In two separate actions this week, the FCC eliminated the requirement that broadcasters and others post station licenses and began a rulemaking proceeding to determine whether certain media ownership rules should be changed or deleted.
In the first action, the FCC eliminated the need to post broadcast and related licenses at the transmitter site, or to keep license related information at the transmitter control point, in view of the fact that license information is now readily available online via the FCC’s Online Public Inspection File (OPIF) and other online databases. Furthermore, many of the applicable transmitter sites have been fenced off for public safety reasons and are therefore inaccessible to the public. Additionally, many broadcast towers are owned by third parties, so first responders needing access to the facility would not necessarily know who to contact for access. Because license information is available online, however, the FCC found the posting requirement to be “redundant, obsolete and unduly burdensome.”
Separately, the FCC issued a Notice of Proposed Rulemaking (NPRM) commencing the 2018 quadrennial review of its media ownership rules. Specifically, the FCC is looking at the local radio and TV ownership rules and the “dual network” rule. The FCC is also considering whether to adopt several diversity-related proposals requested by the Multicultural Media, Telecom and Internet Council (MMTC). These quadrennial ownership proceedings often take years to complete, as exemplified by the fact that the FCC concluded its 2010 and 2014 quadrennial ownership reviews just last year, as we explained here.
Local Radio Ownership
The local radio ownership rule limits the number of radio stations one entity can own in a market, based on the size of the market, and limits the number of same service (FM or AM) stations that can be owned within that market. In most small markets, one entity can own up to five radio stations, no more than three of which can be in the same service (AM or FM). In the largest markets, one entity can own up to eight stations, no more than five of which can be in the same service.
The FCC asks whether the rule should be eliminated or modified. If modified, the FCC can increase the number of co-owned stations allowed, change the relevant market size and definition, and/or consider whether to change or eliminate the limit on the number of stations co-owned within the same service (the so-called “AM/FM subcaps”). Although the FCC has previously refused to consider the impact of nonbroadcast services within the relevant market, they now ask whether it would be appropriate to consider the prevalence of both satellite and online/streaming audio services as well as podcasts as being competitive with broadcast radio.
The FCC also asks for comments on the costs and benefits of retaining, modifying or eliminating the local radio ownership limits.
Local TV Ownership The current local TV ownership rule allows one entity to own up to two TV stations in the same market, so long as no more than one of them is a “top four” (usually network) station. However, under the rule as modified last year, an entity can seek a waiver of the “top four” restriction if circumstances warrant. As with the radio ownership rule, the FCC asks whether the TV ownership rule should be retained, eliminated, or modified in view of competition from nonbroadcast video providers. The FCC also asks whether non-video sources of news and information such as radio, newspapers, the Internet, and social media should be considered in determining how much local TV ownership should be permitted. If the rule is retained, the FCC can change the number of co-owned stations permitted in the same market or delete the “top four” ownership restriction. It could also adopt a case-by-case approach, if appropriate.
Other factors that may be taken into account in determining what to do with the local TV ownership rule include multicasting (the fact that multiple stations can be transmitted over one broadcast channel), low power TV (which is currently not subject to any ownership restrictions), the so-called “next generation”/ATSC 3.0 broadcast standard (expected to facilitate the merger of broadcast and Internet capabilities), and the effect any rule or rule change would have on female and minority ownership of broadcast stations.
Dual Network Rule
The FCC also asks whether it should modify or repeal the rule that prevents ownership of two broadcast networks: ABC, NBC, CBS and Fox. The FCC questions whether this rule is still necessary in the current competitive marketplace. The marketplace includes cable TV as well as online video platforms and social media. The FCC asks whether retention of the rule is necessary to promote localism and whether modifying or eliminating it would have any impact on female and minority ownership of broadcast stations.
Finally, the FCC asks whether it should adopt any one of three MMTC proposals it began considering during the previous quadrennial review. The first proposal would extend cable procurement requirements to broadcasters. The cable procurement regulation requires cable systems to “encourage minority and female entrepreneurs to conduct business with all parts of [the cable system’s] operation,” e.g. recruiting of qualified entrepreneurs from sources likely to be representative of female and minority interests. Specifically, the FCC asks whether expanding the cable procurement rule to broadcast stations would help promote female and minority entrepreneurs to ownership and operational positions in the broadcast industry.
The second proposal concerns the adoption of “tradeable diversity credits” that would allow for greater concentration of media ownership than otherwise permitted by the FCC in exchange for sale of a station to a socially and economically disadvantaged business to foster diversity of ownership. If the FCC were to implement this proposal, it asks how it should do so and how “socially and economically disadvantaged” should be defined, among other considerations.
Third, the FCC asks whether it should consider implementation of either a “tipping point” or “source diversity” formula that would consider whether a proposed media transaction would result in a level of media concentration that would implicate public interest concerns for maintaining diversity and competition within the market. In other words, the FCC would consider whether a particular transaction would reduce the amount of advertising revenue available to support independent stations in the market. If the FCC were to adopt such an approach, how would it determine the effect of a proposed transaction on ad revenue in a market and how would it define an “independent” station? A source diversity formula also would attempt to measure a proposed transaction’s effect on diversity within the market and raises similar questions that would need to be addressed to determine if and how such a formula could be applied to proposed broadcast transactions.
Comments on all of the foregoing proposals will be due 60 days after publication in the Federal Register and reply comments will be due 30 days later.