FCC Rules Should Reflect New Definition of Broadcast Markets, O'Rielly Aide Tells PLI

Until the markets in which broadcasters compete are accurately defined, FCC ownership rules won’t be able to accurately reflect them, said Brooke Ericson, aide to Commissioner Mike O’Rielly, on a panel at the Practising Law Institute conference Friday. Critics of the recent ownership rule changes aren’t denying the media landscape has changed, but they're concerned the recent relaxation of the rules could have consequences for diversity and localism, said Free Press Policy Director Matt Wood. The market isn't “filling the void” left by declining local news outlets, Wood said. PLI Friday also heard from congressional officials (see 1712080060).

Providing local news is expensive, said Joe Di Scipio, Fox Television Stations senior vice president-FCC compliance. A market may allow only one or two broadcasters to make money on news, he said. The market rather than the rules should decide the number of outlets, he said.

The agency should provide more oversight of retransmission consent negotiations, said Wiltshire Grannis attorney Michael Nilsson, who represents the American Cable Association. There have been more blackouts in 2017 than ever, and retrans prices continue to rise “dramatically,” Nilsson said. Di Scipio said the FCC lets deals happen, and most agreements eventually come together. “Deals get done,” Di Scipio said, saying Fox hasn’t had a serious retrans dispute in years. The FCC should consider retrans implications of its reconsideration order allowing top-four duopolies on a case-by-case basis, Nilsson said. A broadcaster that owns two top-four stations in the same market has a powerful advantage at the negotiating table, Nilsson said. Some small cable carriers are considering exiting the video business because of rising programming and retrans costs (see 1711220013), he said.

Broadcasters could use retrans deals to pressure pay-TV companies into carrying ATSC 3.0, Nilsson said. O’Rielly’s goal for the 3.0 order was that it be consumer and market driven, not “commission driven,” Ericson said. The future of 3.0 may not be broadcasting video at all, Di Scipio said. “It’s an unknown," he said: “Maybe it’s driverless cars.” Public interest groups could take issue if broadcasters transitioning to 3.0 leave consumers without coverage, Wood said. Networks aren’t going to let affiliates serve reduced numbers of households because it would hurt ad sales, Di Scipio said.

Di Scipio and Nilsson said the FCC’s deregulation effort should examine rules that require communications related to carriage to be sent via certified mail. The process is time consuming and expensive, Di Scipio said. He said the FCC should do away with children’s TV rules, especially since many competing outlets provide kids' programming. Such a proceeding would be a step further than the “regulatory underbrush” Chairman Ajit Pai’s media deregulation initiative is intended to target, Wood said.