The agenda for the FCC’s December 12 open meeting is to be released today. As has become customary, the Chairman yesterday blogged about the issues to be considered at the meeting. For broadcasters, there are two matters of interest. The first will be the initiation of the next Quadrennial Review of the FCC’s ownership rules
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.
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.
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.
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.
The FCC on Friday announced the time and location for the fifth of its planned six multiple ownership hearings. The hearing will be held in Chicago on Thursday, September 20. Exact times, location and topics will be announced later. The public notice does indicate that the meeting will begin in the afternoon and continue through…