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Editorial: Time for Change

In 1975, the Federal Communications Commission — during my tenure as chairman — adopted rules that prohibited the common ownership of a daily print newspaper and a full-power broadcast station (radio or television) in the same market. It did so at a time when newspapers played a dominant role in this nation’s media landscape. And the agency’s regulations were largely based on concerns about that perceived dominance and the effect that it might have on viewpoint diversity.

For some 42 years, until very recently, the cross-ownership prohibitions remained substantially unchanged. And this has been true even though dramatic changes have taken place in the communications marketplace. Sadly, the strength of the daily newspaper industry has greatly declined. Many papers have struggled to prosper — and, in some cases, even survive — in what has become an increasingly internet-driven environment. Moreover, there are now many more radio and television stations than in 1975. And today’s media universe features numerous highly diverse sources of local news, information and advertising (including independent digital-only news outlets that have no print or broadcast affiliation).

Such regulatory inertia has been especially disconcerting because Congress, in the 1996 Telecommunications Act, directed the agency to examine its ownership rules every two (now four) years to determine whether they are still “necessary” in the public interest. Given the marketplace metamorphosis that has occurred since then, it would seem difficult, if not impossible, for the commission to contend that the cross-ownership restrictions remain necessary or even justifiable.

Further, the FCC’s inaction on cross-ownership has seemed even more puzzling given expressions made by a panel of the 3rd U.S. Circuit Court of Appeals. For more than 13 years, this panel (by a 2-1 majority) has maintained jurisdiction over the broadcast ownership rules and generally has resisted any deregulatory efforts. However, even it has questioned the need for a blanket proscription on newspaper/ broadcast coalitions. Indeed, just last year, the judges observed that the ban’s continued operation has imposed “significant expense” on parties that otherwise might have been allowed “to engage in profitable combinations.”

Despite these congressional and judicial nudges, the FCC held firm not only on the newspaper/broadcast ban but on most of its other age-old broadcast ownership rules as well. However, at its November meeting — under the leadership of chairman Ajit Pai, who long has lamented the “archaic” nature of these regulations — the commission finally took decisive action. In addition to significant modifications of other rules, the FCC totally eliminated all cross-ownership restrictions (including one directed at radio/television affiliations), concluding that they are no longer necessary to promote viewpoint diversity and finding that some combinations may facilitate investment and achieve efficiencies to improve local newsgathering.

The only regret, of course, is that such welcomed relief did not come sooner in order to help remedy the ills that have afflicted the newspaper industry. According to recent data, the number of daily papers has declined by nearly 25% since 1975 and total circulation has fallen by a third. Similarly, newspaper advertising has decreased dramatically. Over the past several decades, the general stability and profitability of elements of broadcasting might have helped to preserve at least some of the “lost” newspapers. While print journalist layoffs sadly have become all too common, staffing in local television newsrooms has steadily increased. Concomitantly, the strength of local news reporting — always a hallmark of the “journalistic tradition” practiced by newspapers — could have been a valuable asset to many broadcasters, especially in sometimes hard-pressed smaller markets.

Still, the FCC’s action — better late than never — strikes me as very much in the public interest. After all, in removing restrictions that can no longer be justified, the commission has recognized the realities of the media world as it is today, and not as it was in 1975, 1996 or perhaps even a decade or so ago.

Wiley is a founding partner of law firm Wiley Rein. His clients have included Newspaper Association of America (now the News Media Alliance).