This Thursday, November 16, the Federal Communications Commission is scheduled to vote on an order on reconsideration that will radically alter the media ownership regulations that are enforced by the agency.
The changes are substantial and include:
- The elimination of the Newspaper/Broadcast Cross-Ownership Rule
- The elimination of the Radio/Television Cross-Ownership Rule
- A revision to the Local Television Ownership Rule that eliminates the Eight-Voices Test and will incorporate a case-by-case review option in the Top-Four Prohibition.
- The elimination of the attribution rule for television Joint Service Agreements (JSAs)
Notably, these changes do not include a revision to the local radio ownership rule, and do not directly address the mandate of the Third Circuit Court of Appeals to develop a viable minority ownership policy. Although the agency is relabeling an earlier minority ownership program, now calling it an “incubator,” it is not implementing a specific proposal or set of rules
Now, put simply, the agency has had what I have coined as the “Legacy of Failure” on media ownership policy for one important reason above all: There is no empirical evidence to support the agency’s decision-making on media ownership. This simple lack of a relationship between policy goals and evidence that those goals are being met was the primary reason the FCC’s earlier ownership rulemakings have been blocked by the Third Circuit Court (more on that in a bit).
The evidence matter is not a trivial one. The agency’s decisions on media ownership have radically altered the media landscape, reducing diversity of ownership and of viewpoints, led to wholesale reductions in locally produced media content, and in one of the great ironies of competition-based regulation, raised advertising rates. The primary reason the FCC can’t find the evidence it needs to justify its policies is that the media ownership regime—launched by Congress with the 1996 Telecommunications Act and dutifully carried about by the agency—is not creating the diversity, localism or even the competition the agency has touted for 20 years.
The changes that are about to be voted on are justified, at least in part, by the failings the FCC has created with previous merger adjudications and ownership policy. The FCC cites, “the decline of radio’s role in providing local news and information,” as a justification for the rule changes it now seeks to make. That decline, in what was once radio’s bread and butter, can be directly tied to the agency’s decision making, the mergers it approved and the rise of radio giants (like Clear Channel, now iHeartRadio) in the early 2000’s.
But more importantly, these changes, and the timing of them, transparently appear to be tied directly to smoothing out the complicated process for approval of the Sinclair-Tribune merger. There’s no other realistic explanation for the rules that are being changed while others are being retained.
A Brief Tour of Fail
To understand why I call this a “Legacy of Failure,” some history is in order. In 1996, the Telecommunications Act included substantial revisions to the FCC’s ownership rules for broadcast stations. Congress raised the ownership limits in a mandate to the FCC in an effort to promote competition. These changes led to a massive round of consolidation, especially in radio.
Included with the mandate was a requirement that the agency periodically review its ownership rules. This requirement was on a two-year (biennial) cycle that was later expanded to a four-year (quadraennial) review. As part of this mandate the FCC reviewed ownership in 1998 and in 2000. Then as part of the 2002 review, in 2003 the agency released a new set of ownership guidelines called the Diversity Index. Several legal challenges were filed to the decision, and those challenges were consolidated into Prometheus Radio Project v FCC, heard by the Third Circuit, which released its decision in 2004.
The decision was a harsh rebuttal of the FCC’s decision-making and lack of evidence, and represented a substantial set-back for the agency. The agency launched another mandated review proceeding in 2010. Then, after limited output, and the remand contained in the 2011 Prometheus decision, the agency extended the 2010 review into the review it was required to undertake in 2014. Resolution seemed impossible. Then, after much delay and very little action by the agency, in April of 2016, the Third Circuit heard oral arguments again, and quickly issued an order to the FCC to resolve the impasse, and in August of 2016 the agency released an order concluding the 2010 and 2014 reviews, as well as the associated proceeding dealing with minority ownership policy
Failure into Failade?
I’ve heard of trying again after you fail. I’ve never heard of turning a failure—the consolidation-driven “decline of radio”—into the reason for more failures. But after so many failures, the agency has found a way to turn lemons (or something the same color as lemons) into lemonade!
So stay tuned… the agency’s “Legacy of Failure” is about to get more legendary.
Christopher Terry addressed the Sinclair-Tribune merger and the proposed ownership rule changes on two recent episodes of our radio show:
- Podcast #112 – Sinclair Could Become the Wal-Mart of TV
- Podcast #115 – The Federal Consolidation Commission
He has also tracked the Commission’s record on media ownership in a number of posts and interviews:
- Radio Survivor Podcast #7: The FCC’s Legacy of Failure with Media Ownership Policy
- A Legacy of Failure: FCC and Media Ownership Policy
- Podcast #33 – 20 Years Ago Local Radio Was Crushed
- Could the FCC’s Legacy of Failure Trigger Even More Consolidation?
- Podcast #50 – Prometheus v FCC and a Generation of Gridlock
- The FCC’s Legacy on Media Ownership: Now with More Failure!
- Podcast 62 – The FCC’s Legacy of Failure & CMJ’s Uncertain Future
- Happy (?) 21st Birthday to the Telecom Act of 1996
- Podcast #78 – Pai is Trump’s FCC Guy
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