The press was abuzz yesterday with the news that Julius Genachowski is apparently the pick of the Obama Administration for the position of FCC Chairman. Mr. Genachowski was at the FCC during the Reed Hundt Administration, and has since worked in the private sector in the telecommunications industry, including work with Barry Diller and running a DC-based venture capital fund. From the positive reactions that the appointment has received from all quarters, the choice would seem to be a great one. But, in looking at some of the reactions, you have to question whether everyone has to be reading what they want to see into the new Commission. For instance, while the NAB has praised the choice of Genachowski (stating that he "has a keen intellect, a passion for public service, and a deep understanding of the important role that free and local broadcasting plays in American life"), so too did media-reform organization Free Press ("This moment calls for bold and immediate steps to spur competition, foster innovation and breathe new life into our communications sector. With his unique blend of business and governmental experience, Genachowski promises to provide the strong leadership we need.") What will this appointment really mean for broadcasters?
In short – who knows? When Kevin Martin was appointed Chairman of the FCC, few would have imagined that a former communications attorney, a person deeply involved in the Bush campaign, and a former staffer of FCC Commissioner Harold Furtchgott-Roth (perhaps the most free market Commissioner ever) would have supported sustained, wide-reaching inquiries into the underbrush of FCC regulation – e.g. localism, embedded advertising, indecency. So we can’t really know what a Chairman will do until he does it. The Washington Post and the Wall Street Journal both suggest that the new chairman will be focused on Internet issues, and may be less interested in indecency – but who knows?
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.