broadcast ownership limits

The Office of Management and Budget, acting pursuant to the Paperwork Reduction Act, has just approved the FCC’s broadcast incubator program, about which we wrote here.   That approval makes the program effective.  The program permits an established broadcaster to provide assistance to a new broadcaster (generally, a qualified small business) to enter the radio broadcast industry.  If, over a 3-year period, the assistance provided by the existing broadcaster (usually either financial assistance or management training) is deemed a success, the established broadcaster can receive a credit allowing it to purchase a station in excess of the radio ownership limits allowed for broadcasters in a market of similar size to the one in which the incubation occurred.  It is interesting that this rule became effective just as the US Court of Appeals heard oral argument on the question of whether that program does enough to encourage new entrants into broadcast ownership to meet court-imposed obligations to address these issues.

The oral argument is on the appeal of the FCC’s 2017 ownership decision which, among other things, did away with the prohibition on newspaper-broadcast cross-ownership and the rule that required that there be 8 independently owned TV stations in a market before one owner could own two stations in that market.  The appeal, as we wrote here, essentially argues that the FCC has not done enough to promote minorities and other new entrants to get into broadcast ownership.  Reports are that the judges asked the FCC many questions at yesterday’s argument as to whether the FCC had enough data to conclude that the changes that were made in 2017 were in the public interest and would not unduly burden new entrants who want to get into media ownership.
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We wrote in December about the delays in the FCC’s proceeding to consider whether changes should be made to its multiple ownership rules. The December delays were to allow for public comment on ownership information obtained from broadcasters in their Form 323 Ownership Reports. Specifically, the public was asked to comment on the what the ownership information revealed about ownership of broadcast properties by members of minority groups, and whether proposed reforms in the ownership rules would affect minority ownership.  Comments from certain public interest groups suggested that any relaxation of the newspaper-broadcast cross-ownership rules or the rules limiting radio-TV cross-ownership would further adversely affect minority ownership, a position that seemingly made certain of the FCC Commissioners reluctant to approve any changes in the ownership rules. This week, the Commission announced another delay in any resolution of this proceeding as the MMTC (the Minority Media and Telecommunications Council) has commissioned a study of the impact of any further consolidation in media ownership on minority broadcast operators.

The study, to be conducted by the broadcast financial analysis firm BIA Kelsey, is supposed to be conducted quickly – in the next 60 days. It is also supposed to be peer reviewed to analyze its methodology and conclusions, and will probably be subject to further public comment at the FCC once it is filed in the record of the multiple ownership proceeding. So this means that there will be likely no decision as to changes in the ownership rules for at least 3 or 4 months – and perhaps longer.


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