Posted on June 17, 2010 by Brendan Holland

Comments Due July 12 on Multiple Ownership Notice of Inquiry - And FCC Solicits Bids for Proposed Media Ownership Studies

The FCC’s Notice of Inquiry (NOI) on Multiple Ownership has been published in the Federal Register, setting July 12, 2010 as the deadline for comments, with July 26 as the deadline for reply filings.   We previously outlined many of the questions asked in the wide-ranging Notice of Inquiry. The questions deal with the entire spectrum of media ownership issues, from asking questions about how the new media landscape changes the considerations given to media ownership restrictions, to inquiries into the way in which the consumer gets needed news and information programming from broadcast outlets, and the impact of consolidation on that information.  Filing comments in this proceeding before the deadline will help to shape the discussion that will occur. The FCC claims to be intent on finishing its review of the ownership during this calender year but, as the comments in this proceeding must be distilled into more specific proposals to be reflected in a subsequent  Notice of Proposed Rulemaking, which must itself be subject to public comment, this would seem a very ambitious task given that there will be less than 6 months remaining after the comments are replies on the NOI are submitted. Nevertheless, the short 30 day comment period on the NOI seems designed to speed review – so time is short for interested parties to draft and submit meaningful comments on the fundamental and wide-ranging questions that are being asked..

Further highlighting the difficulty in completing the ownership review this year, is the FCC’s Public Notice that was just released - announcing that it is seeking bids for nine different studies to review various issues relevant to the media ownership proceeding. According to the Public Notice, studies will look at many of the issues on which the Commission has sought comment in the NOI, including studies of how consumers receive local news and information, the effect that media consolidation affects the diversity of programming and the degree of civic engagement in a community, and even requesting a study to design a model to be used to measure the degree of media consolidation in a market.  the Commission also asked for suggestions as to other studies that it could conduct relevant to this proceeding.  Comments on other potential areas of study are due by July 7.

The Commission is also, on a different track, completing its Future of Media proceeding (which we have summarized before).  That proceeding also looks at whether and how the local news and information needs of today's consumer are being met by the media, and how those needs will be met in the future.  This study, too, is expected sometime near the end of the year.  There have been discussions by those involved in these proceedings that the ownership review, while not formally tied to the Future of Media study, will nevertheless look at the findings of that review to inform its discussion of the ownership issues facing the FCC.  If that is in fact the case, and the Future of Media report is not completed until the end of the year, how can the modification of the ownership rules that relies on this study be completed before the end of the year?

The majority of the Commission is new since the last ownership review was completed in late 2007.  Given the emphasis on so many new issues since that time (including the broadband roll out and the proposals to reclaim some of the television spectrum for wireless broadband uses), one wonders if the Commission really will have the capacity to move quickly on the ownership review, which always involved many controversial issues.  And, with issues such as shared service agreements, newspaper-broadcast cross-ownership, television duopoly in small markets, and revisions to local radio ownership rules all seemingly on the table, there is no lack of controversy that will face the Commission this year.  So, prepare your comments, and get ready to let the FCC know what you think by the July 12 deadline.

 
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Posted on May 20, 2008 by David Oxenford

Senate Resolution of Disapproval on Multiple Ownership - What Does it Mean?

Last week, the US Senate passed a resolution of disapproval, which seeks to overturn the FCC's December decision relaxing the multiple ownership rules to allow newspapers and television stations to come under common ownership in the nation's largest markets (see our summary of the FCC decision here).  This vote, by itself, does not overturn that decision.  Like any other legislation, it must also be adopted by the House of Representatives, and not vetoed by the President, to become law.  In 2003, the last time that the FCC attempted to relax its ownership rules, the Senate approved a similar resolution, but the House never followed suit (perhaps because the decision was stayed by the Third Circuit Court of Appeals before the House could act).  In this case, we will have to see whether the House acts (no dates for its consideration have yet been scheduled).  Even if the House does approve the resolution, White House officials have indicated that the President will veto the bill, meaning that, unless there is a 2/3 majority of each house of Congress ready to override the veto, this effort will also fail.

The reactions to this bill passing the Senate have been varied.  The two FCC Democratic Commissioners, who both opposed any relaxation of the ownership rules, each issued statements praising the Senate action (see Commissioner Copps statement here and that of Commissioner Adelstein here).  The NAB, on the other hand, opposed the action, arguing that the relaxation was minimal, that it was necessary given "seismic changes in the media landscape over the last three decades" (presumably referring to including the economic and competitive pressures faced by the broadcast and newspaper industries in the current media environment), and that it ought not be undone by Congressional actions.   

The broadcast industry is in an interesting position with respect to this decision.  While broadcasters do believe that, given the competitive pressures, there is a need for greater ownership deregulation such as that approved by the FCC in December, many do not believe that the deregulation has gone far enough.  There were some concerns by radio broadcasters that the December decision did not in any way relax ownership even in the largest markets, nor did it correct any of the anomalies created by the switch to a markets based on Arbitron definitions rather than contour overlap for use in computing the number of stations that one party can own in any radio market.

Perhaps most disappointed by the decision were small market TV operators, who were hoping for duopoly relief, allowing owners to operate more than one television station in the smallest markets, where the cost efficiencies of such operations would be the most beneficial.  There is an interesting article in today's tvnewsday, interviewing Bill Duhamel, a television station owner in small market Rapid City, South Dakota, about the operational and economic concerns that arise in that size market.  If the December decision stands, it will take a whole new FCC proceeding and the years of litigation that follow before there can be expected to be any relaxation of the local television duopoly rules in these small markets.

The resolution of disapproval is not the only avenue pending by which the December decision could be changed.  Parties on both sides of the issue have filed appeals and petitions for reconsideration that are still to be resolved.  Thus, no matter what happens in Congress, we have not heard the end of the multiple ownership debate. 

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Posted on December 18, 2007 by David Oxenford

FCC Adopts Changes in Newpaper-Broadcast Cross Ownership Rules - No Relief For Broadcasters Under Other Ownership Rules

The FCC today adopted Commissioner Martin's proposal for limited multiple ownership relaxation, adopting a presumption in favor of approving the common ownership of a broadcast station and a daily newspaper in the Top 20 television markets (we wrote about that proposal here).  But the grant of such combinations would not be automatic, but instead would be considered on a case-by-case basis, so opposition to any merger could be submitted to the FCC.  Under the rules announced today, newspaper-television combinations would not be entitled to the presumption in favor of grant if they involved one of the Top 4 ranked television stations in a market, or if there would be fewer than 8 independent media voices (full power TV or significant daily newspapers that are not commonly controlled) after the combination.  As for the other multiple ownership rules, from what was said at the meeting, no change at all will be made.  We addressed some of the many multiple ownership issues before the Commission that were apparently either not addressed or will not be changed in our post, here. 

As the full text of the decision has not been released, details of how the Commission addressed every issue are not available.  From the comments of the Democratic Commissioners who dissented from the decision, changes were being made to the standards adopted today throughout the night and as early as an hour before the meeting was held (see Commissioner Copps' impassioned statement against the new rules, here, where he details the last minute revisions).  Given the last minute nature of the final order, it may be a while before the full text is released.  However, from statements made today and from the Commission's press release, some details of the decision are known.  They are summarized below.

First, all newspaper broadcast combinations will be addressed on a case-by-case basis.  This seemingly means that, while there will be a presumption that combinations of a daily newspaper and either one radio station or one television station (as long as it is not one of the Top 4 stations in a market) in the Top 20 markets in the United States (using DMA market rankings from Nielsen) will be permitted, this presumption could be rebutted if it could be shown that the combination would not be in the public interest.  How a positive presumption could be rebutted was not addressed at the meeting.  Combinations in smaller markets would be presumed to not be in the public interest, unless a showing could be made that overcame the presumption.  Specifics of how that presumption could be overcome were specifically discussed and outlined in detail.

In evaluating requests to rebut the presumption in smaller markets, the Commission will use a multi-part test that will include looking at:

  • The level of media concentration in a market
  • Whether the combination would increase the amount of local news coverage in a market
  • Whether the newspaper and broadcast station would continue to have independent news and editorial staffs
  • The financial condition of the combining media outlets, and whether the Buyer is willing to commit to spend money to increase newsroom operations

In addition, the Commission would consider the negative presumption to be overcome in any of the following specific situations:

  • Where there was a "failed" station or newspaper, i.e. one in bankruptcy or which had ceased operation for 4 months before FCC approval for the combination was sought
  • If there is a "failing station" or failing newspaper - found only in situations meeting a four part test:
    • If the television station in the proposed combination had an audience share of less than 4%
    • If the station or newspaper which is claimed to be failing had 3 consecutive years of negative cash flow
    • If public interest benefits could be shown, and
    • If it can be shown that there is no other out-of-market buyer for the failing outlet
  • If the combination resulted in a new news operation at the broadcast station which would include at least 7 hours of weekly local news coverage.

Commissioner Copps derided these conditions,finding it difficult to believe that promises made to receive permission for a combination would be kept.  How, he asked, could it be believed that parties would buy a failing property that no one else wanted and increase costs by investing in news?  Instead, he found it much more likely that any new owner would cut costs by combining staff, leading to less diversity. 

There were also numerous arguments between the Commissioners about whether the process was fair, and whether it gave interested parties a meaningful opportunity to have their views heard and considered.  While Chairman Martin, in his statement appends a long list of the process that was gone through over the last several years in considering the ownership revisions, Commissioner Copps focused instead on the "end game," faulting the Chairman for rushing the decision - for example, by having his proposal published in the New York Times and released in a Press Release by the FCC the day after the last field hearing (meaning that the statements at that hearing could not have been considered in drafting the proposal), and having a draft final decision circulated weeks before comments on the Chairman's proposal had even been received.

We may well have not heard the end of this proceeding.  First, the full text will need to be released, addressing some of the many unanswered questions, including what happened to all the reconsideration requests filed in connection with the already effective 2003 revision of the radio ownership rules, to the question of how the FCC dealt with the US Court of Appeals decision that had found the local television ownership rules (which forbid TV "duopolies" except in a market where there will be 8 independent voices after the transaction, and forbid combinations among the Top 4 stations in a market) to be arbitrary and capricious.  Legal challenges to the final decision may follow.  And many in Congress have been actively opposed to this decision, including 25 Senators who signed a letter indicating an interest in overturning this decision.  So, once again, stay tuned for the next episode in this long running series. 

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Posted on September 21, 2007 by David Oxenford

A New Push to Address Multiple Ownership?

Over a year ago, the FCC released its Notice of Proposed Rulemaking on amendments to the FCC's multiple ownership rules.  Issues from newspaper-broadcast cross-ownership, to local TV and radio ownership limits are all being considered.  Our summary of the issues raised in the NPRM is available here.  The FCC has been holding field hearings throughout the country on its proposals, gathering public comment on the proposals - the most recent having been held in Chicago last night.  Only one more field hearing to go and the Commission will have conducted the six hearings that it promised.  Many, including me, had felt that the timing was such that no decision in this proceeding could be reached until 2008 and, as that is an election year, the decision could quite well be put off until after the election to avoid making it a political issue.  However, there are now signs that some at the FCC are gearing up to try to reach a decision late this year or early next - presumably far enough away from the election for any controversy to quiet before the election.  With this push, others are expressing concern about a rush to judgment on the issues, and may well seek to delay it further.

Evidence of the FCC's increasing attention to the multiple ownership issues include the recent Further Notice of Proposed Rulemaking, asking questions about minority ownership and making proposals on how that ownership can be encouraged (proposals we summarized here).  The FCC has also asked for comment on several studies that it commissioned to look at the effects of ownership consolidation in the broadcast media (the public notice asking for comments is here, and the studies can be found here).  Comments on the Further Notice and the ownership studies are due on October 1, with replies due on October 15.  Some have suggested that this time table is unnecessarily accelerated, especially as certain peer review documents on the ownership studies were just recently released.

At last night's Chicago field hearing, the two Democratic Commissioners expressed their concern about a rush to judgment.  Commissioner Copps, in his Remarks at the hearing, expressed concern over the short time frame given for comments on the issues raised by the Further Notice.  Commissioner Adelstein suggested that the Commission appoint an independent panel of experts to review the ownership studies and report back to the FCC before any decision on the ownership rules is made. 

At this week's Future of Music Policy Summit in Washington, DC, a legal assistant to Commissioner Adelstein expressed concern over this rush to reach a decision, suggesting that the Chairman wanted to see the decision out before his term ended, and was looking for a decision early next year.  Several Congressional staffers on a panel about Capitol Hill activities that affect the music industry, as well as Senator Dorgan of North Dakota, all also expressed concerns about FCC action in this area, and indicated that both the House and the Senate intended to hold hearings on media consolidation this Fall, before any decision can be reached.

With battle lines being drawn, there are likely to be stormy times ahead in the multiple ownership debate.  In 2003, with a Republican-controlled Congress, there were a number of bipartisan Congressional attempts to roll back the FCC's relaxation of the ownership rules before the Third Circuit Court or Appeals blocked most of those reforms.  With a Democratic Congress, who knows what would come of any FCC relaxation of those rules in the coming months.  But we may well see that issue play out - and perhaps become a political football in the upcoming elections.
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