imagine the rules against media consolidation with newspapers outliving the newspaper itself.  One hopes that this is not true for other forms of traditional media as well, though recent articles about the FCC potentially moving toward limiting or ending over-the-air television so that the spectrum can be freed for other uses suggest that there are other moves afoot that undermine concerns about the power of big media as regulated by the FCC.  This proceeding is one that all broadcasters should watch carefully, and in which they should participate aggressively, to make sure that your voice is heard when the FCC shapes that rules that will affect media ownership in the next five years - years that may well affect the very survival of many traditional media outlets. 

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. 

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 .

At the same time, competition from new media has increased exponentially.  Last week, Chrysler announced that it would provide Internet access in its cars, to make available all sorts of services, including streaming media and even downloading of movies from the car.   While there was a recent article in the Radio and Internet Newsletter suggesting that Internet radio delivered to mobile devices is not an easy thing, perhaps a mobile Internet device in a car, designed for multimedia purposes, would deliver that nirvana that webcasters seek - mobile access, where Internet radio can be competitive to terrestrial radio in the car, where much radio listening is done.

And if this type of competition is not enough, there have been articles this week that Apple is adding a mobile-music component to various of its devices, including the iPhone.  Apparently, the idea would be a subscription music service, like that offered by Rhapsody or Napster, that would deliver unlimited music to an Apple subscriber.  As Marc Ramsey, in his Hear 2.0 blog suggests, a service that provides unlimited amounts of music to a subscriber is essentially radio, or at least a substantial radio competitor.

With just these being just some of the week's announcements of potential competition to broadcasters, it is evident that there is more competition than ever.  Internet and satellite delivered audio and video, delivered almost anywhere, is a compeitior to broadcasting - a competitor that comes on top of the hundreds of new radio and television stations that have come on line since the Commission decided to look to the marketplace to insure that broadcasters would serve their communities.  As local programming serving a local audience is a broadcaster's way to compete against the new media - why does the FCC need to re-impose rules to get what broadcasters themselves need to do now more than ever?  Remember, comments are due in the localism proceeding on April 28.  Make your views known on this important subject.