Media Ownership

Items relating to media ownership

The Supreme Court Does Not Want To Revisit Constitutionality of Broadcast or Cable Regulation, Get Over It And Get On With Life.

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Remember how conservatives just could not get over the fact that neither Chris Christie or Mitch Daniels — or anyone else they liked better than Mitt Romney — would run for President? Remember how this collective fantasy actually acquired a factesque quality, so no matter how often and emphatically they said “I’m not running,”, hardcore true believers kept saying it would totally happen? As a result, this collective fantasy actually kept impacting reality, with Mitt Romney forced to spend real time and real money persuading potential supporters that their choices really were Mitt Romney, Rick Santorum, Newt Gingrich, or Ron Paul. Really.

I bring this up because we have our own version of this in telecom policyland. Here, a hardcore group of people in telecom policyland believe that the Supreme Court is positively lusting to overturn the two cases that form the mainstay of the FCC’s authority to regulate broadcasters and cable operators: Red Lion and Turner Broadcasting. The rock solid belief that the Supreme Court cannot wait to get its collective hands on these cases cases to overturn them is an article of faith among so many in the telecom world that it influences behavior. Those who favor regulation of things like media ownership and program access live in mortal terror of any change to the rules that might give rise to a cause of action. By contrast, broadcasters, cable operators, and other opponents of any regulation of Big Media keep trying to generate lawsuits so they can strike down what they see as a vile restraint on the First Amendment.

This past term, the Supreme Court had the opportunity to review both Red Lion and Turner. It opted not to do so.  In May, the Supreme Court quietly declined to hear an appeal by Cablevision that would have allowed the Court to revisit the Turner case. In June, the Court not only refused to reconsider Red Lion in the context of the Fox Broadcasting indecency case, they refused to hear the broadcaster appeal of the FCC’s media ownership decision. These cases presented the cleanest, most clear-cut opportunities for the Court to re-examine the constitutionality of either cable or broadcast regulation in years, and the most obvious opportunities for years to come. If the Court were lusting to take on either Red Lion or Turner, surely this presented the perfect chance for them to do so.

But they didn’t. And, just as even the most avid Romney-haters needed to wake up to the fact that Chris Christie wasn’t playing hard to get, folks in Policyland need to deal with the fact that regulation of media ownership and cable remains constitutional for the foreseeable future.

More below . . . .

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My Insanely Long Field Guide To The Verizon/SpectrumCo/Cox Deal.

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The more I look, poke and prod at the VZ/SpectrumCo/Cox deal the more convinced I am that this becomes one of the defining moments in telecom for 2012 – possibly for the foreseeable future. If AT&T/T-Mo represented the last stand for traditional antitrust , VZ/SpectrumCo represents the new frontier. Where AT&T was a frontal assault on antitrust by accumulating marketshare and spectrum, this hits antitrust up its blind side with collaborative agreements and fundamental questions about when can competitors decide to abandon entire markets to one another. Just about everything single issue in telecom – spectrum aggregation, video distribution, the nature of competition in the age of convergence, the interaction of antitrust and patent technology –  all come together in one package so amazingly complicated and wonky that average Americans will fall asleep while you explain it to them.

So, with the help of some incredibly lame innuendos to spice things up a bit, I attempt to explain below . . . . .

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PK Action Alert To Save the Future of Unlicensed Spectrum

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Despite the obvious reliance on unlicensed spectrum by Americans every day in the form of everything from wifi to baby monitors to RFID, the current mania for spectrum auction revenues combined with lobbying from companies opposed to the TV white space has put the future of unlicensed spectrum at risk. This is particularly true under the discussion draft circulated by House Republicans last week. That draft would require that before the FCC could allocate any new spectrum for unlicensed use, it would first have to have an auction that would allow companies to buy the spectrum for exclusive use. Only if everyone collectively outbid AT&T or Verizon for unlicensed would the spectrum go to unlicensed use. As Stacy Higginbotham at GigaOm notes, this would have devastating impact on the future of unlicensed and the innovation that comes out of the unlicensed bands.

As if that were not enough, the proposed bill literally allows companies to buy their way out of FCC consumer protection regulation.

We are trying to stop this before it’s too late.  Public Knowledge has created an Action Alert asking anyone who cares about protecting unlicensed, or opposed to letting companies literally buy their own rules, then help us this Friday (tomorrow) by telling your member of Congress not to sell off our digital future or let companies buy their way out of public interest obligations. Sign up for the PK mobile Action Alert and you will get a text message tomorrow letting you directly contact your member of Congress so you can tell them why this bill is a really, really bad idea.

I reprint the PK Action Alert below.

Stay tuned . . . .

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What the DoJ Documents Tell Us About the Comcast/NBCU Merger

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In all the hoo ha about the Comcast/NBCU Merger, few folks troubled to read the Department of Justice Competitive Impact Statement, Complaint, andConsent Decree. That’s rather unfortunate, as these documents sets forth a straightforward case under the antitrust laws for program access conditions for online competitors and for network neutrality. Here’s the short version:  Comcast pre-merger makes almost 30 times more money from providing cable service than from programming revenues. Even adding all of NBCU’s revenue, Comcast will still make more than twice as much from selling cable service ($34 billion) as from programming ($16.9 billion). Anyone who can do basic arithmetic would therefore conclude that yes, Comcast’s incentive to protect its cable business from erosion by online distributors (or even from traditional rivals) outweighs the potential gain from increasing programming distribution. As an added bonus, for those ideologically committed to believing otherwise, turns out Comcast’s own documents agree with the simple arithmetic and not the fun theoretical models their experts submitted. Which is why (among other reasons) DoJ continued oversight is not merely something extra. It really matters.

Lets break this out some below …

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After 10 Years of Struggle, Low-Power FM Will Give Thousands of New Communities A Chance To Get Their Voices On The Air.

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Ten years ago, the FCC did a startling thing. It recognized that much of the rise in “pirate radio” came from frustrated demand for small, local licenses of the sort the FCC had simply stopped distributing many years before. So the FCC offered a deal to the “pirate” community: stop transmitting illegally and the FCC would create a low-power radio service. Despite fierce resistance by commercial broadcasters at the National Association of Broadcasters (NAB) (and, to their eternal shame, National Public Radio, which can be just as much of a bad incumbent as its commercial sisters), the FCC adopted rules to allow 100-watt radio stations to operate on a non-commercial basis. These stations would operate on a “secondary” basis to full power stations, required to protect these stations from any interference. To create space for these new community Low Power FM (LPFM) stations, the FCC would relax the “third adjacent” spacing requirement, a mechanical rule for spacing radio station transmitters far enough apart adopted in the early days radio to ensure no interference. The FCC studied the matter and concluded that relaxing this rule would not cause harmful interference to existing full-power stations.

Needless to say, the full-power broadcasters did not give up so easily. But neither did the supporters of LPFM. It’s a story worth celebrating not merely for the result, but for what it teaches us about staying in the struggle for the long-haul.

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The Fox/Cablevision Retrans Mess And FCC Learned Helplessness — The Insanely Long Version

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[This is a much longer, wonkier version of a post I did on the Public Knowledge blog, for those who can’t get enough explanation of Section 325.]

I feel a good deal of sympathy for FCC Chairman Julius Genachowski over the ongoing fight between Fox and Cablevision. My brother the educator likes to say that “responsibility without authority is trauma.” Or, in other words, if you are responsible for something, but don’t actually have the authority to do anything about it, then the only thing you can do is suffer when things go wrong. So it is for Genachowski and Fox/Cablevision — under the FCC’s current rules. But here’s the funny thing. The FCC actually has fairly strong statutory authority to take action. So while Genachowski is in a bind, he can actually fix the problem. He even has a vehicle all teed up and waiting in the form of Public Knowledge’s Petition to change the “retransmission consent” rules (I’ll explain what those are below).

So how on Earth did the FCC get reduced from the “cop on the beat” to pathetically tweeting the playoffs? The answer lies with over 15 years of deliberately learned helplessness and rulemaking that I can only charitably describe as auto-castration. Twice, in 1992 and 1999, Congress explicitly directed the FCC to make sure that broadcasters don’t abuse the retransmission consent negotiation process (or as we telecom policy wonks like to call it, “retrans”). Each time, the FCC went out of its way to develop rules that systemically divested itself of all capability to act. So although Congress gave the FCC the job of consumer protection cop, the FCC kept angling for the job of “palace eunuch” to the Media Barons. For 15 years, the FCC has loooooovvvved its job as Palace Eunuch for the Media Barons, wearing a very impressive Palace Eunuch uniform with those great big baggy pants and the cute little fez and toy sword it waves impressively when it tells members of the public to move along and stop trying to hold big media companies accountable for their public interest obligations.

Happily for Genachowski, he can trade in the silly, baggy Eunuch pants for bold, powerful “man pants” the Republican women keep talking about as the fashion accessory for the season. Or Genachowski could do nothing, which will give him time to go shopping for a nice pair of those little pointy shoes with the bells on the toes to go with the baggy Eunuch pants.

Wonky legal details below . . . .

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Will Comcast/NBC Need FCC Approval? And How Would That Play Out?

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The industry news is abuzz with the upcoming Comcast/NC Universal Deal. According to recent reports, Comcast would buy 51% of NBC Universal (assuming Vivendi, which owns 20% at the moment, agreed with the terms). But beyond this general framework, it’s unclear whether all the assets held by NBC Universal would be included in the deal. Whether or not the FCC has jurisdiction hinges on this question.

The FCC does not have general jurisdiction over deals pertaining to content. NBC Universal owns lots of radio and television stations. Transfer of the licenses to the new Comcast-controlled entity would require FCC approval. But if the deal does not include the licenses, the FCC would probably lack a jurisdictional hook. Review of the deal would lie strictly in antitrust — at either the DoJ or Federal Trade Commission (FTC). From an antitrust perspective, the deal raises some concerns given the concentration of content and Comcast’s position vis-a-vis other existing subscription television providers (e.g., FIOS, DIRECTV) and potential new competitors (e.g., Netflix and other “over the top” video providers)). It may also concern broadcasters, both NBC affiliates worried about the change in management and other broadcasters worried how this would impact Comcast’s retrans negotiations. Much of this will also depend on whether the deal includes the movie production studios, prior existing content, and a host of other details that impact the universe of content distribution these days.

Assuming the TV and/or radio stations are included, it’s not entirely clear what happens. The D.C. Circuit eliminated the FCC’s existing ban on cable/television cross ownership (which applied only to broadcast licenses in a cable system’s franchise area) in 2002 on the basis that the D.C. Circuit didn’t like it (Fox Television Stations, Inc. v. FCC, 280 F.3d 1027 (D.C. Cir. 2002). That decision does not directly impact the FCC’s general obligation under Section 310(d) to ensure that any transfer of a license serves the public interest. Comcast and NBC will certain push the Fox Television decision for all its worth, arguing that the DC Circuit decision to vacate the rule means that there are no circumstances under which the FCC could prevent a broadcast/cable cross-ownership rules. Opponents will argue that while the D.C. Circuit vacated a per se rule that any cable/broadcast combination was contrary to the public interest, that has zero impact on the Commission’s responsibility to resolve the question of whether transfer of these licenses to this cable company serves the public interest. I expect much confusion and argument on this point. Assuming the FCC has jurisdiction in the first place.

Stay tuned . . . .

Big Low Power FM Win!

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Back in 2007, the FCC issued an Order to try to address some of the problems impacting the low-power FM (LPFM) service. You can find out more about how amazing LPFM is, and why Congress needs to pass legislation to remove the artificial restrictions on how many LPFM stations we can have, here on the Prometheus Radio website.

Briefly, LPFMs are very small, very local non-commercial stations that operate at 100-watts or less. The FCC authorized the service in 2000, relaxing the “third adjacent channel” (A radio station must be 3 jumps away from the next radio station) rule to permit several thousand LPFM’s to operate without interfering with full power station. The NAB persuaded Congress to reverse this determination with the ironically named Radio Broadcaster Preservation Act of 2000. That act prohibited the FCC from relaxing or waiving the 3rd adjacent channel spacing requirement.

A few years ago, it became clear that the several hundred LPFMs permitted under the act were in danger of being crowded out by full power stations. Because of what appeared to be an unrelated decision to streamline the process by which full power FM stations can change their market designation. As a result, an LPFM could suddenly find itself impermissibly close to a full power station and need to shut down. Or it might start experiencing interference and get drowned out. The Commission therefore issued an Order and Further Notice of Proposed Rulemaking which provided some relief by making it easier for LPFMs to relocate on the 2nd adjacent channel, thus avoiding Congress’ mandate that the FCC not reduce or waive the separation distance required on the 3rd adjacent channel. This is not nearly as silly as it sounds, as the process involves a fact-based determination on whether there is actually any interference to any full power as a result of the move. Given how interference works, it is very possible to fit a LPFM into space on the 2nd adjacent without causing interference. Spacing is based on averages to make processing applications easier. Actual engineering can determine how to place a low-power tower to avoid interference. Mind, this would be easier to do if Congress hadn’t absolutely prohibited any waiver of 3rd adjacent spacing. But they did. Happily, however, Congress did not prohibit any waiver of 2nd channel adjacent.

The NAB promptly appealed, arguing that the FCC had no authority to alter first,second or third adjacent as a result of the 2000 Act. This, in turn, stalled the conclusion of the Rulemaking, since why finish a rulemaking if you don’t even know whether or not you have authority?

Today, the D.C. Circuit affirmed the FCC’s decision. It rejected the NAB’s argument based on the plain language of the statute and found that the FCC had rationally justified its decision.

This is extremely good news for LPFM, and for those communities lucky enough to have them. As acting Chairman Copps noted in a statement issued today after the ruling, the FCC is now free to move quickly to finish the pending rulemaking. And, of course, Congress should move just as quickly to pass the Local Community Radio Act of 2009, so that hundreds of new communities can enjoy the diverse voices of low-power FM.

My former colleagues at MAP — especially Parul Desai who did the lion’s share of work on this issue — deserve a huge shout out for this win. I should also mention that it was not a Democratic FCC, but Kevin Martin who brought the 2007 Order to a vote — and then voted with the Democrats against both his fellow Republicans to get the needed 3 votes to clear the Commission.

Stay tuned . . . .

The FCC and the Flying Purple People Meter.

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O.K., technically, it is the Arbitron Portable People Meter (PPM). For those unfamiliar with this issue, Arbitron has rolled out a a new technology it claims will more accurately measure radio audience share. Many folks in the minority community think that the PPM undercounts minority listeners and has serious flaws in its technology. This later claim, at least, is circumstantially supported by the refusal of the Media Rating Council to certify the technology for use in some markets (but apparently permitting it in others). But since the MRC will not disclose the reasons for its refusal, and neither will Arbitron, no one can say anything for certain.

As an aside, I’ll bet it also undercounts low-power FM stations as well. I also have to wonder whether it counts the new digital stations for radios that have converted to digital. But I haven’t made a study of this and only minority broadcasters and organizations concerned with broadcast diversity have raised the issue in a major way.

You may think, “what’s the big deal?” Well, not only does millions of dollars in advertising ride on this, along with major decisions on programming, format, etc., but so does federal policy. Since we have basically outsourced all significant information gathering on mass media (because the private sector is so much more efficient and why would an industry reporter ever have incentive to manipulate the information?), the FCC now relies on Arbitron ratings for a wide variety of ownership rules and policy decisions. For example, the FCC rules prohibit the top four rated broadcast television stations in any given market to merge.

So the FCC has put out a public notice in response to a Petition for an investigation filed by a coalition of minority broadcasters and the Minority Media Telecommunications Council (MMTC) called the PPM Coalition (PPMC). (you can download the Petition here). The FCC can, of course, investigate anything it wants — especially where its rules rely on the validity of the Arbitron rating system. But does the FCC have authority to do anything about Arbitron’s roll out of the Portable People Meter?

Well, if you believe in FCC ancillary authority, then the answer is probably yes. Arbitron and its rating system are clearly ancillary to a variety of FCC statutorily mandated goals. And if the FCC can require Best Buy to put a big sign next to any analog-only televisions saying “Will Not Work After February 17, 2009,” they can require Arbitron to show they are counting everybody. OTOH, if you don’t believe in ancillary authority, it becomes a heck of a lot harder.

Still, as the study itself demonstrates, there is value even in investigation by the FCC and getting the FCC to issue some kind of report. At some level, Arbitron does have to care if people buying advertisements consider its products reliable. It would be even more embarrassing if the FCC concluded it would no longer rely on Arbitron data — something it clearly has the right to do regardless of any authority to directly regulate Arbitron. By contrast, if the FCC gives Arbitron a clean bill of health, it may not satisfy the PPMC, but it will enhance Arbitron’s claims of reliability for the broader market.

Credit to the FCC for getting this out on notice quickly. We’ll just have to see what comes of it.

Stay tuned. . . .

Iowa Broadcasters to FCC: “We Do Localism! All It took Was A 500 Year Flood.”

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One has to admire the utterly ruthless and meticulous way in which broadcasters will move swiftly to exploit absolutely any possible set of circumstances for their regulatory advantage. Case in point, this letter from Sue Toma, Executive Director of the Iowa Broadcaster’s Association to FCC Chairman Kevin Martin, touting their involvement in their communities during the recent terrible flooding.

Mind you, I am glad that Iowa broadcasters can get it together to do their job during a 500 year flood. And it is the job of trade associations to tout the good its members do — even when it is the sort of thing we expect them to do. And certainly Iowa broadcasters should be praised for stepping up to the plate when needed and recognized for playing their part — along with the other community businesses and volunteers from around the country who, unlike the broadccasters, are not under a legal obligation to provide service to the local community. But of course, for the broadcasters, that is not enough. As usual, the broadcasters behave rather like spoiled 6 year old children who expect bribes to do their homework or their chores. Hence inclusion of this little zinger at the end:

I can’t help but note that the Iowa floods come at a time when well meaning but misguided activists are questioning broadcasters’ commitment to localism. My response: Spend time in Iowa, and see first-hand how local and radio and TV stations are serving our communities during the worst flooding in a century. Iowa broadcasters have once again proven their exemplary commitment to the communities that we serve, without the need for more mandates, paperwork and unnecessary regulation.

In other words, that stations actually do their jobs in a once in a century crisis gets them off the hook for the remaining 99 years, 11 months. To which I can only say, giving proper credit and appreciate to stations doing the work they are supposed to do, “get real.” The real test of localism isn’t just how you do in a crisis and that somehow gives you a free pass on the rest of the license period. The real test of localism is how you serve your local community on a daily basis. That broadcasters refuse even to list what programming they show and what they think their viewers get out of the programming choices — whether news, or entertainment, or exposure to local culture and matters of local interest — should raise serious questions about whether broadcasters take their role as stewards of a public license held in trust for the local community seriously.

I recognize that leveraging responses to natural disasters for regulatory goodies is a hallowed tradition among broadcasters, so I’m not offended at the Iowa Broadcaster’s Association rushing to send this letter as soon as their laptops dried out. But because broadcasters get a lot of mileage out of their so called commitment to localism — such as cable must carry, the right to play music without paying performance royalties, and a rule against satellite radio providing local content that might compete — someone needs to call them on this. You can’t get the benefits of being a licensee with a duty to serve your local community without shouldering the responsibilities as well. So just as my son doesn’t get out of doing his chores just because he did his homework — even if he got an A — broadcasters don’t get excused from serving their community every regular day just because they came through during a flood or some other epic crisis. Kudos for doing a good job on this one, but it’s still your job and you’re supposed to do it well.

And, given that nearly 1 million people took the time to tell the FCC during its localism proceeding that they thought local broadcasters were doing a lousy job serving their local community (I make no claims as to Iowa, that’s national), it doesn’t seem out of line for the FCC to require you to actually tell the FCC how your programming serves the local community as required by your license and to make that documentation publicly available, a requirement broadcasters have gone to court to resist.

Finally, I can’t help but note that low power FM stations (that full power broadcasters fight tooth and nail to keep off the air) have likewise done amazing coverage of the flood and heroic service to their local communities — while still managing to produce local content and serve their communities on a regular basis. If they can pull their weight while still more than complying withe the “mandates, paperwork, and unnecessary regulations” that ensure they serve their local communities, I think the rest of the broadcast community in Iowa can do so as well. And ought to.

Stay tuned . . . .