FCC Ownership Review

[TheBigA]

R-I News reports that the FCC announced it will take up the quadrennial assessment of ownership regulations. They gave this link:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-92A1.pdf

For those of you who follow this stuff religiously, like me, you'll recall that this was the issue that got Michael Powell's head handed to him. Back in 2002, he decided that the authors of the 96 Act intended the FCC to use this system to contiunue the process of deregulation. He went into it based on the assumption that in 96, they intended to deregulate, so every two years, they'd continue that process. So his June 2 rules loosened up ownership rules mainly on TV, not radio. In fact he tightened radio a bit. But the assumption was that he's a Republican, so he's for the big corporations. It got so heated that the Congress got involved. At the end of the day, they decided that the FCC should only do these reviews every FOUR years, instead of every two. That way, they could continue eating their filet mignons without getting indigestion.

So fast forward to 2006. Now Kevin Martin is in charge. If anyone could possibly be less popular than Michael Powell, it would be Kevin Martin. The only thing he tried to do was loosen the newspaper-broadcasting cross-ownership law. And even THAT got tied up in the courts for 3 years. Nothing came of it, and in fact very little has happened with this issue in eight years.

So here we are in 2010. On the very day a bi-partisan group of Senators & Congressmen announce they will do a review of the 1996 Communications Act, the FCC comes out with it's announcement that it will conduct its ownership review. That was bad form. The Congress does not like to be upstaged by a regulatory agency. Particularly one it disagrees with. I don't know if it was coincidence, or if it's politics, or both. But I think Congress is going to tell the FCC that they can't actually make any decisions in this area until after Congress reviews the 96 Act in the first place.

Various people, including me, have suggested several compromises. Mine is simple: If you want to own a newspaper in a town, you need to cut back on the number of broadcasting outlets you have. I'd also suggest a cap on the total number of radio stations a company can own. I think 250 is a good number. It's 2% of the total number of radio stations available. I also think it's time to address the AM problem. I suggest giving a portion of the AM band to minority broadcasters, the way a portion of FM was given to educational broadcasters. Current AM owners will be given various benefits, including tax credits or credit bailouts, to give up their AM licenses.

Those are my thoughts...let's see yours.

 

[Goat Rodeo Cowboy]

Thank you for codifying the history of this issue and sharing your observations.

I have no quarrel with your suggestions on how to go forward, but I realize that you, like the rest of us, have to pick an arbitrary number now and then. (Like the limit of 250 stations.)

Going back to the days of the early rules when it was one station per market (per band) and the limit was seven, that created a limit on the number of markets one owner could be in. If having limits of any kind has value (and I think it does) then maybe there should be a limit on the total number of markets one owner could be in.

Once of the justifications of loosening up the ownership limits was the assumed need to reduce the cost of operation of any one station by allowing common ownership (thus common expenses including personnel) within market.

So the question I raise: Should new policy allow an owner to own 250 stations in 250 different markets, or should there be a limit of 50 markets per common ownership? That would allow a company to have 4 to 6 stations in a market and achieve the efficiency of "economy of scale" and other not-so-academic benefits.

 

[TheBigA]

If having limits of any kind has value (and I think it does) then maybe there should be a limit on the total number of markets one owner could be in.

I always thought of that as being capricious, as the FCC likes to say. The number of markets has nothing to do with media concentration. That was the one number that the FCC had expended, from 5 to 7 to 12. If an owner has the infrastructure to handle 200 markets, great. I think realistically what hurt Clear Channel was that they didn't.

So the question I raise: Should new policy allow an owner to own 250 stations in 250 different markets, or should there be a limit of 50 markets per common ownership? That would allow a company to have 4 to 6 stations in a market and achieve the efficiency of "economy of scale" and other not-so-academic benefits.

I feel the current limits, which are based on market size, are fine. The only exception is if the company wants to add a newspaper to the mix. Then they need to sell a few radio stations. The ecomonies of scale that you talk about are absolutely important, and must be preserved. The only issue the government should have is in terms of media concentration.

 

[TexasTom]

For those of you who follow this stuff religiously, like me, you'll recall that this was the issue that got Michael Powell's head handed to him. Back in 2002, he decided that the authors of the 96 Act intended the FCC to use this system to contiunue the process of deregulation. He went into it based on the assumption that in 96, they intended to deregulate, so every two years, they'd continue that process.

In that respect, I think that Michael Powell actually was right: it's pretty clear that the Telecomm Act was intended to push further deregulation through periodic "reviews" of the rules. So I think that he did read the Act correctly -- what he didn't read was the (then) current political climate, which had grown markedly more hostile towards media ownership deregulation. Specifically, the widespread perception existed by 2002 that consolidation in radio had resulted in inferior programming.

So while the provisions for radio and TV ownership rules relaxation sailed through without much public notice in 1996, six years later it became a highly contentious issue. Although some even more noxious proposals did get eliminated in 1996 (foreign ownership of US broadcast stations, even greater ownership deregulation on the TV side), primarily because the Clinton administration indicated that it would not support the legislation if it included those particular proivsions.

It's interesting how fast the "mainstream" on a particular issue can change...