According to an article yesterday in Broadcasting and Cable Online, and another article in the New York Times today, Chairman Martin of the FCC is looking to complete the multiple ownership proceeding (which we summarized here) by the middle of December. According to the Times article, the Chairman is looking for relaxation of the current newspaper-broadcast cross ownership rules – the prohibition on the ownership of a broadcast station and a daily newspaper in the same market. What the Chairman has in mind for the rules regarding local radio and television ownership is less clear. But, no matter what is planned, forces are already mustering to attempt to delay the Commission action.
Contemplating a December action is certainly aggressive. The Commission had promised to complete the two sets of public hearings – one on the ownership rules and a second on the localism provided by broadcasters – before reaching conclusions in this case. Each set of hearings still has a final hearing to be held. The Commission has yet to officially announce the date and location of either of these final hearings – though press reports have indicated that the Commission may look to hold one at the end of the month on the West Coast, and the final hearing in Washington, DC in early November. In addition, the Commission has just received the final set of comments on the proposals to foster minority ownership, which the Third Circuit had indicated was to be part of the analysis in this proceeding when it stayed the effect of most of the Commission’s 2003 multiple ownership decision and remanded that decision to the FCC for further consideration. With the comments on minority ownership just having been filed, and comments on the Commission’s own studies on the effect of consolidation not not due until next week (see details), and replies due early next month, does the Commission really have time to consider the issues raised in these comments in this proceeding and reach a December decision, or will some issues need to be delayed for independent consideration? Seldom has the FCC finished any proceeding within a month and a half of the end of the public comment period – much less an important and controversial one like multiple ownership.
While the Commission’s direction on newspaper cross ownership seems clear, less certain is the final result on the issues of the local ownership of broadcast stations. While some television stations have pushed for greater ability to combine the ownership of local television stations, especially in smaller markets where such combinations can now only be established through waivers based on severe financial hardship (which take a very long time to process) or through arrangements that stop short of complete ownership or even direct combination of programming (see our description of one such shared service agreement, here). With the increased costs of digital operations and other business challenges, many small market stations have been hoping for some regulatory relief, though convincing the Commission to allow less ownership diversity in small markets is always a difficult sell – no matter how good the economic justifications.
Following the Commission’s 2003 multiple ownership decision, the only significant portion of the decision to become effective was the tightening of the radio ownership rules. While there have been some calls to relax the local ownership rules for radio, these calls seems somewhat muted -especially when contrasted with the calls from newspaper owners to be allowed back into broadcasting, and even when compared with the pleas of small market television for more ability to combine operations. But, in connection with recent transfers of control of several large radio companies, there are numerous radio stations held in trust, awaiting disposition. These trusts were formed because, after the 2003 tightening of the rules, certain local radio clusters were no longer in compliance with the rules. The transfers of control triggered a divestiture requirement. Could companies look to relief from the divestiture requirements through these upcoming rule changes? And could the outcome of the proposed XM-Sirius merger affect the decision on local radio ownership? If the Department of Justice and the Commission allow the merger by finding that these companies are not forming a monopoly in the satellite radio market because they are instead part of a larger market for audio services, wouldn’t radio also be part of that greater market, and wouldn’t that call for allowing more consolidation? If one company can own 300 channels in a market, why should another be restricted to 8 (or maybe 13 or 18 should one consider what would happen if FM multicasting in the new IBOC digital radio format becomes more prevalent)?
Already, the anti-consolidation forces are beginning to muster opposition to any rapid resolution of the proceeding. According to yesterday’s Broadcasting and Cable report, the Senate Commerce Committee promised a hearing on the plans to bring the case to a close, while at least two Senators (a Democrat and a Republican) have already written the FCC a letter asking for a delay in the proceeding. The anti-consolidation forces are also rallying to stop the decision (see the Press Release from the Stop Big Media Coalition, here).
With so many questions to be answered, and the opposition that is already forming, we will see if the December decision is a real target – or but a trial balloon floated to see if anyone was paying attention.