Evaluating the Federal Communications Commission's National Television Ownership Cap: What's Bad for Broadcasting Is Good for the Country

By Benjamin, Stuart Minor | William and Mary Law Review, November 2004 | Go to article overview

Evaluating the Federal Communications Commission's National Television Ownership Cap: What's Bad for Broadcasting Is Good for the Country


Benjamin, Stuart Minor, William and Mary Law Review


TABLE OF CONTENTS

INTRODUCTION
I. BACKGROUND TO THE INCREASE IN THE
   NATIONAL TELEVISION OWNERSHIP LIMIT
II. WHAT IS REALLY AT STAKE IN THE
   NATIONAL OWNERSHIP CAP?
   A. What Is Not Really at Stake
   B. The Importance of Preemption
      1. Why, and When, Do Preemptions Occur?
      2. How Does Raising the Cap Affect Preemptions?
   C. The Costs of Preemption (and Therefore
      the Benefits of Raising the National Ownership Cap)
III. EVALUATING THE RULES: ADVANTAGES OF HASTENING
     THE DEMISE OF BROADCASTING
IV. RAMIFICATIONS
    A. Will the Migration of Broadcast Channels to
       Cable and Satellite Produce a Convergence of
       Broadcast and Cable/Satellite Regulation?
    B. Will the Practical Demise of Broadcasting
       Lead to Spectrum Flexibility?
CONCLUSION

INTRODUCTION

The Federal Communications Commission (FCC) issued a decision in June 2003 on a number of matters that might not seem likely to arouse much public excitement. Its order permits certain combinations of cross ownership for television stations, radio stations, and newspapers; relaxes the limits on ownership of local television stations; slightly tightens the rules on local radio ownership; and increases the national television station ownership limit. (1) But as it turns out, these changes--and in particular the change in the national television ownership limit, which increased the cap on the percentage of households in the nation reachable by a given company's stations from 35% to 45%--produced a firestorm of controversy. The FCC received more comments than it has for any other proceeding (more than 750,000), and the overwhelming majority urged the FCC not to relax its ownership limits. (2) After the FCC did so, the fight moved to Capitol Hill, where the FCC suffered a stunning rebuke: broad bipartisan majorities voted to rescind the FCC's increase in the national television cap--and in fact to codify the 35% limit and leave the FCC with no discretion to raise it. (3) This provision was included in the omnibus spending bill for the 2004 fiscal year. (4) The Bush administration responded by threatening to veto the omnibus bill (full of spending initiatives dear to both the President and members of Congress) if the 35% provision remained in the bill. (5) Eventually, Republican leaders in the House and Senate agreed to change the legislated national ownership level to 39%. (6) That, too, provoked outrage: many members of the House and Senate, from both parties, denounced the move from 35% to 39%. They noted that broad majorities in both houses wanted a 35% limit, and they vociferously opposed any increase. (7) By late January 2004, almost four months after fiscal year 2004 had begun, the pressure to pass the omnibus spending bill was too great, and the 39% compromise was enacted. (8) A significant number of senators, however, restated their outrage at the increase to 39%. (9)

This series of events raises a couple of questions. First, what is at stake in this increase in the national television ownership limit? Is the level of controversy justified, and, if so, why? Second, is the increase in the ownership cap a good idea? Upon what basis should we evaluate that cap, and what is the result of that evaluation?

This Article puts forward answers to these questions. The analysis reveals that most of the reasons proffered by opponents of the increase in the national ownership limit do not stand up to scrutiny--they are largely unrelated to the increase in the limit. (10) The main thing at stake in the ownership limit is the level of influence local affiliates will have in killing television shows. In other words, the question is whether the decision makers who choose to cancel a given television show will be the network executives, as is the case for cable programming, or will also include local television stations. (11) That is not an insignificant question. Those who mistrust the values and priorities of the network executives would prefer that local owners have some veto power over television shows. …

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