Update: FCC Votes Proposed Media Ownership Changes

The FCC has voted to propose scrapping the radio-TV cross-ownership rules, but leave in place the radio and TV local market ownership caps and essentially preserve the FCC's attempted loosening of the newspaper-broadcast cross-ownership rules, which the FCC tried to do under Republican Chairman Kevin Martin.

The item was essentially the same as the one circulated by the chairman.The commissioners were preparing their statements at press time, but it  includes both uneqivocal, and qualiified support, for some parts and a dissent from outgoing Commissioner Michael Copps on loosening the newspaper-broadcast crossownership rules.

The Notice of Proposed Rulemaking (NPRM) was voted by the commissioners on circulation rather that waiting for the next public meeting, which means Copps was able to weigh in on an issue near and dear to his heart. A final order will likely be scheduled for that public vote sometime in the first part of next year, after a sufficient notice and comment period on the proposed changes. That is particularly important since a lack of sufficient notice was one of the reasons the Third Circuit Court of appeals gave for throwing out parts of the FCC's 2007 decision under then chairman Kevin Martin to loosen the newspaper-broadcast crossownership rules.

While the NPRM basically reinstates the Martin plan of making combos between TV stations and newspapers in the top 20 markets presumptively in the public interest, it does put out for comment the Martin four-part test for determining whether such combos should be allowed and whether they should be the criteria. That test is "the extent to which the combination will increase the amount of local news in the market; whether each media outlet in the combination will exercise independent news judgment; the level of concentration in the DMA; and the financial condition of the newspaper or broadcast station, and whether the new owner plans to invest in newsroom operations if either outlet is in financial distress."

The FCC once again concluded that the Internent is not sufficiently ubiquitous to mitigate against retaining the restrictions on broadcasters, putting in a plug for broadband adoption and deployment and higher speeds while it was at it.  "[T]he media marketplace is in transition, particularly as a result of broadband Internet; but new media are not yet available as ubiquitously as traditional broadcast media," the NPRM said. "Our nation has not yet reached universal deployment or adoption of broadband. Too much of the country is unserved or underserved by broadband, and the average broadband speed available to consumers varies in different areas and lags behind some other nations. Broadband adoption remains under 70 percent, meaning that tens of millions of Americans do not have access to news and other programming on the Internet. Some parts of the population, including minorities, people with disabilities, and low-income Americans, have much lower rates of broadband adoption. Access to sufficient broadband speeds is critical for consumers to take full advantage of today's online programming and applications, including access to media content through streaming technology and downloading programs."

At least that tees up the possibility that when deployment has increased, the FCC will revisit its rules.

Broadcasters have not been happy with the news that the local market caps are not scheduled to be lifted, or that the newspaper-broadcast cross-ownership ban is not being scrapped altogether, even though a bipartisan trio of former FCC chairmen conceded to C-SPAN that they thought the ban should be scrapped but did not propose doing so for political reasons. Broadcasters have argued that the local caps are an artifact of a bygone era that prevent them from competing more cost-effectively in a media landscape remade by digital delivery.

""NAB supports elimination of the broadcast/newspaper cross-ownership rules because we believe journalism jobs could be saved under that scenario, " said NAB President Gordon Smith in a statement. "We also support relief from TV duopoly rules to help sustain news and public affairs programming at struggling TV stations. Given the explosion of media outlets, we believe nearly 40-year-old ownership rules that restrict free and local broadcasting ought to be reformed to reflect today's hyper-competitive marketplace." Neither of those were among the FCC's proposals, so that is likely a preview of NAB's comments on the proposal.

The NPRM is a follow-up to the Notice of Inquiry on the commission's quadrennial media ownership reg review, which is required by Congress. But it is also responsive to the Third Circuit's remand of the Martin plan to loosen the newspaper-broadcast cross-ownership ban. The court said the FCC had not given that change adequate notice or opportunity for comment. But it had no problem with Martin's decision not to loosen the other media ownership rules.

Also as part of the NPRM, the FCC will ask whether shared services agreements and other joint TV station operating agreements violate those local market station limits the FCC is keeping in place. Cable operators, led by the American Cable Association, have argued that agreements are a way to sidestep the rules and provide broadcasters with unfair bargaining power in retrans deals.

Small market TV station representatives met with commission staffers this week to make the case that they need those joint agreements to help preserve local programming, particularly local news.

Rep. Mike Doyle (D-Pa.) said Thursday he was glad the FCC was looking at SSA's, but concerned about loosening crossownership.

"I'm glad to see that the FCC is taking a closer look at shared service agreements and their impact on localism. But just as much, I'm worried about the agency's proposal to weaken the newspaper-broadcast cross-ownership rule, much like former Commissions have tried to do. I haven't seen evidence to show that consolidation improves a news outlet's financial troubles; in fact it has often caused cutbacks in staffing and operations. And I'm very concerned about the effect this could have on the production of news and other programming at a local level. I urge the FCC to keep this and other media ownership rules in place."

Doyle, a member of the House Communications Subcommittee, was one of the signatories on a letter earlier this month suggesting that allowing TV/newspaper combos could increase layoffs and decrease diversity of viewpoints.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.