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Broadcast Ownership Rules Should Reflect the Competitive Marketplace
ISSUE SUMMARY
The internet has transformed the media marketplace, yet TV and radio broadcasters are still subject to outdated rules restricting the number and type of outlets they may own. Policymakers should support the modernization of these rules to account for the rise, and increasing influence, of digital media.
TV and radio stations are best able to serve their local communities when allowed to compete effectively in the marketplace. Congress recognized this in the 1996 Telecommunications Act by requiring the Federal Communications Commission (FCC) to review its broadcast ownership rules every four years and to repeal or modify those no longer necessary in the public interest as the result of competition.
Here's why:
In 2017, the FCC finally updated several of the local broadcast ownership rules by:
Eliminating the 1975 newspaper/broadcast cross-ownership ban;
Eliminating the radio/TV cross-ownership rule;
Reforming the local TV ownership rule to permit the ownership of two TV stations in some smaller markets, as well as the largest ones; and
Eliminating the rule treating the joint sale of advertising time by TV stations as equivalent to common ownership.
Following court challenges to this commonsense modernization of the ownership rules, the Supreme Court on April 1, 2021 - by a unanimous 9-0 vote - upheld the FCC's decision. Despite the FCC's and the Court's action, however, local broadcasters remain subject to several analog-era ownership restrictions.
These include limits on the number of radio stations overall, as well as separate limits on the number of AM and FM stations, a broadcaster may own in the same local market.
Further restrictions strictly limit the number of TV stations a broadcaster may own, and prohibit the ownership of more than one top-four ranked TV station, in the same local market.
Although the FCC began its mandated 2018 quadrennial review of the ownership rules, it has not yet completed that review, contrary to Congress' directive to review the rules every four years and determine if they remain in the public interest due to competition.
Among other actions, broadcasters have urged the FCC to update its local radio ownership caps, which have not changed since 1996, prior to the advent of satellite radio, audio streaming services and smart phones, and called for reform of the top-four TV rule, adopted in 1999 before the emergence of video streaming services such as Netflix and internet-connected televisions.
On December 22, 2022, the FCC initiated the 2022 ownership review, despite its failure to conclude the statutorily required 2018 review.
The bottom line:
Local stations are a critical source of information and entertainment in every community across the country, and it takes significant resources to provide up-to-the minute news and emergency journalism, among other services. No other medium has the responsibility, the ability or incentive to serve the public's needs.
As competition from unregulated outlets continues to grow, policymakers should support the FCC's modernization of radio and TV ownership rules to reflect the current marketplace.
To continue offering free, over-the-air service, broadcasters must be able to compete on a level playing field for audiences, advertising and investment.
