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Editorial: Tipping Point

The FCC under chairman Julius Genachowski has insisted that it is not trying to sell broadcasters’ spectrum out from under their noses to feed the beast of wireless broadband.

The chairman has told Congress the commission will resolve the border treaty issues with Canada and Mexico, and will give broadcasters enough information about the framework for incentive auctions and station re-packing so that they can make informed decisions about whether to offer up spectrum or not.

That’s all well and good. But if the FCC wants to really demonstrate its interest in preserving over-the-air TV for the millions of what are often minority, lower-income and senior citizens who rely on it, and the millions more of all stripes who could be added back to the rolls if cord-cutting continues, it could adjust its sights in the media ownership proceeding and help level the playing field.

It’s been almost half a decade since the commission decided not to loosen local market caps and not to lift the ban on newspaper/broadcast cross-ownership. That is an eternity in digital years. And in that time, over-the-top video has made a competitive marketplace even more so. Just last week, in seeking comment on a new regulatory fee structure, the commission talked about how technology had boosted the intermodal competition among cable, satellite, broadcasting and wireless.

If the FCC were to loosen local market limits on station ownership, it would allow more combos in smaller markets, which could not only provide more resources for news and public affairs but would make those stations more valuable.

As attorney Dan Brenner pointed out in a recent analysis of the Supreme Court decision (see “Washington Watch,”), the court’s decision not to hear broadcasters’ challenge to the media ownership rule decision means that as long as the FCC stays on its present course of leaving the local caps in place, there will be no alternative broadcast buyer for weaker stations…which means the government can play “I can get it for you wholesale” when it buys the stations at auction.

By contrast, had the court taken the case and decided on the scarcity rationale of broadcast regulation, “the result could have been greater broadcast ownership consolidation, thereby making a broadcast license more valuable because the potential acquirer pool would be bigger,” Brenner said.

But the court did not take that step. That, however, does not mean the FCC can’t decide that allowing stations in smaller markets to combine is one way to help broadcasters remain competitive in a video marketplace that includes cable, satellite, telco and online.

Broadcasting is at a tipping point in its future; the FCC controls the scales. With fewer ownership restraints, along with the freedom to maneuver, and to offer new and expanded services to what could be a growing population, broadcasting and broadband could develop a symbiotic relationship that would play to their strengths.

But at the moment, broadcasting is being kept in what Brenner calls its “1927 Act regulatory box.” It is treated as a massive, consolidated powerhouse when it serves the FCC’s purpose (justifying continued ownership regulations comes to mind) and a dinosaur in the tar pits when the FCC wants its spectrum back. To some, that might sound like a bit of hyperbole. But it’s no exaggeration to state that an irreplaceable public resource is, quite simply, in peril.