In many specific cases, such changes might be okay by me. But the combination
definitely gives the appearance of some wild-eyed extremist yahoo, gone
ballistic.
And there is the integrity issue that keeps cropping up, with this FCC. Happens
here too.
For example, reinstating the so-called UHF discount is ludicrous, especially
for someone who CLAIMS to want to get rid of antiquated regulations. This is
just such an antiquated, obsolete rule. Why reinstate it? Because the Chairman
is afraid that the 39 percent national ownership cap, which was established by
Congress, might not be able to be eliminated. The correct and ethical thing to
do would have been to go to Congress again, to see about relaxing or
eliminating that 39 percent national cap, but not reinstate the silly old UHF
discount.
The local caps should remain, though. This quote sounds awfully disingenuous to
me:
"Indeed, the Reconsideration Order questions whether there has ever been
sufficient evidence to support drawing a line at eight voices remaining in a
market, or at any other specific number. Finding that the rule may in fact
prevent combinations that would enhance localism, particularly in small and
mid-sized markets,the commission eliminated the eight-voices test."
To ask for "sufficient evidence" sounds absurd. Evidence of what? There are
plenty of confused people who make illogical arguments against relaxing the
national cap, clearly not understanding the difference between national and
local caps. So, if you want to relax that 39% national cap, use the stringent
local cap as your weapon. But no, when someone is totally single-minded, that
type of compromise is inconceivable. Plus, there are those bent on inconsistent
logic that complain about "broadcast oligopoly." Well, eight voices heard,
before allowing mergers, seems like a darned good plan. Should shut up the
constant complainers.
In light of this over-zealous, "let's become a banana republic" behavior, this
other item would bear very careful scrutiny. Unfortunately, while it should be
the FCC's job to provide that careful scrutiny, now we can't trust them:
"Relaxation of the top-four restriction on television duopolies. The
Reconsideration Order retains, at least formally, the existing prohibition on
common ownership of two of the four most highly-rated stations in a market
(generally the ABC, CBS, Fox, and NBC affiliates). The commission, however,
also adopts a policy that will allow, on a case-by-case basis, waivers of the
top four prohibition."
Well, at least this matters less to the country than the repeal of net
neutrality. Imagine, though, the combination of very few voices heard from
traditional media outlets, plus broadband access that will appear more like a
walled in cable TV service. Talk about trying real hard to become a banana
republic.
Courts, do the right thing.
Bert
----------------------------------------------------
http://www.tvtechnology.com/news/0002/deregulation-picks-up-steam-new-media-ownership-rules-foreshadow-a-new-terrain-for-broadcasters/282364
Deregulation Picks Up Steam: New Media Ownership Rules Foreshadow a New Terrain
for Broadcasters
Votes on proposed rules are scheduled as early as December
December 4, 2017
By Dan Kirkpatrick
The author is with law firm Fletcher, Heald and Hildreth, on whose blog this
article originally appeared.
When Ajit Pai took over as chairman of the FCC, it was widely expected that he
would take steps to relax existing restrictions on media ownership. The last
month, in particular, has seen a flurry of activity on that front. As we
reported, the chairman released at the end of October the proposed text of an
Order on Reconsideration relaxing or eliminating a number of broadcast
ownership rules. That Order on Reconsideration was, as expected, adopted at the
FCC's November meeting in essentially the same form as it was proposed. The
chairman days later also released a draft Notice of Proposed Rulemaking opening
a separate proceeding to conduct beginning a "comprehensive review" of the
national television ownership cap. That NPRM is due for a vote at the
Commission's Dec. 14 Open Meeting.
The Chairman clearly is interested in making significant changes to the media
ownership landscape. What do those changes mean and what can we expect going
forward? Read on to find out.
Order on Reconsideration - 2010/2014 Quadrennial Ownership Review
At its Nov. 16 meeting, the commission, on a three-two party-line vote, adopted
an Order on Reconsideration that significantly relaxed a number of media
ownership rules. This Order brought an end (at least for now) to the
commission's 2010 and 2014 quadrennial reviews of its media ownership rules.
Last September, the commission, under former Chairman Tom Wheeler, had
attempted to conclude those reviews with its own Second Report and Order. That
decision, at least for the most part, left the media ownership rules unchanged.
A number of parties, however, asked the commission to reconsider that decision
and, with the change in administration following last November's elections, has
now reconsidered and reversed most of the decisions made in the 2016 Order. As
noted above, this Reconsideration Order was essentially the same as the version
proposed by the chairman in October, so we will just briefly address the major
changes it makes to the media ownership rules when it becomes effective (more
on that later).
Elimination of the newspaper/broadcast cross-ownership rule. Based in large
part on its findings regarding the changes in the overall media landscape since
this rule was adopted in 1975, the commission found that prohibiting common
ownership of newspapers and broadcast stations is no longer necessary to
protect viewpoint diversity or competition-and could, in fact, harm localism.
As a result, the commission eliminated any prohibition on newspaper ownership
by broadcast station owners.
Elimination of the radio/television cross-ownership rule. The elimination of
this rule was based primarily on two related conclusions. First, the commission
found that the record showed that broadcast radio stations, which produce
diminishing amounts of local news, no longer contributed to viewpoint diversity
enough to justify the rule. This is particularly in light of the increasing
contributions to viewpoint diversity from cable, the internet, and other
"non-traditional" voices. Second, in light of the fact that the rule already
allows significant cross-ownership, and there continue to exist separate
television and radio local ownership caps, the commission found that
eliminating the rule would not have a significant effect on common ownership.
Elimination of the "eight voices" test for local television ownership. In the
Reconsideration Order, the commission determines that the eight-voices test for
local ownership cannot be supported by any evidence in the record. This test
prohibited common ownership of two television stations unless at least eight
independent television station owners remained in the market. Indeed, the
Reconsideration Order questions whether there has ever been sufficient evidence
to support drawing a line at eight voices remaining in a market, or at any
other specific number. Finding that the rule may in fact prevent combinations
that would enhance localism, particularly in small and mid-sized markets,the
commission eliminated the eight-voices test. With elimination of this portion
of the rule, duopolies will now be allowed in all markets both stations are not
among the top-four rated stations.
Relaxation of the top-four restriction on television duopolies. The
Reconsideration Order retains, at least formally, the existing prohibition on
common ownership of two of the four most highly-rated stations in a market
(generally the ABC, CBS, Fox, and NBC affiliates). The commission, however,
also adopts a policy that will allow, on a case-by-case basis, waivers of the
top four prohibition. The Reconsideration Order does not adopt a rigid set of
criteria for such waivers, but does identify some of the factors it will
consider in granting waivers. These factors include, among others: the
stations' ratings and revenue share (from both advertising and retransmission
consent fees) in the market; other market characteristics, such as the
existence of strong competitors outside the top-four; and likely effects on
programming serving local needs and interests. Waiver requests should be based
on data covering a "substantial period," which the commission suggests could be
around three years, to minimize the impact of short-term changes.
Elimination of attribution of joint sales agreements (JSAs). The commission
finds that there was not sufficient evidence in 2014 to support making JSAs
attributable to the overall ownership calculations, nor is there such evidence
now. Concluding that the record does not show that JSAs allow one station to
exert undue influence over the operation of a second station, they will no
longer be treated as attributable.
Minimal relaxation of the local radio ownership rule regarding embedded
markets. The Reconsideration Order largely leaves the local radio ownership
rule untouched with one small exception. Currently, a number of radio markets
(which are defined in most cases by Nielsen ratings information) include
embedded submarkets. Any combination in such markets must show compliance with
the rule in the larger market and in each embedded market. Recognizing that
this may produce unintended consequences, at least in the Washington D.C. and
New York markets, each of which contains multiple, non-contiguous embedded
markets, the Reconsideration Order adopts a presumption in favor of certain
waivers in those markets.
Establishment of a diversity/incubator program. The Reconsideration Order also
includes a section that serves as a Notice of Proposed Rulemaking regarding the
establishment of some type of incubator program to encourage greater diversity
in media ownership. Such a program, as envisioned by the NPRM, would work by
granting waivers of the ownership rules to applicants who establish programs to
enhance broadcast ownership by new and diverse entrants. Finding that such a
program may be desirable in the abstract, the commission requests comment on
how any such program should be structured and implemented to serve its goals
effective and comply with legal requirements.
Interested parties are now waiting for the Reconsideration Order to be
published in the Federal Register. When that happens, a shot clock will begin
for the filing of court appeals. It seems almost certain that such appeals will
be filed by the public interest groups that have long opposed media ownership
deregulation. Portions of the Reconsideration Order may also be appealed by
other parties. This could include, for example, the waiver policy for top-four
combinations in television, which has been criticized by the cable industry.
When any such appeals are filed, it is likely that they will include a request
to stay the effectiveness of the rules. As in the case of the reinstatement of
the UHF discount earlier this year, courts are generally reluctant to grant
stays, although the potential impact of these rules, and the difficulty in
unwinding combinations in the event they are ultimately overturned, may change
a court's calculus somewhat. If the rules are stayed, it may be an extremely
long time before they go into effect.
Whenever the rules do go into effect, it will also take some time for the
commission to flesh out the parameters of its top-four waiver policy. As with
any such case-by-case policy, the exact nature of policy will depend on the
filing, and resolution, of specific requests for waiver. , Given that it would
include combinations of top-four rated stations in a number of markets, it is
easy to imagine that the pending Sinclair-Tribune merger will be the first
"test-case" of the new policy. If so, the resolution of any such waiver
requests is itself certain to be controversial and could, potentially, lead to
further appeals to the courts. In any event, this relaxation may not trigger an
immediate flood of waiver requests, as some potential applicants may decide to
wait for additional clarity as to how those requests will be evaluated.
If you're left feeling unsatisfied by this wave of deregulation (as many radio
licensees may be), it is worth remembering that the next quadrennial review
begins in 2018. As a result, all of the commission's media ownership rules
(except, as explained later, the national television ownership cap) will once
again be subject to further review.
Notice of Proposed Rulemaking - National Ownership Cap
Just days after the commission adopted the Reconsideration Order, Chairman Pai
released the proposed text of a Notice of Proposed Rulemaking to amend the
commission's national television ownership cap. If adopted, this would continue
the chairman's push to deregulate television ownership. The national ownership
cap currently prevents any entity from owning or controlling television
stations that reach more than 39 percent of the television households in the
country. (Although, with the reinstatement of the UHF discount, the actual
percent of households reached may be substantially higher.)
As the chairman promised to do in reinstating the UHF discount back in April,
the NPRM begins a "broad review" of the national ownership cap. The NPRM
requests comment on whether the commission has the legal authority to modify or
eliminate the 39 percent cap at all. This may prove perhaps the most
interesting question in this proceeding.
Unlike many of the specific limits set forth in the commission's rules, the 39
percent cap was explicitly established by Congress in 2004 and was removed from
review in the quadrennial ownership reviews. The NPRM seeks comment on whether
the commission cannot review it at is prohibited from reviewing it at all, or
just cannot do so in the context of the quadrennial reviews.
While the NPRM certainly suggests that the commission has at least tentatively
concluded that it has the authority to review the national ownership cap,
Commissioner O'Reilly (one of the two other Republican votes Chairman Pai will
almost certainly need to adopt any change) has clearly indicated in the past
that he disagrees. In his dissent to the Wheeler Commission's 2016 decision to
eliminate the UHF discount, he "reject[ed] the assertion that the Commission
has authority to modify the National Television Ownership Rule in any way."
Nevertheless, Commissioner O'Reilly has indicated that he supports asking the
question again now in the NPRM. It will be interesting to see how this plays
out over the coming months.
Assuming the commission has the authority to modify the national ownership cap,
the NPRM seeks comment on whether the rule should be modified or eliminated in
light of the changes in the media landscape since 2004. This includes the
proliferation of non-broadcast programming, changes in the network-affiliate
relationship, and consolidation among MVPDs, among other things. The NPRM also
seeks comment on how compliance with any modified cap (or the existing 39
percent cap, if it is retained) should be calculated, including whether the UHF
discount should be modified or eliminated. Finally, the NPRM asks how any
existing ownership combinations should be grandfathered if any changes to the
rules make them non-compliant.
Assuming it is adopted at the commission's December meeting, comments would be
due 30 days after Federal Register publication, and reply comments 30 days
after that. Absent any extension of those deadlines, the comment cycle could
reasonably be expected to close by late in the first quarter of 2018, meaning a
potential decision could come during the second quarter of the year. Any such
decision, assuming the chairman is able to garner three votes, will almost
certainly be appealed. This is particularly likely here in light of the rather
thorny legal questions surrounding the commission's authority in this area.
Taken as a whole, it seems clear that Chairman Pai is moving with significant
speed to adopt a deregulatory agenda. Of course, this should not really come as
a great surprise, since he has long been an outspoken advocate of deregulation.
The ultimate outcome of these efforts remains uncertain, and will almost
certainly be decided in the courts.
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