Concepts for Media Ownership Reform 888011000110888 Last week, in its “third go-round” with the Commission’s media ownership rules, the U. S. Court associated with Appeals for the Third Circuit struck down the 2014 rule change needing ownership attribution for broadcast combined sales agreements (JSAs), while admonishing the Commission for its continued failing – for nearly a decade – to complete the statutorily-mandated Quadrennial Review of media ownership rules. The court’s endurance has clearly worn thin, given its not-so-veiled threat that it may be justified in wiping all the rules off the books if the Commission will not act quickly. Given the increased attention on this issue, it seems an appropriate time to outline some of my basic principles to guide our review and reform work. To be clear, my principles talked about below reflect the current make-up of the Commission, not an ultimate proposal when the power structure or participants were different. Since the illegitimate ban on JSAs two years ago, the Commission has ongoing flying in the face of clear Congressional directives and reality itself – specifically, that the overall media marketplace is more competitive and diverse than ever before and warrants less regulation, not more. Social media giants, like Twitter and Facebook, are shifting quite explicitly onto the turf of news providers, while articles proliferates with breathtaking speed across the Internet and moves over-the-top directly into American living rooms and mobile devices. In the mean time, traditional video providers are building more and more sophisticated systems for marketing local advertising and delivering local content. Broadcasters plus newspapers have much to contribute in terms of diverse, local content, most have been left fighting, some for their very survival, with an artificially-narrowed range of options. In general, they should be set free to compete on equal footing using of their fellow content providers, not really kept on an unnecessary and unjust regulatory leash. The Quadrennial Evaluation was created precisely to avoid this end result by freeing media ownership guidelines from the most powerful force in Wa, if not physics: inertia. In light of all the development in the dynamic media marketplace, it would be extremely hard to rationalize any effort to further restrict the media ownership rules final effectively amended in 1999, or even to leave them as-is. Many of them appear to be quaint relics when viewed via a 2016 lens. If a struggling newspapers needs an investor, why should we all consider it a greater danger for a nearby broadcaster to get involved than to have an Internet billionaire who lives a large number of miles away? The particular Commission can better promote localism, competition, and diversity – and become consistent with the public interest – by thoughtfully removing outdated restrictions to media combinations. Specifically, the following concepts should receive priority consideration within the media ownership reform effort in the future: Fairly Define Markets: As with almost all Commission issues, definitions matter, and accordingly, our definition of the markets by which newspapers, radio stations, and television channels operate is the source of much series drawing in the application of the mass media ownership rules. In the 2014 Quadrennial Review FNPRM, the Commission shockingly refused to acknowledge any non-broadcast or non-newspaper competitors since market participants. Think about how misdirected that is. As part of this year’s review, the Commission must take a reasonable market view and account for the significant role that competitors for example MVPDs, over-the-top video providers, sites, streaming music services, and satellite television radio play in the 2016 mass media marketplace. Eliminate cross-ownership bans: People are demanding 24/7 access to media content material on numerous platforms, but artificial silos created by the cross-ownership bans are keeping broadcasters and newspapers from innovating into multi-platform organizations that could better serve these needs. Evidence of synergies already exist by means of grandfathered combinations and giving the chance for more, with additional outlets plus platforms, could generate a boom in local content or perhaps prevent a further erosion from occurring in some markets. Eliminating the restrictions upon newspaper/radio and radio/television combinations, as the 2014 FNPRM suggested, would be a appropriate start to reform our ownership rules, while the newspaper/television limits should the actual same course rather than face some form of incremental relief. If the Commission can be serious about preserving localism and perhaps the newspaper industry, it should remove these types of artificial barriers keeping the most probably interested and qualified investors – local broadcasters – on the sidelines. Eliminate Duopoly Rule: Perhaps limiting common ownership of two tv stations in the same market may have made sense in 1964, whenever consumers only had a handful of programming options. Four decades later, encircled by thousands of new options, just how can the FCC justify maintaining this rule in its current form? In many markets, duopolies or even triopolies could strengthen the overall state of broadcasters and allow stations to concentrate more resources on bringing more and top quality local content to their viewers. At the very least, some of the conditions attached should be eliminated or relaxed. For example , the “Eight Voices Test” was previously struck lower by DC Circuit in 2004, and a previous Commission concluded that it might not be justified. It makes even less sense now. Why exactly eight in every case? This condition disproportionately impacts stations in small and mid-sized markets, more frequently preventing these channels, and their viewers, from being able to access the benefits and efficiencies a combination can provide. Provide More Waivers and Grandfathering: To the extent that any of the rules are left unchanged and my views are ignored, the Commission should, at a minimum, reform current waiver processes to make them clear and realistically obtainable, provide a lot more opportunities for waivers, and allow grandfathering of existing combinations. The market dimension waivers proposed by various parties could mitigate the constrictive effect of these outdated rules on tv producers in smaller markets. The Payment has properly grandfathered existing mixtures in many contexts, and this policy should continue and expand wherever possible, such as by allowing grandfathered combinations to be freely transferrable. Additionally , the Commission rate should follow through on its proposal in order to grandfather radio intra-market community of license changes. Resist Reinstating the JSA Prohibit: This rule has met its demise in the Third Circuit, and should not be resurrected for any reason. Congressional input both before, and much more so , after this ill-advised change continues to be crystal clear: JSAs have served the general public interest well in many circumstances, and the Commission’s rules should not be interpreted to prevent them. Deny Additional Restrictions: Open public advocacy groups have clamored for additional tightening of the ownership rules. Proposals such as eliminating the UHF discounted and limiting shared services contracts are completely illogical if the fundamental rules are not properly addressed and modernized at the same time. To add further restrictions would harm the media industry and those it serves, including underrepresented populations. The particular Commission’s recently released Annual Video Competition Report included a work of art of understatement: “[b]roadcast television stations face changing technology, ” and noted their decreasing share of viewers and advertising. There is no question that today’s extensive media marketplace has had a significant impact on television stations, radio stations, and newspapers. Fairness – and our conformity with the statute – demands an equally significant impact on our media ownership rules.

June 3, 2016 – two: 09 pm

Michael O' Rielly | Commissioner

Last week, in its “third go-round” using the Commission’s media ownership rules, the particular U. S. Court…


No Responses to “Concepts for Media Ownership Reform 888011000110888 Last week, in its “third go-round” with the Commission’s media ownership rules, the U. S. Court associated with Appeals for the Third Circuit struck down the 2014 rule change needing ownership attribution for broadcast combined sales agreements (JSAs), while admonishing the Commission for its continued failing – for nearly a decade – to complete the statutorily-mandated Quadrennial Review of media ownership rules. The court’s endurance has clearly worn thin, given its not-so-veiled threat that it may be justified in wiping all the rules off the books if the Commission will not act quickly. Given the increased attention on this issue, it seems an appropriate time to outline some of my basic principles to guide our review and reform work. To be clear, my principles talked about below reflect the current make-up of the Commission, not an ultimate proposal when the power structure or participants were different. Since the illegitimate ban on JSAs two years ago, the Commission has ongoing flying in the face of clear Congressional directives and reality itself – specifically, that the overall media marketplace is more competitive and diverse than ever before and warrants less regulation, not more. Social media giants, like Twitter and Facebook, are shifting quite explicitly onto the turf of news providers, while articles proliferates with breathtaking speed across the Internet and moves over-the-top directly into American living rooms and mobile devices. In the mean time, traditional video providers are building more and more sophisticated systems for marketing local advertising and delivering local content. Broadcasters plus newspapers have much to contribute in terms of diverse, local content, most have been left fighting, some for their very survival, with an artificially-narrowed range of options. In general, they should be set free to compete on equal footing using of their fellow content providers, not really kept on an unnecessary and unjust regulatory leash. The Quadrennial Evaluation was created precisely to avoid this end result by freeing media ownership guidelines from the most powerful force in Wa, if not physics: inertia. In light of all the development in the dynamic media marketplace, it would be extremely hard to rationalize any effort to further restrict the media ownership rules final effectively amended in 1999, or even to leave them as-is. Many of them appear to be quaint relics when viewed via a 2016 lens. If a struggling newspapers needs an investor, why should we all consider it a greater danger for a nearby broadcaster to get involved than to have an Internet billionaire who lives a large number of miles away? The particular Commission can better promote localism, competition, and diversity – and become consistent with the public interest – by thoughtfully removing outdated restrictions to media combinations. Specifically, the following concepts should receive priority consideration within the media ownership reform effort in the future: Fairly Define Markets: As with almost all Commission issues, definitions matter, and accordingly, our definition of the markets by which newspapers, radio stations, and television channels operate is the source of much series drawing in the application of the mass media ownership rules. In the 2014 Quadrennial Review FNPRM, the Commission shockingly refused to acknowledge any non-broadcast or non-newspaper competitors since market participants. Think about how misdirected that is. As part of this year’s review, the Commission must take a reasonable market view and account for the significant role that competitors for example MVPDs, over-the-top video providers, sites, streaming music services, and satellite television radio play in the 2016 mass media marketplace. Eliminate cross-ownership bans: People are demanding 24/7 access to media content material on numerous platforms, but artificial silos created by the cross-ownership bans are keeping broadcasters and newspapers from innovating into multi-platform organizations that could better serve these needs. Evidence of synergies already exist by means of grandfathered combinations and giving the chance for more, with additional outlets plus platforms, could generate a boom in local content or perhaps prevent a further erosion from occurring in some markets. Eliminating the restrictions upon newspaper/radio and radio/television combinations, as the 2014 FNPRM suggested, would be a appropriate start to reform our ownership rules, while the newspaper/television limits should the actual same course rather than face some form of incremental relief. If the Commission can be serious about preserving localism and perhaps the newspaper industry, it should remove these types of artificial barriers keeping the most probably interested and qualified investors – local broadcasters – on the sidelines. Eliminate Duopoly Rule: Perhaps limiting common ownership of two tv stations in the same market may have made sense in 1964, whenever consumers only had a handful of programming options. Four decades later, encircled by thousands of new options, just how can the FCC justify maintaining this rule in its current form? In many markets, duopolies or even triopolies could strengthen the overall state of broadcasters and allow stations to concentrate more resources on bringing more and top quality local content to their viewers. At the very least, some of the conditions attached should be eliminated or relaxed. For example , the “Eight Voices Test” was previously struck lower by DC Circuit in 2004, and a previous Commission concluded that it might not be justified. It makes even less sense now. Why exactly eight in every case? This condition disproportionately impacts stations in small and mid-sized markets, more frequently preventing these channels, and their viewers, from being able to access the benefits and efficiencies a combination can provide. Provide More Waivers and Grandfathering: To the extent that any of the rules are left unchanged and my views are ignored, the Commission should, at a minimum, reform current waiver processes to make them clear and realistically obtainable, provide a lot more opportunities for waivers, and allow grandfathering of existing combinations. The market dimension waivers proposed by various parties could mitigate the constrictive effect of these outdated rules on tv producers in smaller markets. The Payment has properly grandfathered existing mixtures in many contexts, and this policy should continue and expand wherever possible, such as by allowing grandfathered combinations to be freely transferrable. Additionally , the Commission rate should follow through on its proposal in order to grandfather radio intra-market community of license changes. Resist Reinstating the JSA Prohibit: This rule has met its demise in the Third Circuit, and should not be resurrected for any reason. Congressional input both before, and much more so , after this ill-advised change continues to be crystal clear: JSAs have served the general public interest well in many circumstances, and the Commission’s rules should not be interpreted to prevent them. Deny Additional Restrictions: Open public advocacy groups have clamored for additional tightening of the ownership rules. Proposals such as eliminating the UHF discounted and limiting shared services contracts are completely illogical if the fundamental rules are not properly addressed and modernized at the same time. To add further restrictions would harm the media industry and those it serves, including underrepresented populations. The particular Commission’s recently released Annual Video Competition Report included a work of art of understatement: “[b]roadcast television stations face changing technology, ” and noted their decreasing share of viewers and advertising. There is no question that today’s extensive media marketplace has had a significant impact on television stations, radio stations, and newspapers. Fairness – and our conformity with the statute – demands an equally significant impact on our media ownership rules.”




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