June 4-10: The FCC Reports on the Changing Media Landscape in a Broadband Age
On June 9, 2011 the Federal Communications Commission's Working Group on the Information Needs of Communities delivered an analysis of the current state of the media landscape. It was back in January 2010, that the FCC issued a Public Notice seeking information on the future of media and the information needs of communities in the digital age. The FCC promised the effort would result in an examination of the changes underway in the media marketplace, analyze the full range of future technologies and services that will provide communities with news and information in the digital age, and, as appropriate, make policy recommendations to the FCC, other government entities, and other parties. The topics examined include: the state of TV, radio, newspaper, and Internet news and information services; the effectiveness and nature of public interest obligations in a digital era; and the role of public media and private sector foundations.
The FCC's key findings and recommendations include:
- Fueled primarily by broadband-enabled innovation, the news and information landscape is more vibrant than ever before. Digital technology is creating a world of opportunity to keep the public informed in ways unimaginable just a few short years ago.
- The disruptive impact of the Internet has enabled an unprecedented free exchange of ideas and information. Breakthroughs in hyperlocal news and citizen journalism are on the rise, empowering individuals with a wealth of new information to better inform decisionmaking and engender more accountable government.
- There are nonetheless serious gaps, including in local accountability reporting. These deficits increase the likelihood of corruption, wasted tax dollars, worse schools and other problems for communities.
- Accelerate move from paper to online disclosure. Disclosure information required by the FCC should be moved online from filing cabinets to the Internet so the public can more easily gain access to valuable information. FCC should eliminate burdensome rules and replace the current system with a streamlined web-based disclosures focused on providing information about local programming.
- Remove barriers to innovation and online entrepreneurship by pushing for universal broadband deployment and adoption. Achieving this goal would remove cost barriers, strengthen online business models, expand consumer pools and ensure that the news and information landscape serves communities to the maximum possible benefit of citizens.
- Target existing federal spending at local media. Existing government advertising spending, such military recruiting and public health ads, should be targeted toward local media whenever possible. Each year, the federal government spends roughly $1 billion in advertising without maximizing potential benefits to local media.
A report this long in the making has garnered lots if attention -- and some controversy as some accused the government of using a financial crisis in newspaper industry to justify an effort to control the editorial content of media outlets.
Joel Meares writes in the Columbia Journalism Review that the report outlines the crises facing the journalism industry in excruciating, painstaking detail. Similar detail is lacking in its recommendations on how we dig out, however . There are no bold ideas. There are very few concrete ideas at all. Government certainly isn't expected to lift a heavy finger -- “government is not the main player in this drama,” the report reads. The theme seems to be to hold a steady course, loosen up the system, put a lot of information online, and hope foundations are willing to do some hard work.
There is a shortage of in-depth local journalism needed to hold government agencies, schools and businesses accountable, Joelle Tessler of Associated Press notes. The dearth of reporting comes despite an abundance of news outlets in today's multimedia landscape. "A shortage of reporting manifests itself in invisible ways: stories not written, scandals not exposed, government waste not discovered, health dangers not identified in time, local elections involving candidates about whom we know little," the report says.
Writing for the CJR, Lauren Kirchner notes that while almost all Americans have easy access to TV, only about 55 percent of Americans have a broadband Internet connection at home. [See a similar take by Fast Company's Kit Eaton FCC Praises The Internet For News Evolution, Then Blames It For Crappy News Quality] This is a problem, the report says, because:
If traditional media companies devote fewer resources to accountability journalism, it becomes more important for all Americans to have access to a full range of comparable resources online. Those that have low quality newspapers or TV and limited Internet access end up with less useful news. Conversely, greater broadband penetration will make it more likely that local digital media efforts will succeed.
A key recommendation, then, is to expand broadband access across the country -- by way of public libraries, by encouraging digital and media literacy, and by creating a wireless broadband “auction” so that broadcasters can sell some of their spectrum, perhaps for educational programming. Other recommendations include creating public affairs cable channels similar to C-SPAN at the state level, easing tax rules for non-profit news organizations, and directing more federal advertising spending to local news media.
Josh Smith, writing for the National Journal, highlights that the report finds that online advertising is nowhere near to providing media outlets the revenue they need. While the Internet has provided new ways to communicate, it has also undermined revenue for many traditional news outlets:
"It is a myth that local newspapers suffered because they did not grow traffic online. From 2005 to 2009, newspapers' online traffic skyrocketed -- from 43.7 million unique monthly users to 70 million, from 1.6 billion monthly page views to 3 billion page views. But in financial terms, that growth was shockingly meaningless." In that same period, online advertising revenue for newspapers grew by $716 million, while print advertising plummeted by $22.6 billion.
With debates about online privacy raging in DC, The Hill's Sara Jerome notes with some surprise that the report points to behavioral advertising — which tracks the Web habits of consumers in order to better target ads to their personal preferences — as an important way to make hometown journalism more profitable: "Ad targeting, since it commands higher prices, offers one possible way for local content creators to build sustainable business models that can help finance local journalism," the FCC report says.
David Oxenford focuses on the takeaways for broadcasters writing on the Broadcast law Blog The report finds that the public trustee model of regulating broadcasters is "broken." That model mandates that the broadcaster, in exchange for its use of the public spectrum, must broadcast programming that serves the public interest. The report looks at the last 30 years of broadcast regulation and finds that no broadcast station has lost its license for not serving the pubic interest. It also questions the use of quarterly program issues lists as providing the basis of reviewing the service provided by broadcasters, as these lists are not filed with the FCC, are not uniformly kept, and are not regularly reviewed by anyone but the broadcaster. "Over time, court rulings, constitutional concerns, and FCC decisions have left a system that is unclear and ineffective," said the report. "The current system operates neither as a free market nor as an effectively regulated one; and it does not achieve the public-interest goals set out by Congress or the FCC."
However, even though the report finds the public trustee model to be broken, it does not suggest a raft of new detailed regulations for broadcasters to follow. Instead it seems to suggest that, if the public has more information about the performance of broadcasters (especially info that easily-accessible online), it should be able to better judge the performance of those broadcasters.
The report suggests that the last remnants of the Fairness Doctrine be repealed, and that the FCC's localism proceeding be terminated. The report suggests some form of enhanced disclosure form be adopted for broadcasters to report about their treatment of local issues of public importance, and that this information, and the rest of a broadcaster's public file, be kept online so that it would be more easily accessible to the public and to researchers. Online disclosures were also suggested for sponsorship information, particularly with respect to paid content included in news and informational programming. And proposals for expansion of low-power radio stations (LPFMs) and for allowing noncommercial stations to raise funds for other nonprofit entities were also included in the report. [TVNewsCheck's Kim McAvoy writes "Broadcasters See Positives in FCC Proposal"]
Reactions
Perhaps the loudest critic of the report so far has been the FCC Commissioner who has been most vocal about addressing the needs of communities. Commissioner Michael Copps released a five-page statement. He is stunned that the report suggests ending the FCC's localism proceeding instead of calling for stepped-up FCC action. He highlights the reports mention of the harmful effects of media ownership consolidation -- less local news, fewer reporters, and less diversity -- but questions why the report seems to hedge on whether recent ownership consolidation has been good or bad. The report also recognizes the problems with media diversity -- of viewpoint, in ownership, in who and what we see on TV, and in who runs the companies -- but lacks recommendations for strong, implementable-now programs that can begin to make a difference despite recommendations from the FCC's own Diversity Advisory Committee. He also questions the report's over-reliance on more disclosure since the FCC has shown no interest -- in some 30 years -- of acting to remedy poor performance by broadcasters.
Commissioner Copps said:
There is more to be said about the Staff Report and I will be talking about it in the days ahead. But rather than parsing the contents of a particular report, I intend to spend most of my time encouraging the Commission to take up its charge of responsible public interest oversight and to do everything it can to encourage the news and information and diversity that Americans have a right to expect from their media. If the Staff Report helps generate a spirited national dialogue toward that end, it will have served a purpose. If we can learn from the history traced in the Report-much of it very good-we will be able to craft stronger public policy proposals. And if the Commission can move swiftly ahead on some of the good ideas that are offered-and there are indeed good ideas offered -- we can reap real benefits from it.
Media Access Project Senior Vice President and Policy Director Andrew Jay Schwartzman was also critical of the failure to implement existing FCC rules and to strengthen other rules to require minimum amounts of news and public affairs programming:
Broadcasting remains the predominant source of news and information at the local level, and there are even indications of increased reliance on over-the-air TV by young people who are “cutting the cord” by not subscribing to cable or satellite TV. Yet, according to the best information we have received from FCC staff and press leaks, the staff report does not call for every radio and TV station to make a meaningful contribution to coverage of local issues. While it seems to favor greater transparency, we've been told the report actually recommends weakening program reporting requirements that the Commission has failed to enforce since their adoption more than three years ago.
Schwartzman also observed that the failure to recommend strong action in broadcast regulation appears to undermine FCC Chairman Genachowski’s “incentive auction” plan to persuade some TV stations to sell off their spectrum so it can be used for broadband.
Free Press President and CEO Craig Aaron called the report a "major disappointment." FCC Report Falls Far Short of Real Solutions "The report discusses many important ideas, but where the FCC actually has the power to help local communities, the agency abdicates its responsibility in the areas. Worse yet, instead of striking a bold path forward, the FCC chairman appears to be backing away from the positive, though baby steps made by his Republican predecessors on the issues of competition, localism and diversity," Aaron said.
Multichannel News' John Eggerton collects more reaction.
"We appreciate that the report suggests moving away from outdated reporting rules," said Hearst Television president David Barrett. "We are open minded about the new proposals, especially given the productive process by which the report arrived at its conclusions, and will consider them carefully."
"In an age where some have argued that the federal government has increased its reach over an increasing number of private sectors of American life, this report is a refreshing change. It refrains from imposing mandates, but instead recognizes opportunities to incentivize private media," said National Religious Broadcasters president Dr. Frank Wright.
"We look forward to reviewing the Report and exploring these important issues with the Commission and other interested stakeholders," said National Cable & Telecommunications Association president Michael Powell. "The cable industry has a long and proud history of providing the American people with a vast array of local, regional and national news and information - including the founding of C-SPAN. Local cable news channels can be found in communities such as New England, New York, Florida, Ohio and cable provides support and distribution for channels that provide extensive coverage of state and local government affairs in Michigan, Pennsylvania, California and elsewhere. Our industry's leadership role in deploying high-speed broadband services and on-demand programming also reflect cable's continuing commitment to expanding sources of news and information for consumers."
The American Television Alliance (ATVA), which includes some NCTA members and has been pushing for retrans reform, saw the report has supporting evidence for its assertion that broadcaster localism claims are more brag than fact.
"According to a report delivered today to the FCC, local broadcasters 'do little or no local programming' and 'about 30 percent air no local news,'" said ATVA in a statement. "The new report takes the air out of the broadcasters' argument that squeezing more money out of retrans supports local programming, especially news."