FCC Officially Releases Ownership Rules Order, With Not Much Changing And Some Commissioners Not Happy

Rules Stay Put

The FCC has officially released the mostly-unchanged ownership rules Second Report and Order, preserving the newspaper-broadcast and radio-television cross-ownership prohibitions and the attribution rules that mostly eliminated television joint sales agreements and shared services agreements, and reinstating the revenue-based eligible entity standard for purposes of ownership diversity. 

The Local Radio Ownership Rule has been retained as well, with the Commission rejecting the consideration of non-broadcast audio sources in analyzing competition, despite the growth of Internet and satellite radio ("Neither of these sources is as universally and freely available as broadcast radio, and neither typically provides programming tailored to the needs and interests of specific local markets"), using the broadcast radio industry's own touting of over-90% reach as a reason to consider broadcast radio as a separate market from other audio.        

In the order, the Commission insisted that its action would "maintain strong media ownership rules, take steps to help promote small business participation in the broadcast industry, and adopt rules that will help to promote transparency in local television markets." While the Commission said that it "recognize(s) that broadband Internet and other technological advances have changed the ways in which many consumers access entertainment, news, and information programming," the rules were nevertheless left in place or, in the JSA/SSA case, further tightened, with the report insisting that "Traditional media outlets, however, are still of vital importance to their local communities and essential to achieving the Commission’s goals of competition, localism, and  viewpoint diversity. This is particularly true with respect to local news and public interest programming, with traditional media outlets continuing to serve as the primary sources on which consumers rely."  The report also uses the spectrum incentive auction as a reason not to revise the rules, saying that it would be premature to make changes while the impact of the auction is as yet unknown.

Pai: Commission Has Its Head In The Sand

As he has consistently done throughout the process, Commissioner AJIT PAI offered a fervent dissent to the Commission's action, saying that Congress has mandated that the agency "shall" delete outdated rules but the Commission "has failed" to do so, adding that the Commission's delay in reviewing the rules for eight and a half years resulted in the agency doing "nothing but stick its head in the sand."

He noted that the media marketplace has undergone "revolutionary" changes but that the Commission continues to "cling" to outdated cross-ownership rules while "the days of Americans waiting for the morning newspaper to learn about what is going on around them are long gone." "The more the media marketplace changes, the more the FCC’s media regulations stay the same," PAI complained, calling the result an "ostrich of an Order" and " a thumb in the eye of the UNITED STATES Court of Appeals for the Third Circuit," which remanded the rules and ordered the agency to get moving on revising the diversity rules, only to have the FCC reinstate the same eligible-entry definition rejected by the court in 2011.

PAI also charged that a "bipartisan majority of commissioners was willing to repeal the outdated Newspaper-Broadcast Cross-Ownership Rule. But for some reason, we were told that this rule would not be repealed unless all commissioners agreed. And sadly, one chose to exercise that veto." He added that he is "baffled by this new requirement for unanimity. We’ve been told for years by the FCC’s leadership that 3- 2 votes are what democracy is all about. Except, I guess, when it isn’t. Or more precisely, 3-2 votes are what democracy is all about so long as the commissioners are divided cleanly along party lines. As a result, we end up keeping a rule on the books that almost no one at the FCC actually believes make sense any longer. This is a shame because our regulations should always be shaped only by the facts and law -- not crass political considerations."

On the newspaper-broadcast cross-ownership prohibition, PAI wrote that "it makes no sense for the government to be discouraging investment in the newspaper industry. In this day and age, if you are willing to invest in a newspaper, we should be thanking you, not imposing regressive regulations."

He added that while the Commission says the regulation promotes viewpoint diversity, "the evidence overwhelmingly shows that there is little if any connection between viewpoint diversity and ownership."  And he pointed out a contradiction in the Commission's reasoning in retaining restrictions on owning radio stations along with newspapers and TV stations, in that the Commission called radio a "significant source of viewpoint diversity" to justify the cross-ownership ban, yet if this is the case, it would, PAI contended, mean that radio stations would count as more voices in the marketplace, undermining the need for a prohibition to "protect viewpoint diversity."

O'Rielly: 'Thoroughly Objectionable Document'

Commissioner MIKE O'RIELLY similarly dissented, but in much briefer form, criticizing the Order as "more of the same obfuscation, ignorance, hyper-partisanship and defiance as before ... a thoroughly objectionable document divorced from the realities of today’s media marketplace."  He joined PAI in objecting to Chairman TOM WHEELER's policy of "only approving an item if the majority party commissioners are in unison," allowing the objection of one Democrat on the panel to torpedo bi-partisan compromise. 

He suggested that the Commission's inaction upon remand was meant as an "instrument of delay," a way to extend the life of rules the court has indicated should be thrown out. "(R)arely, O'RIELLY conculded, "have I seen a proceeding take so long and a document say so much in order to accomplish nothing of value."

Clyburn: We Need More Data

But Commissioner MIGNON CLYBURN, issuing a statement but not a concurrence or dissent, contended that even though digital news sources have proliferated since the last rules review, "more options do not necessarily translate into access to original local news gathering, reporting or sourcing." She called, however, for more work towards ownership diversity, saying that "we need a robust record of data that paints a comprehensive picture of today’s media landscape. Today, this simply does not exist ... Everyone should stop making excuses. The Third Circuit, in its most recent decision was crystal clear: if more data is needed, we 'must get it.'"

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