Recap of House Communications Subcommittee Hearing "Broadcasting Ownership in the 21st Century"

On Sept 25, the House Communications Subcommittee held a hearing titled, "Broadcasting Ownership in the 21st Century". The hearing focused on broadcaster ownership rules and examined their relevancy in the modern media industry. Members discussed the state of today’s media marketplace, existing rules that limit ownership of broadcast and newspaper outlets, and barriers to entry for businesses owned by women and minorities. Several witnesses said that it was imperative for the Federal Communications Commission to focus on diversity among broadcast stations. Overshadowing the hearing was House Speaker John Boehner’s (R-OH) announcement, made less than an hour before the panel began, that he will resign from Congress in October.

Witnesses:
Paul Boyle, Senior Vice President of Public Policy, Newspaper Association of America
Kim Keenan, President and CEO, Multicultural Media, Telecom and Internet Council
Jason Kint, CEO, Digital Content Next
Todd O’Boyle, Program Director, Media and Democracy Reform Initiative, CommonCause
Michael Scurato, Vice President, Policy, National Hispanic Media Coalition
Gerry Waldron, Partner, Covingto

House Communications Subcommittee Chairman Greg Walden (R-OR) was notably absent from the dais.

House Communications Subcommittee Ranking Member Anna Eshoo (D-CA): “We know nothing we deal with has easy answers but one thing is certain: Relaxing the FCC’s media ownership rules will pave the way for increased industry consolidation, which does, in my view, nothing to promote localism, competition or diversity...A 21st century broadcast system should reflect the composition of our country. This is not only the right thing to do, it’s good business as well."

House Communications Subcommittee Vice Chair Bob Latta (R-OH): “Ignoring the need to make media ownership rules more relevant only hurts the industry and public interest. We need updated laws that better reflect the 21st Century communications landscape.”

Kim Keenan, President and CEO, Multicultural Media, Telecom and Internet Council: “Unfortunately, since 1978 the FCC’s activity regarding minority ownership has been marked by inconsistently applied policies and, in some cases, repeal of minority ownership initiatives without the implementation of new or alternative approaches.”

Todd O'Boyle, Program Director, Media and Democracy Reform Initiative, CommonCause: Common cause says waves of consolidation have eroded the quality of local media and urges the FCC to metaphorically man the pumps and build up the bulwarks. O'Boyle calls joint sales agreements covert consolidation loopholes that the FCC had allowed by looking the other way while media monopolists exploited them. FCC chairman Tom Wheeler also suggested as much when he proposed, and the FCC adopted in March 2014, rules limiting those JSA's by making the attributable as ownership interests. O'Boyle gave that move a shout out. "Thankfully, the FCC more recently did a good job of recognizing that sophisticated, nested ownership structures which facilitate financial shell games violate the public interest." He pointed out that within months of that decision, "the agency reported 10 new minority/female ownership arrangements, the first meaningful gains in minority and female ownership in years."Broadcasters have argued that JSA's help them to preserve local voices, but O'Boyle was having none of it. "Broadcasters frequently defend these tricks of the trade as essential to keeping the lights on," he said in his testimony. "They often paint a grim picture that but for these financial arrangements, broadcasts would go dark. Those protestations notwithstanding, we are hard pressed to find evidence of JSAs and SSAs that keep the books balanced during tough economic times. On the contrary, the bevy of recently announced mergers illustrates that broadcast business is booming, thanks to record ad sales–the bulk of which come from political advertising." He said Common Cause wants broadcasters to flourish, and if they have a good argument why JSA's do that in individual cases, they are free to seek a waiver from the FCC. There are various legislative initiatives to block the FCC's JSA limits, either by not funding them, or overturning them. O'Boyle said that would e a "staggering step backward."

Gerry Waldron, Partner, Covingto and counsel to the National Association of Broadcasters: According to his prepared testimony, Waldron says that FCC media ownership rules not only do the rules not help, but in many cases hurt those public interest goals of fostering competition, localism, and diversity. On the issue of competition, Waldron planned to tell the legislators that the rules stifle broadcasters' ability to be equal players in a very competitive video marketplace, and so do not serve the public interest, which the FCC is sworn to defend and promote. As for localism, he says, the rules have had the opposite effect by "by limiting investment and synergies that could otherwise fuel locally-focused programming." Waldron says NAB supports diversity, and recognizes that the industry as a "great deal of room for improvement." But he says the current ownership rules only "suffocate" smaller broadcasters and limit new entrants. "The current FCC rules distort broadcast competition in this new media landscape. They limit broadcasters’ ability to respond to market forces, while cable, satellite and Internet-based media outlets without comparable restrictions proliferate and take away both audience share and advertising revenues from traditional broadcasters. The reality is that today, broadcasters’ main competition for advertising dollars comes from the cable industry, and increasingly from the Internet, yet the broadcast ownership rules have not adapted to account for this progressively more competitive playing field."