Free Press Pushes the FCC to Do Something About the Dismal State of Ownership Diversity

If you thought this summer was just about Net Neutrality and merger mania, you have another think coming.

We at Free Press have also been hard at work on the media ownership front. Last week, we filed comments in the Federal Communications Commission’s 2014 Quadrennial Review docket. In our comments, we urged the FCC to retain local media ownership limits and ensure enforcement of those limits by curbing the use of Shared Services Agreements. (For the last decade, broadcasters have used SSAs to evade the ownership rules and control multiple TV stations in the same market.)

For those keeping score at home, the 2014 Quadrennial marks the sixth time the FCC has reviewed its ownership rules. The FCC is legally bound to review its ownership rules every four years, but the agency managed to weasel its way out of completing the 2010 Quadrennial and instead rolled that review into this year’s. The FCC is now four years late and counting when it comes to meeting its obligations under the Telecommunications Act.

The FCC has also punted yet again on the Third Circuit Court of Appeals’ instruction to study the impact of media ownership rules on diverse owners.

Back in 2010, the FCC promised that it would take steps in preparation for the 2014 review to complete studies and institute policies that would boost ownership among women and people of color. That still hasn’t happened, and the buck must stop here. Minority ownership levels are at a record low and the Commission must make diversity a central focus of its 2014 review.

In our comments, Free Press recommended that the agency do the following:

1. Assess the market structures that are most likely to foster ownership among women and people of color and evaluate the potential impact of media ownership rule changes on opportunities for such owners.

2. Conduct the research necessary to promote ownership of broadcast stations among underrepresented groups and guard against further erosion of media ownership among these groups that could occur if the FCC relaxed its media ownership limits.

The dismal state of minority ownership and the Third Circuit’s directive are reason enough to maintain existing ownership limits. But even if that weren’t the case, there is substantial evidence that the FCC’s media ownership rules play an integral role in promoting competition and independence among the most popular and important local information sources.

Mega broadcasters will tell you that there’s no longer a need for the ownership rules because “OMG … the Internet!” You shouldn’t believe the hype. Sure, new technologies may offer the promise of supplemental news services, but they haven’t come close to replacing the newsgathering and information programming of broadcast television and newspapers.

Moreover, the sources of local news available online are virtually identical to those available offline: Websites of local TV stations and local newspapers remain the dominant destination for local news on the Internet.

And because local ownership limits are still needed, the Commission needs to prevent broadcasters from skirting those rules through SSAs.

Free Press has already provided ample evidence of how harmful these agreements are. Broadcasters are using SSAs to sidestep ownership rules in nearly half of all media markets. It’s time for the Commission to require disclosure of these arrangements and make them count toward ownership totals. If the agency won’t respect its own rules, it can’t expect anyone else to.

Georgetown Law professor and former Free Press adviser Andrew Schwartzman wrapped up this sentiment nicely when he spoke about the FCC’s latest failure to enforce its rules. This came just last week when the FCC renewed the license of New Jersey Fox affiliate WWOR and granted it yet another temporary waiver of the newspaper-broadcast cross-ownership rule.

Groups have twice challenged this Fox station’s right to hold a license given its failure to serve residents of Northern New Jersey. WWOR is the only full-power station in the state but instead serves New York City ... where Fox owner Rupert Murdoch already owns TV stations and two major newspapers.

“It is very hard,” Schwartzman said in an email, “to tell my law students that the legal system works when the FCC allows one of the most powerful companies in the country — and the world — to violate the Commission’s ownership rules with impunity for years on end, and gives it a new ‘temporary’ waiver that allows it to operate in violation of the ownership rules for several more years and allows it to extend even that waiver indefinitely by simply filing a new request for a waiver.”

People + Policy

= Positive Change for the Public Good

people + policy = Positive Change for the Public Good