Posted on September 30, 2009 by David Oxenford

FCC Plans Public Workshops to be Held in Connection with Its Review of Broadcast Ownership Rules

In a Public Notice issued yesterday, the FCC announced that it would do a series of open "workshops" in connection with its review of the broadcast multiple ownership rules - the rules that restrict the number of radio or television stations which one party can own and which restrict the cross-ownership of radio and TV stations and newspapers in the same market.  The FCC is poised to begin its quadrennial review of the ownership rules in 2010.  The open proceedings just announced (without details of how many workshops will be held) will be used to gather information for the Commission's review of the rules. According to the public notice "the Commission will seek viewpoints and information from a broad range of experts; consumers; public interest and trade associations; labor unions; media industry representatives, both traditional and new; and other interested persons,"  as the first step in this review process. So what is this all about?

As part of the Telecommunications Act of 1996, the FCC was instructed to do a regular review of broadcast multiple ownership rules, seemingly with the intent of reducing the prohibitions of those rules as part of the general deregulatory spirit of that Act.  Originally, proceedings were to review the rules every two years, a Biennial Review.  However, those reviews kept dragging on and becoming consolidated with each other so Congress eventually amended the law to require that the review take place only once every four years.  But each time the FCC has taken action on the rules, especially any time there has been any liberalization, there has been a major outcry from consumer groups that they were left out of the process.  Perhaps the just announced hearings are an attempt to short circuit that protest by getting the public involved even before the process begins.

Some of the fears of the public being left out of the process arose in connection with the ownership review that was completed in the summer of 2003, when the FCC concluded that local television ownership rules could be relaxed, as could the prohibitions against the cross-ownership of radio, TV and/or newspapers in the same market.  Then-Chairman Michael Powell was criticized by many for leading this reform without any serious public input.  After the decision was made, Commissioners Copps and Adelstein led their own public hearings around the country, causing the Chairman to initiate a series of his own public hearings on the performance of broadcasters in serving their communities, which led to the still-unresolved localism proceeding. 

But even with hearings, the Commission isn't assured that there will be no public outcry when it changes its rules.  In late 2007, after the localism hearings and hearings on the changes in the ownership rules, the Commission finally got around to its re-consideration of the 2003 decision, which had been thrown out by the Court of Appeals, .  The 2007 decision, loosening only the cross-ownership rules between television stations and daily newspapers in the largest markets, was met with a hail of protests that the public didn't have a sufficient opportunity to comment on the final rules themselves before the Commissioners voted on them (even though the Chairman did reveal his tentative conclusion a month before it was voted on, giving the public a limited comment period).  Even with all that public input, the decision was met with a Congressional hearing and serious complaints about the process. 

Whether the Commission, whenever it finally gets around to completing the upcoming quadrennial review, will let the public review and comment on any new rules before they are finally adopted remains to be seen.  But, seemingly, no matter what the decision and the process by which it is made, someone will be disappointed and will complain that the process was unfair.  Perhaps that is just the essence of Washington. 
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Posted on March 2, 2009 by David Oxenford

Will the Newspaper-Broadcast Cross Ownership Rules Outlive the Newspaper?

At the end of last year, we wrote about the decision of the Detroit newspapers to go to a 3 day a week publication schedule, and asked the question that we had heard posed by a writer for one of the communications trade publications - "will the FCC rules limiting the cross-ownership of broadcast stations and daily newspapers outlive the newspaper itself."  In the last few weeks, that question has become even more relevant.  The FCC's decision to relax the cross-ownership restrictions in December 2007 drew widespread condemnation from many big-media opponents, and even attempts to overturn the decision, even though its direct effect was limited to the nation's largest markets.  One now wonders whether, with the current economic condition of newspapers and broadcast stations, the rules should not be revisited, for purposes of further relaxing those rules, not tightening them.

In the last few weeks, we've seen a major newspaper in Denver stop its presses for the last time, and companies owning papers in many major markets, including Minneapolis, Philadelphia and New Haven, all declare bankruptcy.  At the same time, papers in San Francisco and Seattle have warned that they may also shut down if there are not significant savings found or new buyers.  Even venerable papers like the New York Times have been the subject of shut-down rumors, and the Wall Street Journal and other papers in the Rupert Murdoch empire have been said to be dragging down the profits of the News Corporation. 

With television stations also suffering from the economy, and with changing audience demands (with media choice eroding television audiences for traditional network fare, see this article in the New York Times), the fears of media concentration seem to be a relic of some past economic reality.  It will be interesting to see if the FCC addresses these issues in the coming months, or if in fact the writer's musings will be proven true - and the FCC's rule against the cross-ownership of television stations and newspapers will outlive the newspaper. 
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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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