Pai Wants More Communication Between FCC, Broadcasters, Ownership Deregulation

FCC Commissioner Ajit Pai wants the agency to communicate more with broadcasters to help eliminate what he said some executives perceive as a regulator disinterested in radio and TV station priorities (CD March 5 p2). In the 25 meetings he’s had in his four months as a commissioner, “I keep hearing the same thing,” he told the NAB radio show in Dallas Wednesday. “Unfortunately, it seems there’s a widespread perception that today’s FCC is largely indifferent to the fate of your business.” As FCC members are preliminarily slated to vote next week on a notice of proposed rulemaking to hold a voluntary incentive auction of TV station frequencies (CD Bulletin, Sept 7) to free up airwaves for mobile broadband, Pai sought deregulation of media ownership and foreign investment rules and an initiative focused on AM.

The FCC should end its delayed review of media ownership rules in 2012, with the resulting order ending cross-ownership restrictions of one company holding a radio or TV license and publishing a daily newspaper in the same market, Pai said. The 2011 NPRM on the quadrennial media ownership review order, due to Congress the year before under the 1996 Telecom Act, rightly proposed ending cross-ownership rules on common radio and TV holdings within a market, he said. Agency and industry officials told us there’s no quadrennial review order circulating for a vote, and it’s unclear whether what has been a goal of Media Bureau Chief Bill Lake and Chairman Julius Genachowski to get rules adopted this year will happen. Bureau and commission spokespeople had no comment.

The speech dismissed talk in Washington and elsewhere that the FCC views “broadcasting as a fading relic of the past.” As the commission looks “ahead, I believe we need to start from the following premise: Broadcasting remains an extremely important service,” Pai said. Broadband and broadcasting are “complements,” he said. “If we were to shift all of the services provided by broadcasters to broadband, that would actually be counterproductive. It would make our spectrum problems worse, not better” and isn’t “what the market will demand,” Pai said. “It is a much more efficient use of spectrum to deliver high-demand programming like the Super Bowl through a one-to-many broadcast than to provide it through millions of one-to-one wireless broadband connections.” Broadcasters have made similar arguments as they seek to hold onto their spectrum. Many low-power stations and full-power owner Sinclair have an alternative plan that instead of an auction, TV stations should be used by carriers to offload streaming video, which they'd broadcast to mobile devices (CD Nov 17 p11). Pai’s not aware of that plan, he told us.

It’s “critical that the FCC not neglect broadcasters,” because their medium and broadband will have a place in communications, Pai told the annual NAB gathering. “I don’t believe that this impression is accurate. … But I do understand where broadcasters are coming from. I agree that the commission can do a better job of focusing on what’s important to broadcasters. We also need to make a greater effort to keep the lines of communication open between us.” Encouraging goodwill between the industry and agency means the commission should “be doing early and broad outreach to broadcasters, to know their concerns and tell them our priorities,” Pai said in an interview. He’s at the show to hear what the industry has to say about the agency’s work, he said: “Two-way communication” will “be really important for this relationship going forward."

Finishing the quadrennial review this year and not early next is important “because Congress told us to do” the order, “and we're late already,” Pai told us. And the newspaper/broadcast cross-ownership rule is “in need of reform to allow synergies to benefit consumers, so I strongly support reforming the rules now rather than later,” he said. That cross-owned properties can “thrive” in markets smaller than designated market area 20, the largest DMA where the NPRM’s proposed deregulation would apply, is shown in his native Kansas, Pai said. He cited Morris Communications holding the Topeka Capital-Journal and WIBW(AM/FM) in that market. “I have looked through the record compiled by the commission on this issue, and the simple fact” is “no one has presented significant evidence to justify the continued prohibition of newspaper/radio cross-ownership,” he told the show. “Quite the opposite.”

Free Press sees consolidation and cross-ownership leading to “less news, not more,” said Policy Director Matt Wood of the group, a foe of broadcast mergers and acquisitions. “You only need to look to Tribune, Media General and others to see that the supposed business case for such deals is crumbling,” he told us by email. “The commission should be searching for ways to promote broadcast localism, competition and diversity, not eradicate them by rolling back these protections. People outside of the Beltway and broadcasters’ boardrooms understand that homogenized media is bad for democracy. The Commission should tune into the public’s views on this topic, not just those of the NAB."

Acting on long-pending radio and TV station license renewals from the last cycle of applications, of which there are several hundred pending, is important to Pai, he told us. He said there are more than 1.5 million pending indecency complaints. Renewals for stations with pending complaints had been held up. They shouldn’t “languish … for years,” Pai told broadcasters: With the Supreme Court “issuing its indecency decision earlier this year, now is the time for the commission to act."

The commission should start an AM radio revitalization initiative early next year, because the number of stations on that part of the radio band has fallen since 2002, while the number of FMs has grown 20 percent, Pai told the show. “We should conduct a comprehensive review of all our AM radio rules. We should focus on one basic question: Are there regulatory barriers we can remove to help this sector rebound? There have been many changes in technology since we last reviewed these rules back in 1991.” The initiative, which should finish work in early 2014, should consider whether to allow for across-the-board AM power increases, OK antennas that let stations causing interference at night prevent such problems and so not shut down at night when the transmissions travel farther, and consider synchronous AM transmissions, Pai said.

A proposal from the Coalition for Broadcast Investment, with nonprofits among its members, to end the ban on foreign stakes above 25 percent in broadcast holding companies, and instead review deals on a case-by-case basis, is “a good idea,” Pai said. The coalition also includes CBS, Clear Channel Disney, Ion Media, Sinclair and LIN TV (CD Sept 6 p15). Pai said it makes no “sense” that “foreign companies can own a majority stake in cable operators, cable programmers, common carriers, Internet backbone providers, satellite video providers, newspapers” and other assets, but not in a radio station. “Given its relative decline over the past decade,” the initiative should “figure out on the AM side if there are any ideas the FCC can adopt that will allow it to thrive, as FM has in recent years,” Pai told us. He’s also “open to any ideas” for FM stations.