In considering whether to ease TV duopoly and other ownership rules, the Commission should view broadcasting's prospects as broadcasters really see them. While some broadcasters have told the FCC that competition from other multichannel providers necessitates relaxation of the multiple ownership rules, that is not what they say to each other, or to Wall Street. Here is what NBC Television President Neil Braun really thinks:
"[T]he notion of broadcast television's "declining share" has obscured the reality of tremendous growth. The size of the audience pie continues to expand. If NBC's current Thursday lineup had captured the same number of viewers in the early 70's that it does today, it would have resulted in a 30 rating and a 50 share."
At the outset, it is especially important to note that much of the broadcasting industry has not joined in the demand for permitting fewer, larger companies to dominate their industry. While these reply comments respond to those who do make such arguments, the silence of many others is important testimony supporting the existing framework.
Of those broadcasters which do seek to lift ownership limitations, none can demonstrate benefits that outweigh the diminished viewpoint diversity this would bring, or that retaining the current rules will cause them harm. They completely ignore compelling indications that the industry will only get stronger vis … vis its competitors, with or without changes in ownership po- licies. The most critical of these omissions is that broadcasters will soon become local multichannel providers themselves when they convert to digital transmission in the next several years. The failure even to mention digital TV, and the increased advertising revenues they will bring, as well as entirely new revenue streams which will come from subscription fees, is indicative of a "win-at-all-cost" attitude which ill-serves broadcasting or the nation.
There is no statutory or other reason compelling the Commission to relax the duopoly rule. The plain language of Section 202(c) of the Telecommunications Act could not be more clear - the Commission may choose either "to retain, modify or eliminate" the rule. Nor does the mere existence of other multichannel competitors provide any justification for relaxation or change. None of these competing services are available, for free, to essentially 100% of the American people. None are required, by law, to serve their local communities. And none of them command the level of advertising revenues that broadcasting does.
However welcome it may be, the emergence of new multichannel providers does not counteract the loss of diversity which would accompany relaxation of the duopoly rule. The fact that several different technologies may soon deliver programming does little to change this, since multiple and cross ownership of these distribution technologies means that their programming will be under common editorial control of the same entities now dominating the program production. And, although the number of broadcast stations has doubled, increasing multiple ownership may have actually decreased the number of independent voices.
If the Commission were to liberalize waiver policies for duopolies, it should do so only in compelling circumstances, and only when applicants make specific, enforceable and reviewable promises of additional programming that goes beyond the "public interest programming" already required of them. Unsubstantiated, self serving promises that cost savings will be shared with the public are worthless.
Parties urging that the Commission grandfather old LMAs and permit new ones have similarly failed to show that there are statutory or equitable reasons to do so. Section 202(g) requires grandfathering only where they are "in compliance with the rules of the Commission." LMAs evade the ownership rules, and facilitate unauthorized transfers of control; this is against FCC rules, and is thus impermissible.
Arguments that current LMAs were created with "reasonable reliance" on bad legal advice are, at the least, insincere. The dubious legality of LMA's has been the subject of frequent and public discussion at the FCC, the trade press and elsewhere for six years. Those who used such transparently evasive tactics were on full notice that they were at risk. Commission action outlawing the practice would not be "retroactive," and would in no event be inequitable.
As to TV satellites, no reason has been advanced as to why the Commission should not count intermarket satellites for purposes of the national ownership rules. While intramarket stations provide local benefits, intermarket stations do not. Such stations merely serve as a vehicle for distant broadcasters to extend their ownership reach outside the scope of the attribution rules applied to others.
Finally, the Commission should eliminate its UHF "discount" for purposes of the national ownership rules. The discount benefits only the largest group owners, some of which may be approaching the 35% audience reach limitation. Most of these stations are carried on cable systems. With the advent of digital TV, any technical or economic disadvantages will soon be eliminated.