FCC Media Rule Review Progresses, With $725,000 of Research

Work by career FCC staffers on proposed media ownership rules is progressing, after an appeals court remand of previous regulations, industry and agency officials said. They said the last batch of studies the agency paid outsiders to do is heading toward completion, and a rulemaking notice will be issued later. The commission contracted to pay $725,000 for eight studies, according to contracting documents Warren Communications News, publisher of Communications Daily, got from the agency by a Freedom of Information Act request. The research is on local online content, “civic knowledge” and “engagement,” TV viewing, ownership and other areas. The FCC has released five studies dealing with the Web, TV and radio (CD June 16 p9).

Commission officials continue to expect a rulemaking notice on the congressionally-mandated review, due to have been completed last year, to come out later this summer or in early fall. With the July 7 remand of the last media ownership review, which also was finished late, FCC staffers are said by those watching the proceeding to be looking at how to deal in the NPRM with the 3rd U.S. Circuit Court of Appeals’ ruling.

Industry executives hope that the pace of the review will be jump-started by Prometheus Radio Project v. FCC. In it, the court sent back to the commission diversity rules and restrictions on common ownership of a daily newspaper and radio or TV station in a market. The ongoing Media Bureau review will take that ruling into account, Chairman Julius Genachowski said last week (CD July 13 p3). The bureau wouldn’t necessarily have waited for Prometheus to finish work on the rulemaking, an agency official said, but having it in hand means the proceeding can ask about cross-ownership and diversity to try to address the defects in the last review. Representatives of the bureau and of the commissioners’ offices had no comment.

It may be relatively straightforward to address the court’s remand, since it didn’t send back to the regulator all parts of the proceeding approved 3-2 and issued in 2008, agency and industry officials said. The Minority Media and Telecom Council became the first entity to propose ways to deal with the remand, in a filing posted Thursday to docket 09-182 (http://xrl.us/bkz6cx). It listed seven proposals on diversity that are among the 72 the MMTC has previously sent to the agency. The reprised broadcast recommendations on deregulating foreign ownership restrictions, facilitating emergency alerts in languages other than English and waivers of local radio ownership caps for a station used as an “incubator” for new entrants could be dealt with separately or in the current review, Executive Director David Honig told us. “Whichever is faster,” he said: “These and dozens of other minority ownership,” equal employment opportunity and other “proposals have been pending for a long time."

Industry executives seek a review that’s quickly completed by addressing the remand and finalizing new rules. “Whatever process results in these issues being addressed sooner rather than later would be in the agency’s, the parties’ and the public’s best interests,” said ex-commissioner Henry Rivera of Wiley Rein, who chairs the FCC’s diversity committee. Tribune’s top area of interest in the ongoing review is easing limits on cross-ownership, Vice President Shaun Sheehan said. “When the 3rd Circuit first intervened” by sending the review done in 2003 back to the agency, “the one element which they said the commission was correct on was major-market cross-ownership relief,” he noted. “From 2003 until today, you'd almost have to be brain dead not to see that the economic model for newspapers has been severely threatened, and the case for cross ownership relief is self-evident."

The upshot of Prometheus is that this review must focus squarely on diversity, said officials of nonprofit groups that often oppose media consolidation. “The court has for the second time told the commission to take this very seriously,” said Senior Vice President Andrew Schwartzman of the Media Access Project. “The commission has to view the impact of the ownership rules through the lens of diversity to a much greater extent than it has in the past,” to avoid a third remand, he said. “The commission clearly has been holding off, waiting for this” ruling, before issuing the NPRM, Schwartzman said. The agency doesn’t appear to have done much if any work on studies to see how the Adarand Supreme Court ruling against some rules aimed at particular groups can square with a focus on diversity, he and others watching the proceeding said. “The Adarand studies are necessary, but not sufficient” to finish the review, Schwartzman said.

Free Press seeks a focus on diversity. “Sound policy making, as well as the directive of the Third Circuit, require the FCC to evaluate the impact of all of its media ownership rules on ownership opportunities for women and people of color, and to make diversity a central focus of it 2010 Review,” the nonprofit said in a filing posted Friday to the docket(http://xrl.us/bkz6ir). The group met with Commissioner Mignon Clyburn, it reported. “Increasing ownership by women and people of color would serve the public interest by improving service to underserved segments of the community and remedying past discrimination in which the Commission has been, at the least, a passive participant."

Pending Studies

The most expensive study the FCC contracted outsiders to do is a consumer survey on how they value media, based on the draft purchase request for $198,000 to Donald Waldman and Scott Savage: The study is on how people value media “as a function of local market structure.” The final report was due March 31. It’s among the several studies the commission has arranged for academics and others to do that’s yet to be released. A commission webpage tracks the status of each study (http://xrl.us/bkz6ju). The study hasn’t been submitted to the commission, peer reviewed or revised, the webpage said. Waldman, a professor of economics at the University of Colorado, didn’t reply to a message seeking comment.

Some studies were being done later than expected because the process in which fellow academics review the research and comment on it takes time, FCC officials said. They said such peer reviews often are followed by revisions to the report by the authors, and the research is then sent to the commission to be released. Studies the commission contracted to pay a total of at least $234,200 for are on the website, although not all are in final form. One such completed study, which the FCC contracted to pay $16,200 for, is “Less of the Same: The Lack of Local News on the Internet."

Kenneth Wilbur Consulting got two orders for $50,400 each, one for a study on TV viewing as a function of local market structure and another on such structures’ effect on “viewpoint diversity.” Reviewing “local news and public affairs programming is of particular interest because this is where viewpoint will be most evident,” said the FCC statement of work for the second report. It’s meant to study the ownership of local media outlets -- whether independent, part of a company that also has media properties in the same market, or in a joint sales or local marketing agreement. The study on TV viewership and local ownership is meant to measure the availability of TV and radio stations; cable, DBS and other subscription-video distributors; papers; and the Internet. Wilbur Consulting will use data from Nielsen for the study, its statement of work said. “By relating overall media usage to media market ownership structure, the present study addresses the Commission’s competition goal, since consumer satisfaction is one consequence of good competitive performance.”

A research foundation of the City University of New York was to get $147,170 for a study on how “viewpoint diversity” in news is affected by ownership of a market’s media, the government order said. Another $45,000 was to be spent on Nielsen data. The study includes all types of local media, as sought in the Wilbur TV report, to link “viewing patterns” of local news to a provider’s ownership type, its work statement said. “Performance metrics for viewpoint diversity” can be based on set-top box data from Rentrak, an analysis of the content on local TV news from transcript providers like Newsbank or video of such newscasts.

Several industry officials said they fear that politics plays a role in this and all other quadrennial reviews, as the potential for deregulation attracts widespread public and legislative scrutiny. “Processes get held hostage by political objectives,” said broadcast lawyer Robert Rini of Rini Coran. “So I remain confident that if the process is allowed to move forward by the way that is allowed by the law” under the Telecom Act, the outcome will be a good one, he added. For the current review, “there’s not enough transparency, despite all the rhetoric in favor of transparency, which really creates its own irony,” Rini said. “Why doesn’t the FCC publish notes of its internal meetings? Why don’t we see drafts of rules? There are a lot of things the FCC could do to open up the process to more public comment."

Contract documents limit award recipients from discussing their research with outsiders, unless the FCC approves such communications. Such limits are often imposed in government contracts. Non-public information, that which isn’t “routinely available for public inspection at the FCC,” must be kept confidential, including raw data used for the reports, one contracting document for the CUNY study said. “The Contractor may not discuss the contract work in progress with any outside party, including responding to media and press inquiries, without the prior written permission of the FCC.” News releases on contract awards also are barred, and the restrictions don’t end after the work is done.