The Price Point | Broadcasters: Beware Of Unintended Consequences
With discussion of big tech regulation all the rage on Capitol Hill, it seems the slow train to government involvement is creeping out of the station. No one expects statues to be enacted anytime soon, nor is there common ground on what regulation would look like, but remember, this is an emotional subject about societal change, huge dollars, massive power and even the odd Russian hacker, so anything could happen.
Those in favor of federally mandated rules got a boost last week when Facebook COO Sheryl Sandberg again welcomed regulation, saying her company wanted to be an active partner in development. Sandberg thinks the EU is a good model (shudder).
Why should broadcasters care about this? Stations that excel in the future will do so because they transitioned into brand-based businesses based on local news and information. Even with the excitement of ATSC 3.0, most brand extensions will be IP based. True 5G, and eventually 6G, will change the game.
Any regulation involving use of the internet by business will eventually affect television stations, particularly any encroachment on the First Amendment. This is a genuine concern because one of the bubbling issues is who can post what information. The current default gives tech companies control. Allegations of picking winners and losers have helped fuel the call for governmental oversight. No one can foretell what potential statutes might look like, but the EU, which Ms. Sandberg so admires, has never hesitated to regulate speech.
On Capitol Hill, the special interests are already at work. The Journalism Competition and Preservation Act, being studied by the House Judiciary Committee, would give newspaper publishers an exemption from antitrust laws so they could negotiate as a group with online platforms. Maybe this is a good idea for the newspapers promoting it, I don’t know. But I do know once the government gets involved in news aggregation, other legislation affecting journalism is likely to follow.
Whatever regulations are eventually enacted, history tells us they will be complex, expensive to deal with and full of unintended consequences. A few examples from our industry:
- The Prime-Time Access Rule of 1970 was designed to encourage local programming. Instead, it created the modern syndication business.
- The Television/Newspaper/Radio Crossownership Rule of 1975 was designed to create diversity in ownership. Instead, grandfathered operations built massive cultural walls between their newspapers and television stations. The rule, to some extent, and the cultural walls, to their full extent, are still in place.
- The Janet Jackson Super Bowl controversy of 2004 increased indecency fines to $325,000. Anyone who can clearly explain how these fines should be applied, please hold up your hand.
Broadcasters have a strong track record dealing with Congress, the FCC and the FTC, employing the power of local relationships and the tactics of some of the smartest lawyers in town, but they will tell you dealing with both Congress and regulators is never easy, sometimes requiring compromises that make no one happy.
The big tech debate will accelerate as we near the 2020 election. Whatever the outcome, the train is on the track. Broadcasters need to take care to not be run over.
This is one in a series of occasional columns from Hank Price, a media consultant, author and speaker. He spent 30 years managing TV stations for Hearst, CBS and Gannett, including WBBM Chicago and KARE Minneapolis. He also served as senior director of Northwestern University’s Media Management Center and is currently director of leadership development for the School of Journalism and New Media at Ole Miss. He is the author of Leading Local Television, a handbook for general managers.