Changes

The FCC voted 3-2 along party lines to make changes to the broadcast ownership rules, the end result of the 2014 quadrennial review of the rules. The vote came today (11/16) at the COMMISSION's Open Meeting.

The changes include the elimination of the newspaper-broadcast and radio-television cross-ownership rules and several television-specific alterations, including elimination of the Eight-Voices Test and the addition of a case-by-case review option for the current top-four-network prohibition, plus elimination of the attribution rule applied to joint sales agreements and retention of the disclosure rule for shared services agreements. Radio ownership caps remain unchanged, although the Commission did add a presumptive waiver of the rule treating stations in embedded radio markets as part of the larger market for ownership purposes, saying that it will review the proposals by CONNOISSEUR MEDIA in the future and will offer waivers for station deals in those markets until then. And the Commission will also take comments on establishing an incubator program for broadcast ownership diversity.

Clyburn: 'Glaring' Problems

Commissioner MIGNON CLYBURN said that the problems with the changes are "glaring" and ripped the majority for having "chosen to take some of the same facts used by this commission just over a year ago to reach the exact opposite conclusion," pointing out that nothing has changed in 15 months to warrant changes in the treatment of the rules. She charged that the changes are "not really about helping small struggling broadcasters or newspapers... this is really about helping large media companies grow even larger."

CLYBURN contended that "if our aim were to provide hope for the smallest entities in the tiniest of media markets, we would have adopted a narrowly tailored proposal focused expressly on these financially challenged stations. Instead today's action, coupled with the recent FCC action including the reinstatement of the UHF discount and the elimination of the main studio rules, we have paved the way for a new crop of broadcast media empires that will be light years removed from the very local communities they are supposed to serve. These media titans will have degrees of power far beyond the imagination of our local community."

CLYBURN predicted that "when this order is adopted the floodgates to more consolidations will come without transparency or accountability." She also asserted that comparing the past media landscape to today is inapposite because "these platforms are not created equal," pointing to how GOOGLE and FACEBOOK are not in the news gathering business and merely link to news gathered in large part by traditional media companies. CLYBURN also pointed out that the large broadcast groups reporting "horror stories" in ex parte filings to justify the changed rules are telling WALL STREET that their revenues are up, as are retransmission consent fees for television.

CLYBURN criticized the majority for ignoring the courts' instruction that they get "comprehensive reliable data" to support changes that might impact minority and female ownership. "Now, some supporters of this order may point to the Commission's newly established advisory committee on diversity in digital empowerment as evidence that we are on the path toward obtaining better data," CLYBURN noted. "The problem with that notion is that we are adopting today's order less then two months after the committee held its first meeting, so what is the point of establishing a committee if the FCC majority may reach a conclusion that a court media ownership rules are no longer necessary to support our goal of increasing diversity?"

"So," CLYBURN concluded, "welcome back, my friends, to industry consolidation month at the FCC, where it seems my colleagues and the majority are more intent on granting industry wishes then giving a gift to those in the general public. Mark my words that today will go down in history as one when the FCC abdicated its responsibility to oppose the core values of localism, competition, and diversity in broadcasting. I dissent and look forward to the day when the core issues a decision to write this sad wrong."

O'Rielly: About Those Embedded Markets....

Commissioner MICHAEL O'RIELLY denied that the changes are meant to pave the way for the SINCLAIR-TRIBUNE merger (which he did not specifically name), instead arguing that the Commission could not justify its newspaper-broadcast cross-ownership ban for the past 15 years and "determined more than a decade ago that it's no longer in the public interest." O'RIELLY said that the changes "fix the shoddy effort of the previous Commission." He cited the rise of social media and online outlets' impact on viewpoint diversity, and suggested that allowing more television duopolies and even triopolies could be beneficial to broadcasters and viewers.

On radio, O'RIELLY said he would have preferred that the Commission grant CONOISSEUR MEDIA's petition in full to treat ownership in embedded markets as shares of the embedded markets rather than the larger metro in which they reside, but with the Commission looking for more data, O'RIELLY said he supports the grant of a presumptive waiver of the rules to allow station transactions in the embedded markets to be considered within those markets rather than the larger markets. He also asked for the Commission to reexamine the AM and FM subcaps, left intact in today's action, in the future.

Carr: Cross-Ownership Bans Were Doing More Harm Than Good

Commissioner BRENDAN CARR said that the record and comments demonstrate that "many of our current media ownership rules are outdated and counterproductive," including the newspaper-broadcast cross-ownership ban ("now doing far more harm than good"). He suggested that removing the cross-ownership bans would attract investment and lead to better service to local markets.

On the embedded market issue, CARR echoed O'RIELLY's approval of the presumptive waiver, saying that it will help broadcasters improve local service and better compete.

Rosenworcel: Commission 'Sets The Most Basic Values On Fire'

Commissioner JESSICA ROSENWORCEL, acknowledging that "the world has changed" since people waited for the paper to hit the stoop in the morning and watched the evening news on TV at night, focused on the problem of "fake news" versus true reporting and the algorithms used by social media that may promote the former. "The solution does not lie in the FCC scrapping from top to bottom the policy to prevent media concentration," ROSENWORCEL warned, charging that the FCC, "instead of engaging and thoughtful reform, which we should do... sets the most basic values on fire. They are gone. As a result of this decision, wherever you live, the FCC is giving the green light for a single company to own the newspaper and multiple television and radio stations in your community. I'm hard-pressed to see a commitment to diversity, localism, or competition in that result.... We are clearing the way for mergers of greater magnitude like the one presently before us, which will benefit from the destruction of these policies today."

Saying that the Commission's plan to open an inquiry regarding an incubator program is enough to address diversity in ownership, ROSEWORCEL said, "Study a bit of history and you can only come to one conclusion: Consolidation will make stations look less and less like the communities they serve. Women and minorities have struggled for too long to take the reins of major media outlets. A modest rulemaking on an incubator is not going to get us where we need to go. That's a high price to pay for the damage the order does, and that's an exchange i'm unwilling to make."

Pai: We're Dragging The Rules Into The Digital Age

Chairman AJIT PAI opened by saying, "It's a simple proposition, the media ownership regulations of 2017 should match the media marketplace of 2017. That's the proposition the FCC vindicates today, nothing more, nothing less.... This agency finally drags its broadcast ownership rules to the digital age."

Reaction: NAB Yea, Free Press Nay

Unsurprisingly, the NAB is pleased with the outcome, with a statement from President/CEO GORDON SMITH saying, "NAB thanks the FCC for voting today to reform outdated broadcast media ownership rules. These rules are not only irrational in today’s media environment, but they have also weakened the newspaper industry, cost journalism jobs and forced local broadcast stations onto unequal footing with our national pay-TV and radio competitors. We are grateful the Commission has adopted a common-sense approach to media regulations that will foster innovation, reinvestment in investigative reporting and better service to our tens of millions of listeners and viewers.”

But advocacy group FREE PRESS was not at all pleased, releasing an "open letter" to PAI "congratulating" him on his victory and adding, "Today you’ve turned over our collective resource of the public broadcast airwaves to a company whose business model is built on tearing apart the fabric of communities by pushing racist fearmongering in the guise of news. You granted SINCLAIR the ability to not simply broadcast this hate, but to maximize its already inflated profits by targeting its seeds of hate.

"You’ve removed the last barrier preventing one voice from monopolizing every aspect of news production in America’s smaller communities, ensuring future generations will remain ignorant of the corruption taking place around them. You’ve ripped away a literal lifeline to the world for millions of families struggling in ways you will never understand. You’ve taken away basic connectivity to the forgotten seniors who worked their entire lives only to find themselves in abject poverty, failed by politicians like you who pay them cynical lip service and then spit on them when the cameras are off. And you’re on the verge of turning over control of the internet on-ramps to a handful of companies so they can steal even more from their captured customers, and cut them off from the promise of an open and connected world.

"You did all of this not for any legitimate public-policy reason; your actions will move us further from your own stated goals. No, you are cruelly punishing the public and enriching the already fabulously wealthy in service of a radical and immoral ideology. Congratulations, sir. I’m sure you’ll sleep well tonight."

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