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FCC Hears Pros, Cons on Its Latest Attempt to Allow Media Cross-Ownership

Organization hopes to get around 2011 court decision upholding limits on the cross-ownership of newspaper and broadcast entities

Industry and public-advocacy groups have put in their two cents on the Federal Communication Commission’s latest attempt to dissolve the ban on media cross-ownership in local markets.

The FCC is required to review its media ownership rules every four years to reflect the changing competitive landscape. However, looming in the background during this go-round is a 2011 3rd Circuit Court of Appeals decision in the Prometheus Radio Project vs. FCC.

At the time, new FCC rules, developed under then chairman Kevin Martin, that would have ended a 35-year-old rule prohibiting cross-ownership of newspaper and broadcast entities in the same local market were struck down by the court.

The Prometheus case was brought by a consortium of activist groups who opposed expanded concentration of media ownership, but the court never got to the merits of the FCC's new rules.

Also read: FCC's Attempt to Ease Media Ownership Struck Down by Court

The court instead agreed with the activists that the FCC had not provided adequate notice of the proposed rule changes.

In its ruling, the court also upheld pre-existing limits on the number of television and radio stations any broadcaster can own in any single market, and ordered the FCC to consider how media ownership rules affect ownership of media outlets by women and people of color.

The FCC again is proposing rules changes that would relax the ban on crossover ownership. 

The first round of comments were due Monday night to the FCC; a round of reply comments ends April 3.

In its latest proposal, the FCC concludes that while some newspaper-broadcast cross-ownership restrictions remain necessary to “protect and promote viewpoint diversity,” overall the agency favors its proposed earlier rule change that would remove the crossover ownership firewall in local markets.

This latest FCC proposal would allow crossover newspaper-broadcast ownership in the top 20 markets in the United States, while also providing a range of exceptions that could allow such joint ownership in “virtually” all markets, according to Corie Wright, senior policy counsel for Free Press.

As far as radio-television cross-ownership, the FCC currently maintains caps to regulate the number of radio stations or television stations one entity can own in a given market. The FCC also allows for a capped amount crossover radio-television ownership in a given market but is now proposing that that the latter rule be abolished, as the rules governing the first two caps should suffice.

“We believe that the local radio and television ownership rules adequately protect our localism and diversity goals and seek comment on this proposal,” the FCC proposal reads.

The National Association of Broadcasters, in its comments, called for the FCC to relax or repeal broadcast ownership rules entirely.

The current rules “distort competition in the marketplace and place broadcasters at a severe disadvantage,” said the NAB in its comments. “The rules limit broadcasters’ ability to respond to market forces, as cable, satellite and internet-based media outlets proliferate and compete for audiences and advertising revenues without comparable restrictions.”

The benefits of common ownership have been well-documented, the NAB said, pointing to a 2011 study examining the television industry which found that "broadcasting generally, and local news production specifically, are subject to strong economies of both scale and scope.”

The association maintains that removing the cross-ownership restrictions would “allow local stations to tap those efficiencies and pass the benefits to consumers in the form of enhanced programming, including local news, and other improved services.”

The NAB also supported the FCC’s proposal to eliminate the radio/television cross-ownership ban. “Elimination of the rule will help level the playing field between local broadcast stations and multi-channel video and audio distributors,” the organization said.

It also was in favor of the FCC’s proposals for incentive-based means of promoting ownership of broadcast outlets by minorities, women and small businesses.

“Incentive-based methods, such as tax incentives, waiver/exception programs, establishment of reversionary rights for certain sales, and sub-channel licensing programs will be effective in enhancing ownership opportunities for these groups, without restricting broadcast ownership in ways that disadvantage all broadcasters,” writes the NAB.

On the other side of the dial, the public advocacy group Free Press excoriated the FCC proposals.

“At a time when conglomerates are spinning off their broadcasting and print operations, the FCC’s re-proposing of Chairman Kevin Martin’s loophole-ridden cross-ownership rule is nothing more than a solution in search of a business model,” wrote Wright to the FCC. “Increasing cross-ownership will not help the newspaper industry — it will only push it further into debt while also harming the production of quality local news.”

Wright added that the FCC had “no business” relaxing the ban when it has shown "it can’t even hold broadcasters to the letter of existing law. The local TV ownership rule is supposed to promote competition between local stations, but some broadcasters are skirting the rules by entering into secret deals to combine local newsrooms and station operations. If it walks like a duopoly and talks like a duopoly, it should be treated like a duopoly.”

Meanwhile, the Media Access Project, in league with the Prometheus Radio Project — which brought the 2011 action against the FCC — said that while it applauded the FCC’s reaffirmation that “media ownership limits are necessary to preserve and promote viewpoint diversity,” it was troubled by the agency’s lax regime in keeping the public apprised of license applications, transfers or waivers in regard to broadcast entities.

“Commission also should increase the frequency with which applicants for renewal or transfer must broadcast notice, to at least once a week, if it is to ensure that viewers and listeners have a meaningful opportunity to participate rather than an opportunity that fleets as quickly as expletives,” wrote Andrew Jay Schwartzman, senior vice president and policy director for the Media Access Project.