Ownership

Apparently, Federal Communications Commission Chairman Ajit Pai is working on a media ownership order that would allow newspaper-broadcast and radio-TV cross-ownership. The item also could remove the prohibition on owning two of the top four-rated stations in a market, and "tweak" the eight-voices test for allowing duopolies (two stations in a market owned by a single entity). Currently newspaper-TV and radio-TV combinations cannot be co-owned in the same market, with the exception of some grandfathered combos. The duopoly restrictions currently prohibit common ownership of two TV stations in a market if it would result in fewer than eight independent outlets, which means no station co-ownership in smaller markets. Reducing the number of independent voices (stations) in a market would expand the number of markets where dual ownership would be allowed.

The item is not expected to deal with the UHF discount or 39 percent national station ownership cap, apparently. While it initially looked like it could be circulated to the other commissioners for a vote at the Sept 28 meeting, that timeline would likely be pushed to at least October.

[Commentary] The Federal Communications Commission has before it the question of Sinclair Broadcast Group’s $3.9 billion proposed acquisition of Tribune Media. It is a major decision, since the resulting broadcast behemoth would hold as many as 233 local television stations reaching into more than 70 percent of American homes.

Allegations about the Trump administration’s closeness to Sinclair – including Jared Kushner’s campaign deal – have been made. All I know is what I read, but the lead up to the actual decision has been significant and seems to presage approval. The statutory test for the FCC’s decision – and the only test Congress has instructed the commission to use – is whether the merger is in the “public interest.” The corporate interest of Sinclair is obvious; they may be a politically friendly company, but whether they meet the public interest test is now even being challenged by others of the same political stripe. Not to be lost in the decisionmaking is the statutory rationale behind broadcast licenses in the first place. In the belief that broadcasting is a public trust, broadcast companies have been given use of the public’s airwaves. The key to that public trust is providing news and information to the local community of license, a concept that appears in danger by the one-two punch of the FCC’s elimination of the local studio requirement and the national network designs of Sinclair. Ultimately, the decision comes down to the record in the proceeding. The richness of the record on this matter would suggest that even though the Trump FCC has bent the rules to facilitate such a merger, it is not in the public interest.

Republican Reps are seeking to eliminate the Federal Communications Commission’s newspaper and broadcast cross-ownership rule through draft legislation reauthorizing the federal agency. The 1975 rule bars media companies from owning and operating newspapers and TV stations in the same local market. The FCC reauthorization draft bill that was discussed during a House Commerce subcommittee oversight hearing on July 25 includes a section called “elimination of daily newspaper cross-ownership rule.”

Democratic Reps are reportedly largely opposed to eliminating the rule. “Committee Democrats will not support any efforts to eliminate the broadcast and newspaper cross-ownership rule,” a Democratic aide said. “We should not be making it more difficult for independent voices in the media to thrive, especially as the Trump administration continues its misguided attacks on the free press.”

Senate lawmakers are also planning on releasing an FCC reauthorization bill before the end of 2017. Senate Commerce Committee Chairman John Thune (R-SD) said after a panel executive session on Aug 2 that FCC reauthorization will be one of the first things that the committee addresses when lawmakers return from the August recess. It is unclear if the committee’s legislation will also include a provision eliminating the media cross-ownership rule as part of the agency’s reauthorization.

As Internet-based distributors move up and down the stack to become vertically integrated platforms with a preferred suite of affiliated content, there is a growing concern among policymakers that innovation among independent content creators and websites may be threatened. More fundamentally, the Internet is not one thing—it is many things, and our current regulatory regimes are struggling to address that complexity. These new platforms give rise to potential conflicts of interest, in which it might pay for a vertically-integrated platform owner to sacrifice some profits (if any) in its distribution division in order to support an affiliated (or favored, third-party) application.

This essay focuses on identifying and fixing this potential regulatory gap when crafting a “net neutrality” policy—a set of rules or standards designed to spur innovation at the “edge” of the Internet by preventing Internet service providers (ISPs) from engaging in discriminatory conduct. But the essay could just as easily be directed at the powerful online platforms wielded by Amazon, Facebook, or Google. The applicability of this remedy to other parts of the Internet is natural, not because market power is paramount there (though it certainly exists), but because there is a large enough threat to innovation in adjacent markets to online shopping, social media, and search, respectively.

[Singer is Principal, Economists Inc., and Senior Fellow, George Washington Institute of Public Policy. The author has served as a consultant to both ISPs and independent cable networks in regulatory matters.]

It was a crazy idea: Take the bulk of the world’s books, scan them, and create a monumental digital library for all to access. That’s what Google dreamed of doing when it embarked on its ambitious book-digitizing project in 2002. It got part of the way there, digitizing at least 25 million books from major university libraries. But the promised library of everything hasn’t come into being. An epic legal battle between authors and publishers and the Internet giant over alleged copyright violations dragged on for years. A settlement that would have created a Book Rights Registry and made it possible to access the Google Books corpus through public-library terminals ultimately died, rejected by a federal judge in 2011. And though the same judge ultimately dismissed the case in 2013, handing Google a victory that allowed it to keep on scanning, the dream of easy and full access to all those works remains just that.

CNN is reporting that it has severed ties with commentator Jeffery Lord on Aug 10 after he tweeted “Sieg Heil!” at a liberal activist on Twitter. Lord, a columnist for conservative magazine The American Spectator, tweeted the Nazi victory salute at Angelo Carusone, president of the liberal group Media Matters for America. “Nazi salutes are indefensible,” a CNN spokesperson said, according to the network. “Jeffrey Lord is no longer with the network.” In the opinion piece that eventually led to his ouster from CNN, Lord took issue with a Media Matters campaign to get Fox's Sean Hannity fired from his network. Media Matters urged its supporter to pressure advertisers on Hannity’s program to withdraw their support. Lord argued in his piece that this was a “fascist game” and an effort to end Hannity’s “free speech.”

Apparently, House Commerce Committee Republican leadership got together, both in person and by phone, with the major trade associations on both sides of the network neutrality issue August 7 in a series of meeting throughout the day to discuss possible legislative pathways to clarifying the Federal Communications Commission’s network neutrality authority. The associations involved, according to sources, included NCTA: The Internet and Television Association, CTIA (the wireless industry), USTelecom, and the Internet Association. The associations were asked for, and answered with, suggestions for changes, updates, and input, or alternatives, based on a starting point of draft bills dating back a couple of years that included no blocking, throttling, or paid prioritization, though with paid prioritization language that was flexible enough not to be a blanket prohibition, say, only prohibiting “anti-competitive” or discriminatory paid prioritization.

[Commentary] In a perplexing dance toward consensus, left and right have united to pour vinegar on Sinclair Broadcasting Group’s effort to add Tribune Media’s 42 television stations to the 173 it already owns. You’d think that Sinclair—which hikes on the conservative side of the news by forcing its stations to air commentaries by former Trump adviser Boris Epshteyn and other right-tilting segments (“Terror Alert Desk”)—would be cheered by its fellow media ideologues. But no. Newsmax, One America News Network and Glenn Beck’s the Blaze have joined with the lefties from Public Knowledge, Common Cause, Free Press and Media Matters for America to decry the $3.9 billion acquisition. The opposition doesn’t stop there. Such businesses as DISH Network and T-Mobile have decanted their protests, too, demanding that the Federal Communications Commission block the deal, as have broadcast trade associations.

The lefty opposition against Sinclair actually seems to be an argument against media diversity and for media homogeneity. Nowhere on television—not even on Fox-owned stations—is the conservative point of view pursued as aggressively as it is at Sinclair. If rejecting what other journalists are doing and following a unique viewpoint isn't the mark of media diversity, I don't know what is. If the left truly wished death upon Sinclair, it would urge the FCC to change ownership rules so that big broadcasters with different news “philosophies”—ABC (Disney), NBC (Comcast), and CBS—could buy more stations. But the left remains too stitched up in its 1950s thinking about consolidation to advocate that. Might Sinclair’s fight for Tribune’s stations turn out to be a fool’s bargain? For the media diversification reason chronicled above, the conventional television business model has passed its golden years. In 2015, the Bernstein research outfit predicted a “period of prolonged structural decline” for the television industry as viewers continue to defect from ad-supported outlets to on-demand services like Netflix and Hulu. Maybe instead of discouraging Sinclair from making the deal, the company’s foes and competitors should encourage them to close it.

You can add Altice to the growing list of companies trying to figure out a way to buy Charter Communciations. The French telecom giant and its US cable subsidiary, Altice USA, are working on an offer to buy Charter, but have not yet brought a purchase proposal to Charter or its advisors, apparently.

There's no guarantee that Altice will engage, though the prospects seem likely. Altice and its founder Patrick Drahi have long had ambitions to expand in the U.S., and with SoftBank's recent interest in making an offer to buy Charter, Drahi has decided to see if he can compete. Altice has bankers and lawyers working on a bid for Charter. But like SoftBank, it faces significant hurdles in crafting a deal that would meet shareholders' expectations on price while not being replete with the stock of the acquiring company, which in this case would be the far smaller Altice USA.

While its marquee programming is centered on shows like Downton Abby, Sherlock, and, lately, The Great British Bake Off, much of what PBS does is empower its local affiliates to do the kind of local coverage that most news media has abandoned. And while the network would still exist if President Donald Trump’s proposed budget cuts to the Corporation for Public Broadcasting go into effect, PBS President and CEO Paula Kerger says that the network’s ability to thrive in smaller markets and keep its affiliate stations running would be significantly hampered. With so many people still relying on the channel for local coverage, PBS has continued to focus on making sure its local stations have power to program lineups that are relevant to their viewers.