Watchdogs look at ownership rules


Day Two of the FCC media ownership workshop featured the public interest community. The panel included five watchdogs, one of which was noted former deregulatory Media Bureau Chief Ken Ferree. The other four organizations represented are veterans of the battle against media consolidation – including the United Church of Christ Office of Communications, Free Press, Media Access Project/Prometheus Radio Project and the Future of Music Coalition.

The Commission is taking public comment on the workshops and the proceeding in general through 11/20/09. The proceeding is under MB Docket 09-182.

Following are testimony summaries.

* Ken Ferree, Senior Fellow, The Progress and Freedom Foundation: Still has nightmares about the last time FCC undertook this proceeding. Why are we concerned at all? I suspect it’ll be a lot of sound and fury leading to nothing. Fact is that broadcasting is becoming increasingly marginal. In 2003 there was a lot of interest in buying; those days are past. Nobody cares about the ownership limits because nobody wants to buy stations. Produced stats saying people are starting to abandon broadcast radio – listenership is flat. Broadcast TV also challenged, economic model becoming obsolete. Newspapers, indirectly involved in this proceeding, are also losing significance. These platforms have been the best producers of entertainment and news. Today’s concern should not be who owns what, but rather how we are going to maintain economically viable properties to support such programming. It’s a national and a local concern. The challenge is not preventing consolidation, its going to be finding people who want to buy these stations. Most of the big media M&A stories are about divestitures, not acquisition. Broadcasting cannot provide great service unless it can generate funding. FCC should be making things easier for broadcasters, but the time for further deregulation may have passed. Congress could allow full First Amendment protection for broadcasters.

Final remarks: I have high hopes for this – maybe this Commission can do some good. I hope that the process is data driven. These are large questions that are hard to get your hands around. I hope FCC will make it easier for broadcasters to compete in the modern market.

* Cheryl Leanza, Policy Director, The Office of Communication of the United Church of Christ, Inc.: The goals here are high quality journalism, holding elected officials accountable and informing citizens. This will be the first Commission that is in a position to do a good job. A lot of groundwork is laid, and this commission could produce a great result. Look at DTV implications, which open the possibility of five broadcast streams per station. No need to acquire anything to get more program streams. Enhanced disclosure should produce a lot of useful data. Commence process to examine use of waivers. Long history of lax oversight, plus certain corporate entities that are willing to push the issue as far as it can. When are we going to have final rules? The revolving nature of quadrennial review means the door is never closed. Need default rules of the road to add integrity to waiver process. Data – look for indicators of a healthy broadcast system related to goals. Local shared-service agreements need to be looked at – they create virtual duopolies, often against the top-four network rule.

Final remarks: Immediately move on waiver situation and enhanced disclosure. Market seems to be favoring fragmentation, and we may be able to take advantage of that to increase diversity.

* Andy Schwartzman, President and CEO, Media Access Project, on behalf of Prometheus Radio Project: There are very few people I enjoy disagreeing with more than Ken Ferree. Should ask Congress to repeal quadrennial review, which is onerous and burdensome, but glad it’s starting early. Data is key to getting any rules through the court. FCC enforcement: it used to carefully consider all broadcast transactions. That was relaxed in the 80s, relied on general public to raise objections, but made it harder for citizens to participate in the process. Focus on the task at hand – do current rules serve the public interest, and if not, how can they be improved via modification. Keep the process narrow. Let the localism proceeding be the localism proceeding – it should be only a side-issue here. FCC must address SSA. Discount provisions of national TV ownership rule needs to go. Avoid trying to bring other non-FCC media into the equation. Any such formula would be inherently flawed. Market share metrics would be impossible for citizens to help enforce. Data collection: FCC relies on expensive proprietary databases, the reliability of which is suspect. Over-the-air broadcast data is important and should not be underestimated. OTA TV and newspapers remain the biggest media outlets and will be for some time to come. OTA radio remains a major player in local communities. Broadcasting is not something we should just cast off. For the foreseeable future FCC must treat broadcasting as the major societal force that it is.

Final remarks: Make data available. Please recognize that radio and TV have many differences. Radio is extremely important, and local rules for radio must be looked at differently than TV. Roll on noncommercial stations is important and doesn’t show up in ratings analysis.

* Kristin Thomson, Education Director, Future of Music Coalition: FNC has researched radio in post-telecom landscape. 15 formats make up 76% of radio programming; identified problems with local cap definitions; problems remain for musicians getting access to the airwaves. Access to data is a problem for watchdogs. FCC has asked great questions, but who has the data to answer them? FCC must collect data and make it available for research and analysis. Three challenges: FCC has not been collecting enough data from radio licensees. Extent of local news, public affairs, school info, local-produced music and sports. Get percentages of local, syndicated, network programming used from each station, regularly provided as licensee obligation. Two, much information isn’t accessible, such as information about minority ownership. Many organizations have expressed these concerns, including GAO. FCC must create usable database. Three: Proprietary data are often expensive and not always appropriate for research use. Restrictions placed on data by owner make it difficult to use, up to not allowing findings to even be published. Recos: FCC must collect more info on station ownership. Changes since 1996, details on LMAs, how much programming is local v. syndicated or network; lots of other stuff. Second, set up advisory committee to set up data protocols. Broadcasters will claim data collection will be burdensome, but we’ll create a computerized system that automates it and makes it relatively easy.

Final remarks: This is an excellent, unprecedented start. Find new ways to make proprietary data available. The more eyes, more interesting results. This is a great opportunity to create new data protocols – better ways to store it and make it accessible.

* S. Derek Turner, Research Director, Free Press: Tips hat to Consumer Fed’s Mark Cooper. FCC interest in review comes as surprise to those who have become cynical about FCC’s concern about the issue. Under old regime, FCC reports were begun in support of a foregone conclusion, laying groundwork to relax cross-ownership rules. First reco: don’t start process with the result in mind. Review goes slowly, hard to reach an identifiable end. Let the separate focused localism and diversity proceedings move forward on their own. 2006 approach was narrowly focused on outputs. Beware going in with preconceived notions such as the idea that creating ownership efficiencies will automatically produce a desired result. Be skeptical that the internet has changed everything. Remember that broadcasting is supposed to serve the local public interest. The output should be measured at market level, rather than station level. For example, journalism must be available from several competent outlets rather than one dominant outlet (as tends to happen under cross-ownership with newspaper). Don’t confuse diversity with variety – there is now diversity in a news-sharing arrangement. Count audience shares before coming up with local rules, unlike last study that counted small weekly paper equally to the dominant market daily.

Final remarks: Good idea to start a year ahead of the deadline. Process must be very open, including data selected for gathering and entities used to get it. (Research used last time was of questionable value). Some data must come from private datasets, like audience share. But as much as possible must try to make proprietary data available to private researchers and analysts for study. And give us enough time.