Fewer Voices In Our Communities: The FCC Supports More Media Ownership ConsolidationNovember 14, 2017
In a World Where the Media Ownership Rules are Eliminated
Imagine living in a town where the only local daily newspaper, two of the top four television broadcasters, and some local radio stations are all owned by the same entity. An owner might promote one political ideology or favor particular beliefs, leaving different viewpoints simply unheard. This poses many dangers, and runs contrary to the principles of a country that prides itself on the First Amendment and the benefits of robust public dialogue. This Twilight Zone-esque hypothetical may now become reality when the Federal Communications Commission moves to scrap central portions of its historic media ownership rules at the Open Meeting on Thursday. The current media ownership rules limit any one entity from owning too many of the newspaper, radio, and/or television entities within a local market, in order to ensure viewpoint diversity. These rules are under attack.
Historically, Americans have received their news and information from newspapers, radio, and television broadcasters. Even with the rise of cable news, social media, and other sources of information, these traditional sources remain the primary sources of local information. If you want to learn about local politics, development plans, new restaurants, or matters of public safety, you’re still more likely to turn to the local TV broadcast station than to CNN. In fact, the FCC itself branded broadcast radio and television as “distinctly local media.” Keeping communities informed on local news and in emergencies was a significant responsibility, so the FCC created its media ownership rules to reflect the demands of those responsibilities.
Elimination of the Rules Poses Problems to Localism
How do all of these changes lead to a world where potentially all of our information is the same and there is not viewpoint diversity? The Order before the FCC next Thursday rolls back rules that have protected the public interest and fostered diversity of voices in our communities, locally created content, and competition.
The current rules are imperfect: they need to be modernized to reflect the changing media landscape, and enforcement needs to be improved. But they should not be eliminated. The current FCC plan would simply roll most of these rules back, leading to a media consolidation and local news catastrophe.
What the FCC Proposes to Do: Mostly Eliminate
The overarching theme of the Order is to simply eliminate the current rules. However, the FCC did not eliminate everything; it declined to change the Local Radio Ownership Rule and disclosure requirements for shared services agreements (SSAs). Tacked on at the end, the FCC suggests adopting an incubator program, which is really a poorly concocted consolation prize with its own set of problems.
The Newspaper/Broadcast Cross-Ownership Rule and Radio/Television Cross-Ownership Rule
The FCC established the Newspaper/Broadcast Cross-Ownership (NBCO) Rule in 1975 to promote diversity of viewpoints at a local level, noting the rule was “essential to a democracy that its electorate be informed and have access to divergent viewpoints on controversial issues.” The NBCO Rule prohibited common ownership of a full-power broadcast station (TV, AM, or FM) and a daily print newspaper if the newspaper’s publication was encompassed by the station’s service contour. The Radio/Television Cross-Ownership (RTCO) Rule prohibits an entity from owning one radio station and more than two TV stations in the same market, unless the market meets specific size criteria. The Order repeals both of these rules.
The Local Television Ownership Rules: Eight-Voices Test and Top-Four Prohibition
The FCC is also revising its Local Television Ownership Rules, which include the Eight-Voices Test and Top-Four Prohibition. The Eight-Voices Test requires that any time two TV stations combine ownership, at least eight independently owned TV stations remain in the market. The Top-Four Prohibition restricts a single entity from owning two of the top-four ranked television stations in the same market. The Order repeals the Eight-Voices Test, stating that the rationale behind it is unsupported in the record. The Order does keep the Top Four Prohibition, but adds a hybrid approach, which allows the FCC the option to review possible ownership combinations on a case-by-case basis depending on the competitive conditions of those local markets. So even though the Top-Four Prohibition is still in effect, the Commission has the flexibility to waive the rule.
The Attribution Rule for TV Joint Sales Agreements
JSAs are agreements between stations where one station, the brokering station, sells advertising time on another station, the brokered station, for a fee or percentage of revenues. If a JSA includes more than 15 percent of the weekly advertising time of a brokered station by another in-market station, then the brokering station is deemed to have an attributable interest in the brokered station. This would count towards the brokering station’s permissible ownership totals, because in theory the brokering station would be able to exercise considerable influence over the brokered station’s operations. If the Attribution Rule for TV JSAs are eliminated, brokering stations will be able to exert more control over the programming decisions of brokered stations without that control being attributed to them.
The Diversity/Incubator Program
There is a Notice of Proposed Rulemaking at the end of the Order that proposes the adoption of an incubator program that seeks to promote diversity in broadcasting. The program is aimed at providing sources of capital and support to entities that lack the requisite experience or financing. The incubator program suggests established companies could help new owners by providing “technical assistance, loan guarantees, direct financial assistance through loans or investments, training, or business planning assistance” in exchange for a waiver to an ownership rule (or other similar benefit). This essentially means that a big company can show up and help some new, small companies in exchange for a waiver of media ownership rules. The major caveat here is that there will no longer be many ownership rules that need waiving, so there is little incentive for an established company to step into this role.
Broadcasters are spectrum licensees, and without some strong public interest requirements on spectrum licensees, we are at risk of losing local, community-centric information. If the goal of broadcasting is no longer to be public trustees providing local service, then the FCC needs to take some time to seriously reflect on whether broadcasters should continue to have exclusive use of valuable spectrum resources.