FCC opens Notice of Inquiry into media ownership rules


Since the fall of last year, the FCC is engaged in the process of reviewing its rules and regulations governing media ownership. It is now opening the door for public comment on the quadrennial review of the rules.

“We live in an ever-changing media world, but the core public interest goals are the same,” said FCC Chairman Julius Genachowski. “The Commission is committed to fostering a strong and independent broadcast media that provides Americans with multiple and diverse sources of news, public affairs, and entertainment programming. The input we seek in this proceeding will help ensure that our media ownership rules continue to protect consumer interests in today’s marketplace.”

The primary topics of interest are:

* Whether the current rules continue to foster competition, localism, and diversity;

* How to define, measure, and promote competition, localism, and diversity and how ownership structure affects these goals; and

* How to weigh these public interest goals if they conflict with each other.

Another question posed by the proceeding is “…whether and how to use bright line rules, adopt a case-by-case approach, or adopt a broad cross-media approach to media ownership if the Commission determines the current rules no longer serve the public interest goals.”

The shot clock on comments begins upon publication of the NOI in the Federal Register, setting off a 30 day deadline for comments and a 45 day deadline for reply comments.

Commissioners Michael Copps and Robert McDowell appended comments to the issuance of the NOI. Copps leans toward tightening the rules up to counteract the harmful effects of rampant ownership consolidation; McDowell leans toward loosening the rules to take into account the new competitive realities of the internet age. Their full comments are appended.

Remarks of Michael Copps:

I am eager to begin–and complete–this review of the broadcast ownership rules. I want to thank the FCC staff in advance for the hard work that I know they will put into this critical review. It is not an easy undertaking. Nor should it be. I have many times expressed my displeasure with the way this review was handled in its previous two incarnations. Hopefully, the third time is the charm. I am confident that the proceeding we launch today will be different in important ways—asking the questions that really need to be asked, collecting meaningful data and listening, hopefully, to the American people who are ultimately the ones most affected by these rules.

While we go into the proceeding with an open mind and a desire to gain a thorough understanding of the current circumstances existing in today’s media landscape, we would be doing ourselves and the American public a true disservice if we didn’t rely as well on information already in our possession—including the records in the localism proceeding, previous media ownership hearings and proceedings that examine the state of minority ownership.

Based on staff analysis as laid out in the Notice of Inquiry, there has been a 39% decrease in the number of commercial radio station owners between 1996 and 2010. In addition, we have seen a 33% decrease in the number of television station owners over that same time period. It is difficult to fully quantify the harmful effects that media consolidation has had on the news, information and entertainment we receive. Fewer and fewer voices do not an informed electorate and robust democracy make.

Our country urgently needs a media that is reflective of our diverse communities and interests. While minorities currently comprise roughly 34% of the nation’s population, they own only 3.15% of full-power commercial TV stations. And, while women make up 51% of the population, they only own 5.87% of full power commercial TV stations. These numbers are appalling. If a central tenet of our FCC mandate is to promote diversity in the media, which it is, then we need diverse ownership policies to help that happen. Anyone who actually thinks that who owns the media doesn’t significantly affect how our country is being informed is not paying attention. Shortchanging ownership diversity is shortchanging our civic dialogue.

I believe—and I think most Americans believe—that this nation deserves a media that is competitive, diverse and paying attention to the individual localities and communities in which we reside. This is absolutely vital. Certainly in this Quadrennial we need to pay attention to market realities and all the new media innovations that have developed since our last review, but uppermost in our minds must be crafting rules that serve the goals of democracy-building and democracy-maintenance.

I look forward to a full and creative record nourished by the widest possible public participation. I urge any and all interested stakeholders to share their thoughts and experiences with us. And I would note that we seek responses not just to the questions specifically asked in this Notice, but to other questions and concerns that strike particular stakeholders as relevant to this proceeding. Finally, I hope that the Commission will “go on the road” in the months ahead to hear directly from consumers and citizens. I know of no better way for us to educate ourselves about the problems faced by, and the solutions sought by, the American people.

Remarks of Robert McDowell:

In formally launching the 2010 round of our media ownership review, the Notice of Inquiry (“NOI”) outlines many of the challenging difficulties that the regulated media face in a turbulent time of their transition to the digital media era. Broadcast stations and daily newspapers are grappling with falling audience and circulation numbers, shrinking advertising revenue and declining employee rosters as online sources – both those of competitors and the traditional media’s own Internet outlets – attract a growing degree of consumer attention and reliance. The strides being made by online media are creative and exciting, and the future evolution of sustainable business models is hard to predict. I am confident, however, that the answers will come from those actively engaged in media enterprises and not from Washington bureaucrats.

The Commission has known since at least the time of its 2002 ownership review that the Internet would have a profound effect on the media landscape, yet for various reasons the agency has been unable to fully adapt its regulations to the new realities. This time, I hope, we will get it right. Burdensome rules that have remained essentially intact for more than a decade should not be allowed to continue impeding, or potentially impeding, the ability of broadcasters and newspapers to survive and thrive in the digital era. It is not at all clear, of course, that relaxation or elimination of the existing rules necessarily will lead to a major wave of ownership consolidation. Many have predicted – and a question in the NOI suggests – that updating our regulations may be meaningless because traditional media owners now would prefer to spend their time and precious resources on new, unregulated online outlets rather than acquire any more of the heavily regulated ones. Yet even should this prediction to prove true, it is no reason for the Commission to continue to cling to inaction. We have a statutory obligation to eliminate unnecessary mandates and bring our regulations into line with the modern marketplace.  

Nor does it seem necessary to begin this proceeding with a mere NOI rather than a Notice of Proposed Rulemaking (after all, the topic is hardly new to us). Nevertheless, I am pleased that the wide-ranging questions in the document include recognition of the legal precedent in this area and seek comment on how the recent court decisions may affect the scope of the Commission’s decision-making now. In fact, I expect that some commenters will draw upon the data and arguments they submitted just days ago in the U.S. Court of Appeals for the Third Circuit, which finally has reached the substantive review phase of pending court challenges to the Commission’s December 2007 media ownership decision. The appellate proceeding is moving on a separate but somewhat parallel track, and the court may act in time to inform our 2010 rulemaking effort.

Whether it does or not, however, it is high time for us to start moving. I therefore support the issuance of the NOI, even though I find some of its premises and questions disquieting. I am concerned, for example, by the suggestion that the Commission might attempt to use measures of “civic engagement,” such as voter turnout data or citizen knowledge of government officials and issues, to evaluate the degree to which broadcasters in a particular market are fulfilling the agency’s localism goal. The possibility of the government monitoring core protected speech should send shivers down the spine of anyone who cherishes liberty. I similarly question the possible focus on counting the number of journalists employed at broadcast stations. In a free society, the government has no business attempting to influence the Fourth Estate watchdogs of state action. The practice of journalism, a constitutionally recognized freedom, is better off without the “help” of state intervention. I also wonder about the suggestion that our competition analysis should reflect the effect of our rules on “creators of content” apart from the “platform owners” (e.g., broadcasters). I hope that commenters who weigh in on these and other questions bring their business and legal expertise, as well as their policy preferences, to bear on these issues.

I thank the staffs of the Media Bureau and the Office of Strategic Planning and Policy Analysis for their work on the Notice, and I look forward to reviewing the data and analyses that commenters will submit in response to it. I expect that the information we receive should allow us to move expeditiously to the next phase of this proceeding. In that regard, I commend the Chairman and the staff for issuing an open call for proposals on ownership studies to support the rulemaking effort. Although I may not agree with the concept for every study being contemplated, thus far the process for commissioning the analyses has been a good one.