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FCC Overhauls Some Media Ownership Rules

Two longstanding cross-ownership rules head to dustbin

FCC Chairman Ajit Pai promised to streamline many media regulations when he was appointed by President Trump in January and Thursday the commission took another big swing at doing just that at its November monthly meeting.

The commission on a straight party-line vote of 3–2 moved to “modernize” media ownership rules by doing away with two cross-ownership rules: the bans on newspaper/broadcast cross-ownership and radio/TV cross-ownership. (Radio subcaps, another target of those who favor broadcast deregulation, were not part of this meeting.)

The moves come amid criticism from groups who say today’s vote continues the trend of FCC deregulatory actions will lead to further media consolidation. There were even calls from some for Chairman Pai to recuse himself on votes about media ownership. Pai made his intentions clear last month during a House Energy and Commerce subcommittee hearing.

The vote eliminates the radio/television cross-ownership rule, which prohibited an entity from owning more than two television stations and one radio station in the same market unless the market meets certain size criteria. Chairman Pai said he found the rule unnecessary in today’s marketplace given the commission’s separate local radio and local television ownership rules.

The previous newspaper/broadcast cross-ownership rule, implemented in 1975, prohibited common ownership of a daily print newspaper and a full-power broadcast station (AM, FM, or TV) if the station’s service contour encompasses the newspaper’s community of publication.

Pai said: “By modernizing these outdated rules, broadcast stations and local newspapers will be able to more easily invest in local news and content and improve service to their local communities for the benefit of consumers.”

The new media ownership rules will take effect 30 days after publication in the Federal Register, which is expected soon.

Commissioner Mignon Clyburn and Democratic colleague Jessica Rosenworcel dissented. Clyburn said, “Let me again establish this, that despite what you have been told about the genesis of the order, it is not really about helping small struggling broadcasters or newspapers, while the jury is still out, rather it could actually achieve that goal, this is really about helping large media companies grow even larger.”

Added Rosenworcel: “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 our competition in that result. We should be troubled, because we are not going to remedy what ails the media today with the rush of new consolidation.”

Republican Commissioners Brendan Carr and Michael O’Rielly supported the decision to eliminate the radio television cross-ownership rule. “In light of the modern media landscape, our ownership rules should give broadcasters flexibility to attract investments that will enable them to better serve their local markets,” Carr said during the meeting.

The U.S. Congress requires the commission to review its broadcast ownership rules every four years to determine if they are in the public interest as the result of competition and if not, to repeal or modify them.

In addition, the FCC said it will seek comment on how to structure and implement an incubator program to facilitate new entry in the broadcast industry in order to increase diversity. The FCC’s Notice of Proposed Rulemaking seeks comment “on how to implement and structure, a new incubator program in which established broadcasters would help facilitate entry by new voices into the marketplace by providing access to capital and/or technical expertise to new entrants and small businesses.”

The National Association of Broadcasters welcomed the changes but also noted that the FCC had opted not to review AM/FM ownership “subcaps.” The association noted that Commissioner O’Rielly spoke in favor of such a change. “He wants more radio deregulation,” NAB tweeted. “He’s looking forward to the 2018 review.”