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Reforming Broadcast Ownership Rules to Reflect the Competitive Marketplace

ISSUE SUMMARY

The internet has changed everything but ownership restrictions on broadcast stations. Outdated broadcast ownership rules continue to prevent local stations from fairly competing in a crowded media marketplace. Policymakers should support efforts to modernize the rules to account for the rise, and increasing influence, of digital media.

Here's why:

Broadcasters are best able to serve their local communities when they are allowed to compete in the digital media marketplace. Restrictions adopted in 1975 that prevent common ownership of a printed daily newspaper and even a single broadcast station in the same local market, for example, are unnecessary, uncompetitive and unfair. Modernizing outdated restrictions such as this would help ensure broadcasters’ continued economic vibrancy, which is critical to their ability to serve local communities in an increasingly competitive media landscape.

In 2016, the Federal Communications Commission (FCC) concluded a long-overdue review of its broadcast ownership rules after coming under growing pressure from federal courts to act. Although a review is mandated by law every four years, the FCC had failed to complete one since 2006.

Shockingly, in a 3-2 vote with then-Commissioner (now Chairman) Ajit Pai dissenting, the Commission chose to retain all of its existing broadcast ownership rules, even those dating back to the mid-1970s before the explosion of multichannel and digital media. Broadcasters and several policymakers agree that the FCC’s decision ignored new technologies and marketplace realities, applying analog regulation in the digital age.

These ownership rules apply only to broadcast stations and not to their direct competitors. With the explosion of new media sources, such as online video and audio services, social media, blogs and websites, outdated restrictions from the last century are not needed to ensure competition or diverse points of view. It is ironic that the FCC will allow mega-mergers in the pay-TV industry, such as the merger of AT&T and DirecTV, but continues to hold local stations hostage under decades-old, outdated rules.

Broadcasters applauded legislation introduced by House Energy and Commerce Committee Chairman Greg Walden (OR-02) and Rep. John Yarmuth (KY-03) in the 114th Congress that would eliminate the outdated ban restricting ownership of a broadcast station and newspaper in the same market. Striking this ban would save local journalism jobs and provide communities with greater local news. Loosening restrictions from 1999 prohibiting the common ownership of more than one TV station in most local markets would also benefit communities’ free television service. The competitive environment for local broadcasting has changed and regulatory reform is desperately needed to help local broadcast stations continue to serve their communities effectively.