November 16, 2017 Last Updated 2:38 pm

FCC votes to roll back media ownership rules, allowing further consolidation of media properties

In general, media trade association applauded the move, but consumer groups fear this is another give away to big corporate owners of media, and that it will do little to strengthen local journalism

As expected, the Federal Communications Commission today voted to repeal the media ownership rules that have traditionally prevented media companies from owning multiple outlets in the same market. For years the rules were in place to prevent once powerful local newspapers from also owning a radio or television station in the same market, though some exceptions existed.

In general, the associations and large companies in the media business applauded the decision.

“We are extremely pleased with today’s decision by the FCC to repeal the ban on cross-ownership,” said Alliance President & CEO, David Chavern. “This long-overdue decision recognizes the vastly different landscape that exists today, as compared to when the rule was created over 42 years ago.”

But consumer groups and others quickly reacted negatively, concerned that

“These rules serve a purpose: They ensure that viewers, readers, and listeners have access to diverse voices and points of few. They ensure that local news and information is easily available. They protect competition in local markets, ensuring that local media and advertising aren’t controlled by just one or two firms,” said John Bergmayer, Senior Counsel at Public Knowledge.

“Rolling back these rules is corporate welfare at its worst.”

The vote was 3-2, and a direct result of the new Trump administration coming into power. One of the new administration’s first appointments was at the FCC with the appointment of Ajit Pai , the former Associate General Counsel at Verizon.

“The media ownership regulations of 2017 should match the media marketplace of 2017,” FCC Chairman Pai said today.

Not surprisingly, the two remaining Democrats on the voted no on the move.

“Instead of engaging in thoughtful reform, which we should do, the agency sets its most basic values on fire. They are gone,” said Commissioner Jessica Rosenworcel. “As a result of this decision, 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.”

It is ironic that print companies should applaud the decision as it means that many smaller publications will soon face near monopolistic competition. If these changes had occurred a decade or two ago, print publishers might have been in a position to take advantage. But today, the trend has been to divest print. Gannett, Time Warner, Tribune Company, News Corp, among others, all moved to separate their broadcast properties from print. Now, should broadcasters begin to group radio and television properties within a market, the remaining print companies will find that digital players are not the only ones eating their lunches.

Here is the announcement from the FCC:

WASHINGTON, November 16, 2017 — The Federal Communications Commission today voted to modernize its broadcast ownership rules and to help promote ownership diversity in the broadcast industry. These actions will provide broadcasters and local newspapers with a greater opportunity to compete in the digital age and will help ensure a diversity of viewpoints in local markets.

Congress requires the Commission to review its broadcast ownership rules every four years to determine if they are in the public interest as the result of competition and if not, to repeal or modify them. For too long, the Commission has failed to acknowledge the pace of change in the media marketplace by maintaining analog broadcast ownership rules that do not reflect today’s digital age. For instance, the Newspaper/Broadcast Cross-Ownership Rule that the Commission eliminates today dates back to 1975. By modernizing these outdated rules, broadcast stations and local newspapers will be able to more easily invest in local news and content and improve service to their local communities for the benefit of consumers.

Today’s Order on Reconsideration addresses several petitions for reconsideration of the Commission’s August 2016 Order in the 2010/2014 Quadrennial Regulatory Review that left the outdated broadcast ownership rules largely unchanged. Specifically, today the Commission eliminates the Newspaper/Broadcast Cross-Ownership Rule, Radio/Television Cross-Ownership Rule, and Television Joint Sales Agreement Attribution Rule.

The Order also modifies the Local Television Ownership Rule to better reflect competitive conditions in local markets by eliminating the Eight-Voices Test, which requires at least eight independently owned television stations to remain in a market before any entity may own two television stations in that market. The Order also permits exceptions to the prohibition on an entity owning two of the top four stations in a market if it can be shown that a particular transaction would be in the public interest. The Order does not address the issue of the national ownership cap and the associated UHF discount which are not part of the Quadrennial Review, and which will be considered in a separate proceeding later this year.

Lastly, in the Notice of Proposed Rulemaking, the Commission decides to establish, and seeks comment on how to implement and structure, a new incubator program in which established broadcasters would help facilitate entry by new voices into the marketplace by providing access to capital and/or technical expertise to new entrants and small businesses. The program has broad support and will help promote ownership diversity in the broadcast industry.

Action by the Commission November 16, 2017 by Order on Reconsideration and Notice of Proposed Rulemaking (FCC 17-156). Chairman Pai, Commissioners O’Rielly and Carr approving. Commissioners Clyburn and Rosenworcel dissenting. Chairman Pai, Commissioners Clyburn, O’Rielly, Carr and Rosenworcel issuing separate statements.

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