Media Ownership Hearing Cut Short Due to Votes... Again

Truncated queries focus on disclosure, JSAs, tax certificates
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The House Communications Subcommittee tried to reconvene its media ownership hearing Thursday, but following the news that a series of seven floor votes were scheduled, was forced to cut it short once again after only a handful of quick questions.

The hearing was to have been a continuation of the "Broadcast Ownership in the 21st Century," begun Sept. 25 but cut short due to floor votes—and begun late due to the resignation announcement of House Speaker John Boehner.

But those best laid plans were waylaid once again, and most of the witnesses for the lightly attended hearing showed up for what were in most cases only seconds-worth of answers, focused on the minority tax certificate and disclosure of the sponsors of political issue ads.

The minority tax certificate deferred capital gains on sales of broadcast and cable properties to minorities. The program was discontinued in 1995 and reinstating it has become a familiar litany at such hearings, though nothing has been done to date.

All the witnesses agreed that bringing it back would be a good idea. Gerry Waldron, representing the National Association of Broadcasters, said he thought the FCC could structure the program to prevent arbitrage and said he thought the FCC could structure it in a "fair and balanced" way.

He pointed out that more than 50 such deals were done under the program and advised Congress and the FCC to restore it.

Kim Keenan, president of the Multicultural Media, Telecom and Internet Council, was even more enthusiastic. She said that the peak period of growth for women and people of color in the media ownership ranks came during the period of the tax credit and once it was taken away, that bar graph dropped precipitously.

Subcommittee ranking member Anna Eshoo (D-Calif.) joined Todd O’Boyle of Common Cause, to take aim at joint sales agreements. They agreed that broadcasters should have to disclose those agreements, and that they did not boost diversity, as some broadcasters have claimed.

O'Boyle said the FCC should have required disclosure when it revamped its JSA rules in March 2014. Eshoo said it sounded like an area that needed work.

NAB's Waldron was not given the opportunity to rebut their colloquy on the issue given the truncated hearing.

Eshoo, joined by Rep. Frank Pallone (D-N.J.), ranking member of the full House Energy & Commerce Committee used their brief questioning time to raise the issue of the FCC's sponsorship identification rules as they related to political issue ads.

Eshoo pointed to legislative efforts by Rep. John Yarmuth (D-Ky.) to require the on-air disclosure of the "true" sponsors of the ads. The issue stems from the Citizens United Supreme Court decision that prompted a flood of such PAC and SuperPAC ads.

Efforts by Yarmuth and others to legislate on-air disclosures have so far failed to bear fruit. Eshoo asked O'Boyle what the FCC could do.

He said it had the authority to rewrite its sponsorship ID rules, could do so in time for the 2016 election, and should launch a rulemaking to do so. So far, FCC chairman Tom Wheeler has not signaled he plans to go there.

O'Boyle gave the FCC credit for putting TV station political files online, but said it should boost the requirement and make it a searchable, machine readable database, rather than letting stations upload scanned PDFs of handwritten "scrawl."

Rep. Bob Latta (R-Ohio) did give NAB's Waldron a chance to weigh in on the FCC's inaction on media ownership rule revisions that might help broadcasters be more competitive.

Latta asked whether the FCC's failure to complete its congressionally mandated quadrennial rule review had been a problem. Waldron said it had been 12 years since the FCC looked thoroughly at the rules, during which time Google and Facebook had begun competing for ad space and eyeballs, cable consortia had grown as a competitor for local advertising, and the legacy rules still treated broadcasters as though they were only competing with themselves.

He said that given that a local car company—a huge ad category for broadcast TV—can place an ad on Google or cable, if the FCC were doing its job it would come up with rules that would allow "reasonable" combos among TV stations. Looking at the industry through the prism of 2003 distorts what the rules should be, he said.

Both Walden and Eshoo were apologetic for the abbreviated hearing. Eshoo said she wished it could have gone on all morning—it lasted only about 20 minutes—and Walden said perhaps the issues could be revisited, and that legislators could submit more questions for the record.

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