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FCC Ponders Media Ownership Changes

This will be the fifth such review since the '96 act; meanwhile some on the Hill ponder a telecom rewrite

It’s interesting that the chairs of the House and Senate committees and subcommittees that regulate communications have said they intend in June to begin the process of rewriting the Communications Act of 1934.

The last big rewrite was in 1996. Though lawmakers have proposed rewrites since then, none has gained any steam.

The development comes as the Federal Communication Commission released a Notice of Inquiry as part of its periodic review of its media ownership rules, which are part of the act. In the relatively modest 38-page document, the agency says this will be the fifth such review since passage of the ’96 act, and it seeks comment on basically whether the media ownership rules still work as is or if they need to be changed.

Five ownership rules are involved: the local radio ownership rule (the familiar tiered system of limits on the number of stations one company can own in a market, with AM/FM caps), local TV ownership, newspaper/broadcast cross-ownership, radio/TV cross-ownership and the dual network rule.

Among many other queries, the FCC is asking whether the current radio limits are appropriate. The agency asks whether it still makes sense to retain the sub-caps on AM and FM services or whether technological advances have eliminated the need for this aspect. It seeks comment on what role should LPFMs should play and if the agency should account for other sources of audio programming in applying the rule. Should the degree of consolidation of other media in a market affect the local radio ownership rule or should the agency continue to count only the number of radio stations in a market? Should it take market share into account?

Much has changed in the media landscape since ’96. The Internet wasn’t nearly the force it is now in media and cell phones were still the size of bricks. There was little discussion of the newspaper industry dying.

I spent much of 1995 and the early part of 1996 on the Hill covering the machinations of what would become the re-write of the Telecom Act; the majority of the discussions concerned telephony. Landlines were still the majority of phones used in homes back then.

Broadcasting was a small chunk of the bill and radio tinier still. National radio ownership limits were scuttled and we ended up with the tier system in which up to eight stations could be owned in the largest markets.

In its NOI, one nugget is stark: In 1996, there were 10,257 commercial radio stations and 5,133 radio owners. Today, there are 11,202 commercial radio stations and 3,143 owners, representing a 39% decrease in the number of owners since 1996.

I remember being at a trade show soon after passage of the act, and seeing some of the owners who decided to cash out; some felt forced out by larger, more aggressive radio groups while others were happy to take the money and leave the business.

I’m not sure at the time we fully realized what a sea change would occur, as the radio deals became so massive money-wise they needed anti-trust scrutiny. Eventually that phase ended, as Wall Street sucked up radio profits and moved on.

Initial comments to MB Docket No. 09-182 will be due 30 days after Federal Register publication.