Broadcasters Need To Mount Duopoly Drive

Welcome, broadcasters, to the FCC’s 2010 Quadrennial Media Ownership Review.

For the next year or so, you get to make the same old arguments that you’ve made countless times before in hopes the FCC grants you some relief from analog-era ownership rules that restrict what stations you may own and operate.

This latest opportunity is brought to you by the U.S. Court of Appeals in Philadelphia, which yesterday ruled that it couldn’t find anything wrong with the rules, despite the best efforts of your high-priced lawyers to convince the three-judge panel otherwise.

The panel dismissed your constitutional arguments as well as your claim that regulation based on scarcity of media is absurd given the explosion of media triggered by the Internet.

The panel also vacated the FCC’s one lame deregulatory move from the 2006 proceeding — relaxation of the newspaper-broadcast crossownership rule. The FCC said that it would liberally grant waivers of the ban in the top 20 markets if a paper were combining with a radio station or with a TV station ranked No. 5 or below in the market.

The panel didn’t get to the substance of that rule change, declaring it fatally flawed because then-FCC Chairman Kevin Martin botched the proceeding by not giving people adequate notice of what was going on and opportunity to comment.

(Frankly, that amendment deserved to die. It was so tightly written that it was of little help to anybody. Lobbyists and lawyers who had spent literally decades trying to take down the crossownership rule scoffed when it was adopted.)

Free Press, the outfit that believes that heavy government regulation is needed to insure a free press and can’t see the irony in that, called the decision a “sweeping victory of the public interest.”

It many have been a sweeping victory for Free Press, but not for the public interest. I don’t see how the public benefits from news media that are forced to struggle more than they have to — or operate less efficiently — because of government restrictions. My question to Free Press: How many more newspapers have to die before you ease up on the crossownership rule?

So, now it’s back to the FCC, broadcasters.

Your big issue is the TV duopoly rule, of course. You want to be able to own two stations in small markets so that you can enjoy the economies that flow from that.

I know, the current rule is upside down, allowing duopolies in large markets that can support several stations and banning them in small markets that can really only support one or two.

You’ve been disappointed before. But this time, I think you have some cause for optimism.

Chairman Julius Genachowski is a progressive thinker with enough years as a businessman on his resume to know that the ownership rules should be eliminated or significantly relaxed. Plus, he’s got to be feeling a little guilty about his raid on TV broadcast spectrum for the sake of the Silicon Valley crowd.

Unfortunately, Genachowski will be long gone before this proceeding runs its course and all the comments and studies ripen into proposed new rules. But he could set the proceeding on a course toward deregulation.

In fact, in a sense, he already has. On his initiative, with his man in charge (ex-journalist friend Steve Waldman), the FCC last month released The Information Needs of Communities: The Changing Media Landscape in A Broadband Age.

The 465-page report is an excellent look of the state of local media in its myriad forms — broadcast TV, cable TV, radio, newspapers, Internet, mobile. It’s rare that we get a picture of the media business that isn’t distorted by the policy aims of the author.

The section on local TV news is clear, well-documented and even-handed. It recognizes both its strengths and its short-comings.

“Despite the industry’s problems, the best of the local TV stations are still producing high-quality broadcast journalism of tremendous value to the community — while reaching a far broader audience than newspapers in terms of size, diversity and socioeconomic status. It is hard to overstate the importance and value of these broadcasts,” the report says.

On the other hand, it documents the “scant” coverage of local public affair and the steep decline in enterprise and investigative reporting.

The report is ambivalent about ownership regulation, opting not to make any recommendations with the weak excuse that the FCC has an open proceeding on the subject and is generating new research. But in discussing the pros and cons, it makes a couple of critical points that work in the broadcasters’ favor.

The first is that diversity may not be all it’s cracked up to be anymore. “In an earlier day, it was reasonable to assume that a diver­sity of media outlets indicated generalized media health,” the report says. “What we have seen in Part One of this report is that a media market can simultaneously have a diversity of news and information outlets and yet a scarcity of local reporting.

“Another assumption of past regulatory efforts is that more choices leads to greater benefits for consumers. We believe that the changes in the media market may sometimes call this assumption into question. For instance, it might be better to have nine TV stations in a market than 10, if consolidation leads the remaining stations to be economically healthier and therefore more able to invest in local news, information, and journalism.”

Many believe that deregulation “would allow media companies more flexibility to create mul­tiplatform business models that might help sustain local journalism in the long run,” the report also says. “However, others argue that excessive deregulation in the 1980s and 1990s led to a reduction in news on the radio side, and that previous mergers have led to media layoffs, not staff increases.

“It is possible that both of these assessments can be true: savings and efficiencies produced by mergers could well lead the merged company to invest ‘significantly in newsroom operations’ — or the money saved could flow to the bottom line, and lead to a decline in journalistic resources.”

It is possible. Both assessments are true. Some station owners will pocket the savings. Some, perhaps in the business for the long term or interested in quality journalism for whatever reason, will pour it back into the newsrooms. (My guess is that most owners will split the savings between the pocket and the newsrooms.)

If this is the case (and I think history proves that it is the case), the FCC has to deregulate. It can’t continue to block local media combinations on the assumption that all or most will lead to fatter owners and shuttered newsrooms. They can lead just as readily to more and better news.

The FCC actually kicked off its 2010 Quadrennial Review nearly two years ago with a series of workshops around the country. Now that the court has spoken in favor of the status quo, the proceeding should pick up some stream. Hone those arguments. Schedule some ex parte visits with the commissioners and their staffs. It’s time to pay attention.

Harry A. Jessell is editor of TVNewsCheck. He can be reached at 973-701-1067 or mailto:[email protected]. You can read his other columns here.