(The original version of this appeared on the blog of my employer, Public Knowledge.)
At Public Knowledge, we’ve talked a lot about the Journalism Competition and Preservation Act (JCPA) and why we think it’s a very bad idea. But the most recent version made public raises a new twist. For a statute supposedly designed to save journalism and avert the “newspaperpocalypse,” it drastically favors broadcasters over newspapers and gives the biggest rewards to massive media conglomerates rather than local newspapers. Given the role media consolidation has played in destroying local news, and the fact that local TV broadcasting remains quite profitable, this outcome gets a rare 5 out of 5 Morissettes on the irony scale.
To make this even more annoying, Public Knowledge has a much better proposal for using big tech to support local media. Or Congress could go with this Free Press proposal (echoed by econ Nobel winner Paul Roemer in this op ed) to tax targeted advertising to fund local journalism. There are lots of better ways to tax big tech to fund local journalism that have the advantage of actually funding local journalism rather than media conglomerates. But no, Congress would rather create a new exception to the antitrust laws and bring cable must carry to the internet than expressly tax targeted advertising to fund local journalism. Le sigh.
Details on why the current JCPA favors big media below.
Briefly, to address the concern that the largest media companies will dominate negotiations with covered platforms and cut out the very local newspapers the statute is supposed to help, the JCPA sets some ground rules. In theory, no company with more than 1500 employees is eligible. Problem: That limit does not apply to broadcasters. An “eligible publisher” is defined as one that publishes “one or more qualifying publications.” By contrast, an “eligible broadcaster” is a person that has a license under Title III of the Communications Act (and does news stuff). The 1500 employee limit applies only to qualifying publications. Since the definition of qualifying publication excludes “eligible broadcaster,” the 1500 employee limit does not apply to eligible broadcasters.
So The New York Times, with 5,000 employees, is not eligible to participate in the negotiating entities created by the JCPA. By contrast, Sinclair Broadcasting Group – with approximately 13,000 employees – can participate as an eligible broadcaster. Again, given the fact that Sinclair reported profits of $2.59 billion in the first quarter of 2022, it’s hard to see why Sinclair (or Nexstar, or Cumulus, or any of the other large group owners) needs to participate in the JCPA more than The New York Times or The Wall Street Journal. But wait, the loopholes for big media conglomerates keep coming!
Media Conglomerates Double Dip
Nothing in the statute prevents a media conglomerate from participating as both an eligible broadcaster and an eligible publisher. As noted above, “qualifying publication” excludes eligible broadcasters, so an entity that owns both broadcast stations and other online publications can participate as both an eligible broadcaster and an eligible publisher. Comcast/NBCUniversal, for example, can participate as an eligible broadcaster for its 12 owned and operated stations, but also participate as an eligible publisher because of MSNBC.com and CNBC.com.
Things get a bit confusing around governance because the governance language says that every “digital journalism provider” gets one vote. But “digital journalism provider” means either an eligible broadcaster or an eligible publisher. It does not say that an eligible broadcaster owned by or affiliated with a digital publisher (or vice versa) counts as one, combined digital journalism provider. So while the statute requires that a digital publisher that holds multiple qualifying publications is a single, unitary member of the negotiating entity, nothing prevents a conglomerate like Comcast or News Corp from separating their eligible broadcaster and eligible publisher into two, distinct eligible digital journalism providers and doubling their ability to outvote actual small newspaper publishers.
Are Broadcast Networks Excluded? Not So Much.
JCPA defenders will argue that the definition of “eligible broadcaster” explicitly excludes a “television network.” But the definition of “television network” explicitly excludes from the exclusion any “network station” that is owned, operated, or affiliated with a television network. So while Comcast/NBCUniversal cannot participate as an eligible broadcaster by virtue of providing NBC News, its 12 wholly owned and operated affiliates can participate as “eligible broadcasters.”
How Many “Eligible Broadcasters” Can Group Owners Have?
“Broadcasters,” you ask? Shouldn’t that be singular? Here we have another way in which the statute apparently favors broadcasters over other journalists. No matter how many qualifying publications an “eligible publisher” owns (and may therefore be entitled to compensation for), they do not give the eligible publisher any more bargaining power in the negotiation units created by the JCPA. But “eligible broadcaster” has no such limitation. An eligible broadcaster is defined as the owner of a single broadcast license, whereas an eligible publisher is explicitly defined as the owner of “one or more qualifying publications.”
So does each broadcast license count as an individual eligible broadcaster, or do you aggregate all the licenses under common control? And using what set of ownership rules? The FCC attribution rules, or normal meaning of “own”? If I’m CBS Broadcasting or ABC/Disney or iHeartRadio, I know what I am arguing. Each licensee is an “eligible broadcaster” because the statute could have said “license or licenses” but didn’t. If I’m the Washington Post, I argue the opposite. But who gets to resolve the dispute? Under the statute, the negotiating unit sets its own rules by majority vote. But since media conglomerates can participate as both eligible publishers and eligible broadcasters, they automatically get double the votes, and can use that edge to vote that every individual license is a separate eligible broadcaster.
Put all this together for the worst case scenario. Fox Broadcasting participates as an eligible broadcaster, while Fox News participates as an eligible publisher (based on Foxnews.com, the New York Post, and any other qualifying publication). Fox Broadcasting owns 29 full-power TV stations, each of which may also participate as an independent eligible broadcaster. For a statute supposedly designed to help endangered newspapers, the JCPA really stacks the deck in favor of the multimedia broadcaster conglomerates.
Stay tuned . . . .