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Editorial: Bad Times, Hard Choices - Broadcasting & Cable

Editorial: Bad Times, Hard Choices

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Journal Broadcasting's unaudited operating income for all of its 12 TV stations for the first quarter of 2009 was down more than 98% from last year's $3.6 million in Q1, which came before the economic meltdown. Even across-the-board salary cuts couldn't help the dismal first-quarter results.

Taking some of the sting off was a healthy boost in retrans revenues of almost $1 million, but it wasn't nearly enough to offset the bad news.

If that isn't enough to get the attention of Washington policymakers, it should be. We cite Journal in part because it also owns local newspapers, which have been hit even harder by the recession.

The government is quick to invoke the public interest and to protect localism when it wants to regulate broadcasting. It should be as quick to recognize the value of the medium, and its importance, when that local service is threatened by an economic crisis and is in need of regulatory flexibility. Washington needs to scrap the knee-jerk reaction to removing regulations.

It seems to us that the newspaper industry has been saying for years that it was in trouble, which is one of the reasons that it pushed the FCC, along with broadcasters, to remove the ban on combining newspapers and broadcast outlets in smaller markets. It was Congress that didn't seem to believe that newspapers and stations needed the help. Even when the FCC decided not to lift that ban and only loosened it, the wailing and gnashing of teeth from Democrats and even some Republicans was loud and clear.

But this is an unprecedented crisis and requires new thinking. It would be hard enough for a broadcast industry in the best of times to remake itself to meet the competitive challenges of a multiplatform marketplace. And these are not the best of times.

If removing the ban on newspaper-broadcast cross-ownership could save one newspaper or station—say, a minority-owned operation in a small market—it is worth doing, and sooner rather than later.

The Senate last week cancelled its planned hearing on FCC reform. If it ever gets around to rescheduling, one of the items at the top of the agenda should be breaking down those regulatory silos.

If Congress is worried that stations or newspapers will start buying each other up by the armload, think again. Broadcasters are generally trying to shed stations, and buying a lot of newspapers doesn't exactly have huge upside.

Many broadcasters will argue that even now, loosening regulations on ownership is yesterday's battle. But in specific cases, it could help some news outlets have a tomorrow.

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