tv FCC Open Meeting on Broadcast Ownership Rules CSPAN November 16, 2017 9:06pm-9:59pm EST
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working with your cable affiliates as we explore america. next, the federal communications commission needs to consider a proposed rule change to broadcast ownership rules that would impact a merger between the sinclair broadcast group and the tribune corporation. before meeting was just over four hours. we will show you about 90 minutes of it. we will now proceed to a vote. [roll call] the item is adopted the privileges granted as requested. thanks to the staff for the presentation. madame secretary, please take us to item number six on the agenda. >> mr. tremaine and sharon and mr. commissioners, the next item of the presented by the bureau and ibureauand is entitled 2014l give up a great review of the commission broadcast ownership
rules and other rules adopted for 202 of the telecommunications act of 96 and michelle perry, chief of the bureau will give the introduction. >> thank you very much, madame secretary. whenever you are ready. >> good afternoon, chairman and commissioners. we are pleased to present an order on reconsideration and notice of the rule making that t modernizes the commission broadcast ownership rules to reflect the realities of the modern marketplace and seeks to comment on how to structure and implement the program to facilitate new entry in the broadcast industry. joining me at the table are benjamin arden and the media bureau. chad will present the item. >> we present to you this order which repeals and moderate restrictions initiated in keeping her program to help facilitate the entry of the new and diverse broadcast industry
and how to structure this as appropriate. the commission is required by statute review the ownership top rules that before here's a too determine whether they are necessary in the public interest as the competition. and to review and modify any regulation the commission determines to be no longer in the public interest. august of last year the commission adopted a second report were completed in 2010 and 2014 review of the rules. several parties saw the consideration of the aspects in the second report order and today's order granting part three petitions for reconsideration finding that many of the ownership restrictions about were maintained in order are not supported by the record and must be repealed or modified. specifically the order repeals the broadcast ownership rules finding that it is no longer necessary to promote the viewpoint diversity given the multitude in the marketplace and that it prevents the combinations that would enable broadcasters and local newspapers to better serve the
local communities. it also finds it is no longer necessary to promote diversity in the marketplace and must be eliminated. they must remain in the market after the ownership of the two stations. the order finds the test was unsupported by the record on any reasonable basis. it also incorporates a case-by-case review option. this approach to the applications will better reflect the conditions in the local markets. today's order also repeals the attribution rule for the television sales which are to allow non- commonly owned stations to jointly sell their advertising time. the commission's decision to attribute was unsupported by the
record and the beneficial agreements that serv would serve public interest by allowing broadcasters to serve their local communities. the order adopts the approach for transactions involving the markets which are part of a larger needles and audio market and in addition, today's order r on reconsideration maintains the requirement for the shared service agreement involving commercial television stations. at times the decisions requiring the disclosure in public inspection files was supported by the record. finally, today's order finds that the commission will adopt in incubator program to help promote new entry and diversity in the broadcast industry. this can help provide benefits to an entity that hopes facilitate ownership for a certain class through the
provision of technical expertise or financial assistance. in today's notice we seek comment on implementing such a program including how to define entities eligible to participate in the activities and incentives for encouraging. the review process for the proposal, compliance and potential costs and benefits of such a program. the media recommends the commission about an order on reconsideration and the proposed rulemaking and requests privileges to make any necessary technical. >> now for the comments beginning with commissioner clyburn. >> i didn't take a with the commissioner. i think he predicted 1:00 and i predicted 115. we are both wrong. [laughter] i don't drink, but i am getting
closer. [laughter] resetting the tone. [laughter] the problems with the order on reconsideration is so glaring on the process and substance it is truly hard to decide where to begin. do i start by describing why the wholesale elimination of key he had ownership rules will harm competition, do i focus on the number of loopholes the commission blesses through this order or do i highlight how the majority has chosen to take some of the same facts used by the commission just over a year ago to reach the opposite conclusions? after i address each of these in greater detail, allow me to explain the alternative proposal that i've put forward to my colleagues. let me establish that despite
what you've been told about the genesis of this order it isn't about helping small struggling broadcasters or newspapers. while the jury is still out on whether it could actually achieve that goal, it's about helping large media companies grow even larger, which is actually in stark contrast to what the president said just last week discussing the importance of having, and i quote, as many news outlets as you can because if we were to provide health for the smallest entities in the media markets, we would have adopted a proposal focused expressly on the financially challenged stations but instead today's action coupled with the recent actions
including the reinstatement of the discount and the elimination of the main studio will, we paved the way for the broadcast media empires that will be light years removed from the community they are supposed to serve. they would have degrees of power far beyond the imagination of our local communities, our local outlets that inform us of what is happening in our community. those outlets that investigate proprieties and the government. before and after the man-made disasters. we play a unique role and unlike those news networks, our local
outlets deliver their broadcasts using the public airwaves and with that comes the response of thauthority to serve the public interest. if you are to ask someone who owns their television station after they look at you and possibly punch you they wouldn't be able to answer. if the same was affiliated with the stations through a sharing agreement with the local news anchor is reporting a story using the same script as dozens of other stations around the country or even another in their very own market while these may
not be the top questions for most americans, the answers matter the viewers and listeners have the right to know those answers. they should also be aware that these practices are already happening today and the floodgates to more consolidation will come without more transparency or accountability. to be clear, the media landscape has changed a lot over the past 30 years and when it comes to the coverage of national and international events there's no question that there's more than there was back in 1975, the but if we are going to play that game of making comparisons between legacy platforms and newer interests including cable news and online sources, we need a neutral empire to keep the
score because these platforms are not created equal. the reality is that they are not substitutes when it comes to local news and event coverage. as one news publication put it last week, consolidating ownership won't put more reporters on the ground, but it will certainly amplify the influence of a small number of companies. i couldn't have said it any better. citing simple fairness, the chairman responded by making comparisons to local broadcasters and companies on twitter and facebook yet the last time i checked none of them are in the newsgathering business or to my knowledge engaged in local news productions. the recent visit underscored this very point to me. under the local news tab for the district of columbia by now of
the first ten search results linked to stories by traditional local newspaper broadcast or television or radio outlets. these are what we shouldn't ignore when in the current media landscape and while i'm not here to provide financial success i wanted for myself as much as i wanted for you. the stories depicted are cited in this order by the largest broadcasters as reasons for eliminating the rules that do not match the realities of what is being presented on wall street. one major broadcast group is that and reported their revenues are up 15% this year, a new record. another is revenues were up 17% and yet another broadcaster saw
its price reach a record high earlier this year. and even further evidence of that bath matching filings and transmission consent fees, they are up year over year by as much as 162%. these are the financial realities on the ground then why are we in such a rush to eliminate protections that may prevent consolidation but have untold stories of viewpoint diversity or maybe less obvious to the casual observer or the loopholes that this order places. as i have shared in past statements there have been cases in which these have been shown to be in the public interest but
i've also described arrangements that amounted to the control of the station including the same programming, talent, management and studio. such an agreement coupled with the dismantling of overrules distorts the reality of how much control broadcast station owners have in any given market. this also fails to acknowledge in a december 2014 the blog of the chai chairman and i describw in forcing the local television ownership rules the minority owned stations were established. similarly, absent from the analysis eliminates the
ownership attribution of these arrangements. as it was pointed out in a recent filing it coupled with the repeal of the test to enable a single company to dominate advertising sales and make new entry in possible. once again the order fails to consider this reality. turning now to the process. where we reverse not much more than one year after the commission completed its last review. certainly something must have changed in those past 15 months to warrant such a change in the direction ge that the facts aree facts and while my colleagues may not have agreed with the policy adopted in the previous administration, it was based on
the record that hasn't changed. if they disagree with the policy and that is their right to hold such a belief, than what they shoulthen what theyshould have a new proceeding and build a case for that position. records have admonished the agency in the past for changing the rules without a supporting record into today's order and reconsideration it ignores the quick instructions. continuing on the topic of the process, take a look at how the order incorrectly invokes 202 for its policy goals three times, not one, two or three times. the clerk told us if we want to make meaningful changes to the rules to promote minority and female ownership then we must get comprehensive reliable data and for example the court stated at a minimum adopting and
modifying its rules they must examine the relevant data and a satisfactory explanation for its actions including a connection between the facts found and the choices made. here the commission flipped those instructions on its head by concluding without the benefit of new data that we cannot continue to subject broadcast television licensees to aspect of a local television ownership rules that can no longer be justified based on the unsubstantiated hope that they would promote minority and female ownership. supporters of this order may point to the newly established advisory committee on digital diversity and digital and government as evidence that we are on a path towards obtaining
better data. the problem in that notion is that we are adopting today's order list and two months since the committee held its first. so what is the point of establishing a committee if the majority is ready to reach the conclusion that the core media ownership rules are no longer necessary to support the goal of increasing diversity? the 31 members of the committee have agreed to step away from their busy schedules to do what the chair described as taking important steps towards increasing diversity through the communications industry and bringing digital opportunity so why not let them get to work and make recommendations to the full commission and rely on the data
instead of reversing the actions of the previous administration simply because you feel differently. newsflash, there was a path forward that could have garnered my support but regrettably come to the proposa, theproposal i ps rejected. all were denied on the basis of section one dot 429 of the commission's rules. this section of the rules outlined a set of criteria by which the commission would consider a petition that includes new facts or arguments that had been presented. but neither the facts or arguments have changed in the year since the commission completed the last quadrennial review. the majority has routinely rejected petitions for reconsideration is that fail to meet these requirements, but here it ignores the rules to
satisfy its own self-serving interests. second, i propose opening up a new proceeding to explore the adoption of the gator program. such concept has been debated for many years with bipartisan support, but as you know it is largely untested. i believe the questions proposed in the notice of proposed rulemaking are the right ones to be asking that we are undertaking the process in the wrong order. third i urge my colleagues to initiate a proceeding that would build on a comprehensive set of data examining the impact of ownership diversity on the podcast marketplace. the proceedings should also examine how further media consolidation would impact localism and competition. they would be undertaken expeditiously and completed
prior to the start of the equatorial review. last i propose any changes to the commission's media ownership rules be considered part of the 2018 quadrennial review once the appropriate data is collected and an assessment can be made on the impact that an established program has had in creating opportunities for new interests and small businesses. in my opinion these are consistent with the commission's rules, the instructions in the third circuit and the commitment as an agency to be data driven. now my colleagues and other proponents of eliminating those rules might suggest that my aim was to further delay the inevitable. this couldn't be further from the truth. the reality is the rule changes
made in this order are all in turn related by working independently at each change rather than processing the collective impact of the changes on the media landscape we are left with a deeply flawed order with no data to support its conclusions. so welcome back, my friends, to the industry consolidation mark at the fcc where teams, my colleagues and to the majority, are more intent on granting industry wishes than giving a gift to those in the general public. mark my words, they will go down in history as one when the fcc abdicated its responsibility to uphold the core values of localism, competition and diversity in broadcasting. i do separately dissen desperatk
unmistakably mandatory language to describe these obligations. despite what my colleagues would have you believe, our passion today is not part of a larger master plan to favorably set the landscape for a future merger and the election of duty. today's item in 2017, concludes the commissions 2010, 2014 annual review. first it eliminates the newspaper broadcast cross ownership rule and bcl. as the item explains, today's environment, the rule makes no sense. it is not a new idea. the commission has been unable to justify the role for more than 15 years it concluded in 2002 that a complete ban of newspaper crossownership was no longer needed.
as a result, the 1975 rule remains. then in 2006, once again the fcc no longer felt it justify the ban and modified it accordingly. as a result, 1975 rule remains. prior to the commission action , the courts delay and highlighted the nbc o rule stating the 1975 bn remains in effect to the state even though they determined more than a decade ago that it's no longer in public interest. the commission acted on the proceeding and examine the full media landscape and did nothing to adjust the rules in response to the landscape. despite having the votes to limit the roles, the
commission ignored precedent and the record before and decided to maintain the role, again the 1975 rule remained. today we fix the shoddy effort of the previous commission and establish a thorough record and analysis to find that it's no longer necessary. i have no doubt it will wind up before the desk of the third circuit however the court will be hard to find that the fcc justify the reasoning. more than a decade ago they concluded that the rule was not necessary to promote competition. according to pew, americans turned 12 wide range of platform to get local news and information for the third circuit recognizes this including cable and internet into thousand four.
it simply disagreed with the commission on the degree to which the services impeded with local newspapers. something else happened in 2004. facebook launched followed by twitter in 2006. these platforms became go to sites that many consumers visit to first learn about breaking news. more than a decade later it's hard to overstate the impact of social media platforms and online outlets on viewpoint diversity. also, since 2002 the commission explored ways to modify a local television rule. in 2000 for the third circuit largely upheld the decision to relax the eight voice task but. [inaudible] it had the effect of freezing the old rules in place. i long called for re-examining
this rule. in many markets, duopoly's or triathletes could strengthen the broadcasters and allow stations to concentrate more resources on bringing more in higher-quality local content their viewers. at the very least, requirements of the eight voices test make even less sense now than they did in 2002 when it commission sought to eliminate it. as for the top for restriction, i prefer were adopting bright line rules rather than relying on staff driven case-by-case. i also question how likely these decisions would be reached. i trust as we re-examine the issue we will give serious weight to a full illumination of the role. i also hope in the 2018 that we can define the media market as it exists today. the market has evolved based on the current record and the
commission declined to expand its definition beyond local broadcast television stations. i believe there is ample evidence that cable operators, over-the-top providers, internet sites and social media platforms compete with local broadcasters. fortunately, the item recognizes the market definition could change in the future proceeding with a different record. we will be watching close for this review of the roles. we also eliminate the attribution rule which never should've been adopted in the first place. further, we agreed to set up an incubator program to explore how to structure it. turning to radio. i appreciate the chairman's willingness to work with me to address embedded markets. recently this item denied the petition. this is a narrow issue that
only applies into market conditions, new york and d.c. i believe they should adopt the methodology and adopted in full. as both nielsen and others made clear, the listing of embedded markets in apparent market is a reflection of geography, not an analysis of competition. for these reasons, i understand the commission will reconsider this decision in the 2018 revie review. even under the most extreme circumstances where a party would only maximum number of stations in each embedded market and each reach the highest rating of the past 13 months, the owner would rank only third in the new york target.
in washington d.c., under the most extreme example, the station would rank six. for these reason i support providing a presumptive waiver that they will evaluate proposed transactions of radio stations located in current markets with the embedded markets by looking at the transactions compliance with the ownership limit in the embedded market. this will bring more certainty to the marketplace until we can examine this role. be on the issue of the embedded markets, i'm disappointed that the markets did little to unburden the radio industry. i wish the commission would have gone further in addressing our local radio ownership rules. for starters, it's time to review the commission am/fm sub cap.
i understand there will be an opportunity to re-examine once again. i'm disappointed they declined to reverse course from the previous commission imposed disclosure requirements for shared agreements for commercial television station. make no mistakes, disclosure requirements are generally used for precursors for regulations. maybe not today, maybe not tomorrow, but regulations will likely come. it's also counterintuitive that in one item with consider today we question if the cost of form 355 data collection exceeds the benefit of the information, but in this item we retain illogical disclosure requirements. this is the wrong approach. we should treat the same way we treated items in our modernization, with deep skepticism.
in 2004 he got it right and dissented saying it would be better to allow the review process to run its course in order to allow the commission and congress the ability to measure the media marketplace. be cautious they warned in mandating the rules will preserve the existing rules in place for months or years. the resulting delay will leave the public were soft then of these rules were allowed to take effect. these rules have been in place for over a decade. it prohibits a functioning media marketplace to the detriment of the american consumer. only the third circuit understood this as well. the court reminded us, rarely does a trillion benefit from a sequel. i do not disagree. alas, it is coming. i can only hope this time there will be a twist at the
end. if not, i trust we have the wherewithal to challenge any decision to a higher court. >> the congress recognize that the fcc media ownership rules could outlive their usefulness. that's why in 1996 it directed them to examine it every year. unfortunately the mission has taken an approach to this requirement and nearly every one of its quadra annual reviews. when i finally got around to completing the 2010 and 2014 reviews in august 2016, the commission ignore the realities of the modern media marketplace and the many ways that americans consume news and information.
fortunately the agency has a long-standing process on under our rules, any interested party can petition the fcc. a number of parties did so here. in response, they provided public notice and afforded all stakeholders the opportunity to comment. as a result of this, we reconsider several petitions made in the august 2016 order. in doing so, we finally acknowledge the reality that many of our current media ownership rules are outdated and counterproductive. taken news paper broadcast, the fcc adopted in 1975 to promote a diversity of viewpoints. at the time they found that prohibiting one entity from owning both a daily print newspaper and broadcast
station within the same local market would preserve independent voices in the marketplace then characterized by a relative few number of them. extensive records compiled in this proceeding shows that the newspaper man is now doing far more arm than good. there's record of the newspaper industry in decline with massive drops and add revenues in the internet era and the shuttering of hundreds of newsrooms around the country as a result. if we want a result this tie, if we want to incentivize journalism and additional resources for local reporting, we should eliminate the regulations that are preventing that investment. our decision today does just that. the benefits of our decision on not just theoretical. it contains numerous examples
of grandfather, nation where the fcc allowed newspaper broadcast across ownership. those combined operations are producing more local news and other enterprise. they should come as no surprise as the commission recognized that the cross ownership and likely hinders the goals. i support today's long-overdue decision to repeal the newspaper broadcast rule. for similar reasons, i support the decision and the common sense modification for the television ownership role. our ownership rules should give broadcasters flexibility to attract investment that will allow them to better track their markets. additionally, i support the decision to appeal the attribution rules. the record makes clear that these enable broadcasters to attract critical revenue in
the marketplace characterized by increased competition for advertisers and viewers. i'm glad that we are seeking comment on an incubator program to promote more diversity and new entry into broadcast markets. likewise, and pleased that there is some relief in embedded markets which are small communities located outside major cities. our current policy prevent certain commendations of radio stations in these embedded markets, even when doing so could enable broadcasters to improve their coverage of local news, events and better compete for local listeners. on reconsideration we grant some relief by adopting a waiver account. i appreciate my colleagues
willingness to discuss this item. i want to thank you for all your hard work. it has my support. >> thank you. >> which one of you said we would be done by 115? [laughter] all right, there was a time when we waited in the morning for the news to hit the front stoop in print and on paper. then we waited that night, huddled around the glow of the television screen for the evening news. those days are long gone. the world has changed. not one of us expects her news and information to be available now in such a limited way. everyone of us looks for content at any time and any place and on any screen handy. this is exciting. let's be honest, it's also challenging. the economic models have been
forever changed by digitization. what is viral is not always verifiable. look at how fast false information spread following last week's deadly attack in las vegas. the same happened following the shooting in texas. it increased the peril for those were stranded in rough winds and high waters. untangling what is really happening with tax policy or healthcare policy is a tough task. knowing what sources to trust, what packs to rely on our things we need to do as citizens. it's a big job with real consequences.
this is a challenge. when things take hold online and in in accurately inform our decisions, we have a problem. one filter bubbles emerge that never force us to consider what might be happening on the outside, we have an issue. these are not easy matters. they have complicated questions and how do we advanced journalism? how do we advanced trust in real facts instead of dismissing them as fake news. this is hard.
for decades, at the direction of congress, the fcc limit the number of broadcast stations at a single company could own. the agency curb the ability to own broadcast markets and newspapers in the same market. they prevented a single entity from owning multiple televisions nations and radio stations in the same market. these policies were designed to sustain media diversity and media competition. i think they're not trendy but they're solid. they support journalism and news jobs. and they play a critical role in advancing the mix of facts we all need to make decisions about our lives, our communities and our country. today, the fcc dismantled those values. instead of engaging in thoughtful reform, which we
should do, the agency set the most basic values on fire. they are gone. as a result, wherever you live, the fcc is giving the green light for a single company to own the newspaper and multiple television and radio stations in your community. i am hard-pressed to see any commitment to diversity, localism or competition in that result. we should be troubled. we are not going to remedy what ails our media with new consolidation. we are not to fix our ability by doubling down on just a handful of companies controlling our public airways. we are not going to be able to remedy the way the highest level in government is now comfortable during up and bestowing favors that flatter those in power rather than what we need as citizens.
instead, we are clearing the way for mergers of greater magnitude like the one before us which will benefit from these policies today. finally, a note on diversity. media ownership matters because what we see on the screen says so much about who we are as individuals, as communities and as a nation. study a bit of history and you can only come to one conclusion. consolidation will make our stations look less and less like the communities they serve. women and minorities have struggled for too long to take the reigns with media. it's a high price to pay and that is an exchange i'm unwilling to make. >> thank you commissioner. it's a simple proposition.
the ownership proposition of 20's 2016 should match the media marketplace of 2017. nothing more, nothing less. it's about time for a few of the rules are stale or than our broadcast ownership regulation. after too many years of cold shoulders and hot air, this agency finally brought them into the digital age. our decision is based in the law, the record. some say we've gone too far. others say we haven't gone far enough. it sets forth the detailed rationale for our decision. i will highlight four important points.
without the rule from 1975. as the first fcc chairman set in 2013, this rule is perverse. with the newspaper industry in crisis, it makes no sense to place regulatory roadblocks in the way of those who want to purchase newspapers. the media landscape has changed dramatically in the past 42 years. the idea that a company could dominate the media market by owning a tv market and a newspaper is nonsense. this predates cable news, a little thing called the internet, reflective world where people come home from work, put on their slippers, read the evening newspaper and watch the 11:00 o'clock news. it doesn't reflect a world where we get news and analysis throughout the day from countless national and local webcasts and social media networks. one wall street journal article dubbed facebook the
most powerful distributor of nenews and information on earth. i know for a fact, for my twitter feed, that many are following news through that outlet. repealing the newspaper podcast cross ownership rule won't and the newspaper industry struggles but it will open the door to competitive combinations that can strengthen voices and enable newspapers and broadcast stations to better serve their local communities. second, we reform the ownership rule to eliminate the eight voices test. it says no company is allowed to own to television companies in the market and must there eight independently owned stations in that market. we haven't been able to find any other industry in which the government preemptively degrees that there must be at least eight competitors for market to be competitive. nor how we found any economic literature justifying this proposition. little wonder, it doesn't have
much stronger. [inaudible] by ending this arbitrary test, we can help television stations thrive. this is true in small and midsize markets where there may not be sufficient add revenue to support eight competitors. we reverse the mistaken and ideological driven crackdown on television joint sales agreements. whenever i think of them, i think about my visit to jackson mississippi. wl00 is owned by tupelo college, historically black college. the caries program by and for black americans and offers students the chance to get hands-on training, nurturing the next generation of minority broadcasters. i did a tour with the general
manager and they told me that w llo joint sales agreement with another station has been crucial to that station success. without it, he told me point blank, the station would not have survived given its limited financial resources. in fact, i had met them here before as they go to a crackdown on gsa. fourth we adopted incubator program to expand diversity. we heard a lot of talk during the prior admission and today about the needs take action to promote ownership diversity. after eight years, what was there to show for it? nothing. zero. it was all just a talking point as underscored by the specific rejection. this is taking concrete action.
we seek public input on how it should be designed. in addition, i test the new advisory committee on diversity and digital empowerment, another committee that was led last by the powe prior administration to study this issue and provide recommendation. the wise counsel from the public in the committee, i'm confident we can craft program that will help bring diverse voices into the industry. last a not least, i would like to thank the staff that worked on this order. many are listed in the order itself. the good news for you is today marks the end of the 2010 and 2014 quadra annual review. the bad news is it november 2017 hence in many of you will begin working on the 2018 reviews. good luck. >> commissioner riley. >> the item is adopted with editorial privileges granted
as requested. >> the five commissioner panel voted 3 - 2. a partyline vote to illuminate a 42-year-old ban on a cross ownership of newspaper and tv station and in a major market which was a major hurdle for the proposed merger between the sinclair broadcast group and the tribune corporation. in about 50 minutes, we will hear from the vice presidents of those companies. but first, back to the fcc where the commissioner spoke to reporters after the public meeting. , on. >> hello everybody. thank you. the floor is yours. >> all right.