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News :: Media |
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Concentrated Media Sausage: Making Sense Out Of The FCC's Changes To Media Ownership Rules, The Congressional Attempts To Reverse Them, And What This Means In Our Local Media Environment |
Current rating: 0 |
by Paul Riismandel
Email: paul (nospam) mediageek.org (verified)
Address: P.O. Box 2102, Champaign, IL 61825 |
19 Jun 2003
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Just a little more than two weeks after June 2, whenthe Federal Communications Commission passed a set of rulings that loosened key media ownership regulations, the Senate Commerce Committee, which oversees the FCC, approved a bill that would rescind many of these rulings.
In this article I try to make sense of the FCC's decision and the bill that came out of the Senate Commerce Committee on June 19. But to really put things in perspective I think you have to look at how these rules and bills affect our local media.
Unfortunately, almost nothing is ever written about our local media market, except here on the U-C IMC website and in the public i. So I also take a stab at figuring out what effect the FCC's new rules could have on our local media environment, and how the bill now entering Congress might change that situation.
I covered part of the local media analysis on the June 6 edition of the mediageek radio show, heard 5:30 PM Fridays on WEFT ( http://www.mediageek.org/radioshow.html ) and during an interview on the June 9 edition of IMC Radio News ( http://www.ucimc.org/newswire/display/12368/index.php ), heard 5:30 PM Mondays on WEFT. |
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Just a little more than two weeks after the Federal Communications Commission passed a set of rulings that loosened key media ownership regulations, the Senate Commerce Committee, which oversees the FCC, approved a bill that would rescind many of these rulings. The bill that came out of the June 19 committee meeting is not quite a wholesale rollback of the FCC’s decision, but it does contain one provision that would result in the nation’s largest radio giants having to divest themselves of some stations.
The Hollings-Stevens bill was originally written to restore the 35% national TV ownership cap which the FCC raised to 45%. This cap sets the limit on the number of TV stations that a single company can own based upon the total percentage of the nation’s TV households those stations reach.
Sen. Byron Dorgan (D-North Dakota) added an amendment to this bill that would reinstate the newspaper-broadcast cross-ownership ban, which prevents a single company from owning both a TV station and a newspaper in a single market (although several such combinations already exist that were either grandfathered in or given waivers by the FCC).
The Dorgan amendment was unexpectedly weakened by an unusual secondary amendment added by Sen. Ted Stevens (R-Alaska). Stevens' amendment would allow local utilities commissions in rural markets to petition the FCC for a cross-ownership waiver when requested by a media corporation, and would require the FCC to rule within 60 days. This amendment actually represents a greater loosening that what the FCC had voted to permit, since the Commission had decided to retain the cross-ownership ban in the smallest media markets.
Not coincidentally, in Sen. Stevens’ home state, the owner of the Fairbanks daily newspaper has moved forward to buy the NBC TV affiliate in that city.
A more positive amendment was submitted by Sen. Barbara Boxer (D-California) that would require the FCC to hold at least 5 public hearings during any future media ownership proceedings. During this just completed proceeding the FCC held only one officially sponsored public hearing, in Richmond, Virginia, although Democratic Commissioners Copps and Adelstein attended multiple unofficial hearings across the country.
Finally, Senate Commerce Committee Chairman John McCain (R-Arizona) offered a surprising amendment that would cancel grandfathered ownership protections for radio clusters that exceed the new, slightly more stringent caps established by the FCC on June 2. This decision would force Clear Channel, Viacom/Infinity and other industry giants to divest stations in some concentrated markets, where the FCC’s recent decision would allow these clusters essentially to be grandfathered in, while preventing any new clusters of that size from being created.
Although the Hollings-Stevens bill and most of the attached amendments are good news for those concerned about media concentration and democracy, the details of the FCC’s new ownership rules and these proposed revisions are abstract, and it can be difficult to gauge what effect they might have on local media markets.
The FCC’s change to the radio rules are especially confusing because the Commission has completely changed the metrics it uses to decide how big a given radio market it, which then determines how many stations a single owner is allowed to have. The previous definition of a market was based upon the estimated reach of radio stations into a particular geographic area. This definition caused some small western cities, like Minot, ND, where flat terrain aids the reach of radio stations from many miles away, to be considered as large as cities many times its size in population. Because the limit on the number of stations that one company can own in a market is based upon how big the FCC considers the market to be, cities like Minot have been allowed to become much more concentrated than current rules intend.
The FCC decided to change its market definitions to match the one used by Arbitron, the nation’s largest radio ratings company. In the Minot, ND example, Arbitron considers that city to be a much smaller market than the FCC, since the distant radio stations that the FCC counts do not have reliable signals in Minot and are of little interest to advertisers. Therefore, under the new definition, the largest cluster of co-owned stations in Minot is no longer considered legitimate.
However, as mentioned before, the FCC also decided not to break up clusters of multiple stations in a market that have become disallowed under the new radio market definition rules. Instead, while large radio owners, like Clear Channel Communications, are permitted to keep these stations they may not sell them as a cluster to another large owner, like Infinity broadcasting.
Owners of station clusters may, however, sell the clusters to small and minority owned companies, a provision that was added at the last minute by FCC Chairman Powell, in a move that he claims is intended to boost minority media ownership, which has declined greatly since the Telecommunications Act of 1996
Sen. McCain’s amendment to the Hollings-Stevens bill would rescind that provision and likely force the likes of Clear Channel to sell off stations in dozens of markets. Other large radio giants also would be prevented from buying these stations except in markets where they own relatively few stations.
Another change the FCC made to radio ownership rules was to begin counting non-commercial stations when determining the size of a radio market. So, while some markets may see their size go down under the new Arbitron-based definitions, resulting in halting further consolidations, others that have more non-commercial stations may indeed see their size increased under the new rules, possibly allowing for more consolidation to take place. This consolidation would be permitted to go ahead even if the Hollings-Stevens bill becomes law.
On the whole, the FCC’s changes to media ownership rules resulted in relying more on so-called market data, especially viewer and listener ratings. Aside from raising the national TV station ownership cap, which will result in a definite increase in TV ownership concentration, it is more difficult to assess how significant the increase in concentration will be that results from the other rule changes. The changes will be very specific to each city’s individual media market.
In many markets it is difficult to figure out exactly what types of cross-ownership and concentration are permitted under the FCC’s rule changes. Here in Champaign-Urbana it is still difficult to predict what changes could happen.
One complicating factor is the nature of our local TV market, which is defined as including Champaign-Urbana, Decatur and Springfield, an area that is more than 100 miles across. Because of this great distance, several TV channels in Springfield cannot be seen in Champaign over the airwaves, and vice versa. In recognition of this the FCC has given waivers to three companies, allowing them each to own two TV stations in this market.
Sinclair communications owns both channel 20, the NBC affiliate in Springfield, and channel 15, the NBC affiliate in Champaign. Nexstar owns the CBS affiliate, channel 3, in Champaign, and channel 49, which used to repeat channel 3’s signal in the Springfield area, but has recently switched over to UPN affiliation. And Fox affiliate channel 27 in Urbana is owned by the same company that has the Fox affiliate channel 55 in Springfield.
Under the new rules in order for there to be additional co-owned stations, the top four most highly rated stations in the market must be owned by different companies, and those stations cannot become co-owned. Thus the #1 station can be co-owned with the #6, but the #2 and #3 stations cannot be co-owned. However, determining the top 4 stations in the Champaign-Decatur-Springfield market is not so simple, because it’s unclear whether the FCC will consider both co-owned NBC affiliates, channels 15 and 20, to be one station or two.
In many cases Nielsen TV ratings counts them as one—such as for prime time programming which is the same for both stations—and in other times counts them as two. Thus we may not know if any further TV station duopolies will be permitted in this area until some company attempts to buy another station, triggering an FCC review.
There are no provisions in the current version of the Hollings-Stevens bill to address the FCC’s loosening of TV duopoly and triopoly rules. Therefore, if the FCC determines that the new rules permit there to be more co-owned stations in the Champaign-Decatur-Springfield TV market, then this type of consolidation would not be stopped if the Hollings-Stevens bill were to become law.
Things are just a little clearer when trying to figure out if newspaper-TV cross-ownership would be permitted in our local market. The Champaign-Decatur-Springfield TV market has 11 different TV stations, which includes the three combinations I just mentioned. If those combinations are treated as one station each (essentially one station with one repeater), then the market can be considered to have 8 stations, which is likely.
Under the FCC’s new rules, in an 8 station market a single company is permitted to own up to one TV station and a daily newspaper, in addition to half as many radio stations as allowed in the particular market. Therefore, under the new rules, it appears that the owner of any local TV station is permitted to purchase the News-Gazzette, the Decatur Herald & Review or Springfield State Journal-Register. Similarly, the owner of any of those three newspapers is now allowed to get into the TV station business in our local market.
If the Hollings-Stevens bill becomes law with Sen. Dorgan’s cross-ownership ban intact, then no local TV stations and newspapers will be permitted to be co-owned. However, if Sen. Stevens’ amendment allowing for such combinations when advocated by local utilities commissions also remains intact, then newspaper-TV combinations could be allowed, if local governments were to support such combinations.
It is also somewhat early to tell if the changes to the FCC’s radio market definitions will allow for changes in the Champaign-Urbana radio market (radio markets are considered separately from TV, and in our local case are largely based around single urban centers). However most indications are that the current limits on further local radio consolidation will persist.
In the last five year, the FCC has considered the Champaign-Urbana radio market to have 14 or 15 radio stations. At this level, one company is permitted to own up to six stations, with up to four on one dial – so, up to four FM stations and 2 AM, or vice versa. Currently, one company is at that limit, AAA Communications, based in Rhode Island, which owns four area FM stations.
For advertising purposes Arbitron currently considers Champaign-Urbana to have sixteen stations. While that makes the market larger than the FCC has considered it, it does not change the local ownership limits. In addition to the 16 that Arbitron counts, there are at least another four non-commercial stations, bringing the Champaign-Urbana radio market size to a total of 20 stations. Again, this change does not alter the current ownership limits. A single company may not own more than six stations unless the market has more than 30 stations.
Since the FCC’s new radio market definitions do not significantly change the local ownership limits, we will see no change in local radio ownership if Sen. McCain’s divestiture amendment to the Hollings-Stevens bill survives into law.
Broken down and applied to our local media environment, it becomes clear that the FCC’s June 2 relaxation of media ownership regulations could have real, concrete effects. The most significant effect would be the potential for a local TV station and newspaper to be combined, which would likely result in a real reduction of local news diversity.
Local TV owner Sinclair Communications (WICD-15 and WICS-20) has been battling the FCC in the courts over the duopoly and triopoly rules for several years, and nothing in the Hollings-Stevens bill currently threatens their potential to own even more stations in the Champaign-Decatur-Springfield market.
Sinclair is of special concern because of that company’s plans to all but eliminate local news at all of its stations in favor of a centralized “local” news broadcast. In this new program, called News Central, most of the broadcast originates from Sinclair studios outside Baltimore, with just a short insert from the local station for a few local stories. All other aspects, including national and international news, sports and weather, is shared amongst all Sinclair stations.
This program is already being shown on several Sinclair stations, and the commentary portion of News Central, called the Point, current airs at the end of NewsChannel 15’s ten o’clock broadcast. I reported about this situation back in January in an article entitled The Oncoming DE-Localization Of Our Local "NewsChannel” ( http://www.ucimc.org/newswire/display_any/8975 ).
This new News Central program could replace more local news broadcasts if Sinclair were allowed to own more stations in the Champaign-Decatur-Springfield market.
Although the Hollings-Stevens bill is out of committee, it is still not law. And even though it does not completely roll back the FCC’s loosening of media ownership rules, it makes some headway, and also demonstrates the Congress may be newly interested in listening to their constituents and standing in front of the giant media train.
Still, bills like this may not be enough, because it was action by the courts – the DC Circuit Court of Appeals to be precise – that gave Michael Powell and his cohorts the green light to make some of these changes. The Court ruled that several of the FCC’s metrics for determining TV stations and other major media could be co-owned were not sufficiently defensible and ordered the FCC to review and change them.
If the Congress decides to simply reinstate these metrics there is the risk that the Courts would decide that the reinstatement is no good, too, possibly even making matters worse.
Therefore, our legislators may need to be more committed to the cause of limiting media concentration than just passing one bill.
Finally, a last bit of good news is a separate bill introduced by Sen. McCain that would rescind the biennial review provision of the 1996 Telecommunications Act as well as giving the FCC the ability to levy much larger fines on violators. More than any other factor, the biennial review provision is the reason why the FCC went through this recent ownership rules review, and what gave FCC Chairman Powell license to thrust it through the Commission with minimal notice and public input. It’s elimination would be an enormous benefit to the public interest. The Commerce Committee’s consideration of this bill has been put off until next week, so there is still time to agitate for its approval.
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See also:
http://www.mediageek.org
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