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

With a possible decision looming on December 18 on the Chairman’s proposal to loosen the newspaper-broadcast cross-ownership rules (see our summary here and here), the FCC this week granted two applications involving the sales of the Tribune Company and of the Clear Channel television stations, where the decisions focused on the application of the multiple ownership rules – and where the Commission granted multiple waivers of various aspects of those rules – some on a permanent basis and many only temporarily.  And, in the process, both of the Commission’s Democratic Commissioners complained about the apparent prejudgment of the cross-ownership rules and one complained about the role of private equity in broadcast ownership.  Both decisions are also interesting in their treatment of complicated ownership structures and, at least under this administration, evidence the Commission’s desire to stay out of second guessing these structures. 

In the Clear Channel decision, the Commission reviewed the proposed ownership of the new licensee by an affiliate of Providence Equity Partners.  As there were no objections to the proposed sale, the FCC approval process was somewhat easier than it might have been – though the Commission did seem to be somewhat troubled by the fact that Providence was already a shareholder with an interest attributable under the multiple ownership rules in Univision Communications, which had stations in a number of markets in which the Clear Channel television stations operate.  The Commission approved the sale, giving Providence 6 months to come into compliance with the ownership rules – and conditioning the initial closing of the Clear Channel sale on Providence meeting divestiture requirements that it had promised to observe in connection with the Univision acquisition, and had not yet complied with (in fact the Commission recently asked for comments on a proposal by Providence to come into compliance in the Univision case by simply converting their interest in Freedom Communications, which has interests in Univision markets, into a nonvoting interest which would not be attributable under Commission rules)Continue Reading Ownership Waivers All Around – FCC Approves Sales of Tribune and Clear Channel TV

Yesterday’s unique Public Notice outlining Chairman Martin’s proposals for reform of the multiple ownership rules (which we summarized here) is a surprisingly restrained and limited approach to relaxation of the ownership rules – proposing to relax only the newspaper-broadcast cross-ownership prohibitions, and only in the Top 20 TV markets.  Moreover, the reform would only allow the combination of a daily newspaper and a single radio or TV station, and the newspaper-TV combination would only be allowed if the TV station is not one of the Top 4 ranked stations in the market.  While the extremely limited nature of the proposed relief has not stopped critics of big media from immediately condemning the proposal (see the joint statement of Commissioners Copps and Adelstein, here), much less attention has been paid to those multiple ownership issues that the Chairman’s proposal does not seem to address – including TV duopoly relief in small markets and clarifications to the radio ownership rules requested by a number of broadcasters who sought reconsideration of the changes that arose from the 2003 ownership reforms. 

The Chairman’s Public Notice is itself a new approach to regulation – putting out for public comment (due by December 11) an action of the Commission just before that action is to be taken.  Usually, the Commission proposes a set of rule changes in a Notice of Proposed Rulemaking, and the Notice provides time for interested parties to comment and then reply to each other’s comments.  Once all the written comments are submitted to the Commission, parties and their representative often make informal visits to the FCC to argue about the suggestions that have been made, and eventually, after much consideration, the Commission’s staff writes up a decision which is vetted by the Commissioners and their staff, and voted on by the full FCC.  Usually, these final decisions are shrouded in secrecy – though outlines of the proposals are often the subject of informed gossip and rumor, rarely does anyone see the full set of rules that the Commission is considering until after the decision is made. 

Continue Reading What Chairman Martin’s Multiple Ownership Proposals Omit – No Relief for Radio and TV

In a Public Notice released today, FCC Chairman Kevin Martin announced his intention to modify only the newspaper-broadcast cross-ownership rule, among all of the multiple ownership rules under consideration.  That rule prohibits ownership of a broadcast station and daily newspaper in the same market.   Somewhat surprisingly, Martin proposes to leave all other multiple ownership rules untouched.  And his proposal only suggests clearing the combination of a newspaper and either a television station or a radio station in the Top 20 markets, and only if the TV station is not among the Top 4 rated stations in the market.  Any other combination would be presumed to be prohibited, though a showing could be made to rebut that presumption. 

As we have previously written, Chairman Martin has long signaled his desire to modify or eliminate the newspaper-broadcast cross-ownership rule.  His specific proposal was also described in an op-ed piece he wrote for today’s NY Times, and which is attached to the FCC Public Notice.  It would allow ownership of a daily newspaper and one broadcast station (radio or TV, but not both) in the top 20 DMAs (i.e. TV markets).  Even then, Martin would prohibit common ownership of a newspaper and any of the top four TV stations in that market, and would require that there be at least eight independently owned media voices (daily newspapers and full-power TV stations) following the transaction. 

Martin does not otherwise propose any changes to the other multiple ownership rules currently under consideration, including limits on local TV and radio ownership, as well as the national TV ownership cap that counts UHF stations at 50% of their actual audience.  Martin’s editorial makes clear that he would also scrap the Commission’s former "cross media" limits that were remanded back to the FCC by the U.S. Court of Appeals in the 2004 Prometheus decision.  The "cross media" limits would have weighted various media within a market to determine what level of media ownership would be permitted in that market.Continue Reading Chairman Martin Proposes His Multiple Ownership Modifications – Only Proposing to Change Newspaper-Broadcast Cross-Ownership

In an unusual action, Commissioner Michael Copps last week publicly released a letter he wrote to Chairman Martin ( whose office is just down the hall from Copps’ office on the Eighth Floor of the FCC’s headquarters in Washington) urging the Chairman to initiate a proceeding to determine if the News Corporation’s acquisition of the Wall Street Journal is in the public interest.  Copps points to the fact that the company currently owns another daily newspaper published in New York (the New York Post) as well as two full power television stations (WWOR and WNYW) in the market.  While recognizing that the FCC has previously ruled that national newspapers should not be counted for purposes of the FCC’s newspaper- broadcast cross ownership limitations which currently bar local ownership of broadcast stations and daily newspapers in the same area.  This exception for national papers was principally decided in connection with Gannett’s USA Today, headquartered in the Washington DC area, where Gannett also owns a TV station.  Copps argues that, despite the USA Today precedent, this situation nevertheless demands further review for two reasons: 1) the local concentration of two TV stations and two widely-read local newspapers and 2) the national concentration that will result in two of the five most widely read newspapers in the country being commonly owned with one of the four major television networks, as well as the owner of many other outlets of communication spread throughout the country.

One seemingly unique aspect of the Copps request is that he is asking that the FCC investigate the acquisition of a newspaper, over which the FCC has no direct jurisdiction.  In fact, in the past, TV companies have purchased newspapers that they could not own consistent with the cross-ownership rules, with the understanding that they would divest one of these interests by the time that the next license renewal for the television station came up (or ask for a waiver of the rules at that time).  This would be necessary as the FCC would have jurisdiction over the duopoly through the renewal application.  In recent years, there have been companies which have bought newspapers in their television markets, taking the risk that, by the time the television station renewal was filed, the FCC’s cross-ownership rules would have changed.  And they are now left pursuing waivers in connection with their renewal applications.  In this case, while the FCC would not have jurisdiction over the acquisition of the Journal, they would have jurisdiction over the pending TV renewal applications.Continue Reading Copps Calls for FCC Proceeding to Consider News Corporation’s Acquisition of Wall Street Journal

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.Continue Reading Push to Complete Multiple Ownership Overhaul By the End of the Year

At last Thursday’s Public Hearing on multiple ownership in Chicago, about which we wrote here, a statement was read by a spokesman for Presidential candidate Barack Obama.  According to press reports, the statement expressed the candidate’s positions favoring shorter license renewal terms for broadcasters so that they would be subject to more public scrutiny, as well as criticizing the FCC for allowing broadcast consolidation.  These thoughts essentially echo the comments of FCC Commissioner Copps, especially on the subject of license renewal terms, whose views we wrote about here.  While many press reports have asked if this statement by Senator Obama foreshadows the broadcast ownership debate becoming part of the presidential campaign issues, we worry that it may signal a far broader attack on broadcasters during the upcoming political year.  The statement by Senator Obama is but one of a host of indications that broadcasters may face a rash of legislative issues that are now on the political drawing boards.

Broadcasters make easy targets for politicians as everyone is an expert on radio and television – after all, virtually everyone watches TV or listens to the radio and thus fancies themselves knowledgeable of what is good and bad for the public.  But those in Congress (and on the FCC) have the ability to do something about it.  And, with an election year upon us, they have the added incentive to act, given that any action is bound to generate at least some publicity and, for some, this may be their last opportunity to enact legislation that they feel important.  We’ve already written about the renewed emphasis, just last week, on passing legislation to overturn the Second Circuit’s decision throwing out the FCC’s fines on "fleeting expletives" and making the unanticipated use of one of those "dirty words" subject again to FCC indecency fines.  Clearly, no Congressman wants to be seen as being in favor of indecency (look at the rise in the indecency fines to $325,000 per occurrence which was voted through Congress just before the last election), and First Amendment issues are much more nuanced and difficult to explain to the voter, so watch this legislation.Continue Reading One Sign That Broadcasters Are About to Become Political Footballs – Obama Suggests Shorter Broadcast License Terms and Less Consolidation

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.Continue Reading A New Push to Address Multiple Ownership?

In a Further Notice of Proposed Rulemaking, the FCC last week asked for public comment on a series of initiatives to promote the ownership of broadcast stations by minorities and other Socially Disadvantaged Businesses ("SDBs").  These proposals, which include the potential for the sale without requiring any divestitures of clusters of radio stations which exceed the multiple ownership rules now in effect, and the potential for investors to invest in stations controlled by SDBs, even if such investment would otherwise violate the existing multiple ownership rules.  The Further Notice was issued in response to a petition filed over a year ago by the Minority Media Telecommunications Council, which asked for a withdrawal of the FCC’s Notice of Proposed Rulemaking on the Multiple Ownership Rules (which we summarized here) because that Notice did not address the promotion of minority ownership of broadcast stations.  MMTC claimed that the Third Circuit’s remand of the 2003 Multiple Ownership decision mandated that consideration.  Comments on the Further Notice, which will be resolved as part of the current multiple ownership proceeding, are due on October 1, and replies on October 15

The Notice raises a number of suggestions for regulatory changes to foster the ownership of broadcast stations by minority owners and other SDBs.  In addition to allowing the transfer of grandfathered radio clusters that no longer comply with the multiple ownership rules, these include specific proposals that would accomplish the following:

  • Allowing investment by exiting broadcasters and others with attributable media interests into companies controlled by minorities without the investment being counted against the ownership holdings of the investing company
  • Allowing minority groups to purchase unbuilt construction permits, and get sufficient time to construct those stations, even if the construction permit is otherwise to expire as it has been outstanding and unbuilt for over three years
  • Granting some non-minority owned companies waivers to exceed the multiple ownership limits if they sell stations to SDBs (including a proposal to create tradable credits for creating minority-owned stations)
  • Allowing for the waiver of the alien ownership limits if the investment by foreign companies would assist a minority-owned company in getting into the broadcast business.
  • Revival of the policies permitting minority distress sales (where a broadcaster against whom there were issues pending which could lead to a revocation of a license could sell their station to a minority group and avoid the revocation proceeding) and minority tax credits  (where a broadcaster who sells to a minority group could defer gains on sale if the money was reinvested into any broadcast company in the future)

Continue Reading FCC Proposes Multiple Ownership Exceptions to Foster Minority Ownership