Broadcasters Say Google’s Success Demonstrates Need for FCC Deregulation
Google’s and YouTube’s success underscores the need for media deregulation, broadcasters told the FCC. Unprecedented competition from video and news online gives consumers a staggering array of programming choices, they said. Commenting on the Commission’s ownership rulemaking, over- the-air networks and TV station owners said there’s little reason to keep limits preventing a company from owning more than one TV station in most markets. Commenters said cross- ownership rules barring a broadcaster from owning a newspaper in the same town are outdated because websites and cable offer consumers choices and are snaring a growing chunk of local ads. The comment deadline was late Mon. (CD Oct 24 p8).
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Filings touted websites’ increasing share of ads since the Commission last voted to ease media ownership restrictions in 2003. A year later, the rules were remanded to the agency by the 3rd U.S. Appeals Court, Philadelphia, in Prometheus Radio Project v. FCC. “It is the viability of the Internet as a video delivery mechanism that has produced a seismic shift in video competition and viewpoint and source diversity since the Commission’s last review,” Hearst-Argyle said: “Individuals now have a host of outlets for making original content available to anyone with broadband Internet access.”
Prometheus said the FCC should immediately end the so- called UHF discount that provides more lenient ownership caps for UHF stations, while owners of VHF stations can reach no more than 39% of the U.S. Prometheus said broadcasters should get 2 years to sell UHF stations above the limit. Ion Media, a major owner of UHF licenses, said the law that set the 39% cap bars the FCC from reconsidering the discount as part of periodic ownership reviews.
The Google “phenomenon” of inexpensive and free online content was mentioned by more than a half-dozen broadcasters including CBS, Fox, Gannett and Tribune. Some filers said the trend is exemplified by Google’s $1.65 billion purchase of YouTube. Tribune said an abundance of websites with news feeds “serve as significant alternative outlets for local news, views and information, abundantly justifying the Commission’s conclusion in its 2003 order that the Internet serves as a significant source for local news and information.” Burgeoning broadband use means “local TV stations hold no monopoly on contributing to the marketplace of ideas,” Fox said: “Consolidation among local TV outlets poses no threat whatsoever to diversity.”
Cable operator Suddenlink called for tighter broadcast limits. The company said the experience of a recent carriage dispute lead it to ask “the Commission [to] strengthen the existing regulation of televison duopolies.” It asked the FCC to bar a broadcaster from holding retransmission consent talks with a cable operator on behalf of more than one of the 4 most popular TV stations in an area. A slew of media activists and minority groups asked the FCC to keep current limits, saying changes would give broadcasters incentives not to air independently produced shows. “Without current broadcast ownership regulations, media ownership would simply serve what is in the best interests of broadcasters,” said advocacy groups including Common Cause.
Broadcasters must educate the public about how regulatory relief will help them provide more - not less - local news, said 2 executives. “We have to make people understand and recognize that the large companies with substantial financial resources are in some sense necessary in order to shoulder the financial burden in order to provide local news coverage,” Rick Cotton, NBC Universal gen. counsel, told us: “The largest network-owned-and-operated stations are uniformly high in terms of the number of local news hours that are offered.”
The Commission should defer to antitrust enforcers on concerns about competition, Fox said, calling broadcast ownership rules “archaic and counterproductive.” The FCC should eliminate rules that prevent one company from owning more than one of the 4 most popular TV stations in a community, Gannett said. TV ownership caps, first imposed by the FCC in 1964, need to take increased video competition into account, said CBS, Fox and NBC. Disney, which didn’t press for easing limits, said the success of “new media” outlets means the FCC “may soon find itself considering ways to incent, rather than restrict, ownership of over-the-air broadcast stations.”
An alternative to eliminating cross-ownership restrictions, as Tribune prefers, would be for the FCC to allow broadcast-newspaper ownership in all markets except those the FCC determines to be “at risk,” the company said. The popularity of blogs and independent local news sites provides further reason to lift the cross-ownership ban, Belo said: “They are competing vigorously for consumers’ attention.” Others pointed to cable’s dominance in many large markets. NBC said one operator serves at least 75% of all cable subscribers in each of 16 of the 20 largest cities. It said Comcast’s Philadelphia and San Francisco 2005 cable sales far exceeded those of the cities’ most popular TV stations, a gap predicted to increase in coming years.