Genachowski Pauses Media Ownership Proceeding for MMTC Study

FCC Chairman Julius Genachowski paused the media ownership proceeding to give the Minority Media and Telecommunications Council time to study the impact of waivers allowing common ownership of stations and daily newspapers on minority and women-owned broadcasters. The delay had been expected (CD Feb 21 p5) and shortly after NAB and the Newspaper Association of America (NAA) backed MMTC’s plan to spend its own money on the research. Other FCC members and broadcasters generally support the delay in voting on rules first circulated Nov. 14, agency and industry officials told us, and commissioners Mignon Clyburn and Robert McDowell said they backed the delay.

FCC members remain deadlocked on the order, agency and industry officials said. They said Republicans still want more deregulation than is in the draft and Democrats other than Genachowski are concerned about allowing additional cross-ownership before studying barriers to minorities and women owning stations. Attesting to the deadlock, no FCC member including Genachowski ever voted on the draft order, and none ever proposed changes to it to all other commissioners, agency officials said. A commission spokesman had no comment.

After the study, which MMTC said will be ready in eight weeks, the commission may seek public comment on the research and then move to a vote, although exact timing’s not been determined, agency officials said. The council hoped the study would buttress chances of bridging the deadlock and avoid a non-unanimous vote, which Executive Director David Honig had said could hurt the FCC’s case at the 3rd U.S. Circuit Court of Appeals when the new order is appealed. “In this heavily-litigated area where a strong record is particularly important, I believe this is a sensible approach to moving forward and resolving the issues raised in this proceeding,” Genachowski said in a written statement Tuesday.

MMTC’s study “addresses an issue of importance, will augment the record, and will assist the Commission in resolving the issues before it on the full record,” Genachowski said (http://bit.ly/YVVteg). Also Tuesday, the Media Bureau sought comment on a request from many broadcasters to allow foreign interests to own above 25 percent of U.S. stations. (See separate report in this issue.)

Genachowski said the draft “has led to healthy discussions among Commissioners and stakeholders about the substance of the issues and the state of the record before the agency.” The order provides “greater transparency and predictability on waivers” of cross-ownership rules to “strengthen the bar against major TV station-newspaper combinations, and reduce the bar to smaller TV station-newspaper combinations in the top 20 markets.” It would also “remove the bar on cross-ownership of radio stations and newspapers,” he noted.

Commissioner Robert McDowell backs the study, with “expedient but adequate public comment,” so there’s a vote by summer, he said (http://bit.ly/YW2hsr). “The Commission’s review should be swift and sound. Not only did Congress intend for us to eliminate obsolete rules once more competition becomes evident, but it also meant for us to act with alacrity in our review.” The order was due to have been issued in 2010 under the Telecom Act. McDowell hopes “this most recent pause in our progress on this front is our last,” he said. Clyburn thinks the study could “shed greater light on any potential harms” from “increased media consolidation,” she said. “The Commission is in need of data that will enable it to make timely, smart, and forward-looking decisions while taking into account America’s changing media landscape."

Within the eight-week period, the study will be finished and peer-reviewed, MMTC said in a filing Monday in docket 09-182 (http://bit.ly/XeRWd5). It will “determine whether the presence of grandfathered newspaper-broadcast and radio-TV ownership operations materially harms minority and women-owned stations, taking into consideration the experiences of other stations in the same markets,” the council said. The work’s main focus will be the market for ads, “and the study will also inquire into whether cross-ownership has an adverse impact on minority and women owned stations’ ability to gather and present news and information,” Honig wrote.

NAB and NAA filings posted in the docket Tuesday before Genachowski’s statement also backed more time. There’s “potential merit in additional data-gathering regarding minority ownership,” NAB General Counsel Jane Mago wrote (http://bit.ly/1294AQv). “Such a brief deferral, however, should not lead to additional lengthy delay in the resolution of the already overdue quadrennial review proceeding.” The NAA “is confident that the study will demonstrate that the Commission’s modest proposal to loosen cross-ownership rules would not harm minority ownership,” it said in a filing (http://bit.ly/XeUJCZ). “Upon completion of the study, the Commission should vote immediately on the proposal and provide the regulatory relief that is necessary for new investments in local journalism."

Nonprofits opposed to media consolidation also backed the delay, though they also aren’t sure its methods are up to snuff. Free Press is “glad the FCC is backing down from its rush to relax its media ownership rules,” Policy Director Matt Wood said. “It’s about time the FCC admitted that it does not have the evidence to take this step. However, we have serious reservations about the proposed study’s ability to meet the clear demands” of the 3rd Circuit, he said. “The enthusiasm for these studies expressed by the broadcast lobby and its close allies gives us further pause. We are skeptical, to say the least, of a study to be conducted by an analyst that has previously endorsed the FCC’s weakening of its longstanding rules.” BIA Vice President Mark Fratrik will do the study, Honig said. Fratrik declined to comment.

The study’s methods raise “serious concerns” about the prospect the data will be “useful,” Wood said. “Even with considerable improvements,” the work can’t “provide definitive information that would satisfy the” 3rd Circuit’s requirement in sending back the last ownership rules that barriers to entry be studied, he continued. Whatever the results of the research, groups like Free Press may continue to oppose allowing cross ownership, a broadcast lawyer said. The United Church of Christ, which backs getting additional data, sees “the probative value of the proposed MMTC study” as “unclear,” said the church’s lawyer, Cheryl Leanza. It hopes that the FCC “will use this time to press ahead with as much speed as possible on the long-overdue” Office of Communications Business Opportunities and Adarand studies, she said of the Supreme Court ruling that would require such barrier-to-entry studies before adopting rules targeted at specific groups.