Yesterday, the Detroit Free Press and the Detroit Morning News, which operate their publication and distribution operations through a joint operating agreement, announced that they will cut back on the physical publication of their papers – publishing full editions delivered to homes only three days a week.  On other days, the papers will publish an abbreviated version, available only on newsstands.  The papers will not abandon news coverage the remainder of the week, but will instead concentrate on their on-line presence, showing the power of the Internet to disrupt traditional media.  As we said years ago in one of our first posts on this blog – New Media Changes Everything, and it seems that this is just another indication of how true that is.  The broadcast media, particularly radio, has often looked at the advertisers served by the daily paper as a ripe source of new business, and may well see the Detroit change as a major business opportunity.  But does it also change the FCC’s consideration of the multiple ownership rules applicable to radio and television cross-ownership with newspapers?

The FCC’s multiple ownership rules prohibit the ownership of a broadcast station and a "daily" newspaper that serve the same area.  The rules define a daily paper as one that is "published" at least four days each week, and is circulated "generally in the community."  Here, the Detroit papers arguably will not meet that 4 day a week requirement – at least for a publication that is generally circulated throughout the community.  Of course, some may argue that the abbreviated newsstand copy constitutes a daily publication but one would assume that, sooner or later, even that will disappear.  Thus, while there has been so much controversy about the Commission’s decision of one year ago (summarized here) deciding that combinations of broadcast properties and newspapers in Top 20 markets were presumed to be permissible, while those in smaller markets were not, one questions whether this still makes any sense in today’s marketplace where seemingly few can profitably publish a daily paper in most markets, and no one seems to want to rescue the many papers that have fallen on hard times. 


Continue Reading

In a recent decision, the FCC interpreted its radio multiple ownership rules in a case involving changes in an Arbitron market.  The FCC’s rules restrict the number of radio stations that one company can own in a market based on how many stations are in that radio market.  In situations where stations are rated in an Arbitron market, the number of stations is determined by how many stations are in that Arbitron market, as determined by data compiled by the financial analysis firm BIA.  In this case, while the application to acquire the station was pending, BIA came out with its first list of stations that it considered to be in the newly created Arbitron market.  That list showed that, in the new market, the Buyer already owned more stations than allowed by the rules, so acquisition of this additional station was prohibited.  The case stands for the proposition that, while changes in Arbitron markets that allow an acquisition to take place must have been in place for two years to become effective (to prevent owners from gaming the system by making short-term changes), changes that adversely affect the ability of an owner to acquire a station become effective immediately.

According to the decision, at the time that the application in question was filed, the station to be bought was listed by BIA as being in the Manchester, New Hampshire Arbitron market.  The number of stations owned by the Buyer in Manchester was such that the acquisition of the station was permissible at the time the application was filed.  However, Arbitron announced the creation of a new Concord radio market just before the filing of the FCC application for approval of the transfer of control of the radio station.  Soon after the filing of the application, BIA released its list of stations in the new Concord market, and it included a number of the stations owned by Buyer, including the station it was proposing to acquire.  In the new Concord market, the Buyer would have too many stations to permit the acquisition of this station under the restrictions set out in the multiple ownership rules.


Continue Reading

The New York Times recently published an article about NBC’s owned and operated station in New York City acceptance of advertising for liquor.  While ads for beer and wine have been a staple on broadcast stations (though see our discussion of the limits on that advertising, here), ads for other alcoholic beverages ads have been less frequent.  Many broadcasters have for years believed that such ads were prohibited by the FCC or some other government agency.  In fact, alcohol ads have not been prohibited by law, but instead by voluntary actions of trade associations representing broadcasters and the alcoholic beverage industry .

Until the early 1980s, the National Association of Broadcasters had a voluntary code of conduct for broadcasters, suggesting good standards and practices for broadcasters: limiting some broadcast content while encouraging broadcasters to air other programming perceived to be in the public interest.  Among the conduct that the Code prohibited was the advertising of hard liquor. While the NAB Code was not mandatory for broadcasters, in filing many routine applications for new stations and for the acquisition of existing stations, the FCC in the past had requirements that the potential broadcasters explain how their programming would serve the public interest.  Most applicants would shorthand their compliance plans by simply promising to abide by the NAB code, in effect binding themselves to the code through those representations made to the FCC.  The Code was in place until the early 1980s, when the Department of Justice became concerned that code provisions suggesting maximum commercial loads and similar matters functioned as a restraint of trade in violation of the antitrust laws, and the NAB Code was abandoned.


Continue Reading

The FCC last week approved two television "Shared Services Agreements," here and here, each between the proposed Buyer of a television station and a company that owns another television station in the same market.  In each case, the existing owner would sell advertising time for the station being purchased, as well as provide a loan guaranty for the funds necessary for the purchase of the station.  And the station already in the market would receive from the purchaser of the new station an option to purchase the station in the future, if that purchase is permitted under some future set of multiple ownership rules.  It is interesting that these decisions were released in the same week as the FCC issued two requests for public comment on the multiple ownership rules (see our post here).

These decisions probably mark the outside limit of what two stations can do in a television market where they cannot be co-owned without triggering multiple ownership concerns.  In the radio world, such agreements would not be possible to the same extent.  A radio licensee who provides sales services for another station in the same market, where more than 15% of the advertising time on the station is sold pursuant to such an agreement, would result in an "attributable interest," meaning that such services could only be provided to a station that could be owned under the multiple ownership rules. 


Continue Reading

In a letter to FCC Chairman Martin and Commissioners Copps and Tate, Congressman Edward Markey, head of the House of Representatives Subcommittee on Telecommunications and the Internet, has asked that the FCC take strong steps to restrict the advertising of unhealthy food in children’s television programs.  While applauding voluntary efforts promised by some broadcasters to include in their children’s programing more Public Service Announcements (PSAs) for healthy eating, Congressman Markey urged the FCC to do more by cutting in half to 6 minutes per hour the amount of permissible advertising in children’s programming , and by finding that a station had not met its obligations to broadcast educational and informational programming directed to children if the station aired ads for unhealthy foods during a program which would otherwise qualify as a toward meeting the station’s obligations.

The letter from Congressman Markey, while citing efforts in other countries to enforce similar regulations, does not address basic issues with each of his proposals.  First, if sponsorship of children’s programming is cut in half, won’t that also cut the incentive of broadcasters to air such programs?  Cutting sponsorship to the bone would seem to guarantee that broadcasters will do the absolute minimum amount of children’s programming required, so that they can air programs where there are no advertising restrictions.

These requirements would also seem to make broadcasters into the food police.  Broadcasters will have to educate themselves as to the nutritional qualities of various food products to make sure that nothing impermissible gets on the air.  And where will lines be drawn?  Could a station safely advertise a fast food store if the ads featured only the salads sold by the store – even where that store might also sell not so healthy alternatives?  If definitions are drawn by numerical limits on contents such as sugar, salt and fat (as suggested by the letter), will these limits necessarily lead to advertising the most healthy foods?  Will broadcasters be forced to substitute for parents in making decisions about what their children will eat?


Continue Reading

As we’ve discussed before, here, the FCC has been reviewing their power to regulate violent programming on broadcast stations.  Despite the apparent constitutional and practical issues involved in such restrictions (e.g. are Roadrunner cartoons covered?), published reports indicate that a majority of the FCC Commissioners will issue a report asking Congress to give the FCC authority