Monday, October 12, 2009

FCC Plans Public Workshops to be Held in Connection with Its Review of Broadcast Ownership Rules

In a Public Notice issued yesterday, the FCC announced that it would do a series of open "workshops" in connection with its review of the broadcast multiple ownership rules - the rules that restrict the number of radio or television stations which one party can own and which restrict the cross-ownership of radio and TV stations and newspapers in the same market.

The FCC is poised to begin its quadrennial review of the ownership rules in 2010. The open proceedings just announced (without details of how many workshops will be held) will be used to gather information for the Commission's review of the rules.

According to the public notice "the Commission will seek viewpoints and information from a broad range of experts; consumers; public interest and trade associations; labor unions; media industry representatives, both traditional and new; and other interested persons," as the first step in this review process.

So what is this all about?

As part of the Telecommunications Act of 1996, the FCC was instructed to do a regular review of broadcast multiple ownership rules, seemingly with the intent of reducing the prohibitions of those rules as part of the general deregulatory spirit of that Act. Originally, proceedings were to review the rules every two years, a Biennial Review.

However, those reviews kept dragging on and becoming consolidated with each other so Congress eventually amended the law to require that the review take place only once every four years. But each time the FCC has taken action on the rules, especially any time there has been any liberalization, there has been a major outcry from consumer groups that they were left out of the process. Perhaps the just announced hearings are an attempt to short circuit that protest by getting the public involved even before the process begins.

Some of the fears of the public being left out of the process arose in connection with the ownership review that was completed in the summer of 2003, when the FCC concluded that local television ownership rules could be relaxed, as could the prohibitions against the cross-ownership of radio, TV and/or newspapers in the same market.

Then-Chairman Michael Powell was criticized by many for leading this reform without any serious public input. After the decision was made, Commissioners Copps and Adelstein led their own public hearings around the country, causing the Chairman to initiate a series of his own public hearings on the performance of broadcasters in serving their communities, which led to the still-unresolved localism proceeding.

But even with hearings, the Commission isn't assured that there will be no public outcry when it changes its rules. In late 2007, after the localism hearings and hearings on the changes in the ownership rules, the Commission finally got around to its re-consideration of the 2003 decision, which had been thrown out by the Court of Appeals, .

The 2007 decision, loosening only the cross-ownership rules between television stations and daily newspapers in the largest markets, was met with a hail of protests that the public didn't have a sufficient opportunity to comment on the final rules themselves before the Commissioners voted on them (even though the Chairman did reveal his tentative conclusion a month before it was voted on, giving the public a limited comment period). Even with all that public input, the decision was met with a Congressional hearing and serious complaints about the process.

Whether the Commission, whenever it finally gets around to completing the upcoming quadrennial review, will let the public review and comment on any new rules before they are finally adopted remains to be seen. But, seemingly, no matter what the decision and the process by which it is made, someone will be disappointed and will complain that the process was unfair. Perhaps that is just the essence of Washington.

FCC to Revisit Newspaper-Broadcast Cross Ownership Restrictions - Maybe the Rule Will Die Before the Newspaper Does

A few weeks ago, we wrote about just how outmoded the FCC's prohibitions on the cross ownership of newspapers and broadcast stations were in an era when newspapers seem to be going out of business at an alarming rate. We quoted a DC trade press reporter who had mused that the newspaper-broadcast cross-ownership rule could well outlast the newspaper itself.

According to a report in Bloomberg News today, the Commission may well be revisiting the issue, according to statements made by Chairman Copps, in light of the economic turmoil in the newspaper industry. But what would a review of the issue bring from the FCC? That is unclear from the article - and unclear from the prior statements of the Acting Chairman.

In late 2007, Acting Chairman Copps was active in his opposition to the Commission's very limited relaxation of the cross-ownership prohibitions.

See our summary of the FCC debate on that relaxation, here. But would he take the same position today in light of the current economic climate for newspaper publishers? As the Bloomberg article pointed out, House of Representatives Speaker Nancy Pelosi has suggested that the Justice Department might want to relax antitrust review of newspaper combinations given their economic plight.

Other legislative fixes have been suggested - including allowing papers to operate as non-profit, tax-exempt entities to which charitable contributions could be made. With these kinds of legislative efforts underway, perhaps a change in direction at the FCC is indeed possible. One more issue to watch in the coming months.

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Brendan Holland is an attorney in DWT's Washington, DC office. He advises broadcast television and radio stations on a range of issues including auctions, indecency, digital television, multiple ownership, EEO compliance, and general licensing issues. He has also represented clients at the FCC in connection with complex mergers, wireless communications including wireless broadband applications, and in a number of rule making proceedings.

David Oxenford is a partner in Davis Wright Tremaine's Washington, DC office. David has represented broadcasters for over 25 years on a wide array of matters from purchases and sales of broadcast properties and the negotiation of programming agreements to regulatory matters. His regulatory expertise includes all areas of broadcast law including the FCC's multiple ownership limitations, the political broadcasting rules, EEO policy, advertising issues, and other programming matters. He also represents webcasters and other digital media companies, including serving as counsel to a webcast trade association, and representing internet radio companies on copyright, music licensing and other issues.

David Silverman is a partner in Davis Wright Tremaine's Washington, DC office. David represents a broad range of media clients in broadcast, cable, trademark and copyright matters, including music licensing, Internet domain name, transactional and regulatory matters. He has represented clients before the FCC and US Trademark Trial and Appeal Board, and has acted as an expert witness on US music licensing practices for clients in both Canada and Bermuda.

For Davis Wright Tremaine office locations and contact information, please visit our website.

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