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The FCC has released the agenda for its first open meeting of the year, scheduled for this Thursday, January 17, 2008.  The agenda consists solely of presentations by the various Bureau Chiefs discussing their various policies and procedures in implementing the agency’s "strategic plan."  Such an agenda, while not common, is not unheard of, especially for the first meeting of the year, and especially after so many controversial decisions were made in the last two meetings at the end of 2007.  

This agenda was released a few days after House Energy and Commerce Committee Chairman John Dingell announced an investigation of the Commission’s rulemaking procedures and management practices.  FCC Chairman Kevin Martin has been under fire from Republicans and Democrats alike in both the House and Senate, especially following the agency’s December meeting in which the newspaper/broadcast cross-ownership ban was modified, as we discussed here.  Congress has criticized the agency’s lack of transparency, and infighting among the Commissioners has become open and much talked about in Washington, as reflected in meetings that are often delayed by hours and in Commissioner’s Copps’ vitriolic dissenting statement read aloud at the December meeting.  Continue Reading FCC to Hold Open Meeting Featuring Bureau Chief Presentations – While Congress Investigates

Investors in broadcast properties often seek to have their interests "insulated" from "attribution"   meaning that the interests do not count in a multiple ownership analysis.  In other words, if a party has an attributable interest in a company owning a broadcast station, that interest counts in determining whether the party can, under the FCC’s multiple ownership rules, own an interest in another station in the same market.  The FCC has extensive case law describing when an interest is non-attributable and does not count in a multiple ownership review.  In most cases, a non-attributable interest is one that does not hold voting rights on most company decisions.  However, the Commission has always recognized that the non-attributable, non-voting equity owner may retain certain voting rights when dealing with certain fundamental company actions, as necessary to protect the fundamental integrity of their investment.  In the recent decision approving the transfer of the Ion Media Network broadcast stations, the FCC clarified some of the permissible voting rights of nonattributable shareholders.

In the past, the FCC has permitted nonattributable owners to vote on certain fundamental actions of a company without threatening the owner’s nonattributable status.  Such fundamental actions included changes in the articles of organization or the by-laws of the company, a sale of more than 10% of the assets of the company, a merger or transfer of control of the company, a declaration of bankruptcy, or the issuance of new stock.  As these actions could all affect the fundamentals of the economic interests of the nonattributable owners, votes on these actions was permitted.  In the Ion Media case, new rights were found to not affect the non-attributable status of their investmentsContinue Reading FCC Clarifies Permissible Activities of Nonattributable Investors

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

The FCC has released its agenda for its December 18 meeting – and it promises to be one of the most important,and potentially most contentious, in recent memory.  On the agenda is the Commission’s long awaited decision on the Chairman’s broadcast multiple ownership plan relaxing broadcast-newspaper cross-ownership rules (see our summary here).  Also, the FCC will consider a Further Notice of Proposed Rulemaking on Localism issues (pending issues summarized here) following the conclusion of its nationwide hearings on the topic, as well as an Order and Further Notice of Proposed Rulemaking on initiatives to encourage broadcast ownership by minorities and other new entrants (summary here).  For cable companies, the Commission has scheduled a proposed order on national ownership limits.  And, in addition to all these issues on ownership matters, the FCC will also consider revising its sponsorship identification rules to determine if new rules need to be adopted to cover "embedded advertising", i.e. product placement in broadcast programs.  All told, these rules could result in fundamental changes in the media landscape.

The broadcast ownership items, dealing with broadcast-newspaper cross-ownership, localism and diversity initiatives, all grow out of the Commission’s attempts to change the broadcast ownership rules in 2003.  That attempt was largely rejected by the Third Circuit Court of Appeals, which remanded most of the rules back to the FCC for further consideration, including considerations about their impact on minority ownership.  The localism proceeding was also an outgrowth of that proceeding, started as an attempt by the Commission to deal with consolidation critics who felt that the public had been shut out of the process of determining the rules in 2003, and claiming that big media was neglecting the needs and interests of local audiences.Continue Reading FCC Meeting Agenda for December 18 – Potentially One of the Most Important in Recent Memory – Multiple Ownership, Localism, Minority Ownership, Product Placement and Cable TV National Ownership Caps

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

The FCC has released the agenda for its Open Meeting to be held on Tuesday, November 27.  The agenda is full of issues of importance to broadcasters, and several items may resolve issues that may be troubling – including issues relating to low power FM stations (LPFM) and resolving a long outstanding proceeding concerning the possibility of mandatory public interest obligations for TV stations.  The Commission also has on tap initiatives to encourage the entry of minorities and other new entrants into the broadcast business – even though comments on the Commission’s proposals on this matter were received just a month ago.

First, the Commission is to release an Order on Low Power FM.  We have written about some of the issues that could be decided previously – including issues of whether or not to allow the assignment and transfer of such stations (here) and whether to give these stations preferences over translators and even improvements in full power stations (here and here).

On the TV side, the Commission seems ready to issue an order on the public interest obligations of television operators.  We wrote about the proposals – made as part of the Commission’s DTV proceedings (though to be applicable to all TV stations), here.  Proposed rules included the standardization of quarterly issues programs lists, making station’s public fies available on the Internet, and quantifying other public interest obligations.  Continue Reading FCC Meeting to Consider LPFM Reform, Public Interest Requirements for TV Stations, and Minority Ownership Proposals

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