Academic journal article Journal of Broadcasting & Electronic Media

Juggling Justifications: Modifications to the National Television Station Ownership Rule

Academic journal article Journal of Broadcasting & Electronic Media

Juggling Justifications: Modifications to the National Television Station Ownership Rule

Article excerpt

When Viacom and CBS merged in 1999 and News Corporation acquired Chris Craft's 10 television stations in 2000, both combinations violated the National Television Station Ownership rule (NTSO), a rule that at that time prohibited any one entity from reaching over 35% of the national households with its owned and operated television broadcast stations. Rather than comply with the Federal Communications Commission's (FCC) condition that these companies meet the 35% cap, they filed suit against the FCC.

In September 2001, the U.S. Court of Appeals for the District of Columbia heard the case of Fox Television Stations, Inc., et al., v. Federal Communications Commission [herein Fox v. FCC] and rendered its decision in February 2002. Fox and co-plaintiffs National Broadcasting Company, Viacom, and CBS Broadcasting had argued that the FCC violated section 202(h) of the Telecommunications Act of 1996, which stated that the Commission must review its ownership rules every 2 years and determine whether the rules are "necessary in the public interest as a result of competition." The court agreed with the plaintiffs' contentions that: 1) The NTSO rule was "fundamentally irrational," and the FCC's justifications for retaining the rule were "correlatively flawed"; 2) The FCC "failed meaningfully" in its 1998 Biennial Review "to consider whether the Rule was 'necessary in the public interest'"; and 3) The FCC did not successfully explain why it departed from its 1984 stance that the rule should be repealed (Fox v. FCC, 2002, p. 1040). The Appeals Court stated that the FCC's decision to retain the regulation was "both arbitrary and capricious" (p. 1033). It remanded the rule, requiring the FCC to address these concerns and provide evidence that the NTSO rule does what the Commission stated it does: protect diversity and competition. The FCC responded to the court's concerns in its 2002 Biennial Review and announced its decision in June 2003: It would raise the 35% cap to 45%, justifying the decision in a manner that again contradicted the 1984 Report but at the same time attempted to placate the business interests involved as well as abide by congressional and court mandates.

Central to the debates regarding structural regulations such as the NTSO rule are the public interest standards of fair competition, diversity, and localism (e.g., Aufderheide, 1999; McChesney, 1993; Napoli, 2001). The NTSO rule, adopted in the 1940s, was one attempt to reel in the abuses of concentration of ownership seen in radio and was justified

by the notion that diversity of ownership leads to diversity of viewpoints. Inherent in this justification is the need for fair competition, as competition should challenge broadcasters to provide more and higher quality informational and entertainment programming. Consistent with the First Amendment, the need for localism in broadcasting was also recognized, as people need to be informed to participate in the political process. It can be argued, though, that once the FCC began allowing and justifying multiple ownership, the concept of competition in the marketplace overpowered all other public interest arguments. This debate remains as the FCC continues to consider regulations regarding cross-media ownership and digital broadcasting.

The NTSO case is significant for several reasons. First, it demonstrates yet again the complexity of the policy-making process, which continues to be an important area of inquiry. Krasnow, Longley, and Terry's (1982) model of broadcast regulation is useful for contextualizing the roles and influence of various stakeholders in FCC policy-making. Their model is based on the premise that the FCC's decision-making process is not necessarily rational nor autonomous; rather, decisions are political in nature, as policy-making is influenced by several forces, including the White House, Congress, the courts, the industry, and citizens groups. A review of the history of the NTSO rule highlights the continued viability of the Krasnow et al. …

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