Broadcasters To FCC: Digital Age Increasing Competition, Ownership Rules Harmful

Minority broadcasting reps weigh in, say consolidation lowers minority ownership

By John Eggerton -- Broadcasting & Cable, 11/4/2009 10:52:17 AM

Broadcasters got their chance to weigh in Wednesday on the FCC's media ownership rule review. Their message was clear: The digital age has produced a wealth of competition that ownership rules are preventing them from facing head on.

That came in the third of three workshops on the FCC's quadrennial review of its media ownership rules and followed two days of workshops with academics and public interest groups where broadcasters took plenty of criticism on the issue of consolidation.

In Wednesday's workshop, which gave the spotlight to broadcasters, David Barrett, president of Hearst Television, said that what was formerly the prospect of increased competition was now an "undisputed fact" that the FCC must take into account when deciding which of its rules were still necessary in the public interest.

He said it was increasingly tough to finance the local news and public affairs programming and political coverage and provide emergency information -information that cable and satellite did not provide-and certainly not for free to anyone who wants or needs it. He made a point of calling TV a free "wireless" service. Broadcasters' spectrum is being eyed hungrily by wireless companies and the FCC.

Barrett said the FCC should rightly be concerned about undue consolidation, but it must also be concerned about fostering and preserving local TV. He said broadcasters need to further consolidate to achieve economic efficiencies and compete more effectively with competitors like cable, satellite and the Internet, which are not subject to similar constraints.

That was seconded by George Mahoney, VP and general counsel of Media General, which owns 18 network affiliates and 21 daily newspapers.

Mahoney, who was arguing for eliminating the ban on newspaper-broadcast cross-ownerships, said the companies new multiplatform model was best served in the five markets (he called them convergence markets) where the company owned newspapers, stations and web operations (there are a number of grandfathered combos). He said the appointment journalism model was dead, and that in those converged markets, reporters could produce stories for 11:30 to meet a Web deadline for traffic spikes around lunch. They could then update those stories in the afternoon, developing them for the 6 p.m. TV news, and more in-depth analysis for the next morning's paper.

He said the cross-ownership ban was an anachronism that worked against that multiplatform model. He advised the FCC to talk to stations, advertisers, and investors to get a sense of how important that multiplatform model is.

Media General has had to cut staff from 7,100 to 5,200 to align operations with the marketplace, suggesting an urgent need to create more efficient operations, Mahoney said.

He said he didn't expect there to be a flood of new station purchases if the ban were lifted, but that groups could trade properties to create more multiplatform market synergies.

National Association of Broadcasters Executive VP Jane Mago said broadcasters were not looking to get rid of all ownership regulations, but that in light of the reality of competition, it must review the newspaper cross-ownership ban and local ownership rules.

Mago's three main points were that the FCC recognize that allowing them to compete effectively was the best way to insure they are serving the public interest; that the FCC must base its review on the current level of competition and that the FCC base any judgment on evidence, not "unsupported claims."

Representatives of minority broadcasters saw it rather differently. James Winston of the National Association of Black-Owned Broadcasters, said that his group was not interested in any conversation that began with relaxing ownership rules. He argued that consolidation was responsible for the continuing decline in minority ownership of stations.