quadrennial review of FCC ownership rules


With the NAB Convention upon us, and much of the talk being centered on television issues including the repacking of the TV band after the incentive auction, the conversion to the next-generation of TV transmission as allowed by the new ATSC 3.0 transmission standard, and the effects of the FCC’s changes in the local television ownership rules and the reinstatement of the UHF discount in connection with the national ownership cap, it almost seems like radio is an afterthought. The FCC is considering some matters of interest to radio, including how to revitalize the AM band, and it has taken steps to revitalize individual AM stations through the use of FM translators. And the FCC is apparently considering changes in FM through the creation of a new class of C4 stations (see our post here). Yet, in recent ownership orders from the FCC, while TV ownership rules have been dramatically relaxed in the face of new video competition so that local TV owners can more robustly address their challengers, there were no corresponding changes in the radio rules. In the last ownership proceeding (which we summarized here), other than making changes to the embedded market rules (potentially affecting only radio stations in the suburbs of New York and Washington), and allowing ownership joint ownership of radio with TV and newspapers through the abolition of the cross-ownership rules that had limited or prohibited those combinations, radio ownership rules themselves have not been subject to any real changes in ownership limits since those limits were set in the wake of the 1996 Telecommunications Act. The FCC did make some changes early in this century when it adopted Arbitron (now Nielsen Audio) markets as the way in which competition in rated markets is defined, but the numbers of stations that one party can own has not changed since those numbers were established in the 1996 Act – even though Congress gave the FCC the authority to review and revise the rules to insure that they remained in the public interest.

While there have been no changes in the ownership rules for radio, think about the changes that have taken place in the competitive environment since 1996. At that point, streaming was something only a few technologically-forward people even knew existed. Pandora did not launch its streaming service for another decade, and Spotify was even further behind – not launching in the US until 2011. Even those few people who knew that audio streaming existed in 1996 would never have thought that they could listen to a streaming service in their cars. Apple was not offering a streaming music service – in fact it had not even introduced the iPod (introduced in 2001) or the iTunes store (2003) – both now about to become technological relics themselves because of technological changes. Given that there was no iPod, there were obviously no podcasts to bring audio storytelling to the millions who now listen to their favorite programming through the multitude of services that provide podcasts on almost any subject. There was no Alexa to bring Amazon and other music services into the home – in fact Amazon itself had only begun selling books online in 1995. Even Sirius XM (then Sirius and XM as two competing companies) had not initiated their services at the time of the 1996 Act – as XM did not start providing service to consumers for another 5 years (with Sirius launching a year later). And the pace of change for audio technology is not slowing.
Continue Reading What’s Next for the FCC’s Radio Ownership Rules? – Do Changes in the Audio Marketplace Justify Changes in Ownership Limits?

With the FCC about to propose changes in its national ownership cap for television at its meeting tomorrow (see our article here), we thought that we would take a look back to the week before Thanksgiving, when the FCC made some important decisions for the broadcast industry – including the approval of the Next Generation TV transmission standard and the change in numerous broadcast ownership rules.  We promised to take a deeper look at these decisions when the texts of the orders were released, and here is a look at some of the interesting items in the ownership decision.  We will only lightly touch on radio issues here, concentrating primarily on TV matters, as the FCC made few changes that directly affected radio, pushing most to the next Quadrennial Review of the ownership rules, likely to begin next year.  We’ll post some thoughts on radio issues at some point in the future.

Certainly, there was plenty of legal discussion about the standards for reconsidering an FCC decision (this reconsideration being a review of the FCC’s ownership order adopted under the last administration in August 2016).  While the FCC ultimately concluded that it could review the 2016 decision where it believed that there were substantial errors in the Commission’s initial decision, the legal wrangling over the process for the review is perhaps less interesting to most in the broadcast industry than is some of the other discussion contained in the order and what that may portend for further ownership review by this administration.  So let’s look at the FCC’s discussion of the various issues that it faced in the reconsideration order.
Continue Reading A Deeper Dive on The FCC’s Ownership Order

The FCC late yesterday released full texts of the decisions adopted last week to revise the broadcast ownership rules and approve the next generation television standard (ATSC 3.0). We summarized last week’s decisions, based on the press releases released after the meetings, in our article here. The full text of the ownership decision, available

While there is a new administration in charge at the FCC, there are still those regular regulatory dates that broadcasters must face, as well as dates unique to pending proceedings that arise from time to time. Before we get to the February dates, we should remind broadcasters of those January 31 dates that they should be considering, including the deadline for signing up for the Interim License Agreement for those radio stations playing music represented by the new performing rights organization GMR (see our articles here and here). January 31 is also the deadline for payment of SoundExchange yearly minimum fees by webcasters (including broadcasters who stream their music on the Internet), as well as the date for comments to the House Judiciary Committee on the structure of the Copyright Office (see our article here) and with the Copyright Office on the qualifications for a new Register of Copyrights (see our article here).

With the start of February, there are routine regulatory dates for broadcasters dealing with EEO requirements. Commercial and Noncommercial Full-Power and Class A Television Stations and AM and FM Radio Stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma that are part of an Employment Unit with 5 or more full-time employees, must place in their public file (or upload to their online file for TV and radio stations that have already converted) their EEO Public File Reports. Stations also need to put a link to the EEO Public File reports on the home page of their websites, if their station has a website (meaning they have to have a webpage for their most recent report if they have not converted to the online public file). For Radio Station Employment Units with 11 or more full-time employees in Kansas, Nebraska, and Oklahoma and Television Employment Units with five or more full-time employees in Arkansas, Louisiana, and Mississippi, FCC Mid-Term Reports on Form 397 must be submitted to the FCC by February 1. We wrote about FCC Mid-Term Reports here.
Continue Reading February Regulatory Dates for Broadcasters – EEO Reports and Comments on Ownership, EEO and Copyright Issues

While we are into the holiday season, that does not stop the routine regulatory obligations for broadcasters. December 1 brings a host of routine obligations for stations in many states. EEO public file reports must be added to the public files of Commercial and Noncommercial Full-Power and Class A Television Stations and AM and FM Radio Stations in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, and Vermont that are part of an Employment Unit with 5 or more full-time employees. Of course, for TV stations and radio stations that have already converted to the online public file, that will mean uploading those reports to the FCC-hosted public file. For all stations, a link needs to be included on the main page of your station website, if your station has a website, which leads to these reports. Mid-Term EEO Reports on FCC Form 397 must be filed with the FCC by December 1 by radio employment units with 11 or more full-time employees in Colorado, Minnesota, Montana, North Dakota, and South Dakota and television employment units with five or more full-time employees in Alabama and Georgia. For more on these Mid-Term Reports, see our article here.  

A year from now, on December 1, 2017, all broadcast stations are expected to be required to file Biennial Ownership Reports, including noncommercial stations which now have those reports due on the anniversary date of the filing of their license renewal applications. See our article here on the new obligation that will be effective next year, though appeals of that requirement from some noncommercial groups are pending (see our article here). But, until that rule is effective, non-commercial stations need to continue to file on their renewal anniversary dates. Thus, on December 1 of this year, Noncommercial Television Stations in Alabama, Connecticut, Georgia, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont and Noncommercial AM and FM Radio Stations in Colorado, Minnesota, Montana, North Dakota, and South Dakota have the obligation to submit their Biennial Ownership Reports to the FCC.
Continue Reading December Regulatory Dates for Broadcasters – EEO Reports, Ownership and Ancillary Revenue Reports, Ownership Review and Incentive Auction Updates

Early this week, in some of the legal journals that circulate in Washington, there was much speculation as to potential appointees to various government positions after the election. For positions such as the chairman of the FCC, many of these publications listed familiar DC names as likely appointees if, as expected by most pundits, Hillary Clinton was elected president. On the Trump side of the leger, speculation was much vaguer, as few had any real insight into how his administration would implement the broad but, in many cases, imprecise policies that Mr. Trump expounded during the election. Given the results of last night, those speculations are sure to ramp up as everyone tries to guess what will happen with broadcast policy in a Trump administration.

At this point, we can only speculate as to what that election will mean for broadcast policy – particularly at the FCC. One would certainly expect a lessening of the regulatory burden on broadcasters – as lessening burdensome regulations on businesses was a clear plank of the Trump agenda. The make-up of the FCC will likely facilitate such changes, as Republicans will no longer be in the minority at the FCC. A third Republican will join Commissioners Pai and O’Rielly on the FCC. These two Republicans dissented on many issues of importance to broadcasters – including the recently concluded Quadrennial Review of the Ownership Rules. Thus, a third Republican vote could have changed the decisions on many issues.
Continue Reading Looking at the Last Night’s Election Results and the Future of Washington Policy For Broadcasters

The FCC’s Order released at the end of August deciding the issues in its Quadrennial Review of its ownership rules is over 100 pages long. The full document, with the dissents from the Republican Commissioners, required regulatory impact statements and similar routine attachments totals 199 pages. The Order addresses many issues. For TV, it declines to change the local ownership rules, readopts the decision to make Joint Sales Agreements into attributable interests (thus effectively banning them in many markets, though making some tweaks to the grandfathering of existing JSAs), and adopts new rules for reporting shared services agreements. The Order retains the newspaper-broadcast and radio-television cross-ownership rules. It takes limited new steps to encourage minority ownership (principally re-adopting the rule that allowed small businesses to acquire and extend expiring construction permits for new stations and to buy certain distressed properties, see our article about that old rule here), but does not adopt any racial or gender preferences for broadcast ownership. It also ends consideration of using TV channels 5 and 6 for the migration of AM radio and other new audio services including those targeted to new entrants into broadcast ownership (see one of our articles about that proposal here). And it rejects most proposals to change the radio ownership rules. Today, with the NAB Radio Show just two days away, we will look closer at the radio rules, and will cover many of these other aspects of the decision in coming days.

Perhaps the biggest “ask” for changes in the rules came from numerous radio groups that requested changes in the “subcaps” that apply to radio ownership. For instance, in the largest radio markets, one owner can hold up to 8 stations, but only 5 can be in any one service (AM or FM). Some parties had hoped to be able to own more FM stations in a market, particularly given the growing levels of competition in the audio marketplace from satellite and online radio. Some AM owners looked to hold more than the current maximum number of AMs in a market as a way to provide economies of scale that might help to preserve and strengthen the struggling AM radio industry. The Commission rejected such changes.
Continue Reading FCC’s Decision on the Quadrennial Review of the Multiple Ownership Rules – Part 1 – Radio Issues

Last week, the FCC released its order eliminating the UHF discount. Under this discount, a TV broadcaster, in determining its compliance with the national ownership limit prohibiting any owner from having attributable interests in stations serving more than 39% of the nationwide television audience, would include in its count only one-half of the audience of any market served by a UHF station. This discount originated in the analog world, when UHF stations tended to have smaller audiences as their signals were harder to receive, and yet their operational costs were higher. Three years ago, the FCC proposed to eliminate the discount, as the technical inferiority of UHF stations no longer exists in the digital world (see our post here describing the FCC’s proposed action). This decision, reached in a 3 to 2 vote of the Commissioners, will put several broadcast groups over the national cap, while others will come close to it, limiting their ability to expand into new markets. Did the video distribution marketplace demand this action?

In fact, the Commission’s majority decision really did not examine in any detail the public interest factors justifying this action. Instead, the FCC focused almost totally on the fact that, in the digital world, UHF stations were no longer technically inferior. That was essentially stipulated by all parties, and the Commission viewed the decision as simply being one that was necessary to keep up with technology – as UHF stations were no longer inferior to VHF stations, there was no reason to give owners of these stations a discount in computing compliance with the national ownership limits. The Commission also pointed to the fact that, in the days before the digital transition, it had warned TV broadcasters that an end to the UHF discount was coming. But changes in the media marketplace in the 15 years since many of these statements were made, with the rise of multichannel video program providers and over-the-top television services like Netflix that were not even imagined 15 years ago, are given only a passing reference, as pointed out by the dissenting Republican commissioners.
Continue Reading Eliminating the UHF Discount and Limiting the National Ownership Reach of Television Groups Without Reviewing the Media Marketplace

In the last few minutes, the FCC has released its order on the Quadrennial Review of its multiple ownership rules, about which we wrote last week. The decision is available here, and includes dissenting opinions from the two Republican commissioners and a concurring statement from Commissioner Clyburn. In total, the text is 199

While the trade press has been full of reports that the FCC has voted on an order addressing the issues raised in its Quadrennial Review of its multiple ownership rules, and that the decision largely left those rules unchanged (including the broad ban on the cross-ownership of daily newspapers and broadcast stations), no final decision on the review has yet been released. However, we did see on Friday that, in the FCC’s list of matters pending before the Commission for approval “on circulation” (i.e. to be voted on without being considered at an FCC open meeting) the ownership item was removed from the list of pending items, seemingly confirming that the decision has in fact been voted on and is thus no longer circulating for approval. If the press reports are to be believed, there has been no major change in the rules despite much last minute hope for some relaxation of the newspaper cross-interest rule. The rules are thus likely to be those indicated by the Chairman in his blog post in late June, which we summarized here. Even if the most significant rules (e.g. local ownership rules for radio and TV – the “duopoly” rules, and the newspaper-broadcast cross-ownership rules) remain unchanged, that does not mean that the broadcast community should ignore the upcoming decision, as there are bound to be other issues addressed in the order that may be of significance.

In connection with the newspaper cross-ownership rules, while the press reports indicate that the rules will remain in place, there are reports that there will be some sort of waiver allowed, seemingly where economics justify the combination. If this is akin to the “failing station” waiver used to justify the ownership of 2 TV stations in markets where such ownership would normally not be allowed, some have wondered, given the economic state of the newspaper industry, if such a waiver would ever be used as it will be a rare case where a last-minute broadcast combination will rescue a failing newspaper. But we will need to see what the details are of the waiver standard to be applied.
Continue Reading Preparing for the FCC’s Soon to be Released Decision on Changes to its Multiple Ownership Rules