The Federal Communications Commission plans to vote on a proposal that would eliminate regulations preventing companies from owning multiple broadcast stations in the same media market, as well as the rules that prevented owning both a broadcast station and a newspaper in the same market. The regulations, which have been in place for more than 40 years, were intended to promote better media coverage by encouraging competition and a diversity of viewpoints.
If the Commission decides to lift the ban on consolidating media ownership within markets, it would pave the way for companies like Sinclair Broadcast Group, a conservative-leaning company that already owns 173 televisions stations, to complete its merger with Tribune Media — giving the company control of media outlets that would reach more than 73 percent of U.S. population.
This consolidation is viewed by the Trump administration as a necessary step to save struggling media outlets that are losing their audience and advertising revenue to digital media companies.
But Drexel professor Philip Salas, a 30-year veteran of media management, along with many other industry experts, is concerned about the effects that this unchecked consolidation could have on the information the public receives. Below he offers insight on what could happen if the FCC repeals the ownership rules when it votes Nov. 16.
The FCC Chairman has indicated that the Commission will vote on rolling back media ownership rules that limit companies from owning multiple television stations and newspapers in the same market. This rule has been in place for 42 years. Why was it created? Has it ever been challenged before?
The cross-ownership rules were created to maximize the number of local “voices” in a market, to encourage diversity.
There have been challenges to these rules along the way, resulting in changes to them in 1975, in 1996 and in 2002. It is important to remember that the FCC commissioner is appointed by the president and, therefore, decisions and the direction of the agency are reflective of the party in power. Some of the rule changes that were intended to increase competition actually had the reverse effect, by making it easier for station ownership groups to merge/acquire/consolidate.
There are a few other rules of note that are part of the cross-ownership rules. One rule that had been in place, then repealed in the Obama administration, then recently replaced under the current administration, is the so-called “UHF Discount.” Under current ownership limits, one company is not allowed to own so many broadcast stations that reach exceeds 39 percent of U.S. households. But the “UHF Discount” allowed station groups to count UHF broadcast stations — local stations with a comparatively weaker signal — at half of their actual household coverage when calculating market coverage toward the 39-percent cap.
I believe that there should be no discount, as cable and digital distribution for over-the-air stations have put all stations on pretty much the same playing field, unlike the days when a UHF station had a poor signal.
Also recently repealed, was the 80-year-old “main studio rule” which required broadcasters to maintain a studio in their city of license.
Over the last 20 years we have seen quite a bit of consolidation of media ownership across different markets. How would you say this has affected editorial independence of news coverage in those markets?
It really depends on the size of the market. I think in larger markets, there remains a reasonable amount of editorial independence and multiple voices. But that doesn’t hold for smaller markets.
Research has shown that local television news, in markets of any size, tends to be more “neutral” in tone than the national 24-hour networks. Local news has fewer hours to fill than a CNN or Fox News, and rely less (almost zero) on political talk, commentary, or controversy. They report the local news, such as fires, crashes, crime, education, labor and news that is important to their local communities. They also throw in some “internet cat videos” on a slow news day.
What could we expect if consolidation is allowed to happen within markets?
Consolidation will hurt the local news effort, as stations will tend to “hub” news from regional newsrooms. Small to mid-size local coverage will suffer.
Is there a case to be made for consolidation of ownership actually improving local news programming?
I hear broadcasters talking about the need to consolidate in order to operate more efficiently, to survive and to provide more local programming. There is a grain of truth to this, as a satellite truck or 4k camera costs the same whether you are doing news in New York or Fargo. But it’s hard to believe that any money saved as a result of consolidation won’t just flow right to the bottom line, as these are companies with large debt service that have to answer to investors.
Is this a viable course for saving struggling newspapers?
This is a tough one. I think not, unless newspapers begin to effectively use video distribution systems and social media channels to distribute and monetize video content. Large market papers should be fine, as long as benefactors like Jeff Bezos and Gerry Lenfest continue to step up and support them.
What other limitations would remain on media ownership if this provision is repealed?
I’ve not heard anything about the current 39 percent cap being raised. However, along with the UHF Discount and other loosened provisions on joint management and joint sales agreements, more consolidation can occur even within the limits of the cap.
Philip Salas is an assistant teaching professor in Westphal College of Media Arts & Design’s Television Production and Media Management program. His career has spanned three decades in media management, from sales, to market research and analysis for NBC, CBS and ABC affiliates in New York and Philadelphia.
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