The following is from Nexstar Media Group’s reply comments to the FCC, which is conducting its quadrennial review of whether broadcast ownership regulations are “necessary in the public interest.” Nexstar is currently trying to purchase the Tribune Media stations to heavy up in the face of competition from other video providers.
The record contains abundant evidence that the media marketplace is undergoing transformative changes that render the underpinnings of prior media ownership proceedings obsolete.
As Nexstar and others established in their comments, broadcast-television stations face fierce competition for viewers and advertising dollars from a multitude of advertising sources and video distribution services.
This competition has intensified and accelerated in recent years, and particularly since the most recent quadrennial review.
The record demonstrates that this competition takes many forms. In particular, advertisers today distribute shrinking advertising budgets across an increasing number of nonbroadcast platforms, including cable, satellite, the Internet, social media and others. Moreover, there has been a vast proliferation of video programming alternatives to broadcast television, including not only traditional MVPDs but a plethora of new online video distributors and streaming options. While the marketplace for distribution of video programming is evolving at an historic pace, the FCC’s media ownership regulations remain stuck in a bygone era in which broadcast television was the first and only choice for viewers and local advertisers.
Today, consumers of video programming can access content over-the-air, on cable and satellite, from over-the-top distributors, from direct-to-consumer streaming services and more. Advertisers seeking to reach consumers, meanwhile, have a plethora of options offering a wide variety of price points and levels of interactivity.
Television stations represent just one of many options for viewers and advertisers alike. These underlying facts about the status of the video distribution marketplace are not in dispute.
The same competition rationale that may, at one time, have justified restricting local television station ownership is outdated and even counterproductive today. Therefore, in order to fulfill its statutory mandate to eliminate regulations that are no longer “necessary in the public interest as a result of competition,” the commission must account for the rapid changes in the video distribution marketplace.
In particular, the FCC should eliminate the presumptive restriction on ownership of two of the top-four rated stations in a market. The so-called Top-Four Prohibition creates an unnecessary and arbitrary burden on broadcasters’ ability to obtain operating efficiencies that allow them to deliver more comprehensive news and information programming and the most-desired entertainment programming in an era of fierce competition.
As a result of the Top-Four Prohibition, broadcasters must compete with increasingly competitive — but unregulated as to ownership — cable and satellite video distributors, cable advertising interconnects, cable program networks and internet-based services, all with one hand tied behind their backs.
Don’t Extend Rules Too Far
At the same time, the FCC must resist calls by some commenters to extend media ownership regulations to multicast streams, LPTV [low-power television] stations and satellite stations.
The commission’s long-recognized policy rationales for not attributing ownership to those services remain unchanged: They provide a substantial expansion of free, over-the-air services to underserved populations without the corresponding benefits available to full-power stations. Any effort by the commission to attribute ownership of these services based solely on their programming content would be unjustified and constitute an affront to the First Amendment rights of broadcasters.
In taking account of the rapid evolution in the video distribution marketplace, the FCC must ease the ability of broadcasters to provide the valuable programming that their local viewers desire, and avoid erecting any new barriers that will disserve the public interest.