They Want to do What Now? The FCC’s Media Ownership Proposal

An issue that has been simmering in Washington has finally boiled up to the surface. And, no, we’re not talking about the fiscal cliff. This issue is media ownership in the U,S. As longtime Headlines readers know, this has been a recurring, major issue, especially in the last ten years or so. The Federal Communications Commission is trying to wrap up a review of its ownership rules as is required by law every four years. This particular review began in 2010 and FCC Chairman Julius Genachowski hoped to complete the proceeding by the end of 2012, but that ain’t gonna happen.

Localism, competition and diversity are the bedrock principles upon which the FCC’s ownership rules rest.

From the earliest days of broadcasting, federal regulation has sought to foster the provision of programming that meets local communities' needs and interests. Thus, the FCC has licensed stations to serve local communities and it has obligated them to serve the needs and interests of their communities. Stations may fulfill this obligation by presenting local news and public affairs programming and by selecting programming based on the particular needs and interests of the station’s community.

The FCC has relied on the principle that competitive markets best serve the public because such markets generally result in lower prices, higher output, more choices for buyers, and more technological progress than markets that are less competitive. In general, the intensity of competition in a given market is directly related to the number of independent firms that compete for the patronage of consumers.

Diversity advances the values of the First Amendment, which, as the Supreme Court stated, “rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.” The FCC has elaborated on the Supreme Court’s view, positing that “the greater the diversity of ownership in a particular area, the less chance there is that a single person or group can have an inordinate effect, in a political, editorial, or similar programming sense, on public opinion at the regional level.”

The FCC has considered four aspects of diversity:

• Viewpoint diversity ensures that the public has access to “a wide range of diverse and antagonistic opinions and interpretations.” The FCC attempts to increase the diversity of viewpoints ultimately received by the public by providing opportunities for varied groups, entities and individuals to participate in the different phases of the broadcast industry
• Outlet diversity is the control of media outlets by a variety of independent owners.
• Source diversity ensures that the public has access to information and programming from multiple content providers.
• Program diversity refers to a variety of programming formats and content.

Since 1973, minority media ownership has been a goal of the Commission’s structural ownership regulation. However, recent research shows that the ownership of broadcast outlets does not reflect the diversity of the nation as a whole. Minority ownership promotes competition by ensuring that all sources of intellectual and creative capital are put to their highest use, and because an integrated industry serves the public better and thus competes more effectively than a segregated industry. Minority ownership promotes diversity because minority owners serve interests and address needs not served or often recognized by most majority media.

On December 2, former FCC Commissioner Michael Copps, a vocal critic of media ownership concentration and advocate for minority media ownership, wrote an article for the Benton Foundation, Promises To Keep (), noting President Barack Obama’s oft-stated commitment to media ownership diversity. But, Commissioner Copps notes:

President Obama’s first term has come and almost gone. Important national priorities have been tackled and major legislative and executive milestones have been achieved. Reforming media policy was not among them. Now comes the second term and the opportunity to deliver on his earlier approach by tackling the declining state of America’s news and information ecosystem. This essential infrastructure of democracy has suffered the same kind of collapse as so much of America’s physical infrastructure—witness the sorry state of our bridges, highways, streets, public transportation, airports and public utilities. So, too, in media. Private sector consolidation led to the closing of hundreds of newsrooms and the firing of thousands of investigative reporters who should be combing the beats to hold the powerful accountable. Instead journalism has been hollowed out as badly as those rust-belt steel mills. Investigative journalism hangs by a slender thread, replaced by vapid infotainment, bloviating talking heads, and a dry well of facts and real-world analysis.

The proposed changes, according to reports we’ve seen since early November, include loosening the newspaper/TV station cross-ownership rule, lifting limits entirely on newspaper/radio and TV/radio cross-ownerships, and counting some joint sales agreements -- those involving selling over 15% of another station's airtime -- toward local ownership caps the FCC is not lifting or modifying.

Commissioner Copps warns that the FCC is about to vote on a proposal to loosen its newspaper-broadcast cross-ownership rule – a proposal very similar to one adopted by the then-Republican-led FCC back in 2007. “Shockingly,” Copps writes, “the new proposal goes even beyond the 2007 proceeding by actually permitting more radio-TV consolidation, too—putting diversity-owned radio stations at greater risk of take-over by the media giants.” Moreover, Copps and many public interest advocates have pointed out, the FCC has failed to meet the demands of a federal court to deal with the lack of minority ownership before loosening the newspaper-broadcast cross-ownership rule.

In response to the criticism of the proposal now being considered by the FCC commissioners, a FCC spokesperson reiterated that newspaper/radio and TV/radio ownership limits were no longer needed, and that the item did address diversity. "FCC Chairman Genachowski [has] shared a proposal with his colleagues to streamline and modernize media ownership rules, including eliminating outdated prohibitions on newspaper-radio and TV-radio cross ownership. As the Commission recognized last year, while the media marketplace is in transition, broadband and new media are not yet available as ubiquitously as traditional broadcast media, and certain protections therefore remain important to promoting competition, diversity, and localism," the spokesperson said. "The proposal promotes media diversity by retaining some of the consolidation limits, and through a number of measures that provide broadcast opportunities for small businesses."

FCC Media Bureau Chief William Lake added, "Reports that the order would make it easier to own a top TV station and a major newspaper in a market are wrong. In fact, the order would strengthen the current rule by creating an express presumption against a waiver of the cross-ownership ban to allow such a combination. In addition, the proposed order preserves the existing TV duopoly rule, which forbids ownership of more than one of the top four TV stations in any market."

But the criticism of the FCC proposal has already gotten the attention of Congress. First we saw reports of Members of Congress asking, at the very least, for a public vote on the media ownership rules changes. Sen Maria Cantwell (D-WA) led this charge hoping the commissioners would have to publicly defend their decision. But Sen Cantwell and other Members would prefer the current proposal be scrapped altogether, saying it would diminish diversity of "local views, viewpoints and opinions."

On November 30, nine U.S. senators wrote to Chairman Genachowski asking that the commission not proceed with any rule changes without providing, as mandated by the federal court, "clear, evidence-based response" to concerns about the impact of those changes on diversity of ownership. Rep Jan Schakowsky (D-IL) added her voice to the chorus on December 4. A number of minority groups, media activists and unions have asked the FCC to hold off on a vote until the diversity impact is better gauged. Free Press has threatened to sue the FCC if it votes before collecting more input. “The FCC hasn't released text or held any public hearings on its final proposal, and that lack of transparency is part of the problem here,” said Matt Wood of Free Press. “But based on what we do know, it is flat-out wrong to suggest that the top-4 ranking exemption would prevent any possible ownership of a top TV station and a major newspaper in the same market.”

The media ownership proposal was also raised at a nomination hearing for current FCC Commissioner Mignon Clyburn. Senate Commerce Committee Democrats, led by Sen Cantwell, threatened to pass a resolution of disapproval over the FCC’s media ownership rules, currently under circulation at the agency. Mentioning her newspaper experience, Commissioner Clyburn told the Senators “Diversity and media are what I lived and breathed,” as the publisher and general manager of The Coastal Times, a Charleston-based weekly newspaper that focused primarily on issues affecting the African American community. She owned and operated the family-founded newspaper following her graduation from the University of South Carolina.

On December 4, the FCC blinked saying it would take more comments on the issue, pushing off a vote until January 2013 at the earliest. Specifically, the FCC is seeking public comment on a recently-released report on the ownership of commercial broadcast stations. The Ownership Report provides detailed information by race, ethnicity, and gender concerning ownership of commercial television, radio, Class A television, and low-power television stations. The report confirms that minority and female ownership numbers remain low and provides more detailed ownership figures. The public comment period ends January 4, 2013, but the Leadership Conference on Civil and Human Rights, which represents groups that have been critical of the FCC's media ownership proposal, told the FCC that the comment period is not sufficient since the report was only released two weeks ago. "The burden of proof lies with the Commission to demonstrate that its media ownership rules promote ownership by women and people of color, and thus, we expect the Commission to give full consideration to the comments received in the new comment cycle. Further, we anticipate additional meetings and dialogue after the comment period is concluded. Accordingly, we seek your assurances that you will not rush to conclude the 2010 Quadrennial docket in early January without time for dialogue."

The FCC has gotten some support, from surprising corners, for changes its rules, however. Minority Media and Telecommunications Council leader David Honig wrote an op-ed this week saying MMTC was urging the agency to relax the 37-year-old regulation. “As the nation’s leading advocate for equal opportunity and civil rights in mass media, the MMTC champions a diverse and robust Fourth Estate. And the absolute ban on cross-ownership no longer serves this purpose.” He explained: “We must ensure that journalism — particularly at the local level — does not continue to deteriorate. Relaxing the cross-ownership ban would provide newspapers with immediate relief. Cross-owned newspapers and television stations pool resources and collaborate on investigative projects. FCC-commissioned studies have concluded that television stations that are cross-owned with newspapers provide more public affairs programs and local news than other stations.”

After Honig’s announcement, the National Urban League (NUL), National Council of La Raza (NCLR), Asian American Justice Center (AAJC) and the National Association for the Advancement of Colored People (NAACP) wrote to the FCC saying that, despite reports to the contrary, they do not support loosening the newspaper-broadcast crossownership rule (NBCO) without evidence it will not negatively impact diversity. While in a filing to the FCC on media ownership the groups did say they would not object to relaxing the rule, they only did so with the explicit caveat that "if such a relaxation would not diminish minority ownership." They say any implication that their support does not require that evidence, which they say the FCC has not provided, is not correct.

Like the debate over the looming fiscal cliff, it is not clear how the media ownership debate will end. Advocates are scrambling to analyze the FCC’s broadcast ownership data and will be working furiously through the holidays to craft arguments on how those numbers should impact FCC policy. We’ll be tracking the debate in Headlines. See ya next week.