Cross-Ownership Changes In Cue For Radio.

Story by Inside Radio

The media marketplace today is nothing like it was in 1975 – that’s the message Federal Communications Commission chair Ajit Pai told Congress in a hearing this week. With release of his draft order to make several changes to the agency’s media ownership rules he’s proposing rule changes that may be of some value to radio operators whose growth has been hampered by cross-ownership limits.

“We refuse to ignore the changed landscape—and we deliver on the Commission’s promise to adopt broadcast ownership rules that reflect the present, not the past,” the 86-page document says http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1026/DOC-347453A1.pdf.

The FCC tentatively concludes that by relaxing and eliminating outdated rules, broadcasters and local newspapers will be given a greater opportunity to compete and thrive in a fast-changing marketplace. “And in the end, it is consumers that will benefit, as broadcast stations and newspapers—those media outlets most committed to serving their local communities—will be better able to invest in local news and public interest programming and improve their overall service to those communities,” the draft says.

To that end, Pai is proposing the radio-television cross-ownership ban be lifted completely. If approved it would allow a company to own as many as two TV stations and six radio stations in a market. It’s not expected the change would have much of an impact because the separate local radio and TV ownership rules will still need to be abided by. FCC officials say it’s pretty clear to them that the evidence collected during the past two quadrennial media ownership reviews has shown the radio-television cross-ownership ban isn’t needed to protect ownership diversity. In fact, they’ve concluded radio itself is not all that strong an element in viewpoint diversity in media markets across the country.

The other rule that a radio group could take advantage of if Pai’s proposals are approved would be the elimination of the newspaper-broadcast cross-ownership ban. Pai has called it a regulatory relic and a change could lead to combined clusters with improved local newsgathering capabilities. Considering the print industry is struggling to stay afloat one FCC insider said if someone wants to buy a newspaper in 2017 they should be thanked rather than have regulatory barriers thrown in their way.

In addition to a focus on cross-ownership limits, Pai is also proposing easing the rules to help more companies own a second television station in a market. Currently a broadcaster can own up to two TV stations in the same market if at least one is not among the top four rated stations in the market and at least eight independently owned stations would remain following the combination. Pai’s proposal would eliminate the so-called eight voices and allow two of the stations to be among the top four if the broadcasters can show the transaction would be in the public interest. FCC officials describe that case-by-case review process as a middle course set to appease some commissioners who wanted to keep the prohibition while others wanted to eliminate it altogether.

The proposal also includes reversing a 2014 party-line decision that made television joint sales agreements (JSAs) attributable toward ownership caps. JSAs would, however, remain attributable in radio.

Incubator Program Remains a Work In Progress

When votes are cast next month to change some rules, the Commission will only start the process of creating an incubator program. The proposed order would establish an incubator program but leave many of the key factors left to be filled in a subsequent rulemaking. That includes how to identify who qualifies as a beneficiary, what kind of activities would qualify as incubation, how it would be monitored to make sure the rules are being complied with, and what benefits would be given to existing broadcast stations that serve as an incubator.

The proposals will be voted on at the Commission’s Nov. 16 meeting and any changes approved will take effect 30 days after they appear in the Federal Register. Because the item is coming to the floor late in the year, FCC officials told Inside Radio on Thursday that the scheduled 2018 quadrennial review isn’t expected