January Call with Mark Cooper, Notes and Audio

Lessons from '07, Opportunities for Election Year '08

Featuring: Dr. Mark Cooper, Director of Research, Consumer Federation of America

Additional Resources: Please see the end of these notes for links to resources for further examination of these issues.


Introduction: The close of 2007 saw furious policy activity in the areas of media ownership - TV/newspaper cross ownership, opportunities for minorities and women, and the auction of spectrum that will be freed up when the nation switches to digital broadcasting in February 2009. Cooper suggests that the impact of these items on the media space will be the biggest since the passage of the Telecommunications Act of 1996.

Media Ownership Ruling:
This issue is about to hit with the fierce intensity that it had in 2003 - Congress will be moving forward a motion of disapproval, the courts will be buzzing with challenges, and public interest advocates will be mobilizing. Why?

In December, the Federal Communications Commission (FCC) struck down key aspects of the 32 year-old "cross ownership rule," clearing the way for mergers between major newspapers and television stations in the same market that had previously been barred as counter to "the public interest." FCC Chairman Martin moved a rule which presumes just the opposite - now such mergers will automatically be considered to be "in the public interest" in the top 20 markets in the country if:

  • The TV station is not one of the top four in ratings
  • Owners do not also own a radio station
  • Separate editorial boards are maintained
  • There will be more than eight voices in market following the merger

Opposition to such mergers can still be brought on a case-by-case basis, but now the burden of proof will be on public advocates to challenge such mergers after the fact.

Outside of the top 20 markets, in the other 190 markets, Martin gave lip service to the long-standing presumption that TV/newspaper mergers are generally against the public interest - BUT he actually created many new scenarios and lots of wiggle room under which the owners could appeal and thus prevail with their merger.

Cooper notes that, as a result, "All hell could break loose in the bottom 190 markets." Public interest advocates will now likely have to wage numerous case-by-case legal battles to preserve their local media landscape.

Also, it appears Martin is going to let stand all of the 23 or so mergers that violated the old cross ownership ban but were given temporary waivers to be reviewed with the '96 Telecommunications Act. The waiver reviews have been held up, partly due to advocates' victories in contesting the rule changes in 2003. Most of these mergers violate several of Martin's new criteria for approving a merger, but it looks like he's going to argue that they should be allowed to stand since so much time has elapsed - essentially rewarding them for breaking the law.

At some point during the course of this year, it's likely the FCC will be looking at approving numerous mergers and appeals based on these contested rule changes. This will be an intense touchstone for debate across the political spectrum.

Minority Ownership:
There's been a huge flap over the inability of the FCC to accurately document the dramatic under-representation of women and minorities in station ownership. As part of the above-mentioned Media Ownership ruling in December, the Commission did make some modest moves to create greater access to capital for women and minorities, but the Republican majority has not been willing to consider any type of affirmative action program.

Spectrum Auction:
To meet a Congressionally-mandated deadline of February 2009, all TV and radio owners who have been broadcasting analog signals over the air for years will be transitioning to broadcast digital signals over a different part of the airwaves/spectrum. The vacated spectrum - at 700 megahertz - is very valuable and will be auctioned off in 2008, instead of being placed in a public trust as many public interest advocates had urged.

Due to much advocacy, the FCC did agree to impose an Open Access requirement on one block of the spectrum to be auctioned. This means that the new spectrum operator would still control the flow of traffic but would have to allow any provider to move data on that spectrum, presumably for a fee, and that devices from other providers could hook up to that network.

After much speculation, Google has filed an intention to bid on the open access spectrum. Whether they will outbid the cable and telephone operators remains to be seen.

A major development out of all this: Verizon recently announced they will be providing their existing network as an open platform moving forward, allowing outside devices and applications to run on their system (an aspect of Net Neutrality). AT&T then followed suit but many doubt their follow-through. There will be a technical conference in February where Verizon will be sharing some of their plans, and advocates will be pushing them to truly live up to the promise of an open structure.

Digital TV Transition:
This is the other piece of the spectrum auction, dealing with how consumers with analog equipment - the old rabbit ears - will receive the new digital broadcast signals. Tens of millions of TV sets will go dark in February 2009 unless they have a digital tuner affixed to the set. Cable and satellite subscribers have been equipped to receive a digital signal, and so will not face this issue.

Congress has approved a voucher program to subsidize the purchase of these digital tuners for existing analog TV sets, for the total cost of $50 or less.

However, this is proving to be a significant consumer advocacy issue, as cable and satellite companies are scaring the public with "going dark" scenarios, and offering their services as the solution. This is a $600 per year - or more - solution to a $50 problem.

Broadband Deployment:
Public momentum around Network Neutrality is likely to morph into broader attention to the sad state of broadband availability and service in this country. President Bush's administration clearly failed to reach its goal of ensuring all Americans ubiquitous and affordable high-speed broadband access by the end of 2007.

This is primarily because the United States does not have meaningful public policy requiring phone and cable companies to operate an affordable and robust, consumer-friendly system. Meanwhile, the rest of the developed world has moved far ahead in broadband penetration- in 2000, the U.S. was ranked 3rd in the world, we are now ranked 15th or 16th.

Of all the media policy issues, broadband policy is likely to get the most attention in this election year.

Election Year Considerations and Implications:
Cooper suggests that "if you have not laid policy groundwork with Presidential and Congressional candidates in '08, you will not succeed in moving policy in '09."

Advocates on a range of issues will be busy this year seeking to influence national parties' platforms, obtain pledges from candidates, get candidates to talk about their issues, and push for D.C. hearings to set stage for what may follow in 2009 and beyond.

There will be little legislating in '08; it's too political. Now is the time to be preparing for the coming administration and Congress. A thoughtful strategy focused on these activities is a good bet to bear fruit in the coming years.


Questions and Answers:

Will there be local hearings on case-by-case ownership challenges?
It's unclear, we will know more when the rule is formally released. It's likely we will see challenges from localism advocates if there is no commitment to local hearings.

Have any presidential candidates taken a stand or made public statements on these issues?
The three leading Democrats have taken good positions on technology/broadband deployment/network neutrality issues, though with few details. They each signaled their opposition to the December media ownership ruling soon after it was announced. Broadband policy is expected to be the area of greatest focus.

NOTE: The following websites detail candidates' media policy positions:

Can you address Chairman Martin's stated rationale that ending the newspaper/TV cross ownership ban was necessary to keep papers from going out of business?
We've conducted a specific study that addressed this question, and the New York Times editorial the day before the FCC vote also made the case that the economic challenge for papers is not in physical space - it's in increasing revenue in the online space. It's a flawed model that argues for consolidating with TV stations and firing reporters to squeeze more distribution out of a smaller staff.

The business model has been changing and the papers that took longer to catch on have paid the price. Tribune and Knight-Ridder, both sold last year, were the worst in online readership.

Additional Resources:

Click here for an audio recording of Dr. Cooper's presentation.

Media Ownership

Minority Ownership

Spectrum Auction, Digital TV Transition

Broadband Deployment
"Universal, Affordable Broadband for All Americans" - Benton Foundation

"The Case for Universal Broadband in America" - Center for Creative Voices

Presidential Candidates' Positions on Media Policy Issues


Future Topics: Please write to Jeff Perlstein, Working Group Coordinator, with suggestions for future topics and presenters. jperlstein@gfem.org