Says FCC should allow common ownership of stations in a market as long as the collective audience share is 30% or less.
In comments on the FCC’s review of its broadcast station ownership rules, Hearst-Argyle Television Inc. has proposed a new standard that would eliminate the existing “voice count” and “top four” restrictions that require eight “voices” or owners in a market and prohibit a combination of the market’s top four stations.
Hearst-Argyle told the FCC that “notwithstanding claims to the contrary, never in history have viewers been afforded more choice in how to receive video programming or greater diversity in the programming available for viewing. Nor have local television markets ever been more competitive.
“The challenge for the commission going forward is to fashion a local television ownership regulatory regime that will maximize for the nation’s television viewers the benefits of competition and the diversity of programming available from the nation’s local free, over-the-air television stations.”
Hearst-Argyle’s local television ownership rule proposal eliminates the existing rule’s “voice count” and “top four” restrictions. The proposal substitutes, instead, an analog of antitrust law and analysis and is two-fold:
- “The commission should permit common ownership of local television stations as long as the combination’s collective audience share is 30% or less,” and
- “The resulting concentration, together with the change in concentration of audience share, post-combination, must satisfy a standard that is grounded in the general standard ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ analog for audience share.”
Hearst-Argyle goes on to list the advantages of its plan, which it says, include:
- “The proposal captures consumer substitutability of television channels, be they over-the-air or cable or DBS, and avoids the arbitrariness of voice counting. In addition, the basic approach remains simple: it obviates the need to consider consumer substitutability of other media for television, especially since there is no common metric among these other media.”
- “The proposal is likely to survive judicial scrutiny since its pedigree is antitrust law and analysis.”
- “The proposal has the virtue of stability. Changes in a station’s audience ratings of a few tenths of a point, as averaged over a year, will generally have no material impact on whether a combination is permissible.”
- “The proposal is indifferent to market size.”
- “The approach consists of bright-line tests, providing critical certainty to the markets, yet it accommodates one exception, for “failed” or “failing” stations, which is unlikely to have the effect of ratcheting up concentration levels over time with developing commission precedent.”
- “The approach will be straightforward for commission staff to apply, greatly speeding application processing time and freeing up commission resources for other tasks.”
Neither economic theory nor empirical evidence support the current rule’s “voice count” or “top four” merger restrictions, Hearst-Argyle contends, adding that they should be eliminated.
In addition, Hearst-Argyle says its plan also “advances the commission’s competition, diversity, and localism policy objectives. It will not result in an unchecked wave of mergers. Its pedigree is unimpeachable, and it can be rationally adopted by the commission and survive judicial scrutiny.”
In addition, the company says the FCC’s newspaper/broadcast crossownership rule should be repealed since, it says, “There is simply no record evidence upon which the commission may reasonably retain or relax the newspaper/broadcast crossownership rule.”