[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



              OVERSIGHT OF THE FEDERAL COMMUNICATIONS 

                    COMMISSION: MEDIA OWNERSHIP

=======================================================================

                                HEARING

                               BEFORE THE

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               ----------                              

                            DECEMBER 5, 2007

                               ----------                              

                           Serial No. 110-77


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov







  OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION: MEDIA OWNERSHIP

=======================================================================

                                HEARING

                               BEFORE THE

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 5, 2007

                               __________

                           Serial No. 110-77


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov

                               -------
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                    COMMITTEE ON ENERGY AND COMMERCE

                  JOHN D. DINGELL, Michigan, Chairman
HENRY A. WAXMAN, California          JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts         Ranking Member
RICK BOUCHER, Virginia               RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York             J. DENNIS HASTERT, Illinois
FRANK PALLONE, Jr., New Jersey       FRED UPTON, Michigan
BART GORDON, Tennessee               CLIFF STEARNS, Florida
BOBBY L. RUSH, Illinois              NATHAN DEAL, Georgia
ANNA G. ESHOO, California            ED WHITFIELD, Kentucky
BART STUPAK, Michigan                BARBARA CUBIN, Wyoming
ELIOT L. ENGEL, New York             JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland             HEATHER WILSON, New Mexico
GENE GREEN, Texas                    JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado              CHARLES W. ``CHIP'' PICKERING, 
    Vice Chairman                        Mississippi
LOIS CAPPS, California               VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania             STEVE BUYER, Indiana
JANE HARMAN, California              GEORGE RADANOVICH, California
TOM ALLEN, Maine                     JOSEPH R. PITTS, Pennsylvania
JAN SCHAKOWSKY, Illinois             MARY BONO, California
HILDA L. SOLIS, California           GREG WALDEN, Oregon
CHARLES A. GONZALEZ, Texas           LEE TERRY, Nebraska
JAY INSLEE, Washington               MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
MIKE ROSS, Arkansas                  SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon               JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York          TIM MURPHY, Pennsylvania
JIM MATHESON, Utah                   MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina     MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana          
JOHN BARROW, Georgia                 
BARON P. HILL, Indiana               
                               ------- 
                Dennis B. Fitzgibbons, Chief of Staff
                 Gregg A. Rothschild, Chief Counsel
                    Sharon E. Davis, Chief Clerk
              David L. Cavicke, Minority Staff Director

                                  (ii)











          Subcommittee on Telecommunications and the Internet

               EDWARD J. MARKEY, Massachusetts, Chairman
MIKE DOYLE, Pennsylvania             FRED UPTON, Michigan
    Vice Chairman                        Ranking Member
JANE HARMAN, California              J. DENNIS HASTERT, Illinois
CHARLES A. GONZALEZ, Texas           CLIFF STEARNS, Florida
JAY INSLEE, Washington               NATHAN DEAL, Georgia
BARON P. HILL, Indiana               BARBARA CUBIN, Wyoming
RICK BOUCHER, Virginia               JOHN SHIMKUS, Illinois
EDOLPHUS TOWNS, New York             HEATHER WILSON, New Mexico
FRANK PALLONE, Jr., New Jersey       CHARLES W. ``CHIP'' PICKERING, 
BART GORDON, Tennessee                   Mississippi
BOBBY L. RUSH, Illinois              VITO FOSSELLA, New York
ANNA G. ESHOO, California            GEORGE RADANOVICH, California
BART STUPAK, Michigan                MARY BONO, California
ELIOT L. ENGEL, New York             GREG WALDEN, Oregon
GENE GREEN, Texas                    LEE TERRY, Nebraska
LOIS CAPPS, California               MIKE FERGUSON, New Jersey
HILDA L. SOLIS, California           JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex 
    officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     1
Hon. Jane Harman, a Representative in Congress from the State of 
  California, opening statement..................................     3
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     4
Hon. Rick Boucher, a Representative in Congress from the State of 
  Virginia, opening statement....................................     4
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     5
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     6
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     8
Hon. Hilda L. Solis, a Representative in Congress from the State 
  of California..................................................
Hon. Lois Capps, a Representative in Congress from the State of 
  California, opening statement..................................    10
Hon. Mary Bono, a Representative in Congress from the State of 
  California, opening statement..................................    11
Hon. Edward J. Markey, a Representative in Congress from the 
  State of Massachusetts, opening statement......................    12
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................    13
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................    15

                               Witnesses

Kevin J. Martin, Chairman, Federal Communications Commission.....    16
    Prepared statement...........................................    21
    Answers to submitted questions...............................   262
Michael J. Copps, Commissioner, Federal Communications Commission    29
    Prepared statement...........................................    31
    Answers to submitted questions...............................   230
Deborah Taylor Tate, Commissioner, Federal Communications 
  Commission.....................................................    37
    Prepared statement...........................................    39
    Answers to submitted questions...............................   312
Jonathan S. Adelstein, Commissioner, Federal Communications 
  Commission.....................................................    43
    Prepared statement...........................................    46
    Answers to submitted questions...............................   215
Robert M. McDowell, Commissioner, Federal Communications 
  Commission.....................................................    58
    Prepared statement...........................................    60
    Answers to submitted questions...............................   292
Sidney Bliss, president and chief executive officer, Bliss 
  Communications, Incorporated...................................   106
    Prepared statement...........................................   109
    Answers to submitted questions...............................   226
E. Faye Williams, national chair, National Congress of Black 
  Women, Incorporated............................................   114
    Prepared statement...........................................   116
    Answers to submitted questions...............................   328
Andrew Levin, executive vice president and chief legal officer, 
  Clear Channel Communications...................................   120
    Prepared statement...........................................   122
    Answers to submitted questions...............................   255
James L. Winston, executive director, National Association of 
  Black Owned Broadcasters.......................................   132
    Prepared statement...........................................   134
    Answers to submitted questions...............................   323
John F. Sturm, president and chief executive officer, Newspaper 
  Association of America.........................................   139
    Prepared statement...........................................   141
    Answers to submitted questions...............................   307
Juan D. Gonzalez, past president, National Association of 
  Hispanic Journalists...........................................   154
    Prepared statement...........................................   156
Jerald N. Fritz, senior vice president, legal and strategic 
  affairs, Allbritton Communications Company.....................   159
    Prepared statement...........................................   161
    Answers to submitted questions...............................   249
Andrew Jay Schwartzman, president and chief executive officer, 
  Media Access Project...........................................   183
    Prepared statement...........................................   185
    Answers to submitted questions...............................   302

                           Submitted Material

Jean M. Prewitt, president and chief executive officer, 
  Independent Film & Television Alliance, letter of December 5, 
  2007 to Messrs. Markey and Upton...............................   208
Matt Welch, Los Angeles Times, article of November 16, 2007......   210
``FCC Opens Media Ownership Proceeding for the Public Comment'' 
  FCC News Release, June 21, 2006................................   212
Summary of Ideas on Newspaper-Broadcast Cross-Ownership, by 
  Leslie Marx. Submitted by Mr. Doyle............................   332
Gene Kimmelman, vice president for Federal and International 
  Policy, Consumers Union, et al., letter of December 4, 2007 to 
  Messrs. Dingell and Barton.....................................   359
Kevin Martin, Chairman, Federal Communications Commission, letter 
  and attachment to Mark Goldstein, physical infrastructure 
  issues, U.S. Government Accountability Office..................   362

 
  OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION: MEDIA OWNERSHIP

                              ----------                              


                      WEDNESDAY, DECEMBER 5, 2007

              House of Representatives,    
         Subcommittee on Telecommunications
                                  and the Internet,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:35 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Edward J. 
Markey (chairman) presiding.
    Members present: Representatives Doyle, Harman, Gonzalez, 
Inslee, Boucher, Stupak, Rush, Green, Capps, Solis, Dingell, 
Stearns, Upton, Shimkus, Pickering, Bono, Walden, Radanovich, 
Terry, and Barton.
    Also present: Representative Blackburn.
    Staff present: Amy Levine, Tim Powderly, David Vogel, Colin 
Crowell, Maureen Flood, Philip Murphy, Neil Fried, Courtney 
Reinhard, and Garrett Golding.
    Mr. Doyle [presiding]. Chairman Markey is on his way, but 
since this is going to be a long morning, we thought we would 
get started.
    Mr. Upton. Our box has been open for a little while.
    Mr. Doyle. So I intend to waive my opening statement, so we 
will go right over to our ranking member, Mr. Upton.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, my friend. I will give an 
opening statement. We have a Republican Conference that is 
going on as well, so I think we will have members coming in, as 
that won't be over until after 10 o'clock. I appreciate today's 
hearing.
    Traditional media, including radio, TV, and newspaper, have 
been thrust into the world of new media. CBS has announced the 
creation of Inner Tube; Clear Channel now has a juiced-up 
online division; and ABC, NBC Universal, and FOX are all 
investing in Internet video streaming. This wave of new 
technology owes its very existence to a deregulatory 
environment that encourages innovation and investment. And, 
while all of this is quite exciting, we cannot forget about 
broadcasting, which remains a critical, free source for news, 
information, and public awareness for so many of our local 
communities. To ensure that broadcasting remains competitive 
and enjoys the benefits of investment and innovation, 
policymakers should look to the absence of regulation of new 
technologies as a guide.
    I commend Chairman Martin for addressing the serious 
competitive and financial challenges facing local newspapers 
and the need to revisit the newspaper/broadcast cross-ownership 
ban. The effect of the ban is to limit how a newspaper, with 
its enormous investment in local newsgathering, can reach local 
citizens. This only diminishes the news and information 
available to Americans. I am puzzled, however, by the 
chairman's recent comments that he does not intend to propose 
relief for our Nation's local radio broadcasters, who face 
similar challenges and constraints. In fact, the parallels are 
striking.
    Both newspapers and local radio have seen dramatic declines 
in their advertising revenues, threatening the economic model 
upon which their respective services depend. Free radio 
advertising revenue fell an average of 8 percent between 
September 2006 and 2007. Both compete with an unimaginably more 
diverse array of media outlets than existed in 1996, virtually 
all of whom are less regulated. Liability of both newspapers 
and broadcast radio is crucial to preserving localism, 
diversity of voices, and healthy competition in the American 
media landscape. Yet both are singled out among their 
competitors for archaic ownership restrictions that are 
limiting the ability of these companies to serve the needs of 
their local communities. Thus, I propose modest reforms of the 
ownership restrictions for local radio in very large markets.
    Look at another tier. Specifically, I suggested that the 
Commission permit common ownership of 10 stations in the 
markets with 60 to 74 stations and permit common ownership of 
12 stations in the markets with 75 or more stations, nothing 
radical or revolutionary. In fact, I would like to think that 
it is a very reasonable and evolutionary approach, especially 
if we would like to keep free radio as a medium in the future.
    I look forward to hearing the views of the chairman and all 
the Commissioners on that matter. The challenge for Congress 
and the FCC is to take stock of the vast changes in the media 
marketplace. We must seize this opportunity to modernize the 
regulations governing ownership to enable all forms of media to 
have a fair chance of competing for the attention of our fellow 
Americans. Likewise, older forms of media will have to be more 
creative, more innovative, and more dynamic than ever to remain 
competitive. But the government has a responsibility to ensure 
that we do not throw on the shackles of outdated ownership 
rules.
    Common sense and the Courts tell us that the explosion of 
media sources remove concerns over a lack of viewpoint 
diversity and competition in the marketplace, which have been 
the principal justifications for the ownership rules. And while 
there has been tremendous growth and advances made in the world 
of media over the years, the unfortunate reality is that our 
Nation's media ownership laws do not reflect or even 
acknowledge such great advancement.
    I look forward to the testimony of the witnesses today, and 
I yield back the balance of my time.
    Mr. Doyle. Thank you, Mr. Upton. The Chair now recognizes 
my colleague from California, Ms. Harman.

  OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Harman. Thank you, Mr. Chairman, and I want to wish 
everyone a happy holiday from one dysfunctional body to 
another. Commissioner Tate was going to use that line, but I 
got here first.
    What I hope in the new year is that dysfunction stops and 
that we proceed smartly with some issues in which we both have 
strong, mutual interest. I want to start with one that is even 
more important to me than media cross-ownership and that is the 
700-megahertz band auction. That is critical to me not just 
because it can invite some new participants into this marvelous 
communication system that we have, but most important it can 
finally provide emergency spectrum for our first responders who 
are out trying to protect our communities against the next 
terrorist attack or natural disaster. We have had plenty of 
experience recently with natural disasters. I fear we may have 
experience soon with manmade terrorist incidents, and we have 
wasted a lot of time on this.
    Last week I hosted a DTV transition briefing in Los 
Angeles. I want to thank Chairman Martin for sending FCC staff 
to give a presentation to local officials in my district. The 
standout turned out to be Mayor Kelly McDowell of the vaunted 
city of El Segundo, California, a brother to Commissioner Rob 
McDowell. And we are going to work hard to make sure that there 
is not one nanosecond delay in that transition and that the 
auction comes out right, so that the emergency sector has the 
tools that it needs, finally, in order to make sure that we 
have interoperable communications across our country.
    On to the other subject, which is media cross-ownership. I 
would just like to say that the Commission, in my view, must 
allow the public adequate time to weigh in. I think the 
December 18th date is pushing it too fast. With the Tribune 
waivers put to rest, there is no need to rush on so critical an 
issue. All of us should want to get it right, and I believe all 
of us do want to get it right, and there is a lot to consider. 
Much of the content on TV and radio, music, sitcoms, and movies 
like Cool Hand Luke, comes from Southern California, my 
backyard. The FCC's media ownership rules should keep the 
airwaves open to new artists and the novel programming that 
buoys the Los Angeles and American economy. Acting hastily 
could alter the media landscape with disastrous fallout, so I 
urge caution and a fair, open process.
    Let me just conclude by saying that many of us spent a very 
pleasant weekend in Washington--that is sometimes an oxymoron--
at the Kennedy Center events. Many of you were there, and many 
of us were there. There was a showcase, the diversity and 
talent of the American artistic community. They are amazing. 
And it will remain to me very important to make sure that their 
diverse talent is able to be listened to and watched over our 
airwaves. So I hope we do this right, and I certainly offer my 
best efforts. Thank you very much, Mr. Chairman.
    Mr. Doyle. Thank the gentlelady. The Chair now recognizes 
Mr. Shimkus.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. Thank you, Mr. Chairman. A couple quick 
things, and I will try to move expeditiously. I appreciate my 
colleague from California talking about 9-1-1. You all know I 
am involved and heavily invested in that, and you all play an 
important role in public safety. And we want to make sure we 
move in that vein.
    The presidential debates that they had on CNN/You Tube 
really identify the fact that the public, especially the 
younger generation, get their information from a lot of 
different places, and it is not the traditional media sources 
anymore. Having said that, that talks about the reason why we 
are having this hearing today. And, Chairman Martin, you are 
moving on the 20 largest markets. I am in support of that.
    Opening statements help identify where members are in their 
thought process. I am one that thinks it is not far enough. The 
Telecommunications Act requires you all to look at the 
competitive marketplace and see if these restrictions are still 
needed. I don't think you can say the world has not changed 
significantly, to the point where people get information from 
such a diverse range of sources today that it is really hard to 
believe that you would roll back and say media ownership has to 
be tightened versus freed. And you all have had two rounds of 
ownership studies. I think they support that case, and I would 
encourage you to move rapidly to easing these restrictions for 
the benefit of the consumer and the individuals in our society 
who are trying to find information.
    I have got good friends up on the dais there, and we have 
talked on many different issues on many different aspects of 
where you all are the experts, and I look forward to working 
with you. I am bringing at least the Midwest perspective of 
rural Illinois and the St. Louis media market and Springfield 
media market, not the major metropolitan areas. But it is still 
a very important aspect in our society, and I look forward to 
working with you.
    With that, Mr. Chairman, I yield back.
    Mr. Doyle. Thank the gentleman. The Chair now recognizes 
the gentleman from Texas, Mr. Gonzalez.
    Mr. Gonzalez of Texas. I waive opening statement.
    Mr. Doyle. The Chair now recognizes Mr. Boucher.

  OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF VIRGINIA

    Mr. Boucher. Thank you very much, Mr. Chairman. I welcome 
the opportunity this morning to discuss the Commission's 
proposal for newspaper/television cross-ownership and to offer 
an idea in the alternative to the proposal that Chairman Martin 
has put forward. I share Chairman Martin's view that under 
certain circumstances newspaper/television cross-ownership in 
some markets should be permitted. But I differ with them on 
what those circumstances should be.
    Since the original cross-ownership ban in 1975, the news 
and entertainment content available to the typical consumer has 
expanded dramatically. There is more choice today than there 
was in 1975. Unlike in 1975, when the local papers and local TV 
stations were for practical purposes the sole information 
available to most, today's consumer has satellite services, 
independent cable channels, and, most importantly, Internet-
delivered fare at his disposal. He is no longer dependent 
solely on local print and broadcast media for news and 
information.
    The financial effect of this explosion of news and 
information alternatives on the newspaper industry has been 
profound. Advertising revenue declined by 9 percent in the 
third quarter of this year alone. For a decade, circulation 
numbers have been declining. The industry has responded in what 
I think is a highly creative way that, in my view, well serves 
the information consumer.
    Legally permitted newspaper/television cross-ownership in 
one of the markets that serves my congressional district has, 
in my observation, resulted in a better news product, both for 
the newspaper and the TV station that are commonly owned. The 
collaborative pooling of the newsgathering and reporting talent 
of the print and the broadcast operations enables more in-depth 
reporting on major events and an increase in the number of 
local events that can be covered when TV contributes on the 
print side and when print contributes to television reporting. 
I have seen this collaboration in operation, and the 
improvement in the news product is real.
    Under Chairman Martin's proposal to permit cross-ownership 
only in the 20 largest markets, the beneficial combination that 
I have described in my district would have to be disbanded. 
Either the television station or the newspaper would have to be 
sold by the entity that owns both. The news consumer would, in 
my opinion, suffer.
    I agree with those who say that maintaining a diversity of 
voices in a community is important. That should be the basic 
test for whether a proposed combination should be legally 
permitted. I would ask that the Commission consider permitting 
a combination where, following the combination, there would be 
at least one independently-owned television station and one 
independently-owned newspaper of regular, general circulation 
remaining in the market. At most, the number of independent 
voices in such a situation would decline from four to three. 
Diversity would be preserved, and many more helpful 
combinations would be allowed than under the proposal that has 
been made to date.
    I hope the Commission will consider that constructive 
alternative, and, Mr. Chairman, having exceeded my time, I am 
pleased to yield back.
    Mr. Doyle. I thank the gentleman. The Chair now recognizes 
Mr. Walden.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Thank you very much, Mr. Chairman. I appreciate 
the opportunity in having all the Commissioners here today, and 
for the first time in 20 years and 7 months, I am no longer a 
broadcast licensee, once we closed on the sale of our radio 
stations yesterday. So I feel somewhat free to talk about----
    Mr. Upton. Did the check clear?
    Mr. Walden. Yes, the wire cleared it at 4:52 yesterday. And 
so it has been a great business. I have been in the radio 
business for 20 years, and I come to this hearing with some 
level of mixed emotion, both in terms of leaving that behind 
but also having witnessed what happened out of the 1996 Act and 
the ability to pool together larger groups of radio stations. 
In my own situation, we went from two to five, having put one 
on the air ourselves and acquiring two others, two of which, 
frankly, weren't cash flowing. Those were the two we bought. 
They had no Associated Press newswire, which we added, and they 
had a full-time newsperson, but I am not sure how long that 
position would have lasted.
    My point in telling you that is not from our own success 
but the notion prior to 1996, about half the radio stations in 
America ran in the red. The ability to group together made them 
more economical, viable units. And I agree with the gentleman 
from Virginia, who just spoke about the partnerships that are 
out there that could actually enhance the free flow of 
information in a community. And, in fact, some of the cross-
ownership between newspaper and broadcast might actually 
benefit listeners and readers more in small communities where 
the economics are actually tougher than in the major markets. 
And you might actually have improved coverage and improved 
quality of coverage if the two were allowed to partner up, 
keeping in mind that you still need competition in a community. 
So we will argue about what is that level of cross-ownership 
that is appropriate and still provide for diversity in news and 
competition in news coverage. But some level would make sense 
in most markets, I believe.
    I look at the extraordinary and rapid shift in how 
information is delivered and the competition that exists in the 
marketplace today. My father started in broadcasting in the 
1930s. The radio stations we purchased in 1986 went through the 
full digital changeover, and I look today at the competition we 
get, when my wife is notified by text message on her cell phone 
that the schools may be running an hour late, is a long way 
from when we were the only carrier of that information every 
morning.
    And so, as we try to compete in these various markets and 
try to compete with new media, whether that is satellite-
delivered audio or in the broadcast TV case, satellite-
delivered TV, there is no prohibition in my market from two 
entities and, if the Commission decides, one entity, from 
offering all satellite audio programming and still owning 
newspapers if they want it.
    So I think we have to review this. I am glad the 1996 Act 
calls for that, and I appreciate the Commission's diligence in 
looking at the Act's requirements in providing us with some 
options to consider and for the people to consider as well.
    Mr. Chairman, thank you for your time. I look forward to 
the testimony of the panel.
    Mr. Doyle. I thank my colleague. The Chair now recognizes 
the distinguished Chair of the whole committee, Mr. Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Mr. Chairman, I thank you for your courtesy to 
me, and I note that this is a very important hearing, and I 
commend you for holding it in a very timely fashion. I also 
want to welcome back to the committee my valued friend, Andy 
Levin, who served so well on this committee as Democratic 
Counsel. While we may not see eye to eye on the matter of radio 
consolidation, I am happy that he is here today.
    In recent months we have heard about many FCC agenda 
meetings postponed all day while closed negotiations on 
important public matters were conducted. We have witnessed too 
much sniping among the Commissioners, and we have heard too 
many tales of short-circuited decision-making processes. In 
sum, the FCC appears to be broken.
    The victim in this breakdown is a fair, open, and 
transparent regulatory process, or is it perhaps that the 
transparent and open regulatory process is not available and 
that that is the cause of the events before us? The real loser, 
of course, is the public interest and the American consumer.
    When the process breaks down, reasoned analysis and debate 
suffer. The public confidence in the agency is shaken. This 
committee is responsible for overseeing the Commission, and I 
think that it would be intolerable if this committee were to 
allow this situation to continue. This is why I have asked the 
Subcommittee on Oversight and Investigations of this committee 
to review how the agency is conducting its business.
    Chairman Martin is ultimately responsible for the conduct 
of the FCC. But each Commissioner, including those on the 
Democratic side, is also responsible for ensuring that the 
agency works effectively for the American people. This means on 
the part of all that there be good-faith efforts to discuss 
differences and seek common ground, and it will require honest 
efforts to work together and to negotiate out the differences. 
I remind the Commissioners that they are appointed to 
faithfully interpret the laws. Agency proceedings should not be 
a forum to pursue personal agendas.
    As Chairman Stupak commences his investigation into the FCC 
process, I encourage him, and I think he probably needs little 
encouragement in this matter, to take a broad view and to 
examine the role that all Commissioners play in ensuring that 
the agency serves the broad public interest. I hope that all of 
us here on this committee and this subcommittee can work 
together to remedy the problems that exist.
    With respect to media ownership, Congress has for decades 
deliberately acted to protect localism, enhance diversity, and 
promote competition in local media markets. In 2003, then-FCC 
Chairman Powell issued an order that eviscerated several long-
standing rules that protected the local media marketplace. The 
process employed by Chairman Powell was so poor and the results 
so legally untenable that the Third Circuit remanded the order 
back to the Commission.
    Today we will hear about the Commission's latest proposal. 
I continue to have grave concerns about the lack of time to 
review comments on the proposed rule. If there is anyone who 
believes that one week provides sufficient time to review the 
thousands of pages of comment that will assuredly be received, 
then I have a bridge in Brooklyn that I'd like to sell to that 
unfortunate individual.
    My initial reaction to any proposal designed to permit 
greater consolidation of the media is not positive. I am 
willing to consider Chairman Martin's arguments and those of 
his colleagues and to give them all fair and proper 
consideration, and I do recognize that the marketplace has 
changed. But the question is, is the Commission properly 
responding on this matter?
    I want to thank the members of the Commission for being 
here, and I look forward to their testimony. I thank you, Mr. 
Chairman.
    Mr. Doyle. I thank the chairman. The Chair now recognizes 
the gentleman from Florida, Mr. Stearns.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Thank you, Mr. Chairman, and let me thank you 
and Mr. Markey for having this hearing and thank our 
Commissioners for coming here. And I know how difficult your 
job is in some of the nuances here and the tough decisions you 
make, particularly in dealing with all the politics. But I 
think in light of what we see in the market with, you know, the 
consumers can choose from both satellite, radio, iPods, 
Internet radio, wireless phones, downloads, audio streams, many 
of us have even gone into the iTunes University that Apple has 
put together and got full courses from 28 various colleges. 
There is such a plethora of choices, so obviously the question 
becomes in media ownership who should own what, and should we 
relax the ability for these companies to do cross-ownership, 
and I sort of think so. I know it gets to be very 
controversial, and I really respect what you have to do here.
    Today's hearing, as I understand, focuses on Chairman 
Martin's plans to relax rules with regard to cross-ownership 
for broadcast and print media properties within a single 
market. I think this proposal, frankly, Mr. Chairman, 
represents real progress. It is a good step forward. The repeal 
of that ban was justified and necessary to give newspapers the 
opportunity to survive. People say the Washington Post won't be 
around in 10 years as a delivered item to our doorstep, and so 
I think they need this to survive and compete against the 
Internet.
    It also serves to further strengthen the local news 
operations of cross-owned broadcast stations. With a growing 
number of sources of news and information, and looking at a 
proper analysis of the media marketplace, leads to the 
appropriate conclusion that competition, rather than 
regulation, will best serve the consumers. As many of you know, 
I introduced H.R. 4167, the Broadcast Ownership for the 21st 
Century Act. My bill goes a little further than perhaps the 
Commission wants to consider, but it would eliminate the cross-
ownership regulations based on the FCC's findings that the 
prohibition could not be justified for large markets in light 
of the abundant sources that citizens rely upon for news. So 
mine goes a little further than perhaps than the Commission 
would want to do.
    On another note, Mr. Chairman, a year ago the Commission 
approved the merger of AT&T and Bell South in order to promote 
additional competition in the voice, wireless, video, and 
broadband marketplace. This decision was based on the 
philosophy that in a competitive marketplace consumers are best 
served by the light touch of regulation, where companies are 
allowed to grow, compete and innovate, and that is good. 
However, Mr. Chairman, you seem to have some concern that 
guided you to approve the AT&T/Bell South merger and propose a 
relaxation of broadcast/newspaper cross-ownership rules by 
pushing for a rule to impose a 30-percent horizontal ownership 
cap on cable operators. So in light of what you have done, 
coming back with this 30-percent horizontal ownership cap on 
cable operators is something that perhaps during this hearing I 
hope you will give your justification, and how do you 
apparently make this decision based upon your other actions?
    So with that, Mr. Chairman, I thank you for this hearing. I 
look forward to hearing the witnesses, and I appreciate their 
giving of their time to serve, because obviously many of these 
people could be doing something else, but we appreciate very 
much what they are doing.
    Thank you, Mr. Chairman.
    Mr. Doyle. I thank the gentleman. The Chair now recognizes 
the gentlewoman from California, Ms. Solis.

 OPENING STATEMENT OF HON. HILDA L. SOLIS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Solis. Thank you, Mr. Chairman, and welcome to the 
Commissioners for being here this morning. I am pleased that we 
are going to have a discussion today on FCC media ownership 
proposals and how they impact diversity and localism.
    The number of women and minorities who own broadcast 
television and radio stations in the United States, as you 
know, is shamefully low. Women comprise over half of the U.S. 
population but just over five percent of full-power commercial 
television stations. Minorities compromise only 34 percent of 
the U.S. population but only three percent of all full-power 
commercial TV stations. Just 1.25 percent of all stations, as 
you know, are owned by Latinos or Hispanics, and, as you know, 
they are the fastest-growing minority in the country.
    These numbers are declining even further, as minority-owned 
stations decreased by 8.5 percent from 2006 to 2007. And, 
unfortunately, as noted by the GAO, the FCC lacks accurate data 
on minority ownership information. So that is one question that 
I would hope that we could clarify today.
    Furthermore, the FCC in my opinion has failed to make a 
good-faith effort to enact serious proposals that would 
increase diversity in broadcast ownership. To address the low 
numbers of women and minority owners of broadcast stations, I 
had joined with Commissioner Adelstein in September, calling 
for an independent task force on minority ownership. I would 
like to know what the status of that is and what the time frame 
and hearings, when they will be set. I also ask that the task 
force complete its work before the FCC put forth any proposals 
on media ownership. These calls were echoed also by some very 
substantial Latino organizations, including the National 
Council of La Raza, LULAC, and MALDEF.
    I am still frustrated very much, so I have to say, Mr. 
Chairman, Chairman Martin, for you putting forward this 
proposal, which in my belief will not provide the broadest 
participation by all segments of our society. And I want to 
strongly encourage the Commission to take more time to review 
cross-ownership proposals and instead of taking swift action to 
just try to remedy certain concerns for certain special 
interests.
    In addition, I have a deep concern regarding your proposals 
to implement new regulations on the cable industry. Any 
proposals that include an a la carte cable or multicast must 
carry rules that will not negatively impact the potential for 
diversity, for minorities to also be able to have some of their 
flagship programs that are currently available to us now. So I 
would urge you to take these different points into 
consideration and hope to hear that you will be able to respond 
to some of my concerns.
    Thank you. I yield back.
    Mr. Doyle. The Chair now recognizes my friend from 
Mississippi, Mr. Pickering.
    Mr. Pickering. Mr. Chairman, I yield back for right now. Is 
there another speaker?
    Mr. Doyle. OK. We will go back over to this side. The 
gentlewoman from California, Mrs. Capps.

   OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Capps. Thank you, Mr. Chairman. I want to thank both 
you and Chairman Dingell for your work on this topic. This 
hearing is an example, and an excellent one, I believe, of 
responsible congressional oversight. The diversity and 
integrity of our speech, whether over the airwaves or in print, 
demands that we proceed cautiously with any proposal regarding 
media consolidation. The decisions we make today will seriously 
impact the level of diversity in our media, from ownership to 
news coverage to non-biased portrayals of minorities. My 
district is 42 percent Latino, yet there is only one minority-
owned television station. Women own less than eight percent of 
radio stations and no television stations. In all, two firms 
control nearly two thirds of the market's audience.
    Mr. Chairman, my district is dominated by a handful of 
media companies, and I am wary when further attempts at 
consolidation take place in a flurry of haphazard procedures 
and without actively addressing these particular needs for 
increased diversity and localism. Let me say just one word 
about localism. We had a brush and forest fire a couple of 
years ago that cut off access to our single transportation 
corridor down the central coast of California from all of the 
ranchers and farmers living in the back country, and there was 
panic literally about how to get in touch with some of these 
people. Now I know there is a possibility, with the explosion 
of Internet and other capabilities, but going back to the old-
fashioned ways that people would find out about road closures 
and all kinds of other things that they need to know, I am 
concerned with the thrust of what is being proposed.
    And I want to also join, although I know I am in danger of 
the euphemism the pot calling the kettle black, the alarming 
discord by which proceedings at the FCC are now characterized. 
Unfortunately, this characterization is not limited to the 
genesis of media-ownership proposals that we are reviewing 
today. More than one FCC proceeding frankly has been short-
circuited by truncated or wholly foregone procedural norms. 
Chairman Dingell noted in his letter to Chairman Martin, 
reasoned analysis and debate have suffered, especially of late, 
at the FCC. And I think we all want to take responsibility and 
look forward to restoring the FCC to a fair, open, and 
transparent agency that puts the public interest first.
    So, Vice Chairman Doyle, I want to thank you for holding 
this hearing, and I look forward to the testimony of all of our 
witnesses. I yield back.
    Mr. Doyle. I thank my friend. The Chair now recognizes the 
gentlewoman from California, Ms. Bono.

   OPENING STATEMENT OF HON. MARY BONO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFONRIA

    Ms. Bono. I thank the Chair, and I would like to begin 
today by admitting that I share with other committee members 
the desire that localism and diversity be reflected in our 
media. However, I am also keenly aware that the traditional 
media are under intense pressure from the growth of new media, 
primarily due to the Internet, which not only contains a 
tremendous amount of information, but also possesses an ability 
to converge media platforms. In my view, the Internet is 
creating hyper-competition among media outlets. As such, we as 
policymakers need to allow traditional media to remain 
competitive and experience growth. We must do what we can to 
prevent the traditional media from being hamstrung by outdated 
or ill-advised rules. Let us face it. We no longer live in an 
era with three commercial television networks, no cable, no 
satellite, and no Internet.
    With respect to radio, in June 2006, I joined 22 of my 
colleagues in writing to the FCC to encourage the Commission to 
allow common ownership of up to 10 radio stations in markets 
with 60 or more stations and ownership of up to 12 stations in 
markets with 75 or more stations. Today, I restate that request 
and ask that the FCC not overlook the need to modernize the 
local radio ownership structure. When I hear about rules' being 
modernized in one area but not in another I am disturbed, 
because it is foolish to think each medium operates in a 
vacuum. Often lost in the rhetoric of those that would like to 
prevent any market-based radio ownership rules is the fact that 
over a decade ago radio was also a struggling industry. More 
than half of the radio stations in the United States were 
operating in the red because the FCC's rules prevented rational 
economic behavior. Then in 1996 Congress stepped in and 
modestly relaxed the FCC's local radio ownership rules, a 
necessary move that enabled local radio to stop the bleeding 
and continue to provide local programming. Indeed, Congress 
rightfully recognized in 1996 that radio stations couldn't 
fulfill their public interest obligations if they couldn't even 
afford to stay on the air.
    Despite the steps taken in 1996, we are all aware that over 
the last decade unimagined technology and the Internet have 
provided consumers with more choices from which to access news 
and audio entertainment. Traditional boundaries are being 
knocked down. Just yesterday I was listening to Marshall and 
Stone, a talk show in Palm Springs, while in my condo in 
Washington, DC. I am not alone in this practice. Wall Street 
understands this and continues to project little to no growth 
if all things remain the same. What we can expect if we 
continue on with an overregulated, inflexible marketplace is 
less money for radio stations to serve local communities, pay 
employees, and invest in new technologies and online and HD 
radio.
    Increasing the radio ownership limits on markets with 60 or 
more stations would be a good start. In doing so, the 
Commission would be providing radio with greater regulatory 
parity in the already competitive audio marketplace.
    Thank you, Mr. Chairman. I yield back my time.
    Mr. Markey [presiding]. The gentlelady's time has expired. 
The Chair recognizes the gentleman from Michigan, Mr. Stupak.
    Mr. Stupak. Mr. Chairman, if I waive my opening, do I get 3 
extra minutes of questions? I will waive, because I have many 
questions.
    Mr. Markey. Are there any other members seeking recognition 
for the purpose of making an opening statement? Then the Chair 
will recognize himself for his opening statement, and then we 
will move to questions from the Federal Communications 
Commission.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Today, the subcommittee is holding an oversight 
hearing on the Federal Communication Commission and in 
particular the proposal recently put forward by Chairman Martin 
to relax the broadcast cross-ownership rule. Under the previous 
FCC Chairman, in response to pressure from special political 
and corporate interests, the Commission approved a drastic and 
indiscriminate elimination of mass media ownership rules across 
the board. Thankfully, that plan was thwarted from going into 
effect by the Court and remanded back to the Commission.
    Chairman Martin's proposal wisely avoids further 
deregulation of radio and television ownership limits and seeks 
only to relax the broadcast/newspaper cross-ownership rule. 
After months of public and corporate input and several public 
hearings around the country on the general issues of media 
ownership, localism, and diversity, I believe Chairman Martin's 
specific proposal merits scrutiny and input from the public and 
the Congress. The process by which this proposal is considered 
and voted upon should reflect the importance of the subject 
which it addresses. Its consideration should also be informed 
by the public hearings conducted around the country. Postponing 
the planned vote from December 18 would remove clouds of 
procedural objections that currently obscure the specifics of 
the proposal and hamper efforts to directly discuss them. The 
chairman's plan would benefit from more time so that the public 
and the Congress can see clarification over several provisions 
that remain ambiguous or vague with respect to their intent or 
operational effect.
    Our national media policy has long been characterized by 
efforts to promote the values of diversity and localism. Over 
time, the technologies utilized to deliver information to the 
public have changed. But these values remain immutable. As a 
matter of media policy, diversity of ownership remains our only 
proxy for diversity of viewpoints. Elimination of ownership 
limits therefore removes the best tool we have to help ensure 
that the public has access to a wide array of viewpoints and 
local news and information.
    Because our system of democratic self-government relies on 
an informed citizenry, we must seek ways to strengthen such 
historic policy objectives. Excessive media concentration can 
represent a powerful toxin to democracy, and for this reason we 
are attaching great importance to the present policy undertaken 
at the Commission.
    I again urge Chairman Martin to give the public and the 
Congress the time his serious proposal warrants for review and 
consideration. It is important to remember that the limits on 
mass media ownership that Chairman Martin proposes to relax 
were not created solely by liberals. On the contrary, both 
liberals and conservatives, Democrats and Republicans, have 
insisted on such rules and developed them in bi-partisan 
fashion over a number of decades. The broadcast/newspaper 
cross-ownership rule, for instance, was adopted by the 
Commission during the Nixon and Ford Administrations. The 
Commission chose to take action during that time due to what 
was occurring in communities around America.
    On the local level, powerful conglomerates in the 1960s and 
the 1970s were amassing multiple ownership of media outlets. 
During that timeframe, in the top 50 television markets 
comprising 75 percent of the Nation's television homes, 30 of 
such markets had one of the local TV stations owned by a major 
newspaper in the same market. By 1967, some 76 communities 
possessed only one AM radio station and only one newspaper, and 
they had cross-ownership interest between the two. Fourteen 
small communities had one AM radio station, one television 
station, and only one daily newspaper, all commonly owned.
    Finally, I firmly believe that the Commission must take 
concrete action as part of this overarching media ownership 
examination to improve our Nation's abysmal record with respect 
to minority and female ownership of broadcast licenses. Racial 
and ethnic minorities own a paltry three percent of full-power 
television licenses, even though they make up roughly one third 
of our population. Women, who represent half of the population, 
own only 5.8 percent of such licenses. The Commission is long 
overdue to make progress on this front.
    So I want to thank our witnesses for being here today. We 
very much appreciate having the full Commission before us.
     I am told before I introduce the Commission that the 
ranking member of the full committee, the gentleman from Texas, 
Mr. Barton, has arrived, and so I will recognize the gentleman 
from Texas at this time for an opening statement.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Mr. Chairman. I am glad that you 
came a little late. It helped me. You probably didn't do it for 
that reason, but I do appreciate it.
    It has been said that consistency is the hobgoblin of 
little minds. If that is the case, we could use a few 
hobgoblins at the FCC. The FCC is poised to eliminate the 
absolute ban on broadcast/newspaper cross-ownership at its 
December the 18th open meeting. That is a good thing, not a bad 
thing.
    As Chairman Martin has rightfully pointed out, when the ban 
was created in the 1970s, cable served fewer than 15 percent of 
television households. Satellite television and the Internet 
did not even exist. Today, everyone except 13 percent of the 
television households subscribe to cable or satellite, and 
almost one third of Americans regularly get their news over the 
Internet. With all of these independent competing sources for 
news and information, the rationale for the ban preserving 
localism and diversity starts to collapse. In fact, newspapers 
are so strapped these days that the ban probably hinders 
localism and diversity. If you come from any of the big 
newspaper cities in America, you know what I mean. Circulation 
is down nearly everywhere, so they are laying off and cutting 
back. Big print is on a starvation diet and is not quite so big 
anymore. One of the real joys of the Internet age is that 
people decide where they get their information, not editors.
    Once upon a time most people had three TV channels, one for 
each of the networks, and a choice perhaps of one or two 
newspapers. Now, they have got one local newspaper, hundreds of 
channels, and thousands, literally, of Internet sites. The 
cross-ownership ban is a relic of the past. Its time has gone, 
and it should be abolished. Yet it appears that at this same 
meeting, where Chairman Martin and the Commission apparently 
plans to honor the rise of vigorous media competition by 
eliminating a largely meaningless regulation, the FCC is not 
going to revise or eliminate other broadcast media ownership 
restrictions that the Courts have repeatedly said it has failed 
to justify.
    Moreover, according to reports, the FCC even plans to 
reimpose the very cable ownership cap that a Federal Appeals 
Court has sent back to the FCC on first amendment grounds. It 
baffles me how the same FCC can appropriately eliminate 
regulations for some segments of industry because of increased 
competition and at the very same time refuse to deregulate or 
even impose more regulation on segments of industry that are 
creating that very competition.
    The problem has not been lack of review or lack of 
information. The FCC's media ownership restrictions have seen 
an unprecedented amount of public scrutiny. Starting in late 
2002, after two DC Circuit Court decisions ruled the FCC failed 
to justify its media ownership restrictions, the FCC has 
commissioned 12 media ownership studies, received thousands of 
pages of comment and nearly 2 million filings from the public, 
held a media ownership field hearing, and held four localism 
hearings. After the FCC imposed a new set of restrictions that 
the 3rd Circuit found unjustified in 2004, the FCC reviewed 
more than 130,000 new comments, released a second public notice 
to collect proposals for increasing minority and female 
broadcast ownership, conducted six field hearings on ownership, 
held two field hearings on localism, and received comment on 
more than 10 economic studies. I have a feeling that the Courts 
will once again conclude that the FCC has not justified 
imposition of the media ownership restrictions. Like I said, 
maybe the FCC needs a few hobgoblins just for consistency's 
sake.
    With that, Mr. Chairman, thank you for the hearing, and I 
yield back.
    Mr. Markey. I thank the gentleman very much. I note that 
the other gentleman from Texas, Mr. Green, has arrived. Would 
he want to be recognized for the purpose of making an opening 
statement?

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Just briefly, Mr. Chairman. And again, I thank 
you for holding this hearing. I want to welcome back our FCC 
Commissioners.
    To start with, I share my many members' concerns about the 
process at the FCC, and I commend Chairman Dingell's leadership 
to look into the problem. The last several media ownership 
hearings were called on short notice, and the cable proceedings 
and the FCC meeting agenda has been less than open. It is not 
the way to keep the public's trust and certainly not the way to 
maintain a sense of openness in the Commission's proceedings.
    But while there have been several problems recently with 
the current proceedings, such as short notice before the 
hearing in Seattle, over the years the Commission has compiled 
a significant record on cross-ownership. For over a decade now 
the FCC has been reviewing the broadcast/newspaper cross-
ownership ban, and the current media ownership proceeding began 
nearly 18 months ago. The current proposal to lift the 
broadcast/newspaper cross-ownership cap would apply to only the 
20 largest markets, so less than 10 percent of the designated 
media markets. Newspaper ad revenue and circulation has been 
declining for a number of years, and most data supports the 
fact that their own non-revenue growth is also slowing as well. 
I think lifting the cross-ownership cap could help traditional 
media outlets compete with the new competition in the 
marketplace while protecting diversity and localism in the 
market if necessary protections are included. The last major 
legislative attempt Congress had on media ownership was 1996 in 
the Telecom Act, which Congress authorized to help the 
financially- struggling radio industry and authorized an 
increase in the number of stations a single owner could acquire 
in the market. We saw after the 1996 Telecom Act, which lifted 
the cap on radio stations in our nation's largest cities to 
eight, an economic turnaround for many stations that had been 
struggling, as well as an increase in diversity of programming 
in many instances. Portable music players, cell phones, 
Internet radio, satellite radio all compete now with free over-
the-air, local broadcast radio, which none of us could have 
expected in 1996. I have supported small increases in radio 
ownership in large markets because I believe the FCC's limits 
on radio ownership act as a cap on the number of formats that 
are available in a local market. The station owner can only own 
one station, and that owner will program the most popular and 
the most profitable format. If the owner can program two 
stations, then the owner will pick the top two formats. The 
limit on terrestrial radio even in the largest market is still 
eight stations, while satellite radio has hundreds of channels, 
and the Internet radio channels are basically infinite.
    If we really want to get more format diversity and free 
over-the-air, the way to do it is allow for radio to compete on 
a playing field that is less minimally leveled by allowing 
radio to own a few more stations in a larger market. This will 
give the owners in these markets the opportunity to come up 
with new formats to meet the needs of their listeners. Since 
our experience in 1996 demonstrates the way the market is 
operated, in 1995 there were only 32 radio formats, but after 
Congress relaxed the ownership restriction, that number is at 
85 today. And I am interested in hearing from our Commissioners 
what their thoughts are in relaxing ownership rules in the 
largest markets. That is where there are significant 
underserved populations in need of radio stations in some 
areas, such as Spanish-language stations that are formatted to 
meet their needs.
    Again, I thank the chairman of our subcommittee for holding 
the hearing. I look forward to our witnesses, and I yield back 
my time.
    Mr. Markey. The gentleman's time has expired. The Chair 
notes that the gentleman from Nebraska, Mr. Terry, has arrived. 
Would the gentleman want to be recognized for the purpose of 
making an opening statement?
    Mr. Terry. Waive.
    Mr. Markey. The gentleman does not. The Chair does not see 
any other members who seek recognition at this time. So we will 
turn to our panel. We thank the entire Federal Communications 
Commission for coming before this subcommittee today on such an 
important issue. We thank you, Mr. Chairman, for your work and 
the other members of the Commission on telecommunications 
issues on an ongoing basis. It has been a particularly hectic 
time at the Federal Communications Commission, and the next few 
weeks have the prospect of continuing that trend. And so we 
know you are all very busy, but of course, these issues are 
central to congressional policymaking as well.
    So let me now recognize you, Mr. Chairman, and whenever you 
are ready, please begin.
    Mr. Martin. Good morning, Chairman Markey, Ranking Member 
Upton, Ranking Member Barton----
    Mr. Markey. Could you just hold for 1 second? I see the 
gentleman from Illinois, Mr. Rush, has arrived. Does the 
gentleman wish to make an opening statement?
    Mr. Rush. No, but I have one that I have submitted for the 
record.
    Mr. Markey. We will have the gentleman from Illinois' 
statement inserted into the record at the appropriate point.
    Mr. Markey. Again, we come back to you, Chairman Martin. 
Whenever you are ready, please begin.

STATEMENT OF KEVIN J. MARTIN, CHAIRMAN, FEDERAL COMMUNICATIONS 
                           COMMISSION

    Mr. Martin. Thank you for the opportunity to be here today 
to discuss the Commission's review of the rules governing media 
ownership.
    I have a brief opening statement, and I certainly look 
forward to answering any questions you might have.
    A robust marketplace of ideas is by necessity one that 
reflects varied perspectives and viewpoints. Indeed, the 
opportunity to express diverse viewpoints lies at the heart of 
our democracy. To that end, the FCC's media ownership rules are 
intended to further three core goals: competition, diversity, 
and localism.
    Section 202(h) of the 1996 Telecommunications Act, as 
amended, requires the Commission to periodically review its 
broadcast ownership rules to determine ``whether any of such 
rules are necessary in the public interest as a result of 
competition.'' The statute then goes on to read, ``The 
Commission shall repeal or modify any regulation it determines 
to be no longer in the public interest.''
    In 2003, the Commission conducted a comprehensive review of 
its media ownership rules, significantly reducing the 
restrictions on owning television, radio, and newspapers in the 
same market and nationally. Congress and the Courts overturned 
almost all of those changes. There was one exception. The Court 
specifically upheld the Commission's determination that the 
absolute ban on newspaper/broadcast cross-ownership was no 
longer necessary. The court agreed that ``reasoned analysis 
supports the Commission's determination that the blanket ban on 
newspaper/broadcast cross-ownership was no longer in the public 
interest.''
    It has been over 4 years since the Third Circuit stayed the 
Commission's previous rules and over 3 years since the Third 
Circuit instructed the Commission to respond to the Court with 
amended rules. It is against this backdrop that the FCC 
undertook a lengthy, spirited, and careful reconsideration of 
our media ownership rules, and I am pleased to have this 
opportunity to discuss the process and the proposed rule 
changes with you today.
    In 2003, when we last conducted a review of the media 
ownership rules, many expressed concern about the process. 
Specifically, people complained that there were not enough 
hearings, not enough studies, and not enough opportunity for 
comments and public input. When we began 18 months ago, the 
Commission committed to conducting this proceeding in a manner 
that was more open and more transparent and allowed for public 
participation.
    I believe that is what the Commission has done. First, we 
provided for a longer public comment period of over 120 days, 
which we subsequently extended, and we have held six hearings 
across the country at a cost of more than $200,000, and we held 
two additional hearings specifically focused on localism. The 
goal of these hearings was to more fully and directly involve 
the American people in the process. Public input is critical to 
our process and informs the Commission's thinking on these and 
other issues.
    We listened to and recorded thousands of oral comments and 
allowed for extensions of time to file written comments on 
several occasions. To date, we have received over 166,000 
written comments in this proceeding. We also spent $700,000 on 
10 independent studies. I solicited and incorporated input from 
all of my colleagues on the Commission about the topics and 
authors of those studies, and we put those studies out for 
comment and made all the underlying data available to the 
public.
    I also committed to completing the Notice of Inquiry on 
localism, something that was initiated but stopped under the 
previous Chairman. This included holding the two remaining 
hearings. In all told, the Commission devoted more than 
$160,000 to hear from expert witnesses and members of the 
public on broadcasters' service to their local communities.
    I presented my colleagues with a final report containing 
specific recommendations and proposed rule changes reflective 
of the comments that were produced by the record of that 
inquiry.
    Finally, although not required, I took the unusual step of 
publishing the actual text of the one rule I thought we should 
amend. Because of the intensely controversial nature of the 
media ownership proceedings and my desire for an open and 
transparent process, I wanted to ensure that members of 
Congress and the public had the opportunity to see and review 
the actual rule prior to any Commission action.
    The media marketplace is considerably different than it was 
when the newspaper/broadcast cross-ownership rule was put in 
place more than 30 years ago. Back then, cable was a nascent 
service, satellite television did not exist, and there was no 
Internet. Consumers have benefited from the explosion of new 
sources of news and information, but according to almost every 
measure, newspapers are struggling. At least 300 daily papers 
have stopped publishing over the past 30 years, their 
circulation is down, and their advertising revenue is 
shrinking.
    At the Boston Globe, revenue declined nine percent in 2006. 
The Minneapolis Star Tribune announced an ad and circulation 
decline of $64 million from 2004 to 2007, and the San Francisco 
Chronicle reported in 2006 that the paper was losing $1 million 
a day. Newspapers in financial difficulty oftentimes have 
little choice but to scale back their local newsgathering. In 
2007 alone, 24 newsroom employees at the Boston Globe were 
fired, including two Pulitzer Prize-winning reporters. The 
Minneapolis Star Tribune fired 145 employees, including 50 from 
their newsroom. The Detroit Free Press and the Detroit News 
announced cuts totaling 110 employees, and the San Francisco 
Chronicle plans to cut 25 percent of its newsroom staff.
    Without newspapers and their local newsgathering efforts, 
we would be worse off. We would be less informed about our 
communities and have fewer opportunities and outlets for the 
expression of independent thinking and a diversity of 
viewpoints.
    If we believe that newspaper journalism plays a unique role 
in the functioning of our democracy, we cannot turn a blind eye 
to the financial condition in which these companies find 
themselves. Our challenge is to address the viability of 
newspapers and their local newsgathering efforts while 
preserving our core values of diversity of voices and a 
commitment to localism in the media marketplace.
    Allowing cross-ownership may help to forestall the erosion 
of local news coverage by enabling companies to share their 
local newsgathering costs across multiple media platforms. 
Indeed, the newspaper/broadcast cross-ownership rule is the 
only one not to have been updated in three decades, despite 
that fact that FCC Chairmen, both Democrat and Republican, have 
advocated doing so.
    As a result, I proposed that the Commission amend the 32-
year-old absolute ban on newspaper/broadcast cross-ownership 
and allow a newspaper to purchase a broadcast station, but not 
one of the top four television stations and only in the largest 
20 cities in the country, as long as eight independent voices 
remain. This relatively minor loosening of the ban on 
newspaper/broadcast cross-ownership in markets where there are 
many voices and sufficient competition would help strike a 
balance between ensuring the quality of local newsgathering 
while guarding against too much concentration.
    In contrast to the actions of the Commission 4 years ago, 
we would not loosen any other ownership rule. We would not 
permit companies to own any more radio or television stations 
either in a single market or nationally. Indeed, this proposed 
rule is notably more conservative in approach than the remanded 
newspaper/broadcast cross-ownership rule that the Commission 
adopted in 2003. I believe that the revised rule would balance 
the need to support the availability and sustainability of 
local news while not significantly increasing local 
concentration or harming diversity.
    I see that my time has expired. Establishing and 
maintaining a system of local broadcasting that is responsive 
to the unique interests and needs of individual communities is 
an extremely important goal for the Commission and one of the 
principles upon which our media ownership rules are built. Last 
week, the Commission also adopted an order requiring television 
broadcasters to better inform their communities about how the 
programming they air serves them.
    In addition, I have circulated a Localism Report and NPRM 
that addresses other actions the Commission can and should take 
to ensure that broadcasters are responsive to their local 
communities. And in order to ensure that the American people 
have the benefit of a competitive and diverse media 
marketplace, we need to create more opportunities for 
different, new, and independent voices to be heard.
    The Commission has recently taken steps to address the 
concern that there are too few local outlets available for 
minorities and new entrants. Last week, we significantly 
reformed our low-power FM rules in order to facilitate LPFM 
stations' access to limited radio spectrum. The Commission also 
took significant actions adopting an order that will facilitate 
the use of leased access channels for diverse viewpoints.
    I have also circulated an order that proposes to adopt 
rules that are designed to promote diversity by increasing and 
expanding broadcast ownership opportunities for small 
businesses, including minority and women-owned businesses. The 
order adopts a significant number, a majority, of the 
recommendations made to the Commission by the Minority Media 
and Telecommunications Council and our advisory committee on 
diversity. The items I have circulated on localism and minority 
ownership are important steps to ensure that broadcasters 
fulfill their obligations to serve their local communities and 
to expand opportunities for entry into media ownership and 
media programming.
    Regardless of whether the Commission acts on the newspaper 
cross-ownership rule, these are important actions that the 
Commission should address. It is my sincere belief that all of 
these proposals taken together will serve the public interest, 
providing for competition, localism, and diversity in the 
media. My proposed change to the newspaper/broadcast cross-
ownership rule addresses the needs of the newspaper industry 
and helps preserve their local newsgathering, while at the same 
time preserving our commitment to localism, diversity, and 
competition.
    It is not an exaggeration to say that the media ownership 
rules are the most contentious and potentially divisive issue 
to come before the Commission. It certainly was in 2003, and 
many of the same concerns about consolidation and its impact on 
diversity and local news coverage are being voiced today. And 
it is no wonder. The decisions we make about our ownership 
rules are as critical as they are difficult, and the media 
touches almost every aspect of our lives. We are dependent upon 
it for our news, our information, and our entertainment. And 
indeed, the opportunity to express these diverse viewpoints 
does lie at the heart of our democracy.
    So the Commission has no more important responsibility than 
to strike the right balance between ensuring our rules 
recognize the opportunities and challenges of today's media 
marketplace and prioritize the commitment to diversity and 
localism.
    I look forward to working with my fellow Commissioners in 
the upcoming weeks to adopt rules consistent with these goals, 
and I certainly would be happy to answer any questions about 
the proposals I put forth. Thank you.
    [The prepared statement of Mr. Martin follows:]
    
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    Mr. Markey. Thank you, Mr. Chairman, very much. Now we will 
hear from the senior Democrat on the Federal Communications 
Commission, Commissioner Michael Copps. Welcome, sir.

     STATEMENT OF MICHAEL J. COPPS, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Mr. Copps. Thank you. Good morning Chairman Markey, Ranking 
Members Barton and Upton, members of the committee.
    This oversight hearing could not have come at a better 
time. The FCC is lurching dangerously off course, and I fear 
that at this point only congressional oversight can put us back 
on track. The chairman is proposing that just 2 weeks from now 
the FCC open the door to newspaper/broadcast combinations in 
every market in the country. At the same time, we have given 
short shrift to pressing problems like the sad state of 
minority ownership of U.S. media properties, the obvious 
decline of localism in our broadcast programming, and a DTV 
transition that holds real potential for television outages and 
the consumer backlash the likes of which you and I haven't seen 
for a long, long time. My written statement discusses how we 
are flubbing up I believe the DTV transition.
    The ownership proposal in front of the Commission has been 
portrayed as a moderate relaxation of the newspaper/broadcast 
cross-ownership ban in the 20 largest markets. But look 
carefully at the fine print. The proposal would actually apply 
the same test in every market in the country. That is right. 
Any station can merge with any newspaper in any market. The 
only difference is that in the top 20 markets you start with a 
presumption that you meet the test, while in the other markets 
you don't.
    But here is the rub. The four factors proposed by the 
chairman are about as tough as a bowl of Jell-O. You don't even 
have to meet them all. It is just a list of things the FCC will 
consider. Given how the FCC has considered media regulation in 
recent years, I have about as much confidence that a proposed 
combination will be turned down as I do that the next 
Commission meeting will start on time.
    The ownership process here has been no better than the 
proposed substantive outcome. The Commission conducted hearings 
reluctantly on ownership and localism, yet I cannot find 
anywhere in the pending item the citation of a single citizen's 
testimony. Was public comment without value? Is such comment 
extraneous to our decisionmaking? And why were some hearings 
called with such little notice that people often could not 
attend? There are other process breakdowns during this 
proceeding which time precludes my discussing, inadequate 
studies, items written and even circulated before the comment 
period closes, and so on. We need a process that allays 
distrust rather than one that creates it.
    To me, this is just nuts. We are rushing in to encourage 
more consolidation without addressing the real damage 
consolidation has already caused. We haven't systematically 
addressed the fact that in a nation that is almost one-third 
minority, people of color own 3.26 percent of all full-power 
commercial television stations, women, five percent. And we 
wonder why minority issues and minority contributions to our 
culture gets such short shrift and why minorities are so often 
depicted in caricature. Is our response to this really going to 
be to take the smaller stations where the few lucky minority 
owners happen to exist and put them now into a big media bazaar 
and to put such stations totally out of reach of aspiring women 
and minority broadcast entrepreneurs who still don't have the 
incentives that they require to become owners? Is the response 
to the decline of localism really going to be to encourage more 
one-media company towns often controlled from afar rather than 
instituting a real, honest-to-goodness licensing renewal system 
where the presence of localism and diversity determine whether 
a broadcaster gets to keep his license? And please don't tell 
me that a little localism tweak here or there can fix the 
problem, so go ahead and vote to loosen the rules now, and we 
will be back to do a better job later. I think we should all 
want a comprehensive localism package now such as we were told 
was coming when the localism proceeding was initiated rather 
than rushing ahead to encourage more of the consolidation that 
did so much to diminish localism in the first place.
    What we have here is an unseemly rush to judgment, a 
stubborn insistence to finish the proceeding by December 18th, 
public and congressional opinion be damned. When overwhelming 
majorities of citizens oppose this, when members of Congress 
write to caution us every day, and when legislation to avoid a 
nine-car train wreck is being actively considered on Capitol 
Hill, I think the FCC has a responsibility to stop, look, and 
listen.
    The stakes are enormous. I know a little bit about the 
history of this country, and I know how precious media is. The 
diversity and creativity of our culture can be encouraged or 
discouraged by media. Media can reflect and nourish these 
things or shove them aside, and there has been too much shoving 
aside in recent years. Our civic dialogue can be either 
expanded or dumbed down by media. Lately our policies have 
encouraged an erosion of the civic dialogue upon which the 
future of our democracy depends.
    I hope the committee will act to save the Commission from 
itself. Thank you for the opportunity to testify, and I look 
forward to our discussion.
    [The prepared statement of Mr. Copps follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Commissioner Copps, very much. Our 
next witness is Commissioner Deborah Tate, from the Commission 
as well. We welcome you back, Commissioner Tate. Whenever you 
are ready, please begin.

    STATEMENT OF DEBORAH TAYLOR TATE, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Ms. Tate. Good morning, Mr. Chairman and ranking members. 
It is an honor to appear before you today and an honor to be a 
member of the Federal Communications Commission.
    Since arriving in January 2006, there have been literally 
hundreds of issues before us, some ministerial that are 
important to parties who are affected, and others of national 
and international significance which foster competition, 
encourage innovation, and help ensure our global 
competitiveness for years to come. A few of the issues you all 
have noted this morning will have lasting impact on our 
country, from the remand of our media ownership rules to 
coordinating with the industry for a successful DTV transition, 
from our fiscal responsibility in managing spectrum to 
encouraging the nationwide deployment of broadband services, 
especially as it relates to the interoperability of public 
safety.
    These have been at the top of our agenda since I arrived. 
They are among the most historically significant that the 
Commission will make and command your attention, ours, and the 
public's. We are here today to seek and listen to your input on 
one of these and that is media ownership.
    Since October 2006, as has been noted, we have held six 
public hearings across the entire country, including my home 
town of Nashville. These lengthy hearings from sea to shining 
sea provided an opportunity for Americans to have unprecedented 
access to a governmental body about the role that media plays 
in their lives and their opinion regarding ownership of media 
outlets.
    Over my 20-plus years of public service at all levels of 
government I cannot remember a single time that an agency 
expended this much institutional energy and investment on an 
issue or was this open and thorough regarding a matter of 
public interest. We invited comments not only of course from 
the general public but also from expert panels of economists, 
producers, musicians, directors, professors, students, small 
and large broadcasters, and of course many, many community 
organizations. During the roughly year and a half of on-going 
hearings, we also had 10 media studies by preeminent 
economists, academics, and researchers.
    Never before, as many of you all have noted, has there been 
so much competition for the eyes and ears of American consumers 
of news and information, wherever, whenever, and however, on 
any device that they may choose. This competition is cross-
platform, and it includes newspapers, broadcasters, cable, 
satellite, wireline networks and, increasingly, mobile 
networks. And as more platforms offer access to the Internet, 
those sources only expand.
    Like many of you, I am an avid consumer of news, but my 
list of news sources pales in comparison to those that the 
younger generation use. So we need to not only structure our 
media ownership rules to account for the needs of today and our 
generation but of the next generation, the I-generation that 
lives in an online, YouTube world, with access to local, 
national, and international news sources that we never dreamed 
of at their ages.
    I share many of the concerns that commenters made regarding 
the negative impacts media can have, from extreme violence to 
exceedingly coarse language to the impact on childhood obesity. 
I also continue to be troubled, as many of you all have noted, 
with the alarmingly low rates of female and minority ownership, 
and I have tried to work with others to find solutions, both 
inside and outside the Commission, which can have a positive 
impact as we go forward, from the NAB's Education Foundation 
series for women and to the Hispanic Broadcasters Association 
Financing and Capitalization Seminar. And I have worked with 
the National Association of Black Owned Broadcasters at their 
outreach events.
    I am very pleased that the Commission is presently 
considering a number of proposals put forward by the chairman 
to assist women and minorities, specifically with both capital 
and debt financing. In addition, I have offered to lend my 
support to an annual conference engaging partners and potential 
financiers. Another recommendation from the Commission is 
allowing women and minorities to purchase expiring construction 
permits. Finally, we continue to discuss changing our Equity-
Debt Plus rule.
    Let there be no doubt that women, many of whom are African-
American, are succeeding in the industry. Look, for example, at 
Cathy Hughes of Radio One, Susan Davenport at Sheridan, 
Caroline Beasley, and Susan Patrick. But I hope that we will 
continue to employ every possible avenue to have a more 
positive impact on the diversity of both voices and ownership.
    I look forward to hearing your thoughts today and working 
with you on these and many other important issues. Thank you, 
Mr. Chairman.
    [The prepared statement of Ms. Tate follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Commissioner Tate, very much. Next 
we will hear from Commissioner Jonathan Adelstein, and we 
welcome you back again, Commissioner. Whenever you are ready, 
please begin.

   STATEMENT OF JONATHAN S. ADELSTEIN, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Mr. Adelstein. Mr. Chairman, Congressman Upton, Congressman 
Barton, and members of the subcommittee, thank you for calling 
this hearing to address the future of American media. No issue 
on our agenda has more far-reaching consequences for the future 
of our democracy than this one. As I have traveled across the 
country, I have heard a bipartisan chorus of opposition to 
further media consolidation. Americans from all walks of life, 
from all political perspectives, from the right, left and 
virtually everyone in between, do not want a handful of 
companies dominating their main sources of news and 
information. It goes against the spirit of America for that 
kind of concentration of power in the media to occur. People 
from all perspectives decry the coarsity of our media that has 
coincided with the rise of consolidation. Yet, we seem to be on 
a sprint to disregard the public's view of the public interest. 
We are on a dangerous course that could damage the diversity of 
voices that is so critical to the future of our democracy and 
to an informed citizenry.
    Given the importance of this, it is very disappointing to 
see the Commission proceed without due deference to the 
American public and their elected representatives. For example, 
at a recent hearing in Seattle, Washington, it was announced 
with just 5 days' notice, the minimum amount of notice allowed 
by law, despite the express request for more time by members of 
the Washington delegation, including Congressman Jay Inslee. 
Nevertheless, over 1,000 people showed up on a Friday night to 
voice their opposition to increased media consolidation. And I 
can tell you that, as you know in Seattle, Mr. Inslee, there 
are a lot of diversions on Friday night out there, but they 
poured out because they cared about this issue. They poured out 
their heart and soul. They read poems, they sang, they begged 
us not to allow further media consolidation.
    And what was their answer? The next day, back at the 
office, the chairman announced in a New York Times op-ed--not 
to us, but in a New York Times op-ed--his plans for relaxing 
the cross-ownership rule. It is hard to imagine how it was 
possible to review and consider hundreds of public comments 
that we received that night in Seattle before issuing that 
proposal the next working day. It is also an ominous sign for 
those hoping their comments on the current proposal be 
considered in the decision-making process as we hurtle towards 
December 18th and are given only one week to consider the 
public comments after they close.
    Though the proposal is portrayed as modest, it would 
actually open the door to newspapers buying up broadcast 
outlets in every market in America as Commissioner Copps 
indicated. It would replace the current ban with a wide-open 
bazaar that only requires buyers to meet the loosest standards 
for a waiver. The waiver standards are so weak that 
combinations could be allowed in any city, no matter how small, 
for any TV station, no matter how dominant. My colleague, Mr. 
Copps, called it a bowl of Jell-O. I called it like a wet 
noodle that can be shaped at will by three Commissioners. They 
are overcooked.
    Some claim that relaxing the rule would create more local 
news, yet a path-breaking study by leading consumer 
organizations, using the FCC's own data, demonstrates that 
claim to be wrong. Properly analyzed, the FCC's data shows that 
in communities with cross-owned stations, the overall level of 
local news actually is diminished. There is less local news. It 
is hard to see how that promotes localism, it is hard to see 
how that promotes competition, and it is hard to see certainly 
how combining these outlets would increase diversity. Further, 
there is no real evidence that cross-ownership improves the 
finances of the newspaper industry. Witness Tribune, whom we 
just approved a merger for who came in in very desperate 
financial straits. Virtually no company in America owns more 
cross-ownership stations than the Tribune. So to argue that 
this is somehow going to save the newspaper industry when they 
were recently put on the block defies reason and defies the 
evidence on the record.
    The Internet is causing some disruption in revenues, there 
is no question. Newspapers are under a lot of pressure, but 
their profits remain very high by corporate standards, 20 
percent margins on average. The Internet also though presents a 
wonderful opportunity for future revenue growth if newspapers 
focus on news.
    So I think we really need to reassess our priorities here. 
Whatever you think of the newspaper/broadcast cross-ownership 
ban, across the country--and we have been all across the 
country, we have been to over 20, 30 hearings--people aren't 
clamoring for us to relax the newspaper cross-ownership ban. 
They are concerned about how responsive their local media is to 
local communities, what is happening in their own community, 
the local artists that aren't getting heard on the radio to the 
local civic and cultural affairs that they are not hearing 
enough about on the news that covers if it bleeds, it leads. 
They are concerned, people of color and women are stereotyped, 
misrepresented or underrepresented.
    So first things first. Media consolidation would only take 
these outlets further out of the reach of women and people of 
color. We should first implement improvements to localism and 
diversity of ownership before we consider loosening the media 
ownership rules, not afterwards. As Congresswoman Solis noted, 
I have called for the creation of an independent, bipartisan 
panel to guide us on a course to raise the dismal level of 
ownership of media outlets cited by members of this committee 
by women and minorities. Many members of Congress, along with 
Congresswoman Solis, have joined that call. And many civil 
rights organizations have joined that call, thus far to no 
avail.
    So to restore an open and transparent process, I think the 
Commission should voluntarily follow course along the lines 
laid out by members of this committee and in the bipartisan 
bill approved unanimously yesterday by your counterpart 
committee in the other body, the Media Ownership Act of 2007. I 
don't see why we can't follow something that was on a 
bipartisan basis approved by our Oversight Committee and by 
request of members of this committee.
    Following these simple guidelines can set us on a path 
toward a fair and transparent process, and you will no longer 
hear complaints about process from me if we follow those 
guidelines.
    Another critical area of concern, and an area where the FCC 
should show far greater leadership, is the DTV transition. We 
need a national DTV outreach, education, and implementation 
plan that coordinates the efforts of all stakeholders. We 
should create a DTV Transition Task Force immediately to 
coordinate Federal efforts and work with our private sector 
partners. And we need to establish more guidance for 
broadcasters soon. As the GAO recently noted, nobody is in 
charge of the transition, and there is no plan. We still have 
time to turn this around but only if we increase the level of 
leadership, coordination, and resources dedicated to it. The 
ongoing leadership of this subcommittee has been extremely 
helpful, and I thank you for that in focusing our efforts; and 
we need more focusing from you.
    I also look forward to working with you to ensure that the 
American media remains the most vibrant in the world and to 
ensure that the DTV transition goes as smoothly as you 
intended.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Adelstein follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Commissioner Adelstein, very much. 
And now we will turn to the fifth of five FCC Commissioners, 
Commissioner Robert McDowell. We welcome you back, 
Commissioner. Whenever you are ready, please begin.

    STATEMENT OF ROBERT M. MCDOWELL, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Mr. McDowell. Thank you, Mr. Chairman, Ranking Member 
Upton, and members of the subcommittee.
    Almost exactly 216 years ago, on December 15, 1791, the 
American people ratified the Bill of Rights. First among them 
is the first amendment. Among other things, it guarantees the 
freedom of speech and freedom of the press. Perhaps it is first 
because all other rights and all other issues can be affected 
by how the media filters and shapes information. In 1791, other 
than word of mouth, the primary medium for conveying 
information and opinion was paper. Today, competition, 
innovation and technology have produced an explosion of 
countless forms of media that bombard us with so much data our 
culture has created a text-messaging acronym to name one of the 
phenomena produced by these changes, TMI, or too much 
information.
    Of course, the Federal Communications Commission is tasked 
with reviewing rules governing the ownership of only some of 
the platforms that comprise today's media marketplace. The 
Commission's work on this matter has been unprecedented in 
scope and thoroughness. The current proceeding began at my very 
first open meeting as Commissioner, almost 18 months ago. We 
gathered and reviewed over 130,000 comments and extended the 
comment deadline. We released a Second Further Notice regarding 
proposals to increase ownership of broadcast stations by people 
of color and women. We traveled across our great nation to hear 
directly from the American people during eight field hearings. 
During those hearings, we heard from 115 expert panelists, and 
we stayed late into the night and sometimes early into the next 
morning to hear directly from concerned citizens who signed up 
to speak. We also commissioned and released for public comment 
10 economic studies by respected economists.
    So, during my entire term as a Commissioner, we have been 
reviewing this matter. But our review didn't begin last year. 
The previous round began in 2002. At that time, the Commission 
received millions of formal and informal comments. Four 
localism hearings were held across the country, and the FCC 
also produced more studies. The 2002 review ended with both the 
legislative and judicial branches overturning large portions of 
that Order. However, the Third Circuit in the Prometheus case 
concluded that, ``reasoned analysis supports the Commission's 
determination that the blanket ban on newspaper/broadcast 
cross-ownership was no longer in the public interest.''
    But the debate began even earlier, in 2001. That proceeding 
sprouted up as a result of a June 2000 report from a Democrat-
controlled FCC. That report resulted from a 1998 proceeding, 
which stemmed from a 1996 proceeding, which was sparked by 
bipartisan legislation.
    In short, the directly-elected representatives of the 
American people enacted a statute that contains a presumption 
in favor of modifying the ownership rules as competitive 
circumstances change. Section 202(h) states that we must review 
the rules and ``determine whether any of such rules are 
necessary in the public interest as the result of competition. 
The Commission shall repeal or modify any regulation that it 
determines to be no longer in the public interest.''
    We also have a statutory duty to pursue the noble public 
policy goals of competition, diversity, and localism. We have 
been debating all of these ideas for years. In the meantime, 
the media landscape has undergone dramatic change.
    Now, we have five national networks, not the three I grew 
up with. Today we have hundreds of cable channels spewing out a 
multitude of video content produced by more, not fewer, but 
more entities than existed before. Now we have two vibrant DBS 
companies, telephone companies offering video, cable 
overbuilders, satellite radio, the Internet and its millions of 
websites and bloggers, a plethora of wireless devices operating 
in a competitive marketplace, iPods, Wi-Fi, and much, much 
more. And that's not counting the myriad new technologies and 
services that are coming over the horizon, such as those 
resulting from our wireless auctions.
    All Americans, and the rest of the world, are migrating 
toward the boundless promise of new media for their news, 
information, and entertainment. That is where the eyeballs, ad 
dollars, energy, and investments are going. It should be no 
wonder that this new, exciting frontier is lightly regulated. 
While traditional media is shrinking, new media is growing. The 
best news is that all Americans will benefit from this new 
paradigm, because new technology empowers the sovereignty of 
the individual, regardless of who you are. All of us should 
continue to examine the important public policy implications of 
this new era in the context of these facts.
    Thank you for having us here today, and I look forward to 
answering your questions.
    [The prepared statement of Mr. McDowell follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Commissioner McDowell, very much. 
And now we will turn to members of the subcommittee for 
questions for the Commission. The Chair will recognize himself 
for that purpose at this time.
    Chairman Martin, why does your proposal select the top 20 
markets? Aren't you concerned that that will be viewed as an 
arbitrary decision in the same way that the court ruled earlier 
that Commissioner Powell's plan was arbitrary and not backed by 
facts? How did you arrive at the number 20?
    Mr. Martin. Well, whenever the Commission is trying to make 
any kind of a line-drawn exercise, it becomes difficult, and 
people will always argue that the Commission drew those lines 
arbitrarily. Traditionally, the Commission does deserve some 
deference from the courts on that. But the main reason that I 
drew it was it was a natural breaking point. If you looked at 
the number of commercial owners for television stations in the 
top DMAs, and the top 20 DMAs, 18 of those 20 had at least 
double-digit owners of television stations. But starting with 
No. 21, that went down to seven/five, seven/six, six/six, 
seven. So it started going down to single digits and actually 
below the eight independent owner threshold that we were trying 
to establish and that we mirrored off of the television duopoly 
rule.
    Mr. Markey. In your plan, you actually include a waiver for 
markets that are below the top 20, and you have a hurdle that 
has to be overcome in order for mergers of newspapers and media 
outlets to occur below the top 20 markets. Is that a Berlin 
Wall or just a speed bump? In other words, why have you 
abandoned the historical test that the property has to be in 
distress essentially and used a new test that some are saying 
could result in an easier path to merger?
    Mr. Martin. In both the top 20 markets in the cases where 
there is a presumption that this would be allowed and in the 
bottom markets and the other remaining 200 markets where the 
presumption is it wouldn't be allowed, we will consider a 
series of factors so that people can come in and make their 
case that either the presumption in favor of a merger should be 
overcome and the presumption against a merger should be 
overcome. And actually, when I met with particular public 
interest groups, some had advocated that kind of a case-by-case 
analysis because they also wanted the opportunity to come in 
and oppose mergers that would still be within the top 20 
markets and still be able to put forth evidence that would 
indicate that those shouldn't be sold out. Right in the----
    Mr. Markey. Would you consider, Mr. Chairman, working with 
the other members of the Commission towards moving back to the 
current standard for waivers, rather than the new standard 
which you propose in this draft?
    Mr. Martin. First I should say I would absolutely consider 
working with all of the Commissioners on the proposal to the 
extent that any of them are willing to engage in the substance 
of it to try to figure out--and their proposals on how they 
think that they can be improved and make it better.
    Mr. Markey. Let me just ask this.
    Mr. Martin. Sure.
    Mr. Markey. Is your intent that this be a high hurdle or 
just a speed bump?
    Mr. Martin. Oh, no, I think that when there's a presumption 
in favor or presumption against the merger, I think it should 
be a high hurdle.
    Mr. Markey. A high hurdle? Let me then turn to Commissioner 
Copps.
    Mr. Martin. The one thing I would add is I do think it is 
important that the previous waiver policy was only for 
financial distress.
    Mr. Markey. I understand that.
    Mr. Martin. I think that one of the critical factors that 
we should be considering is their commitment to start new local 
news, and I think that that would be something that I would be 
hesitant to not be able to take into account.
    Mr. Markey. Commissioner Copps?
    Mr. Copps. I don't think it is a Berlin Wall, and I don't 
think it is a speed bump, either. I think it is an on ramp to 
more consolidation in many markets across the country. This is 
a tremendous loophole, so all you have to do in the top 20 
markets is meet the presumption or you are presumed to have 
met, and in the smaller markets you have to demonstrate that 
you are meeting that presumption. But we make this so very, 
very easy it is not even a test, it is just factors that we 
will consider. That is what it is called.
    Does a combination produce more news? We are not looking at 
whether it produces more news for the market, we are looking to 
see maybe they added one little column in the newspaper. So OK, 
they do that. Do they maintain independent news judgment? Do 
you know how we are going to determine that? We are going to 
look at their organizational charts and their titles of the 
people who hold them. So that is not exactly the most stringent 
kind of test I have ever seen. We look at levels of 
concentration. We haven't done a very good job with that. It is 
hard to get levels of concentration on any market in this 
country, and we go through proposals where you count the New 
York Times the same as the Penny Shopper; so you know, that is 
a little bit leaky, too. And then we look at financial 
condition, you know. I have never met with a company at the FCC 
that doesn't come in and say they are in financial distress at 
some point. They are all in distress. They are all broke. Or 
then they go to Wall Street and they say we will pay you, we 
are doing so great; and then when they come down here, it is 
moan and groan and bewail their horrid----
    Mr. Markey. Mr. Copps, could I just hear from Commissioner 
Adelstein on this subject for a second?
    Mr. Adelstein. I would certainly agree that all of the 
standards are so loose that there is virtually no line that is 
drawn that is set in stone. All of them are like shifting 
sands. Financial distress, it is not financial distress, it is 
financial condition. I could always say I would like my 
financial condition to be better, who wouldn't? Newspapers 
right now, their margins have gone down from 30 percent to 20 
percent, very high by corporate standards. And yet they could 
argue, gee, we have had our margins cut by one-third. Even 
though we make more money than everybody else, our financial 
condition is affected. Therefore, they would be eligible for a 
waiver.
    You talk about the other standards. They are all so loose. 
The level of concentration in the market, no definition of a 
level of concentration.
    Mr. Markey. You have heard both of their comments, 
Commissioner Martin, but you say you want a high standard that 
would be difficult to me. Could you explain the difference in 
perspective in terms of the language which you are----
    Mr. Martin. Sure.
    Mr. Markey. --using in your proposal, and would you be 
willing to work to find language that would raise the 
presumption which you are saying is a high hurdle and not a 
speed bump?
    Mr. Martin. Sure. First, I would say I absolutely would be 
willing to work with them on finding language that would make 
them feel more comfortable that this is a high hurdle. So 
absolutely, I would be willing to work with them.
    For example, on the level of concentration, our typical 
concentration analysis we use an HHI concentration analysis. 
Because broadcasters aren't selling a product to consumers, we 
have to traditionally look at the advertising market as a 
surrogate for the level of concentration among properties, so 
that is traditionally how the Commission has looked at that 
level of concentration. Some public interest groups have 
criticized that and want us to look at other things like 
viewership and subscription to newspapers. I didn't want to 
foreclose on people being able to put that kind of evidence in 
the record to demonstrate concentration, but our traditional 
analysis has been an HHI analysis, which I would assume the 
Commission would follow. That would be one of the examples of 
how I would traditionally think that we would be imposing this, 
but I didn't want to preclude others from coming forward with 
other evidence of self-concentration, which is why it was a 
broader standard. But I would certainly be happy to work with 
the other Commissioners.
    Mr. Markey. Great. Thank you, Mr. Chairman. The time of the 
chairman has expired. I now recognize the ranking member, the 
gentleman from Michigan, Mr. Upton.
    Mr. Upton. Well, thank you, Mr. Chairman. I am glad you 
went over your time. I will try not to go over. I am going to 
try to get two questions in. We will see what happens.
    First, I want to ask unanimous consent to put an L.A. Times 
story in the record which I missed during my opening.
    Mr. Markey. Without objection, it will be included.
    Mr. Upton. Chairman Martin, just a quick question going 
back to my opening statement as it relates to radio. Again, the 
numbers are in. We know that the industry is doing far worse 
today than at any time in the past. Isn't this the same 
situation as what you are trying to address with the newspaper 
side of things as it relates to radio? Some of them I know are 
on the second panel.
    Mr. Martin. Sure. The most significant difference between 
what is occurring in the radio market and the newspaper/
broadcast cross-ownership ban is that the radio market and the 
radio owners received some significant amount of ownership 
relief in 1996. The 1996 Act actually changed the Commission's 
previous ownership rules directly, whereas it told the 
Commission to only study the newspaper rule. So actually the 
implementation of the newspaper rule, as Commissioner McDowell 
went through the lengthy process, that the Commission has never 
been fully implemented.
    Mr. Upton. The courts though allowed this door to open, 
though, to reexamine the radio side, is that not right?
    Mr. Martin. They absolutely did, and there is a significant 
increase in the number of radio stations that are actually 
available today compared to the number of radio stations that 
were even in the marketplace in 1996. But there has also been a 
significant decrease in the number of owners since 1996, and 
that is a different situation that we are facing today in the 
radio than we see in newspapers. That is why that, in 
combination with a significant amount of concern that was 
raised at many of the public hearings about the radio 
consolidation that has already occurred, has convinced me that 
at this stage we should be careful about the radio markets and 
any immediate further consolidation and instead focus on the 
rule that hasn't been updated since 1975.
    Mr. Upton. OK. I'm watching the clock, and I want to get an 
observation, and I would be interested in each of your comments 
as it relates to this. I just drove halfway across the country 
three times during the Thanksgiving break, and I did not listen 
to my iPod or CD player. I listened to the radio. I picked up 
literally hundreds of stations, AM and FM, talk, music, et 
cetera, three different languages, French, English, and 
Spanish. I can remember as a child having only three TV 
stations, the three networks from Chicago that reached my house 
over the air along with WGN. Today as I have cable, literally 
hundreds of stations, everything that you could imagine in 
terms of diversity, I listen and log onto the Internet every 
day for news and sports, a variety of different stations; and I 
know in terms of my local station, WSBT, which is in South 
Bend, the 89th largest media market in the country, received a 
waiver 35 years ago. It is aligned with the newspaper, the 
South Bend Tribune, as well as a couple of different radio 
stations, as well as the TV, and now that we are in the digital 
stage, they have partnered between all of those different 
entities, a 24-hour digital newsroom of which a number of news 
stories are required literally every hour that pop up on that 
screen. And to go back a little bit to Mr. Markey's question on 
maybe a different angle is while I believe that it is important 
to lessen the cross-ownership restrictions on the 20 largest 
markets, I think it is also very important as we have seen the 
success here in South Bend, the 89th market, that we look at 
the list of stations at the bottom also crying for that same 
type of relief in order to survive. And I would be interested 
in your comments briefly knowing that I have got a couple 
minutes.
    Mr. Martin. I think that you can make certainly a strong 
case that actually consumers would benefit from additional 
newspaper/broadcast cross-ownership in the smaller markets in 
that there could be more financial situations that are 
difficult for people to do local newsgathering. The problem is 
those smaller markets are also where there is the greatest 
danger of consolidation that has occurred. So you have the most 
potential benefit but also the greatest danger because there 
are fewer outlets. And that is the reason why I think that a 
strong case can be made, but I think the Commission should take 
what obviously is a controversial step gradually and at least 
address it where there seems to be a plethora of other voices 
in those largest markets first before we move forward on the 
smaller markets. But I don't disagree that there are lots of 
people who argue it is actually just as important or more so in 
the smaller markets to preserve the ability to gather news.
    Mr. Upton. And Commissioner Copps, you have seen this. I 
don't know if you have been to WSBT in South Bend, but I am 
sure that you have seen a number of these smaller markets where 
in fact it works, the localism, the diversity, they are indeed, 
you know, truly a part of the community in terms of as it 
relates to them. They have received numerous awards, NAB, 
newspaper, et cetera, for their commitment to their localism, 
which frankly, I don't know if they could survive without 
somewhat of that cross sharing of different pools of reporters 
as well as technical assistance, particularly as they go to the 
digital age, which requires really millions of dollars to 
convert from analog to digital, which they have already done.
    Mr. Copps. Well, I have been to a lot of markets around 
this country, and I have listened to a lot of people decry the 
loss of localism. We have heard of episodes where the 
consolidated stations, nobody is minding the studio; so a 
public safety incident occurs, and it is impossible to notify 
the community of it. I have heard complaint after complaint 
about consolidation leading to the cutback in local newsroom 
staff, which leads me to the other point I would like just 
briefly to make. We have heard a lot of discussion about the 
dynamism of the new market with the Internet, and I am a great 
believer, I love the Internet. It is not a substitute for 
newspapers and broadcast. It is far and away a minor player 
when it comes to how most people get their news, and anybody 
who is concerned about the future of this new media ought to be 
concerned about what we do with the old media, because some of 
the same trends are coming there. You go on the Internet, and 
most people go on the Internet, they are not looking for Mike 
Copps's news website coming out of Alexandria, Virginia, they 
are going to read their own newspaper. Look at the 20 titled 
news items on the Internet. It is the same folks that----
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes the gentleman from Pittsburgh, Mr. Doyle.
    Mr. Doyle. Thank you, Mr. Chairman. Let me first start off 
by saying how much I appreciate the LPFM order last week. I 
want to thank the chairman and the Commissioners for their 
part, and I want to make sure that people hear this part that 
was unanimously agreed to. The Commission said, and I quote, 
recommends to Congress that it remove the requirement that LPFM 
stations protect full-power stations operating on third 
adjacent channels. Interference isn't a question anymore. Not 
only did the $2 million study the FCC commissioned prove it, 
but also the fact that big broadcasters want to use the same 
technology as LPFM on those same frequencies for repeating 
their signals proves it, too. If anything, having new local 
non-commercial options might keep people listening to free FM 
radio across the dial. So again, FCC to Congress, fix the anti-
LPFM law. Mr. Chairman, I hope we can expect movement on my 
bill to do just that early next year, and I want to thank my 
friend Mr. Terry, who has co-sponsored that bill with me.
    Now, Commissioner Adelstein, very briefly, the Commission 
was supposed to vote last week on whether or not cable 
operators have met the 70-70 rule, the market penetration and 
take rate standard. What happened?
    Mr. Adelstein. Well, we did vote on a report that was 
radically altered. The initial draft suggested that the 70-70 
part had been met, and it wasn't until the night before the 
meeting that I learned from our own internal data that I had 
asked for earlier that day that it had been omitted from the 
earlier draft for the first time in history. After many years 
of our own internal data being included, it was dropped, that 
in fact we determined that the 70-70 test had not been met.
    Mr. Doyle. Sounds like a question of process. I want to 
piggyback on top of questions of process because I think 
another important question of process is a memo on cross-
ownership dated June 15, 2006, from the FCC's chief economist, 
and it begins like this, ``Mr. Chairman,'' it says, ``this 
document is an attempt to share some thoughts and ideas I have 
about how the FCC can approach relaxing newspaper/broadcast 
cross-ownership restrictions.'' Then it lays out the work that 
would need be done to justify lifting the cross-ownership rule. 
Now this is June 15, 2006. Just 6 days later, the FCC announces 
that it was going to look into media ownership and commission 
some studies and hold public hearings and ``invite comment on 
how the commission should address radio, television, and 
newspaper/broadcast cross-ownership issues.''
    Mr. Chairman, could I ask unanimous consent that these be 
entered into the record for today's hearing, both the paper on 
cross-ownership rule and the press release from a week later?
    Mr. Markey. Without objection, it will be included in the 
record.
    Mr. Doyle. Thank you. Chairman Martin, a more cynical 
person than I might ask the question, did you know what you 
wanted to do on June 15, 2006? I would hope that overturning 
cross-ownership rules wasn't a foregone conclusion, that you 
actually looked at studies, saw what they said, wanted the 
field hearings, listened to the public and the stakeholders, 
and then announced your rule. And my question is, Chairman 
Martin, did your chief economist prepare similar papers that 
took sides on other media ownership rules before the FCC 
announced it was going to seek comment and pay for studies?
    Mr. Martin. I think that it is fair that I did have an idea 
of what I thought the Commission should end up doing in June 
and that is to implement the rule the Commission had already 
adopted and had been affirmed by the Third Circuit. The 
difference is----
    Mr. Doyle. But my question is did your economist prepare 
other studies on other issues?
    Mr. Martin. I was first trying to answer the first I think 
you said more cynical question and that is that the cross-
ownership rule, the ban on cross-ownership, had already been 
eliminated. The Commission had said the ban was no longer 
appropriate, and the Third Circuit had already said by the time 
that memo was produced the ban was no longer appropriate. As a 
result, we were going to do some kind of ownership relaxation 
for cross-ownership because the ban was no longer appropriate. 
As a result, I did ask staff to try to determine how we were 
going to do ownership studies to make a new determination of 
where that line should be drawn so that they didn't accuse us 
of doing it arbitrarily. But I am not aware----
    Mr. Doyle. Has this been done in any other instance?
    Mr. Martin. The memo? No, we didn't do a memo on any other 
rules because going into the rule-making, none of the other 
rules had a presumption.
    Mr. Doyle. OK. Thank you very much.
    Mr. Martin. The one rule was the courts had----
    Mr. Doyle. By the way, I have 8 minutes, Mr. Chairman, not 
five, just so you know. Is that from 8?
    Mr. Markey. Yes, you----
    Mr. Doyle. OK. I want to move on. Thank you, Mr. Chairman. 
Chairman Martin, in my years on the committee, I have learned a 
lot from Chairman Dingell, including this technique, so a 
simple yes or no will suffice to the following questions. In 
the Seattle hearing last month, you referred to the publisher 
of the Seattle Times, Frank Blethin, as being a vocal proponent 
of keeping the rules the way they are. And you also said, and I 
quote, ``I think you have to put that in the context of almost 
every newspaper in the country having cutbacks and that those 
will continue until they can diversify their media holdings and 
spread their costs over other outlets.'' Do you agree with that 
statement?
    Mr. Martin. I haven't----
    Mr. Doyle. It is just a yes or no question.
    Mr. Martin. I can't say for sure that I said it, but yes, I 
think I generally agree with it.
    Mr. Doyle. Are you aware that Dean Singleton, owner of the 
York Daily Record, and dozens of other papers of the Media News 
Group, said that the newspaper industry is, quote, very, very, 
very profitable, and it will continue to be for a long time?
    Mr. Martin. I am not aware that he said it but----
    Mr. Doyle. He did say that. Are you aware in late October 
that he also said that more people read the Sunday newspaper 
than watch the Super Bowl and that newspapers are, quote, 
holding up better than most other media?
    Mr. Martin. No, I am not aware that----
    Mr. Doyle. He said that, too. Are you aware that 
Scarborough Research, a firm that works closely with the 
Newspaper Association of America, their report concluded that, 
and I quote, they continue to find that when online readers are 
considered, the story of newspaper readership for many papers 
transforms from one of slow, steady decline to one of vibrancy 
and growth?
    Mr. Martin. I am sorry, what was the question? Have I seen 
that report?
    Mr. Doyle. Yes.
    Mr. Martin. I haven't seen that report, no.
    Mr. Doyle. Are you aware that the Mid-Atlantic Community 
Papers Association opposes lifting the cross-ownership rule?
    Mr. Martin. I think someone from that group testified at 
one of our hearings I believe.
    Mr. Doyle. Thank you. Are you aware that the Midwest Free 
Community Papers opposes lifting the cross-ownership rule?
    Mr. Martin. I apologize. It may have been the Midwest, not 
the Mid-Atlantic, that testified in Chicago.
    Mr. Doyle. Are you aware that the Association of Free 
Community Papers opposes lifting the cross-ownership?
    Mr. Martin. Yes.
    Mr. Doyle. Are you aware that the Independent Free Papers 
Association opposes lifting the cross-ownership rule?
    Mr. Martin. No, I haven't heard of that association.
    Mr. Doyle. They are. Are you aware that the Community 
Papers of Michigan opposes lifting the cross-ownership rule?
    Mr. Martin. No.
    Mr. Doyle. How about the Free Community Papers of New York?
    Mr. Martin. I knew the Free Community Papers Association 
was.
    Mr. Doyle. The Free Community Papers of New England?
    Mr. Martin. No.
    Mr. Doyle. The Texas Community Newspapers Association?
    Mr. Martin. No.
    Mr. Doyle. The Wisconsin Community Newspapers Association?
    Mr. Martin. No.
    Mr. Doyle. The National Newspaper Publishers Association, 
also known as the black press of America, opposes lifting the 
cross-ownership rule. Did you know that?
    Mr. Martin. I believe they were at the Chicago hearing. I 
think a representative----
    Mr. Doyle. Are you aware the National Association of 
Hispanic Publishers opposes lifting the cross-ownership rule?
    Mr. Martin. I think so, yes.
    Mr. Doyle. Thank you. Now, let me get to the hearings. We 
had one in Pennsylvania. It was in Harrisburg. I remember 
frantically calling about a week before that hearing to try to 
find out what time it was and get the details. One of the 
things that Commissioner Copps said struck me particularly 
about the dumbing down of America. Do you know that you had 
this hearing in Harrisburg, only one newspaper, Harrisburg 
Patriot, made an effort to cover that story. AP did a wire on 
it, but only the broadcast trade journals picked that up. 
Nothing in the News Media Group, York Daily Record, Lebanon 
Daily, or any other newspaper in the State of Pennsylvania. But 
every one of those papers ran a five-paragraph AP wire story on 
Hugh Hefner's belief that Anna Nicole Smith's body should be 
buried in the Bahamas. You talk about the dumbing down of 
America. You can see why many people, Commissioner Copps and 
myself, were concerned.
    I am going to skip my last question because I want to get 
to my conclusion, Mr. Chairman, if you will indulge me.
    Mr. Markey. I am sure it is going to be great.
    Mr. Doyle. I know we have lots of questions about process 
here, and I agree with Chairman Dingell that the vote on media 
ownership needs to be given complete analysis and reflection. I 
am not sure if that is possible to do by the end of this year. 
I read what is driving it is the transfer of the Tribune 
company to a private owner. I understand the chairman has 
proposed the Commission will deny the waivers, but if the 
Tribune sues the FCC, it gets an automatic waiver. That doesn't 
sound right to me. I would be interested in hearing from the 
Commissioners if they have ever seen any process like that 
before, and finally, Mr. Chairman, I am withholding judgment on 
media ownership rules, but I am really concerned with how the 
FCC got here. And I think we need more time to take a look at 
this process. December 18th seems way too short of a time. The 
Senate has already passed a bipartisan bill.
    Mr. Markey. The gentleman----
    Mr. Doyle. I think we may need to do that in the House, and 
I thank the chairman for his indulgence.
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes----
    Mr. Doyle. Was it really 8 minutes?
    Mr. Markey. It was 10 minutes that the gentleman from 
Pennsylvania received, and it is I am sure in silence being 
noted by the Republicans and perhaps not in silence after I 
recognize the ranking member, the gentleman from Texas, Mr. 
Barton.
    Mr. Barton. Well, thank you, Mr. Chairman. I will just tell 
my good friend Mr. Doyle from Pennsylvania that if you wore a 
watch that had numbers on it and not one of those fancy watches 
with no numbers, you would know that you had more than 8 
minutes, see. Well, I want you to know, Chairman Martin, that 
some of us do support the relaxation of the cross-ownership 
rules. So you have a few friends on that issue. Now, some of us 
are skeptical on some of your other positions, but on that one, 
we are with you; and we hope that you will vote to do that.
    What puzzles me though is that in that same hearing 
apparently next week or the week after next you are going to 
reimpose the 30 percent cap for cable ownership. Now, I don't 
understand the philosophy that the Commission apparently is 
going to support relaxation in the top 20 markets for newspaper 
ownership but in the same hearing is prepared to vote to 
reimpose an ownership cap on cable television. Could you 
explain that dichotomy?
    Mr. Martin. Sure. I think at that same hearing I would 
propose we actually leave in place all of the other ownership 
rules that the Commission has had, which would be not only the 
cap on cable, but also the current radio caps and the current 
cap on duopolies and that we not make any other changes at this 
time on the other media ownership rules. I think that media 
ownership in general is obviously a very contentious issue, and 
I think as a result of that I would encourage the Commission to 
move cautiously. And I think that the appropriate response is 
then we should move forward where there seems to be the most 
need for some kind of change, and I think the most need for 
that is the rule that affects the industry that seems to be 
having the most difficulty in continuing its local 
newsgathering and also seems to be the only one that hasn't 
been updated since the 1970s. All of the other ownership rules 
have been amended either by statute or by the Commission at 
some point in the 1990s. This is the only rule that has had no 
change. That is why I think it is important that is the one we 
move forward with first.
    Mr. Barton. You don't see any irony in going one way on one 
issue and the other way on the other issue?
    Mr. Martin. Well, I don't view it as going the other way on 
the other issues because I would not impose and provide lower 
caps than the Commission had previously. I am just not going to 
provide any further regulatory relief on any of the other 
issues. Some of the other Commissioners have encouraged the 
Commission to reconsider some of those ownership caps than 
actually lower them, even at the expense of trying to get media 
companies to divest some of their assets, and I'm not proposing 
to do that, I just don't propose providing additional relief 
for those other companies at this time.
    Mr. Barton. I want to switch issues here. We are all aware 
of the dispute that is going on between various interests on 
what is called carriage disputes. I am a little concerned that 
the Commission has chosen apparently right now to consider 
imposing a government mandated arbitration for carriage 
disputes. I am told that in the latest FCC possible version, 
the government is actually prepared to dictate the structure of 
a carriage agreement between two private parties. That just 
really amazes me. So I have a two-part question for each of the 
five Commissioners. I want each of you to tell me whether you 
believe the FCC has the statutory authority to intervene in a 
private commercial negotiation over carriage of video 
programming. If you say yes, I would like for you to tell me 
and the committee what conditions you believe must exist before 
you would agree to such an extraordinary step. Let us just 
start with the chairman and then go through the Commissioners.
    Mr. Martin. I do believe we have the authority, and we have 
actually exercised it before, most recently in the context of 
the MASN-Comcast dispute in which they were unable to reach an 
agreement, and we ordered an arbitration process for that 
particular dispute and also announced that we would reform our 
rules to better ensure that those disputes got resolved 
quickly. And I think the touchstone of when the Commission 
should be interfering is when there is evidence of 
discrimination in which the operator of the cable system who 
has the infrastructure for providing access to news and 
information is discriminating against other people who are 
trying to get access to that vis-a-vis content they own. And I 
think that is the touchstone for the Commission's analysis.
    Mr. Barton. Let us just go Mr. Adelstein, Mr. Copps, Ms. 
Tate, and then Mr. McDowell.
    Mr. Adelstein. I do believe that we have the authority but 
only under the statute when there is discrimination by a 
vertically integrated cable operator. I was very concerned 
about a proposal that we were considering that would have 
allowed this to go to arbitration with no finding of 
discrimination. In other words, I can set up the Adelstein 
Channel, which would be very boring, I am certain. And I would 
be able to go to arbitration immediately, and the cable 
operator would actually have to offer me some kind of a 
contract. That was extraordinary in its breadth and I thought 
did not consider the limitations on our authority in the 
statute that there should be a finding of discrimination first, 
and hopefully we can work with our colleagues to come up with a 
more rational proposal for dealing with what should only be in 
extraordinary circumstances that the government intervenes and 
only those authorized by Congress.
    Mr. Barton. OK. Mr. Copps?
    Mr. Copps. More than occasionally I find myself agreeing 
with Chairman Martin. In a basic answer to your question, do we 
have the authority? We came close to actually having an item on 
this, but there are items of contention that remain. So 
hopefully we can work through them. I think any independent 
programming is vitally important.
    Mr. Barton. You might want to repeat that. People couldn't 
hear you. I heard you.
    Mr. Markey. The last part.
    Mr. Copps. I am sorry. I said, more than occasionally I 
find myself in agreement with the chairman, and the basic 
thrust of his answer to the question you asked was one I agree 
with. There are items to be debated. Commissioner Adelstein 
pointed some of them out. We came close to having an item at 
the last agenda meeting. We didn't quite get there. Hopefully 
we will soon. I think it is vitally important to make sure that 
independent programming is provided to the American consumer.
    Mr. Barton. We have got two more Commissioners.
    Mr. Markey. If the final two Commissioners could answer 
quickly.
    Ms. Tate. Yes, sir. I have been leery about entering into 
these agreements. I have tried to encourage the companies to do 
that. When they come in to talk to us, I say, have you filed a 
complaint? Have you gone through the process that you have 
available to you now? I agree with Commissioner Adelstein that 
I was concerned about there needs to be a finding of 
discrimination before we act, before we come up with any 
remedy.
    Mr. McDowell. Similarly, I am concerned that we first must 
have a finding of discrimination. In the case of the MASN deal, 
we had a complaint that was filed at the FCC and had been 
sitting there for 15 months and was not acted upon. So I was 
very concerned about that, and we wanted to resolve that. If 
the government couldn't do it, then let us try a private-sector 
solution. But in the history of some of these complaints, 
certain types of these complaints, there have only been two of 
them that were filed at the Commission, so if folks are 
serious, they should file a complaint. Both of those two, by 
the way, were settled out of court, so to speak.
    Mr. Barton. Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. Without 
objection, I would like to enter into the record a letter to 
the committee from the Consumers Union, the Consumer Federation 
of America, and Free Press on Chairman Martin's proposal and 
process issues at the Commission. Without objection, so 
ordered.
    [The information appears at the conclusion of the hearing 
on page 359.]
    Mr. Markey. The Chair recognizes now the gentlelady from 
California, Ms. Harman.
    Ms. Harman. Thank you, Mr. Chairman, and thank you 
Commissioners for very thoughtful and interesting testimony. As 
I mentioned in my opening statement, I am rabid about getting 
the DTV transition right so that first responders at long last 
have communications systems which they did not have on 9/11 and 
still do not have, 6 years after 9/11. I only have 5 minutes, 
but I do want to probe this point with each of you very briefly 
because we need to remember that if Americans' TV sets go dark 
on February 17, 2009, our debates about cross-ownership and 
media consolidation will only be purely academic because the 
airwaves will be inaccessible to large swaths of the country.
    You are the lead agency for consumer education on DTV, and 
I know you have not all agreed that the Commission is doing 
enough. Commissioner Copps just testified that the Commission 
is flubbing the DTV transition. So I would like to start with 
you, Commissioner Copps. Why do you say this and ask each of 
you to comment.
    Mr. Copps. We don't have a program. I recently had the 
opportunity to visit the United Kingdom, where they are doing a 
lot on the DTV transition. They are phasing it in, they are not 
pulling the switch all on one day and potentially 
discombobulating millions of Americans, they are going in city 
by city by city, one station, then the rest of the stations. 
All of this is preceded by consumer outreach.
    Two specific personal contacts to every subscriber in the 
United Kingdom. If you are either elderly or disabled, they 
come to your home and not only tell you what you need to do but 
do the hookup for you. They are spending an outrageous $400 
million for 60 million citizens of the United Kingdom. We have 
spent like $5 million. We are giving NTIA I think to do 
consumer outreach. We can't get the job done that way. It is 
just simply not going to happen. They are doing consumer 
surveys. We ought to be considering transitioning in and do 
some demonstration projects. I think we are setting ourselves 
up, you and me both, for some mighty irate consumers come 
February 18, 2009.
    Ms. Harman. Thank you. Chairman Martin.
    Mr. Martin. I assume you just want me to respond to 
Commissioner Copps'----
    Ms. Harman. No, I want you to respond to the question. Are 
we flubbing the DTV transition?
    Mr. Martin. Oh, do I think we are flubbing it? No. Are we 
spending as much money per consumer as they are spending in 
other countries? No, we are not, either. I think that how much 
money we have for consumer education, that the Commission has 
requested monies in the past, and we have got some in our 
budget this year. Ultimately that is Congress's decision about 
how to allocate public resources for consumer education. We did 
receive a letter this past summer from Chairman Markey and from 
Chairman Dingell encouraging us to adopt a series of 
requirements on all the industries we regulate, most 
specifically on broadcasters, that would require a series of 
PSAs and public education information. There is an order in 
front of all the Commissioners that implements almost exactly 
the letter that Chairman Markey and Chairman Dingell had 
requested, and it goes almost verbatim to implement those kind 
of requirements. And it is in front of all the Commissioners. I 
hope that we will implement it soon.
    Ms. Harman. Thank you. Do others have comments? 
Commissioner Adelstein.
    Mr. Adelstein. I commend the chairman for that proposal. I 
think it is an excellent proposal that gets us started. It 
comes directly, almost rips from what Chairman Markey and 
members of this committee propose, which I think is a good and 
responsible thing to do, a good place to start. It is not just 
a matter of resources, though, it is a matter of leadership. 
The GAO has testified that nobody is in charge. The GAO has 
testified that there is no plan. And I hate to report to you, 
but it is true, there is no plan to make a plan. I don't even 
know of any effort underway to try to figure out how we are 
going to systematically deal with the education we need to do, 
to implement the program. We need to start I think with 
creating an interagency Federal task force. If the private 
sector has done that, we should at least do that for the 
Federal Government.
    Ms. Harman. Thank you. Other comments? Commissioner Tate.
    Ms. Tate. Yes. One of the first things that we did, of 
course, was discuss with the retailers what their 
responsibility was in terms of informing consumers who are 
buying new televisions, and we have already issued I think 
several hundred citations. So I think we are beginning to use 
the tools that we have.
    Ms. Harman. Thank you. Commissioner McDowell.
    Mr. Martin. If you deferred, I was going to ask you if I 
could have entered in the record our written response to the 
GAO study that was referenced by one of the other 
Commissioners. Actually, GAO has not accepted all of our 
written response because they said it is too long on the plan 
that we have. So I would ask if that could be entered in the 
record as well.
    Mr. Markey. Great. I think that would be very helpful for 
us, and without objection, we will take that and----
    [The information appears at the conclusion of the hearing 
on page 362.]
    Ms. Harman. And finally Commissioner McDowell, I just have 
10 seconds of comments following what he says.
    Mr. McDowell. Absolutely. I think the level of anxiety and 
angst right now is very healthy. It reminds me of the angst 
that was building before Y2K. I think there are a lot of moving 
parts obviously working in partnership with the Department of 
Commerce. Certainly there is always room for more effort, but I 
think as we get closer to February 2009, we will see a 
heightened consumer awareness.
    Ms. Harman. Thank you. Let me just add that we cannot let 
this deadline slip. This is about consumer convenience and 
access to television sets, but it is mostly about whether or 
not we are going to give tools to first responders that will 
protect all of us in the event of future manmade and natural 
disasters, and I urge all of you to do much more, and I urge 
all of us to do much more. Thank you, Mr. Chairman.
    Mr. Markey. The gentlelady's time has expired. The Chair 
recognizes the gentleman from Illinois, Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. First, I have a 
question I want to submit in writing to Chairman Martin. It is 
on emergency services stuff, and if I just put that in the 
record----
    Mr. Markey. And we would ask for a written response to it 
which we will put in the record.
    Mr. Shimkus. Thank you. And I was wondering if my friend 
Michael Doyle is the guy that he mentioned was Solomon. I am 
reading 1 Kings again. It sounds like Solomon you were 
referring to, so maybe those comments are appropriate. But I 
also would note the increased partisan tension. I think 
Congresswoman Harman brought the hearing back to some process, 
and that is unfortunate because telecommunications is not a 
partisan debate. We are regionally focused on areas of concern. 
And it is tough. We appreciate the concerns about process from 
the Democrat minority on the Commission because we are going to 
vote on an Energy Bill today that has no hearing, no language, 
no subcommittee, no full committee; and I don't think anybody 
knows what it is. I mean, we have got some broad outline. So 
for my colleagues over there to complain about your process is 
ironic to say the least. And I think what is fair is fair in 
the battle of ideas. If we all had a clear process, the policy 
that comes out is better. We all don't deny that. We are going 
to pass an Energy Bill that gets vetoed by the President 
because it is not going through the process.
    Having said that, let me ask if we could just go with 
Commissioner Adelstein first. Everybody is up here while you 
are making your testimonies, reading their BlackBerrys, getting 
information and news stories from an Illinois local guy. It is 
called Capitol Facts, and he is in the Capitol. He is not an AP 
or UPI guy, and he is sending what is going on in the Illinois 
government and politics right here, real time. Do we have more 
access to information today or less than when the Telecom Act 
was initiated in 1996, and then if you would say we have more 
access to information today or not since the three court 
rulings on media ownership in 2002, the two DC Circuit 
decisions and the 2004 Third Circuit decisions. More 
information now or less?
    Mr. Adelstein. I would say that there might be more hoses, 
but as Congressman Inslee is the one who said they are coming 
out of the same spigot.
    Mr. Shimkus. Let me try the Michael Doyle approach. More 
information or less in both areas, yes or no?
    Mr. Adelstein. Yes.
    Mr. Shimkus. Thank you. Both timeframes?
    Mr. Adelstein. I would say slightly.
    Mr. Shimkus. In 1996 and----
    Mr. Adelstein. People still rely on newspapers for their 
information and broadcast.
    Mr. Shimkus. Commissioner Copps.
    Mr. Copps. More or less diverse information.
    Mr. Shimkus. I may disagree with that but----
    Mr. Martin. Yes, more of the timeframes.
    Ms. Tate. Yes, more.
    Mr. McDowell. Yes, more, in both times.
    Mr. Shimkus. And that is for both timeframes, 1996 and----
    Mr. Martin. Yes. Yes.
    Mr. Shimkus. My time is short, and I am going to be 
punctual for the chairman's sake. You know, my local radio 
stations are concerned about staying on the air. I visited two 
during the break, WJBD in Salem, Illinois, WGEL in Greenville, 
Illinois. They are more concerned with this royalties board and 
the artist payments. And then the other concern goes with 
webcasting and the fact that they are webcasting but there may 
be two grabs at the money. And the local radio stations do 
provide a public service for information. And you know, if 
something happened in Salem, Illinois and people went one 
community over, the radio station is still broadcasting. It is 
not big enough to cover very far, I think 1500 watts. How do 
they know what is going on locally? Well, they can go to the 
web. But the problem is on the royalties issue, there is going 
to be so many big gaps of time because they are not going to 
pay a second bite at the apple on a royalties board. So you 
have got a lot of in essence dead air on their ability. That is 
what concerns small, rural information providers, and I cover 
30 counties in rural southern Illinois. I am not worried about 
St. Louis. I am not worried about Springfield, Illinois, and I 
am definitely not worried about Chicago because they have got a 
lot of money, they have got a lot of constituents, they have 
got a lot of advertising, they have got a lot of big business. 
I am worried about rural southern Illinois, where there are few 
people, few large businesses, not a lot of advertising revenue, 
and if you all help focus on that, then you will make rural 
America very happy. Mr. Chairman, I will yield back on that.
    Mr. Markey. The gentleman's time has expired. I think we 
have time to recognize one additional member and that is Mr. 
Gonzalez who is next in line.
    Mr. Gonzalez of Texas. Thank you very much, Mr. Chairman. 
My question will go to Chairman Martin. In your opinion, what 
is the greatest obstacle----
    Mr. Markey. By the way, if I may interrupt, for all 
members, we will return with the Commission after we have the 
four roll calls that are scheduled on the House floor, and all 
the members who seek to be recognized for questioning the 
Commission will be recognized at that time. The Chair 
recognizes the gentleman from Texas again.
    Mr. Gonzalez of Texas. Thank you. The greatest obstacle to 
minority ownership. How do you accommodate it, how do you 
facilitate it? I know you have some proposals. You have 
responded to a letter that was sent to you by members of the 
Congressional Hispanic Caucus, some of them anyway, and how 
does access to capital play into that whole equation?
    Mr. Martin. The two biggest obstacles for increasing 
diversity of ownership are access to capital by the people who 
want to buy stations and actually access to new stations or to 
the airwaves themselves. So I think that those are the two 
biggest, single biggest obstacles, and I think it is very 
difficult to address both of them. Obviously we have already 
issued lots of licenses for television, news, and radio 
stations; and many of them were done long before the current 
process is in front of the Commission. We do have a process now 
in which we auction off the rights to new broadcast stations on 
the commercial side, and in that context we do provide 
opportunities for smaller entities to compete and get certain 
bidding credits, just like we do on the wireless side. But the 
problem is that the vast majority of licenses have already been 
issued. So the single biggest obstacle is the fact that the 
vast majority of licenses have been issued already and then 
access to capital to buy some of those licenses on the market.
    Mr. Gonzalez of Texas. So let us just say the supply is 
limited and the price is high, and you know, economics is 
economics, regardless. So what can the FCC do again to 
facilitate, encourage, accommodate minority ownership? I mean, 
we go round and round on this, but the reality is like in any 
other enterprise, minority businessmen and women generally 
don't have those assets. I mean, is it something that is a 
permanent situation, or what can you do?
    Mr. Martin. I think it can be a challenge for a long time. 
I think there are some things the Commission can do, I think 
there are some things that Congress could end up doing to 
support it. I think that what the Commission can do is try to 
increase the supply. So what we have tried to do is identify 
where new stations could be available. We also have tried to, 
as we were talking about with Congressman Doyle, try to 
identify ways in which we could have other avenues like low-
power FM stations that would become available where it wouldn't 
need to protect the current commercial operators as much. That 
is one area of increasing supply. We have also tried to, and 
what I propose is that we waive some of our rules to the extent 
that these stations are going to be utilized by new entrants, 
so that for example if a current provider has a construction 
permit that is expired, he could be able to sell that to 
someone else who is a designated entity. That would be one way 
of increasing the supply for them. I also think that there are 
a variety of ways we could try to address some of the 
financing, but it is more limited. One of the things that I 
propose doing is changing what we call our attribution rule, 
our equity plus debt rule, that would allow for a designated 
entity who wanted to buy a broadcast station to help get 
financing from other people that are involved in broadcast 
properties without having those broadcast properties attributed 
to him so that he would violate the ownership rule. So that is 
one way that he could go and get financing from other people 
involved in the business who would understand the value of the 
broadcast property. So I think that would address some of the 
prices-too-high component, along with increasing the pool or 
the limited supply.
    I think Congress could and the Commission has unanimously 
or supported and recommended in the past and does again now 
that Congress enact a tax certificate legislation, which would 
significantly help on the financing side for designated 
entities and minorities to be able to purchase property. So 
those are the ideas that we have. Some of the proposals that 
were put forth by the diversity committee do give me pause that 
I don't think we are able to enact. For example, there was a 
proposal that we waive all the foreign ownership restrictions 
on broadcasters if the foreigner was someone who was a minority 
or a designated entity. I am very concerned about foreign 
ownership in broadcasting. That has traditionally been 
something that Congress has been very concerned about. That is 
one of the commendations that was put forth to us. I would not 
recommend to the Commissioners that we waive foreign ownership 
to try to diversify the airwaves. I think that that is not a 
good idea. So I think there are things we can do. I recommend 
that we take some steps. Some of the things that have been 
recommended I would be hesitant about doing.
    Mr. Gonzalez of Texas. Commissioner Adelstein, your 
thoughts?
    Mr. Adelstein. You talked about economics, there is very 
small supply, the price is very high. If you relax the 
newspaper/broadcast cross-ownership rule, you actually then 
increase the price, because you have a new deep-pocketed entry 
coming in. As it turns out, over half of the minority-owned 
stations are in the top 20 markets, and of those, none are in 
the top four. So the chairman's proposal directly targets those 
stations, those very few stations that are owned by minorities, 
for sale and makes it more difficult for minorities to have 
their own unique voices heard by being able to buy in because 
prices will actually go up. So the access to capital actually 
becomes higher, the prices become higher, and the economics 
issue is affected.
    Secondly, he laid out I think today many positive proposals 
that he has discussed in the minority ownership proceeding that 
we are engaged in, but the definition of minorities is such 
that the organizations representing interests of Hispanics and 
Latinos and others have said that it actually undercuts the 
ability of minorities to get access, because he doesn't define 
them as socially and economically disadvantaged business, it 
uses the broader small business definition. And in fact, there 
are fewer minorities that own media outlets in that definition 
than there are in the STB definition which is Constitutionally 
approved and is something that we could use. So if we could 
change the definition, I think many of the proposals he is 
talking about would actually be very beneficial.
    Mr. Gonzalez of Texas. Commissioner Copps?
    Mr. Copps. I believe the greatest obstacle has been our 
reluctance to address this issue in a holistic and a 
comprehensive fashion. There are lots of good ideas, but we 
need to prioritize them. We are not going to get them all done. 
What are the four or five that are really going to make a 
difference here? Certainly the tax certificate, that would have 
to be done legislatively and would make a huge difference. I 
think there are some other good suggestions here, but the 
Diversity Committee sent recommendations forward maybe a couple 
of years ago, and until recently most of them sat. We have to 
have the commitment that we really need to address the shameful 
state of minority ownership.
    Mr. Markey. Would the gentleman from Texas yield? There are 
only 3 minutes left on the House floor just so you know.
    Mr. Gonzalez of Texas. In that case, I yield back.
    Mr. Markey. The gentleman yields back, and we at this point 
will take a recess for about 30 minutes, and then we will come 
back and reconvene the hearing.
    [Recess.]
    Mr. Markey. The subcommittee will reconvene, and after 
another couple of seconds here so that everyone can settle in, 
the Chair will recognize the gentleman from Florida, Mr. 
Stearns, for a round of questions. Why don't we instead move to 
the gentleman from Virginia, Mr. Boucher, and then we will come 
back to Mr. Stearns. The gentleman from Virginia, Mr. Boucher, 
is recognized for 5 minutes.
    Mr. Boucher. Well, thank you very much, Mr. Chairman. I 
want to thank the members of the Commission for joining us here 
today and sharing their views with us and responding to some of 
our questions.
    I want to return to the subject of the digital television 
transition. One week ago today I had the opportunity to visit 
the U.K. community of Whitehaven, which is the first community 
in the United Kingdom where the digital television transition 
has been accomplished. And it was accomplished with remarkable 
smoothness. As a matter of fact, the individuals there with 
whom I met said that the only surprise they had was the fact 
that on switchover day there was total calmness, absolutely no 
surprises. And that is the kind of results I would like to see 
us have and I know you would here in the United States.
    There are, however, some remarkable differences between 
what was done in the United Kingdom and what we are prepared to 
do, and I would just like to make a couple of observations 
about those differences and get your reaction to how we might 
change our process going forward. In the United Kingdom, there 
was a multimedia advertising effort, and every television 
viewer in Whitehaven was literally inundated with information, 
publicly funded, about the fact that the transition was coming 
and the kinds of steps that television viewers ought to take to 
prepare for it. The elements of that public campaign included 
radio and television ads, a newspaper comprehensive guide that 
was inserted in newspapers delivered to every home, and 
independent direct mail publicly funded that went to every home 
announcing that the transition was coming and talking about 
steps to take, and in the Whitehaven community, they even had a 
countdown clock in the harbor that everybody in town viewed. 
Some loved it, some hated it, but everybody saw it, and they 
absolutely knew what that countdown clock meant. So on 
transition day, everybody was prepared.
    Now, in the United Kingdom, as Commissioner Copps noted, 
they proceeded community by community; and within the 
individual communities, even one television channel at a time 
starting with the channels least viewed and then moving up to 
those that are more popular. So they are clearly taking this 
step by step, unlike the United States, where in a little more 
than a year we are going to have a nationwide switchover with 
every community on every channel.
    In the United Kingdom they allocated about $1.2 billion, 
the pound equivalent of that, to their public education and 
their public assistance effort. We have a total of about $1.2 
billion in this country, and that is largely for a converter 
box program. We have allocated about $5 million to public 
education. The United Kingdom has one-fifth the population of 
the United States, so in comparable dollar terms, if we were to 
spend the same amount per viewer that they are spending, we 
would have to spend about $6 billion. We are spending $1.2 
billion.
    And there are a few other things to note. There were some 
surprises for me. We have talked a lot about converter boxes. 
We haven't had much to say about external aerials. But they 
have had to replace 10 percent of the external aerials on homes 
that have analog television sets. These aerials were sufficient 
to get an analog signal, perhaps a snowy one, but are not 
sufficient to pick up a digital signal at all. And these 
aerials have had to be replaced. Beyond that and perhaps even 
more importantly, they discovered that many people did not have 
the technical know-how to be able to take the converter device 
that switches digital back to analog and actually install that 
in their homes so that they can keep their analog set in 
operation. And they had to have technical assistance. We 
haven't contemplated that. That is not a part of our converter 
box subsidy program.
    And so I realize Chairman Martin indicated earlier that the 
level of funding is Congress's decision, and I certainly agree 
with that; but all of you are Presidentially-appointed and you 
are Senate-confirmed, and at a minimum, I think that entitles 
you to express an opinion. So I am going to ask you for your 
thoughts on the adequacy of the current program that we have in 
the United States. Do we need more money? Do we need to think 
about things we have not considered, such as external aerials 
and the need for technical assistance, and perhaps as 
Commissioner Copps earlier indicated, we should consider some 
kind of demonstration program here in the United States akin to 
what the U.K. has done, starting in one community, the 
community of Whitehaven, and even expanding out from there. I 
agree with Ms. Harman when she said we should not delay the 
switchover date. I think too much planning has gone into that 
date. But prior to that date, we have a little more than a 
year. I think we need to do things differently, and I would 
welcome your views on whether or not we do and what different 
things we ought to be doing. Who would like to begin?
    Mr. Markey. The gentleman's time has expired. But the 
witnesses would be allowed to, if they would, please briefly 
answer the question.
    Mr. Martin. I certainly think some additional public 
resources for public education would be helpful. The Commission 
has asked for some of those in the past. We actually have some 
of that in our budget now. I think that would be helpful. I 
don't anticipate we will ever be able to match on a per-dollar, 
per-capita basis what they have done in the U.K., but at least 
some additional resources would be helpful.
    I also think that in lieu of that, the Commission needs 
to--and as again, I think that Chairman Markey and Chairman 
Dingell deserve the credit for prodding the Commission to go on 
and put in full place requirements that require the industry to 
go through a similar kind of education campaign. Some of them 
were already trying to put together proposals to do that, but I 
think that that was a helpful thing for the Commission to put 
in place some requirements to make sure there is a multi-media, 
multi-faceted education campaign. So I think we need to do 
that, some additional resources directly would help.
    Mr. Markey. Very briefly.
    Mr. Copps. It is a totally inadequate project as Jonathan 
said that needs leadership. I was part of the Y2K thing when I 
was in the Clinton administration, and that was organized, it 
had a focus of leadership, and it got the job done.
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes the gentleman from Florida, Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman. Chairman Martin, you 
know, I have been to these hearings quite a bit, and I see a 
little bit more friction between the Commissioners here than I 
have seen before, and I would certainly want to be able to 
understand, and Mr. Copps has indicated there has been not 
enough comment period. Incidentally, Mr. Copps, you can see we 
didn't start our hearing on time, either, so if you are saying 
the FCC doesn't meet on time, we don't do the same thing here.
    But Chairman Martin, this whole business of media 
ownership, when I was on the Telecom Conference Committee with 
the Senate for the Telecom bill in 1996, you know, by 1998, we 
started talking about media ownership. So this has been going 
on for almost a decade. So I guess my question to you, FCC 
media ownership restrictions I think have received a lot of 
public scrutiny in light of the court review which occurs 
regularly, the comments, there have been economic studies, my 
staff told me there have been field hearings, so maybe you can 
walk us through what the public input has been. The comment by 
Mr. Copps has been there has been not enough time for comments
    Mr. Martin. Obviously in light of the 2003 court decision 
as we were beginning this process, again, I wanted to provide 
more of an opportunity and address some of the concerns that 
have been raised about not having enough public hearings and 
not having enough time for public comment. When we started the 
process, we had an extended 120-day comment period, so it was 4 
months to provide comments. That got extended several times to 
give people even more time to prepare their comments. We had 
six field hearings focused on ownership and an additional two 
hearings focused on localism at which we would stay for hours 
and provided the public an opportunity to comment. And we did 
hear hundreds and thousands of comments from the public on our 
ownership rules and the concerns they had with the media in 
general and whether they were serving their community.
    We have received thousands of public comments, both from 
the industry and from advocacy groups that are more specific 
and then just in e-mail campaigns and the opportunity for the 
public to weigh in just to express concerns about media 
consolidation more generally.
    And as you said, we have done a series of economic studies. 
We have put those out for comment and for peer review. And so I 
think we have had an extended comment period for debate on this 
issue.
    Mr. Stearns. All right. Commissioner Copps and Adelstein, I 
think you have heard all the members, particularly on this 
side, talk about how the media market has changed so much in 
terms of the media platforms, whether it is satellite, 
Internet, or MP3 players. I guess the question for both of you 
is doesn't that fact, combined with the mandates of section 
202(h), which is ownership restrictions are reviewed every 4 
years, and recent court decisions in which the courts have 
really made decisions, doesn't that require the FCC to relax 
ownership restrictions that were created many years ago before 
these developments? So in a sense I am saying perhaps we need 
to relax them. The courts have indicated that on the court 
decisions, but wouldn't the two of you agree that based upon 
the media platforms that have come out here and what has 
happened in the courts under the mandates of section 202(h) 
that the FCC should relax ownership restrictions?
    Mr. Adelstein. The court said the Commission could relax 
the rules. It did not indicate that we necessarily should. The 
concern I have----
    Mr. Stearns. But isn't that important if they indicate you 
should relax but they are not siding on your side?
    Mr. Adelstein. They are saying that it is possible, but 
they are not saying it is necessary for us to do so. So in 
other words, the court hasn't compelled us to relax the rules. 
They said that if you want to relax, that is something which 
you would have the capability to do under their----
    Mr. Stearns. If the courts were concerned, wouldn't they 
compel you?
    Mr. Adelstein. They could compel us to change the rule. 
They could say you have to change it. We still have the 
opportunity to find that the current rule is in the public 
interest and sort of modify it in another way. My concern is 
that people still get their news and information from the same 
sources, even as we have an explosion of technology and new 
opportunities for access to information. Our own data that we 
viewed in the course of this proceeding found that 89 percent 
of the people we surveyed list newspapers and broadcasting as 
their first and second most important source of news, and just 
three percent referred to the Internet or cable. And just one 
percent rely exclusively on alternative media for their news 
and information. If you go out there and you look at the other 
sources, the Internet, people say you can go to the Internet. 
The Newspaper Association said there are all these wonderful 
competitive alternatives. Consumer groups evaluated them and 
found that just 3.6 percent contained original reporting. So 
there is not really a lot of original news being generated 
there.
    Mr. Stearns. The question that I have asked, I don't think 
the courts have even justified the existing rules.
    Mr. Copps. What the court said was that a blanket 
prohibition without any possibility of having an exception 
appears to be no longer justified but that further regulation 
of newspaper/broadcast ownership might be entirely justified, 
and it is perfectly consonant with both the first and the fifth 
amendment of the Constitution. That is what the court said. So 
I think had we gone in eventually with a justification for a 
good rule, that is where so many of our FCC decisions break 
down. We have inadequate legal justification that with the 
deference the chairman was talking about before, we would 
expect that we could have gone in and had a realistic 
presentation and still could justify a realistic approach to 
this.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes the gentlelady from California, Ms. Solis.
    Ms. Solis. Thank you, Mr. Chairman. My question is for 
Chairman Martin, and this has to deal with access to accurate 
data about minority- and women-owned broadcasters. And I would 
just ask you, is it in fact important for the FCC to have 
adequate data that reflects those populations that we are going 
to be deciding their participation in these important topics 
that we are discussing today? Is that something that you 
personally feel is important?
    Mr. Martin. Sure. I think it is important to understand 
exactly the scope of the diversity of ownership in the media 
landscape today, and trying to get additional information to 
understand that I think is important.
    Ms. Solis. Information that was I guess provided that you 
asked for regarding minority ownership and demographic 
information, information that came from your own agency, was 
not accurate. And I hate to say but what we are hearing is 
essentially there are serious flaws in demographic information 
for various populations. So I am wondering what kinds of 
remedies or what kinds of steps will you take and the 
Commissioners to help rectify that? We have already heard from 
members talking about that, the under-representation and 
ownership of minorities and women. How do we then address the 
issue if we don't have adequate information to make those kinds 
of policy decisions?
    Mr. Martin. Well, I think there are a variety of things we 
can even do still to try to address the issue, but I agree with 
you that we need to be collecting information. Part of the 
recommendations that have been made to the Commission and part 
of the minority ownership proposal that I have in front of the 
other Commissioners begins to collect the varying information 
that people said we didn't have adequate enough information and 
develops and starts longitudinal studies that starts saying we 
are going to collect this information, and we are going to do 
it over time so we can see what the impact has been over time 
of minority ownership. So----
    Ms. Solis. We do kind of know right now that we haven't 
changed in terms of the under-representation, so how rapidly 
would you be willing to move on this? Because I think so many 
of us here are very tired about hearing the same things over 
and over again and would like to see some action.
    Mr. Martin. On the data-collection issue that is in front 
of the Commissioners now to begin doing the data collection 
exactly as the diversity groups have advocated that we do, both 
short term and long term, that is what they mean by a 
longitudinal study, they want to do it over time and see how 
the differences have been impacted. But I have proposed the 
Commission begin collecting information exactly as they would 
like us to.
    Ms. Solis. I think one of the concerns I would have is who 
those researcher demographers are and some accountability and 
transparency as to how that data is collected, because that 
just goes back to the same question of not having good data and 
being more transparent about that. The other question I have is 
something that we really haven't talked about, and I would like 
to ask Mr. Copps as well as Mr. Martin. But Mr. Martin, I will 
start with you. On private equity, we are talking about media 
ownership and who owns the levers here, and it just strikes me 
that for some reason we don't really understand fully if there 
is enough transparency in terms of who and truly are the owners 
or folks that pull the levers for these trust funds that are 
established and what kind of disclosure and accountability has 
been made available or what steps will you take to make that 
known? My concern is that as we talked about localism with the 
Tribune merger and all that, I look at my own community and I 
see that we have actually turned the corner and gone in the 
opposite direction. So I would like to know if there is a way 
for members of this committee to be able to get that kind of 
information from you and what steps you are going to take to do 
that.
    Mr. Martin. We have certain rules about what kind of 
ownership interests are attributable and which ones aren't. The 
private equity companies are obviously increasingly interested 
in media properties, but our ownership rules are the same 
whether it is a private equity company or another kind of 
person or entity that is interested in owning media properties. 
I----
    Ms. Solis. Could I ask Mr. Copps if he agrees with that?
    Mr. Copps. No, this is such an important question because 
private equity is transforming the media ownership environment. 
Instead of publicly held corporations, which you can at least 
track and file 10K forms with the SEC, you have these private 
money funds and everything else which don't have to file, I 
can't find out who owns what. When we got into a recent merger 
it was only because my staff started digging that we began to 
find out what this one company held. How can I do my job of 
protecting the public interest if I can't even locate who owns 
what, leave alone who is responsible for a bad decision that 
may have been made?
    Ms. Solis. Mr. Chairman, I don't know if I am going to have 
enough time to ask my other questions, but I would like to 
submit them to the Commissioners for their response, if that is 
possible.
    Mr. Markey. And we would ask the Commission please to 
respond in writing.
    Ms. Solis. Thank you.
    Mr. Markey. The gentlelady's time has expired. The Chair 
recognizes the gentleman from Mississippi, Mr. Pickering.
    Mr. Pickering. Thank you, Mr. Chairman. And what I will try 
to do is ask a series of questions, and I will combine some and 
have some stand alone. I thank the chairman for having this 
hearing, and I thank all the Commissioners for coming before 
the committee.
    First, to the chairman, as I understand it your recent 
proposal on media ownership applies to the top 20 markets.
    Mr. Martin. That is correct.
    Mr. Pickering. Mississippi would not be one of those top 
20, is that correct?
    Mr. Martin. That is correct.
    Mr. Pickering. There are some who say that there is a 
loophole, though, that would allow someone to drive a truck 
through that. Is that true, not true? If true, how, and if not 
true, why?
    Mr. Martin. It is not true that there is a loophole that 
you can drive a truck through, and the Commission has rules the 
people can file for waivers on. Even if we have a presumption 
against allowing cross-ownership in smaller markets, people can 
always file for waivers. What we have said is those waivers 
would be presumed to be against the public interest, but we 
would take certain factors into account like the financial 
distress of the properties as we traditionally have in waivers. 
But even in that context, we would look at the level of 
concentration as we traditionally have done in ownership 
issues. We would also look at something we have not talked 
about before, and that is if someone is willing to start new 
news, if they are willing to create a new local news voice, I 
think that is an important consideration that we should take 
into account.
    Mr. Copps. I think as I said before this is a loophole. 
These factors that we are going to consider are so generic and 
they are so porous, I mean, it is the new media ownership 
sponge. I don't know what it is, but it scares the heck out of 
me.
    Mr. Adelstein. I think it is open season in any community, 
including Jackson, Mississippi, any community in the country 
can apply for a waiver on the basis of very loose standards. 
For example, the financial condition. If they are making less 
money than they used to, that would be a factor. If they have 
more news than otherwise would have been the case, but we don't 
define what more news is. That could be 10 minutes a year more 
news. Somebody promises, I will put on 10 minutes more, I will 
put on one special for a half-an-hour more news than you had 
last year, that would qualify for a waiver. I can't imagine a 
more porous standard.
    Mr. Martin. We did not say that would qualify for a waiver. 
That is not what the order says. No, what we have said is you 
can apply for a waiver and these are the criteria we would 
consider. We do not say that you would qualify for it.
    Mr. Adelstein. The waiver standard says more news. That is 
the only standard, more news. So what is more news? There is no 
definition if it is 5 minutes, 10 minutes, or 50 hours. 
Theoretically, under that standard 10 minutes could qualify.
    Mr. Copps. It doesn't get you the waiver, but it sure as 
heck opens the door.
    Mr. Pickering. Is more news a new standard?
    Mr. Martin. It is. We have not taken into account before 
people starting additional local news, but if the concern that 
the Commission has and what is the most evident that we have 
heard from people is the negative implications on local news, I 
think it would be significant if we were saying as a result of 
the transaction people were going to make a commitment to start 
new local news. I think that would be significant and something 
we should take into account.
    Mr. Pickering. Let me quickly note a couple of other 
different areas. One, special access. I know the Commission is 
considering and gathering data. If the data in addition to what 
is already established on the record shows that in special 
access lines that the local incumbents enjoy 90 percent control 
of that market, would the Commission consider that as a 
functioning competitive market, or would appropriate action be 
warranted if it is that type of finding, 90 percent control?
    Mr. Martin. I think you would have to look at what the 
trends were over time. I mean, if it used to be 100 percent and 
it is down to 90 and you saw trends that were increasing 
competition, that would be different than if there had been 
increased competition and the special access markets had become 
more competitive and had become more consolidated. So I think 
it would depend, and it is hard to say the absolute figure 
without looking at what the trend lines were.
    Mr. Pickering. Any other Commissioner?
    Mr. Copps. The 90 percent scares me.
    Mr. Pickering. Commissioner McDowell?
    Mr. McDowell. You know, the record from my perspective is 
uneven. It does not give us a conclusive, well-defined picture 
of the marketplace. As you know, and as I said last summer, I 
would like to see more detailed mapping, broadband mapping 
actually, of special access ruling on a very granular basis 
before we make any further decisions.
    Mr. Pickering. On universal service, a number of merger 
conditions have been accepted or adopted and likely additional 
merger conditions that would cap the growth of probably 80 
percent of the fund on the wireless side. Given that, it seems 
to me that that is an automatic constraint on the growth of the 
fund, and would that justify making sure that we get 
comprehensive and give us the chance? While you have 
constrained growth of the fund, probably reduction of the 
growth of the fund, does it give us a chance both here on the 
Hill and at the Commission to make sure that we get this right 
to consider broader proposals or the joint board 
recommendations, and does that argue for a go-slow approach 
because this is very significant as we build out broadband, 
especially in underserved and rural markets?
    Mr. Martin. I think it does relieve some of the pressure 
and in that sense give us a chance, but I think it is incumbent 
upon the Commission to still try to move forward then with 
those broader processes. In addition to the item in front of 
the Commission where I have proposed we implement the joint 
board's recommendation of a cap, I have also proposed other 
more fundamental reform, including making all carriers come 
forward and provide their actual costs and including trying to 
look toward how we can reform the process so that we move to a 
most efficient or least costly mechanism for serving 
communities that otherwise wouldn't get service. So I think it 
does provide us that opportunity, but then it is incumbent upon 
us to engage in those other items that are in front of us as 
well.
    Mr. Copps. As a member of the joint board, I really welcome 
your emphasis on what Congress and the Commission can do 
together. We have submitted recommendations to include 
broadband, to do away with the identical support rule, to make 
sure we have good auditing. I think if you threw into that baby 
collecting on intrastate, you would have yourself pretty good 
universal service plans. So I hope the Congress will maybe 
consider that, and together we can move forward and bring this 
to a conclusion, because we got to get this broadband 
deployment done.
    Mr. Pickering. I would encourage the Commission to make 
sure that we get it right, to work with Congress. And we have a 
chance now with these cost constraints in place to do something 
comprehensive and sustainable and to really promote broadband 
in rural areas, combined with what we are doing with 700 
megahertz. So I do encourage you to act, but in this case in 
concert with Congress, and judiciously and wisely because this 
is a major, major opportunity and reform that we want to get 
right. The last question deals with FCC process and reform. I 
have always been a proponent of shot clocks and deadlines. How 
do you handle your process so that principled outcomes are most 
likely guaranteed? And as five Commissioners are before the 
committee, however many members of Congress we have, all the 
personalities in a process will have the right outcome. Do you 
have any thoughts on what we could be doing to improve the 
internal process for each member of the Commission, each 
Commissioner? Do you each have deadlines for responding, for 
acting? What is the process not only from the chairman's 
perspective, but also from each Commissioner and meeting 
deadlines? And I would like to just ask a broad question, do 
you have any proposals of FCC reform that would help you do 
your job better?
    Mr. Markey. The gentleman's time has expired, so we will 
ask the witnesses to respond very briefly, please.
    Mr. Martin. I think that the most significant process 
reform that has been proposed by the Commissioners for a long 
time has just been the opportunity for the Commissioners to 
meet more than just two Commissioners at a time. I think that 
obviously would help facilitate some further discussions and 
debate. But I think there are all kinds of rules and deadlines 
that are in place on Commissioners, and I certainly think that 
I work with all the Commissioners to try to end up 
accommodating the concerns that they end up having, but I think 
that there has been a lot made of certain public concerns about 
deadlines that some people think of them as, and I am not sure 
I agree with those, that there are a lot of deadlines that are 
missed by Commissioners that actually significantly delay, for 
example, release of items, when statements aren't provided when 
they are supposed to be. There are some process concerns that 
would apply to everyone.
    Mr. Copps. Real quickly we have some process concerns to 
work ourselves through, when our meetings are going to be 
scheduled, how much notice, what are the rights of three 
Commissioners to bring an item up, to send an item back, to 
edit an item, and so forth. There are a number of them. I would 
also though echo what the chairman said, we need to do 
something, and I have been talking about this every time I come 
before this committee, to do something about the closed-meeting 
rule. Some of these frictions you are talking about I think 
could possibly be significantly ameliorated if we were able to 
sit down a couple times during the pendency of an item.
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes the gentleman from Michigan, Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman, and thank you to the 
Commission for being here. A number of you mentioned these 10 
studies. I have a number of questions about these studies. Mr. 
Chairman, I am going to start with you. How were the authors of 
these studies selected?
    Mr. Martin. The authors of the studies were selected 
primarily by the Chief Economist at the time. The Chief 
Economist provided a list of potential authors.
    Mr. Stupak. Is that the report that Mr. Doyle put in the 
record, the summary of the ideas based on broadcast----
    Mr. Martin. No, it wasn't that report. She tried to gather 
a list of academics and econometricians around the country who 
would focus in particular on the industry.
    Mr. Stupak. Did you get input from the other Commissioners?
    Mr. Martin. We did. We did actually get input and ask the 
other Commissioners. Only one of the Commissioners suggested 
any names, and all of the potential authors that any 
Commissioner suggested were reached out to. Three of the four 
study authors that were suggested by Commissioner Copps agreed 
to end up doing a process, one I think said they didn't want 
to.
    Mr. Stupak. Are you generally satisfied with these 10 
studies?
    Mr. Martin. Are we generally satisfied with the 10 studies? 
I think that they give us a general sense of what is going on--
--
    Mr. Stupak. Well, let me ask you. Study No. 1, which looks 
at how people get their news, is alleged to use data that 
excluded Latinos. Have you heard that claim?
    Mr. Martin. What is that?
    Mr. Stupak. Your first study excluded Latinos. It was a 
study on how people received their news. It excluded Latinos. 
Wouldn't that be a flaw in the study?
    Mr. Martin. I think it doesn't capture how Latinos are 
actually receiving their news, no.
    Mr. Stupak. Well, if you don't count them, they are 
excluded, right?
    Mr. Martin. If they are not included, then they are not----
    Mr. Stupak. How about No. 2, which focuses on TV station 
ownership structure, which allegedly missed 75 percent of the 
TV stations that were female-owned in 2005 and missed 69 
percent of the TV stations that were minority-owned in 2005, is 
that correct?
    Mr. Martin. I am sorry, you were saying the study missed 
those?
    Mr. Stupak. Yes.
    Mr. Martin. I think that what was important though is that 
the study also concluded that even having missed those that 
minority ownership for TV stations had fallen and that female 
ownership of stations----
    Mr. Stupak. Well, of course, it is fallen if you missed 75 
percent of them.
    Mr. Martin. No, I am saying the point of the study actually 
supported there were concerns with minority and female 
ownership. You are right, I think it is unfortunate if they 
didn't find all of them, but they were still concluding that 
there were concerns with it.
    Mr. Stupak. Let us go to study No. 3. Study No. 3 I am a 
little concerned about because it is by Mr. Crawford. At the 
time wasn't Mr. Crawford negotiating with the FCC to become the 
Chief Economist?
    Mr. Martin. No, when we asked him to do the study, we 
actually asked Mr. Crawford to be the Chief Economist the year 
before. He was unable to because of his academic commitments. 
We asked him to end up doing this study. We subsequently asked 
him when it came open again would he consider being the Chief 
Economist for a year. It is a rotating position that academics 
come and take.
    Mr. Stupak. Sure.
    Mr. Martin. But more importantly, because he did this 
study, Mr. Crawford has not and will not and is recused from 
working on the media ownership proceeding----
    Mr. Stupak. OK, but it looks like the dates overlap from 
our investigation. Let us go to study No. 6. In the peer review 
it says the imperial data in the study are so limited that the 
study conclusions do not and cannot possess the reasonable 
level of confidence necessary to provide policymakers with 
useful evidence on which to use their regulatory decisions. Put 
simply, the findings from the single, 3-day study of one type 
of news broadcast should not form the evidentiary basis of any 
sort of public policymaking. Do you agree with that peer 
review?
    Mr. Martin. I am familiar with that peer review, and the 
way that the proposed item responds is that this is not the 
only study. There were three different other studies, all 
concluded the same thing.
    Mr. Stupak. Let us go to study No. 7.
    Mr. Martin. The cross-owned newspapers and broadcast 
properties actually increased their news. It was the same 
conclusion we had had in the other studies that had been done. 
So while we recognize that there have been peer reviews that 
say we shouldn't rely on this, we don't exclusively----
    Mr. Stupak. But you are relying on this study and this peer 
review to help make your decision?
    Mr. Martin. We are relying on the study and the peer 
review, along with the criticism.
    Mr. Stupak. Number 7. It said the study is oversimplistic. 
Its assumptions and methodology are flawed. It fails to analyze 
the effectiveness of the failed station rule and fails to 
evaluate any of the MMTC's recommendations to improve minority 
ownership. Each of these were required by the Third Circuit. 
That is the Prometheus court ruling. Instead, the Beresteanu 
and Ellickson study, study No. 7, develops a legally flawed and 
unsolved methodology that inflates the percentage of minority- 
and women-owned broadcasters by using census data that includes 
music program distribution, piped-in music services, network 
television. Overall, it says, I find the study is insufficient 
to meet rational decisionmaking standards. So that is what the 
peer review said on No. 7 again on minority ownership.
    Mr. Martin. Yes, and if I could respond, what study seven 
concluded was it found that minority and females were clearly 
underrepresented in radio, television, and newspapers relative 
to their proportion.
    Mr. Stupak. Well, isn't it----
    Mr. Martin. And it found our data was extremely limited and 
that we needed to do better datagathering, both of which I 
think----
    Mr. Stupak. So I have just pointed out five of the 10 
studies that you are relying upon to make this decision on 
December 18th that you are rushing to make are flawed or have 
some real serious question about the integrity of the data 
being based upon. Why would they have to use census data? Why 
wouldn't they use FCC data to reach conclusions about women and 
minorities?
    Mr. Martin. I think what is most important is I am not sure 
that there is any disagreement, and I think the studies support 
what the concerns that have been raised that minorities and 
females are underrepresented in broadcast.
    Mr. Stupak. Maybe I am not making myself clear.
    Mr. Martin. But I think that they still support that 
minorities and females are underrepresented, which was the 
finding of the study.
    Mr. Stupak. Let me quote the last line of the peer review 
No. 7. It said, I find that Beresteanu and Ellickson study 
insufficient to meet the rational decisionmaking standard. That 
is what the FCC is supposed to be doing. Five of the 10 studies 
have serious flaws and questions. Minorities and women are not 
being counted. There is no basis to do it. You talk about 
wanting to go forward in the future, either short term or long 
term, however women and minorities as Ms. Solis mentioned are 
being counted. You don't have a rational basis to even begin 
for a baseline, so how can you go forward to make a comparison, 
your own data within the Commission? Commissioner Tate 
mentioned Ms. Hughes, Cathy Hughes, being the largest minority-
owned radio station. But when she submitted her application, 
was it FCC-323, you excluded her. You don't even have her in 
your own records. That is how flawed the data are and your 
studies are that you are trying to make this decision. That is 
what is bothering us. What is the rational decisionmaking, what 
are you basing it upon?
    Mr. Martin. The concerns you are raising about study seven, 
though, the study actually had the same conclusions and 
findings as I think you all are saying you support, which is 
that minorities and women are underrepresented and that we need 
to gather better data. That was the conclusion of the study. So 
while people think that they should have gathered better data, 
which we are in the process of trying to do, the studies' basic 
findings I think you agree with and I agree with. But more 
importantly the study----
    Mr. Stupak. But you said in your own opening, you, 
Commissioner Tate, Commissioner McDowell, you rely on these 
studies. In fact, one you said $170,000 you spent of the 
taxpayers' money on these studies. You actually spent $322,500 
on these studies, and five of the 10 are flawed. And then you 
also released them, or I believe you did, Mr. Chairman. You 
released these studies before you had a final published, 
submitted, peer review. And that is contrary to OMB guidelines 
on the way you do it, right?
    Mr. Martin. No it is not.
    Mr. Stupak. It is not a violation of your own OMB 
guidelines in peer reviewing?
    Mr. Martin. No, it is not in violation of the OMB 
guidelines. OMB guidelines say that before a Commissioner 
agency disseminates, and by disseminate which is a term of art, 
they mean that they put out----
    Mr. Stupak. Let me ask you about this.
    Mr. Martin. They put out the peer review, and it has to be 
within Commission position, that we did not disseminate it if 
we put it out for public comment.
    Mr. Stupak. We will pick this up when you come back for 
O&I. But let me say this. The Commission did set section 257, 
Market Entry Barrier Studies, in 2000, which were made part of 
the FCC's official record. Those studies, among other things, 
discuss the extent to which small businesses, women- and 
minority-owned businesses, face barriers entering in the 
communications industry along with a series of proposals. What 
work has the FCC done to follow up on this section 257 findings 
of 2000, which was recommended you do?
    Mr. Martin. Sure.
    Mr. Markey. The gentleman's time has expired. Please 
answer.
    Mr. Martin. Can I respond?
    Mr. Markey. Please.
    Mr. Martin. Actually, the Commission has a section 257 
report and order that I circulated a year ago that was adopted 
by the Commission in October that hasn't been released because 
we are still waiting on a statement from one of the 
Commissioners. Commissioner Adelstein voted it December of last 
year but has still not given us his statement.
    Mr. Adelstein. Correction. I have given you the statement.
    Mr. Martin. Hold on. I am sorry?
    Mr. Adelstein. I just don't want to have myself misstated 
here. I did give the statement.
    Mr. Martin. You didn't as of yesterday morning. So when we 
checked yesterday morning----
    Mr. Adelstein. It is as of yesterday.
    Mr. Martin. I am sorry, you did that as of yesterday? He 
voted it a year ago, and he did not give us his statement for a 
year. The report recommends that Congress adopt the Minority 
Tax Certificate program. We have been trying to get that out 
for a long time and have been unable to because we didn't have 
a statement that was provided by one of the Commissioners. That 
is the action we took in response to the section 257 report and 
circulated it a year ago. It was opted in October.
    Mr. Stupak. I have further questions. I will take them up 
later. Thank you, Mr. Chairman.
    Mr. Markey. We will submit the questions to the Commission. 
We will ask that they be responded to. The Chair recognizes the 
gentleman from California, Mr. Radanovich.
    Mr. Radanovich. Thank you, Mr. Chairman, and welcome panel 
members. I do have a couple questions of some of the various 
members. Mr. Adelstein, earlier today you stated that no matter 
how you feel about broadcast ownership, that there hasn't been 
a large enough gathering of information or enough time to 
comment; and given the fact that there have been no hearings on 
the proposal to limit cable ownership and huge changes in the 
competitive landscape have happened since 2001, how can you 
feel that the Commission is ready to vote on the cable 
ownership cap?
    Mr. Adelstein. Well, the cable ownership cap is a very 
difficult issue. I mean, it certainly is something that we were 
directed by the Court to look at. The law requires that we put 
in place a limit on the ownership by cable companies. This has 
been pending for some time. The chairman put forth the proposal 
which I have supported to maintain the current cap, but it 
certainly is something that you know, we have had the rules 
remanded by the DC Circuit. So it is a difficult order. And I 
have supported the chairman's proposal on that.
    Mr. Radanovich. Mr. McDowell, would you care to comment on 
that as well?
    Mr. McDowell. Can you repeat the question? I am sorry, 
Congressman.
    Mr. Radanovich. Yes. Do you feel that the Commission is 
ready to vote on the cable ownership cap now given the fact 
that there have been no hearings and, you know, perhaps debated 
that there is not enough information to do that yet?
    Mr. McDowell. Well, the cap, of course, goes back to 
litigation from a prior Commission and the DC Circuit decision 
in 2001. I am reviewing the draft order. It is teed up for our 
December 18th meeting. I am reviewing it in the context of the 
Turner II decision from 2001 of the DC Circuit. The big concern 
there are the first amendment implications. I am not sure the 
draft order as currently written will satisfy the Court's 
concerns, so it could be ripe to be handed back to us or 
overturned by the DC Circuit.
    Mr. Radanovich. Thank you. Ms. Tate, I wanted to commend 
you for your stance against unjustified regulation of the cable 
industry at last month's FCC open meeting. Thank you very much. 
I understand that another item is now circulating at the FCC 
that would reimpose the very same 30 percent cable ownership 
cap that a 2001 DC Circuit decision concluded that the FCC 
failed to justify under the first amendment. In light of the 
fact that there is more video competition now than there was in 
2001, do you oppose this unjustifiable cable regulation just as 
you opposed the previous regulation last month?
    Ms. Tate. Would you repeat the question?
    Mr. Radanovich. It is a long one.
    Ms. Tate. Unlike Commissioner McDowell, I am still looking 
at this. It is set for our December meeting, and you know, 
certainly I am going to go back and look and see what the Court 
said in 2001 and then try to review the record before I make my 
decision.
    Mr. Radanovich. Thank you. Mr. Martin, do you view this as 
arbitrary, that we are considering all sorts of media except 
cable in the cap debate?
    Mr. Martin. No, not at all. Indeed, as I stated earlier, 
actually except for newspapers and only in a very limited way, 
we are leaving in place all of the caps on radio, all of the 
caps on TV, and all of the caps on cable. So I think it is 
actually very consistent.
    Mr. Radanovich. Mr. Martin, one further question. There are 
two main rationales for media ownership limits, and they are 
promotion of viewpoint diversity and localism, but haven't the 
FCC and now the Third Circuit concluded that the newspaper/
broadcaster cross-ownership ban harms rather than helps 
diversity and localism?
    Mr. Martin. I think the Commission has said that it could 
end up raising concerns, but the Third Circuit didn't conclude 
that. What the Third Circuit in fairness said was that the 
newspaper/broadcaster cross-ownership cap, it was rational for 
the Commission to remove it. And some of the Commission's 
rationale was that, but the Third Circuit didn't affirmatively 
find that.
    Mr. Radanovich. Thank you. I yield back. Thank you, Mr. 
Chairman.
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes the gentleman from Illinois, Mr. Rush.
    Mr. Rush. Thank you, Mr. Chairman. To all the 
Commissioners, first of all, welcome, and I just can't express 
the level of my frustration as I sit here before you and I hear 
the same song and dance, the same empty words, the same 
expressions of concern, and frankly the same universal 
agreement that minority media ownership is a very serious 
problem. I am just absolutely frustrated. I am a minority, and 
to hear this body continue to come up with for me empty 
rhetoric as it relates to minority ownership is just almost 
abysmal as far as I am concerned. It just shows a total lack of 
sincerity. Back in 1998, the FCC identified the minority 
ownership issue as a serious problem, as a real critical issue. 
The Commission accepted this problem, this analysis, this 
viewpoint, and the Commission declared that it would take some 
steps to remedy the situation. Ten years later, no remedy, just 
rhetoric. And I haven't seen any concrete FCC action, and I 
have been on this subcommittee for a number of years now. The 
Federal courts got involved. The Third Circuit criticized the 
FCC on this issue when it remanded the FCC's last attempts to 
relax its rules and specifically ordered the FCC to address the 
issue on remand. It is my understanding, Chairman Martin, that 
the FCC has yet to fill the Third Circuit's mandate. Yet today, 
you are coming in, you are saying December the 18th you are 
going to promulgate and pass some rules to relax cross-
ownership provisions, but yet still, there are still no real 
efforts and activities, no real plan to deal with the No. 1 
issue before the FCC and before the American people, and that 
is the unfairness in the telecommunications industry, the lack 
of ownership, the problem that a majority of the American 
citizenry do not have a voice, a recognized sustained voice in 
terms of media ownership over the public's airwaves. Next month 
you are going to be quoting Dr. King's ceremonies at the FCC, 
and I am sure you are going to be quoting his statement about 
justice delayed is justice denied. Well, let me paraphrase him 
if I can. Ownership, media access delayed is media access 
denied. Now when will the FCC stop denying minorities ownership 
provisions and assist them to become owners of media outlets in 
this Nation? Start with you, Chairman Martin. When, 
specifically when?
    Mr. Martin. On December 18th the Commission will vote on 
the item that implements the minority ownership proposals that 
were put forth by the Diversity Committee. There were 28 
proposals they said we could implement right away, and I have 
gone through and proposed to the Commission that we adopt more 
than a majority of them but not all. But I think that on 
December 18th is the day we will adopt those specific 
proposals. That includes extending time for construction 
permits when they sell the property to a minority. It includes 
adjusting our attribution rules so that the equity-plus-debt 
rules do not apply if the owner is a designated entity, which 
includes minority, female, and small businesses. It adjusts 
some structural waivers. It does non-attribution for, as I 
said, equity-plus-debt. It has a zero tolerance for abuse----
    Mr. Rush. Commissioner Copps. Excuse me. Commissioner 
Copps, do you agree with this?
    Mr. Copps. When we should do this is before we vote on 
ownership. Consolidation has made minority ownership infinitely 
more difficult than it was before, so why would we vote to open 
up a new bazaar before we have these things really in place? It 
is a question of commitment. The chairman wanted to vote a 
number of these items in an item that was drastically changed 
like 3 days before we were to vote. That is not considered 
leadership, considered public comment on an item. We need to do 
this before we vote on consolidation.
    Mr. Rush. Commissioner Adelstein?
    Mr. Adelstein. I would like to say that I wish that that 
was a token item that we were going to be voting December 18th, 
but that would be too kind. We have actually been told by some 
of the representatives of the minority communities that it 
actually hurts women and minorities because the definition of 
women and minorities is any small business. There is not a 
socially and economically disadvantaged business definition in 
there. As a result, these things will actually be a setback. 
They won't actually help. So we need to change the definition 
of who gets benefited by the proposal or it is less than 
worthless.
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes the gentleman from Washington State, Mr. Inslee.
    Mr. Inslee. Thank you. I think it is appropriate to have 
these oversight hearings any time there is an instance where 
the Federal Government or an agency of the Federal Government 
is really demonstrating palpable contempt of the people it is 
supposed to serve--the American people. And the 650,000 people 
I represent believe that that is what is happening with the FCC 
on the cross-ownership rules right now. For two significant 
reasons I want to talk about those and ask the Commissioners 
about that. The first reason is that the proposed rule Chairman 
Martin has proposed and a lot of press accounts suggest it only 
affected the top 20 markets and the first amendment will be 
safe everywhere else. Well, in fact, if you read the rule, it 
essentially allows the FCC to remove these cross-ownership 
protections for the first amendment in every market in the 
country and even to allow ownership of the top four media 
outlets, even in the top 20 markets. All it does is it allows 
the FCC to take bites out of the first amendment in market by 
market and cloaks that in some innocuous language that it 
affects only the top 20 markets. So this is something that 
ought to concern everybody in small and large markets, and it 
is certainly a concern to my constituents.
    And I want to move to the second reason why I am a little 
concerned about this. Out in Seattle we had a hearing. We heard 
about it 5:00 p.m. on November 2nd to tell us about a hearing 
on November 9th, effectively less than a week's notice under 
the apparent attempt to reduce the number of people in Seattle 
who were going to turn out, knowing Seattle is a very vigorous 
opponent of these rules. It didn't work. Over 1,000 people 
showed up, stayed until 1:00 in the morning, and enormous 
eloquence, sincerity, and strength of the message, don't do 
what the proposal of Chairman Martin is now proposing to do. 
And the thing that was most disturbing is that when you had 
1,000 people staying until 1:00 at night on a Friday, on the 
next Tuesday morning in the New York Times, we see an op-ed by 
the chairman saying that he is going to propose rules that 
would basically ignore the testimony of these hundreds of 
people in Seattle the Friday before.
    Now, that troubles me, because apparently this is an op-ed 
that I can't believe wasn't written before this testimony was 
even listened to. We expect Commissioners to go out and listen 
to the will of the American people, take testimony, evaluate 
it, work with the other Commissioners and come up with 
reasonable proposals. My folks in Seattle believe that they 
were treated like a bunch of chumps out there that they had the 
FCC come out, fake like you are listening to them, and the deal 
was already done. And I don't think that is consistent with the 
obligation of FCC Commissioners to listen to the people. The 
Commissioners need to listen to the commissioned who are the 
real bosses here.
    So my first question, Chairman Martin, is, was your op-ed, 
at least rough draft, written before you listened to these 
thousands of people out in Seattle?
    Mr. Martin. Sure, I was working on drafts of the op-ed. I 
am sure I was working on it on the way out to Seattle as well.
    Mr. Inslee. And when did you send the final draft to the 
New York Times?
    Mr. Martin. I am sure it was some time over the weekend. I 
don't know. I don't know whether I submitted it on Friday or 
Saturday. I don't know.
    Mr. Inslee. Well, knowing how the New York Times works, I 
bet you submitted it before you heard the testimony in Seattle. 
I am going to ask you to check that out and let us know. But it 
doesn't really matter because it is pretty clear that minds 
were made up before 1,000 people spent their Friday night 
coming out to share their opinions with the people who are 
supposed to be working for them, not telling them what they are 
doing in their infinite wisdom. And I have heard arrogance out 
of Washington, DC, before; and even though I work here, I don't 
believe that it is the source of all wisdom. And I can respect 
people's academic assessments of this rule and studies that we 
do and everything else. But you know, the ultimate repository 
of wisdom in this country is the people that we work for, and 
they have told you repeatedly in very visceral terms, they 
don't like this idea of reducing the protection of cross-
ownership between newspapers and electronic media outlets. 
Maybe you don't respect their views, but they are sincere, and 
they have them, and we ought to listen to them a little bit. 
And what happened here is really a disgrace to that principle. 
And the folks in Seattle deserve an apology, frankly, in this 
regard. And maybe you move forward after apology with the rule 
you want, but this is not right. It does not sit well with me 
or them. So I am hopeful that you will go back and really think 
at some point about the substance of what the people in Seattle 
told you and reconsider this rule, because I will tell you 
what, the way you set up this rule, it is clever. It says, 
well, we have a presumption, you know, against in the taller 
markets, the non-top-20 markets. We will just have a 
presumption of innocence if you will. Well, there are a lot of 
people sitting in jail where the presumption of innocence has 
been overcome, and in front of this jury, there are going to be 
a lot of people that are going to be convicted, and the first 
amendment is going to go down big time. This rule is wrong and 
should not stand. Thank you.
    Mr. Markey. The gentleman's time has expired. The Chair 
notes that all members of the subcommittee have been 
recognized, asked a round of questions. The gentlelady from 
Tennessee, Mrs. Blackburn, is not a member of the subcommittee 
but a member of the full committee, and she is as faithful an 
attendee at these hearings as any member of the subcommittee; 
and with unanimous consent, I will recognize the gentlelady for 
5 minutes to ask a round of questions.
    Mrs. Blackburn. Thank you, Chairman Markey, and I 
appreciate your consideration.
    Mr. Markey. Put on your microphone there.
    Mrs. Blackburn. It is on. Maybe my voice is too soft, too 
genteel. How about that? Too genteel, but you and the ranking 
member are kind in allowing me to continue to work through 
this. I do appreciate that very much. I think that it is clear 
to the Commissioners that there is a great deal of 
disappointment with the way some things have been carried out, 
and Chairman Martin, I will have to tell you that reading the 
proceedings of the 26th, reading some of the transcript, your 
comments leading up, it has been with great disappointment that 
I have looked at how you have approached disagreement. And I do 
consider it an element of disrespect for our constituents who 
have chosen to speak out on those issues. I regret that. I 
regret the subjective approach that you have chosen to take, 
and as many of my colleagues have said today, the lack of an 
orderly process within your working framework is evident, and 
that is regrettable for those of us who are working diligently 
and who see the telecom industries and the interactive 
technology industries as essential for economic growth and 
prosperity.
    I did want to ask one question if I may, Mr. Chairman, and 
submit my opening statement for the record. Commissioner 
McDowell, coming to your testimony, you talked a lot about the 
diversity within the industry as a whole. And I am working on a 
piece of legislation I am going to file which would repeal 
section 612(g), the 70-70 rule, which I think is something that 
is anachronistic. I don't think the chairman needs to dust it 
off and try to unilaterally regulate the industry. I don't 
think the Commission needs to do that. I think the industry is 
vibrant, and it is competitive, and some things are just not 
necessary. And I went back and looked at 1984 and when that was 
put in place, and I thought of myself as a young mother who was 
very proud of my 19-inch color TV that I could get as much 
Sesame Street on that thing as I needed to occupy my little 
kids. I was very proud of my wall-mounted wireless phone 
because I no longer had a 20-foot cord across the kitchen, and 
I think about how far we have come since that time. So since 
you talked about diversity, very quickly, if you would just 
make a comment for me about the 70-70 rule and repealing the 
Commission's authority in 612(g) and where you think that would 
stand, I would appreciate that.
    Mr. McDowell. Well, certainly back in 1984 it was a 
different world. Most consumers only had a choice of one paid 
video subscriber, MVPDs we called them; and there was far more 
vertical integration and far fewer independent networks. Back 
in 1984, there were less than 100 national programming 
networks, now there are over 500. Back then, vertical 
integration between cable operators and programmers was at 
about 50 percent. Today it is about 15 percent, actually less 
than 15 percent. Today the average consumer has the choice of 
about three MVPDs, video providers. Back then, satellite was 
basically non-existent. Now it has a market share of about 30 
percent. Back then, phone companies were not in this market, 
now Verizon alone has about a million subscribers. And I could 
go on, but the point is that the marketplace has changed 
considerably. Now, prices have gone up, but on a per-channel 
basis, they have actually gone down. There are reports out 
there and studies that show that prices have, you know, gone up 
100 percent over a certain period of time, but at the same time 
the number of channels that subscribers have available to 
them----
    Mrs. Blackburn. So you would say it is a point worthy of 
consideration?
    Mr. McDowell. It is a point worthy of consideration
    Mrs. Blackburn. Commissioner Adelstein.
    Mr. Adelstein. I enforce the laws, Congress writes it. If 
you repeal it, I won't, but, as it is on the books, I think we 
need to enforce it. I was very concerned of course with the 
method by which there was an attempt to arrive at a conclusion 
that wasn't supported by our own internal FCC data. So I think 
as long as it is on the books, I think we have to do the best 
we can to be accurate, fair, and basically report the truth to 
Congress as we see it.
    Mrs. Blackburn. But you wouldn't fret if it went away?
    Mr. Adelstein. Well, you know, I think you could give 
frankly the FCC some valuable tools to promote diversity if we 
reach the 70-70 limit, so I am not necessarily going to 
advocate its repeal. I just think we need to be accurate in how 
we assess whether or not we reached that number.
    Mrs. Blackburn. Very good. Thank you. Mr. Chairman, I yield 
back.
    Mr. Markey. The gentlelady's time has expired. The Chair 
recognizes the chairman of the full committee, the gentleman 
from Michigan, Mr. Dingell.
    Mr. Dingell. Mr. Chairman, thank you for your courtesy, and 
again, I commend you for this hearing.
    Members of the Commission, Chairman Martin, thank you for 
being here. I have a limited amount of time, so I will try and 
proceed by asking questions that can be responded to by yes or 
no. Chairman Martin, this question is in two parts. Do you 
agree that the Administrative Procedure Act requires an 
opportunity for notice and comment and that that Act is 
essentially an expression of the constitutional requirements on 
these matters? And would you agree that the APA requires that 
orders adopted by the Commission must take into account those 
comments received from the public? Yes or no.
    Mr. Martin. Yes.
    Mr. Dingell. Now, to the other Commissioners then. Please 
again, with apologies, I ask yes or no. Ladies and gentlemen, 
would you each agree that each of your offices has received a 
draft order in the media ownership proceeding from the 
chairman's office? Starting on your left and my right, yes or 
no?
    Mr. McDowell. Yes, we have received a draft.
    Mr. Dingell. Ma'am?
    Ms. Tate. It was published, and so I have seen what the 
chairman has stated publicly.
    Mr. Dingell. Thank you. Mr. Chairman, I know you have 
gotten one. Commissioner?
    Mr. Adelstein. Yes.
    Mr. Dingell. Sir?
    Mr. Copps. Yes.
    Mr. Dingell. Now, Chairman Martin, can you explain to us 
very quickly how a draft order in the media ownership 
proceeding that is circulated in this fashion before the 
comment cycle on the proposed rule ends could possibly take 
into account comments that are yet to be submitted to the 
Commission?
    Mr. Martin. The APA notice requirements where we go out and 
ask the public for what they think about our proposed rules are 
satisfied when we began this process 18 months ago. We adopted 
the NPRM at the time, and we actually sought public comment. 
Public comments have been coming in almost the entire time 
since then, and indeed, what was requested of me by members of 
Congress and urged by some of my colleagues is that we publish 
the proposed rule, publish it, which is what I did. I think 
that was in Commissioner Copps's original statement when we 
adopted the NPRM. But as the Third Circuit when they sent it 
back to us recognized it can't be that every time we try to 
take action that the APA results in a revolving-door 
requirement. It can't be that we propose to do something, 
people comment on it, and then we actually try to move to final 
order and we have to put that out for comment on it and then 
people have to seek comment on it. Then as we reach another 
decision we have to put that out for comment, and then if we 
alter it every time that results in a revolving door that never 
allows us to reach a decision. We have sought public notice and 
comment on our proposals, and we have satisfied the APA for 
that. What I have proposed doing is publishing the one rule 
change so that everyone would have an opportunity to actually 
see it, which is what was actually urged on me and urged on the 
previous Chairman.
    Mr. Dingell. I want to thank you for that, Mr. Chairman. I 
want to observe that this is a very fine answer, but I am not 
sure it is quite responsive to the question. Now, in the 
interest of time, this question is for Commissioners Adelstein, 
Copps, Tate, and McDowell. Please again, yes or no. The first 
one is does this indicate that the Commission can be assumed to 
be operating in a fair, open, and transparent manner that 
allows for the full examination of all issues in a reasonable, 
responsible, rational way on the basis of an adequate record? 
Start on your left and on my right, yes or no?
    Mr. McDowell. Sometimes yes, and sometimes it could use 
improvement.
    Mr. Dingell. Sometimes yes, sometimes no? Ma'am?
    Ms. Tate. I would agree.
    Mr. Dingell. Sir?
    Mr. Copps. No.
    Mr. Adelstein. No.
    Mr. Dingell. This question then again for a yes or no 
answer. Commissioners, do you believe that you and your staff 
have full, unfettered access to all the Commission's 
information and resources without oversight or interference by 
the chairman so that you may make informed decisions when 
voting on items before the Commission? Starting again on your 
left.
    Mr. McDowell. Same answer, sometimes yes and sometimes no.
    Mr. Dingell. Ma'am?
    Ms. Tate. When I have had a problem, I have gone and asked 
the chairman for more information, and he has responded.
    Mr. Dingell. Thank you. Sir?
    Mr. Copps. No.
    Mr. Adelstein. No, not in all circumstances.
    Mr. Dingell. Then this question, have you always voted and 
had opportunity to vote on items only after seeing a final and 
complete order? Starting on your left if you please
    Mr. McDowell. Yes, I have only voted on items after seeing 
a complete order.
    Mr. Dingell. Ma'am?
    Ms. Tate. Typically we get a red-line version, and then we 
have the opportunity after the vote to go back and make sure 
that if we had any changes to that order they were included in 
the order.
    Mr. Dingell. Thank you. Sir?
    Mr. Copps. I think the answer would have to be no in light 
of posted option at us and changes that have occurred in items.
    Mr. Dingell. Sir?
    Mr. Adelstein. Technically Mr. Copps is correct. Usually we 
wait until we see them, and that is sometimes why the meetings 
start so late.
    Mr. Dingell. Now, this question, gentlemen, and ladies. Do 
you believe that the Commission is doing all that it can to 
ensure that the regulatory process is open, fair, and is done 
with a full opportunity for public comment in an appropriate 
and proper fashion? Starting again, please, ladies and 
gentlemen on your left.
    Mr. McDowell. It could always use improvement.
    Ms. Tate. I believe we have been doing that, but we could 
always improve.
    Mr. Dingell. Thank you. Sir?
    Mr. Copps. Not the way that I would define those items you 
talked about.
    Mr. Dingell. Thank you.
    Mr. Adelstein. No.
    Mr. Dingell. Now, Mr. Chairman, I think you would agree 
with me that you and I both would like to hear the answer to 
every question that I have just asked to have been yes. I am 
concerned here about the way the FCC is running, and I am much 
concerned about the process that we are observing and seeing 
that the agency improves dramatically. It is my view that when 
the Commission acts, these matters should be the subject of 
adequate notice and full opportunity for comment, that the 
Commission should function in a way which brings all of the 
Commissioners in because they are all equal, all have a vote, 
in determining whether the agency functions as is required by 
the Communications Act and other statutes in the, quote, public 
interest. And until and unless I see that that is happening or 
I see evidence about opportunity for people outside of the 
Commission to file comment in a way that enables it to be 
properly considered and heard by the Commission, to create a 
proper record upon which we may be assured that the Commission 
is functioning properly and carefully, I will continue to have 
significant concerns. Now, in view of what I have said, Mr. 
Chairman, I think it is fair that I should permit you to 
respond. I hope I have not offended you, but these are honest 
concerns which I think you can observe are shared by members of 
the Commission. I think that when you observe the process and 
the practice, it becomes clear that the Commission has not been 
including the public in a way that the public should have been 
included to have its comments properly considered as part of 
the record. Mr. Chairman, if you wish to respond, I would be 
honored that you do so.
    Mr. Martin. Sure, and thank you for the opportunity. I 
think that the Commission has actually followed the appropriate 
procedures in the media ownership context to allow for people 
to be able to understand what the Commission is proposing to do 
and to actually allow for them to have the opportunity to 
comment on it. Indeed the Commission has no obligation to go 
through the extra step before we adopt an order of publishing 
the proposed rule. In our notices of proposed rulemaking the 
law allows us to seek general comments with directions of what 
we are thinking about doing and have people make comment on it, 
and we actually very rarely go through the extra step that we 
did here of before the Commission action, publishing the actual 
rule so people can see that again. But that does not create an 
initial obligation to go through and do the whole notice and 
comment cycle over again. And actually, it was an extra step. 
If an extra step of disclosure to the public triggers 
additional process requirements, it will actually discourage 
the commission from taking that extra step. And what we were 
doing in this instance was to try to give them more opportunity 
to see what we were doing.
    As far as the internal processes and how the Commission 
ends up operating, I am sure that they can always end up being 
improved; but we have been operating under the same internal 
processes since I was a staffer working for Commissioner 
Furchtgott-Roth, when Bill Kennard was chairman, and we 
followed the same process and procedures that we did then. When 
I was in the minority as a staffer, when I was a Commissioner 
under Chairman Powell, and since I have been Chairman, we have 
followed the same basic processes and procedures.
    Mr. Dingell. I am going to say something that I learned 
when I got to be chairman of this committee. I went over to see 
the Parliamentarian, he was Lou Deschler, who was one of the 
giants in that business, and I said Lou, I am very concerned 
about how I am going to do when I am chairman. I said, what do 
I need to do to do a good job? He said, John, you have got to 
do two things. One, you have got to be fair, and two, you have 
got to appear fair. Those are rules that I have not breached. I 
suspect the second is the more difficult of the two rules to 
adhere to. I just would observe one other thing. I always am 
interested in the substance, but I am very, very interested in 
the procedure because my old daddy taught me a little lesson 
way back when I was young. He said, son, if you let me write 
the procedure and you write the substance, I will overcome you 
every time. And that is why it is so important that the process 
and the procedure be fair. You are the guardian of that within 
the Commission, and I say this with respect and affection 
because I like you and I think you are trying. But I would 
observe that these are matters that are going to I think 
require your attention, and I suspect if they do not get that, 
I imagine that you are liable to see these things upset by the 
courts over failure of the Commission to properly give notice 
and opportunity for comment. And I just hope that you will keep 
that in mind as you proceed about the business of the 
Commission. Thank you, Mr. Chairman.
    Mr. Martin. Thank you.
    Mr. Dingell. Thank you, Mr. Chairman.
    Mr. Markey. Thank you, Mr. Chairman, and I think that is a 
very good note on which to end the questioning of the Federal 
Communications Commission. We thank you very much for your 
patience, and obviously we are going to be in very close 
contact with you with many of the issues that were raised 
today. And we will take a minute or so break here while the 
first panel moves out and the second panel of witnesses comes 
up before the committee.
    Mr. Copps. Thank you very much.
    [Recess.]
    Mr. Markey. Thank you all very much for your patience. This 
is obviously a very important subject, and we have put together 
one of the most expert panels ever constructed on any subject 
in the history of Congress. It has been put together with a lot 
of very careful thought, and we thank you for staying around. 
We are now heading towards 4\1/2\ or 5 hours into this hearing, 
and there is no end in sight. And I think, you know, you can't 
get too much of a good thing. So let us just keep going, and we 
will begin with Sidney ``Skip'' Bliss, who is the president and 
chief executive officer of Bliss Communications, Inc. His 
company owns both newspapers and radio stations in Wisconsin. 
Here is what I am going to say, though, just so that you all 
understand, that each of you is going to have to aspire to a 
higher percentage of your thoughts going unspoken. And so this 
5-minute rule upon which you were invited to testify will be 
enforced, and so please look at maybe the opening two or three 
or four paragraphs of your statements, and maybe some of that 
could go and you could get right down into the guts of what it 
is you want us to know, you know? So that would be very, very 
helpful to us. We will begin with you, Mr. Bliss. Welcome. You 
have 5 minutes.

      STATEMENT OF SIDNEY BLISS, PRSEIDENT AND CEO, BLISS 
                      COMMUNICATIONS, INC.

    Mr. Bliss. Thank you. I am happy to be here today to offer 
you a real-life story of how owning and operating a newspaper/
radio combination in a small town can mean better service to 
the public. I live and work in Janesville, Wisconsin, a growing 
community of 70,000 people. The Janesville Gazette, founded in 
1845, is Wisconsin's oldest daily newspaper publishing 7 days a 
week and since 1883 has been under the continuous ownership and 
operation of five generations of my family. Over the course of 
those 162 years of operation, the Gazette has covered the news 
and events of our community like no other source, and the 
people of Janesville have come to rely on the newspaper for its 
accuracy and credibility.
    Before there was a Federal Communications Commission, the 
government turned to newspaper publishers during the Great 
Depression and asked them to invest in the new industry of 
radio to get it off the ground because newspapers knew more 
about how to gather information and disseminate it than anyone. 
My father purchased the license for WCLO-AM, and the station 
went on the air August 1, 1930, 4 years before Congress passed 
the Communications Act of 1934. The programming was locally 
produced and included large segments of local news gathered by 
a team of local news reporters who aggressively competed with 
the newsroom of the daily newspaper, which was located in the 
very same building. Over time, as the medium grew, local groups 
of all kinds appeared on WCLO. Radio became the people's source 
for timely information of breaking news, community events, 
sports, and emergency weather. Eventually a new medium emerged 
which offered a higher quality listening experience, and my 
father acquired an FM license, and on October 10, 1947, WJVL-FM 
went on the air.
    Although this new technology lent itself best to music-
oriented formats, we continued to inform the audience of 
important news with on-the-hour and half-hour news updates. The 
Gazette and these stations have been owned and operated 
together since we went on the air, and our newspaper/radio 
combination was not made subject to the cross-ownership ban 
that went into effect in 1975. Our 77-year commitment to 
quality, independent, community-based broadcast journalism 
continues today on both of these legacy stations. In fact, 
newsroom staffing at the stations over the past several years 
is at an all-time high.
    Both the newspaper and radio stations are frequent award 
winners on a state and national level, and the newspaper is 
currently Best in Class in Wisconsin. In every case, we have 
acted responsibly, and our public file at WCLO and WJVL 
reflects this. Community leaders from all walks of life seek us 
out so that we can better understand their issues. As a result, 
we take proactive positions and help push quality initiatives 
forward. WCLO-AM is an all-local news, weather, and sports talk 
radio station with a combination of CNN, local newscasts on the 
hour, and local news on the half-hour. Monday through Friday 
our morning local talk show brings in community leaders and 
elected officials to discuss issues of importance with our 
listeners. Each election cycle, we produce local debates in 
cooperation with the newspaper and the local University of 
Wisconsin campus. Last night, in conjunction with local 
performing arts groups, we recreated a live radio broadcast of 
Dickens's Christmas Carol.
    However, since our founding, the information business has 
undergone enormous change. Where we were once the sole provider 
of news locally, today there is a wide array of outlets for 
people to get that news. Television, Internet, cable, 
satellite, and telephone communications all compete with us 
every day for our audience and often for the advertising 
revenue that supports our newspaper and radio stations. This 
intense level of communication is creating tremendous 
challenges for our industries, and it is critical that we have 
the ability to operate and acquire new businesses that will 
ensure our economic future.
    Under the current cross-ownership ban, as a newspaper 
publisher, I am the only businessman who is prohibited from 
pursuing local business broadcast opportunities, while national 
companies with no local ties to the community are free to do 
so. This makes it much harder for our company to stay 
competitive and do what we do best, providing our community 
with local news and information. There is another FM station in 
our community that offers no local news programming. It has 
been sold four times in the last 15 years, and if we were 
allowed to acquire it, we would have extended our full 
complement of newscasts. We also operate daily newspapers in 
three other communities, and in one of them, Marinette, 
Wisconsin, the local radio stations were just sold a year ago. 
And again, we were prohibited from acquiring them and providing 
formal local news programming where there was none.
    The newspaper industry is one of America's great 
institutions and is the principal defender of the first 
amendment. Yet, it is changing dramatically as we speak. If we 
are to do our job and be economically viable, we must not be 
forced to operate with one hand tied behind our back while our 
competitors are allowed to prosper. The newspaper/broadcast 
cross-ownership ban is antiquated and outdated rulemaking and 
in the interest of economic fairness needs to be eliminated.
    Thank you, sir.
    [The prepared statement of Mr. Bliss follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you. You finished with 1 second left to 
go, Mr. Bliss. You did an excellent job.
    Mr. Upton. You got to be in radio.
    Mr. Markey. It is our sincere desire that it can be 
emulated by the----
    Mr. Upton. That is authorized by Mr. Markey, right?
    Mr. Markey. So we thank you. Our next witness, Dr. E. Faye 
Williams, is National Chair of the National Congress of Black 
Women, a non-profit organization dedicated to the educational, 
political, economic, and cultural development of women and 
their families. We welcome Dr. Williams.

    STATEMENT OF E. FAYE WILLIAMS, NATIONAL CHAIR, NATIONAL 
                 CONGRESS OF BLACK WOMEN, INC.

    Ms. Williams. Thank you, Chairman Markey and Mr. Upton, 
members of the subcommittee. We have been this way before, Mr. 
Chairman, and this is early compared with the last time we were 
here when we got on about 5:30. But as you know, the National 
Congress of Black Women has had a keen interest in media 
matters for over 15 years when we began a campaign against 
violence, denigration, and misogyny in the media. And I think I 
speak for much of the civil and human rights community in 
making three essential points. My first point is that America's 
media companies, over whom you exert considerable influence, 
need to display more responsibility and refrain from 
disseminating degrading, misogynistic content in order to make 
a simple buck. Members are all too aware of the examples of 
media companies jumping at opportunities to produce movies, 
videos, music, and other content that portray people of color 
as debase caricatures and poor images of women. They hide 
behind the first amendment, which is their right, but ignore 
the larger issue about assuming corporate responsibility to 
remove the poison from our airwaves.
    And that brings me to my second point. There is no balance. 
As Chairman Dingell and Chairman Conyers have said previously, 
the current FCC is broken. As a lawyer and a former 
congressional staff member, I know the administrative agencies 
require transparency and the meaningful participation of the 
public. I hope this committee, as others have done, will call 
on the FCC to cease all rulemaking until the committee is able 
to complete a full-fledged investigation into recent abuses by 
the FCC, abuses cited by both Republicans and Democrats.
    Third, the current FCC chairman seems bent on pursuing a 
decidedly anti-diversity agenda, but I hope this committee will 
stop that. Chairman Martin insists on a big reward for the 
media companies by relaxing ownership rules. All the available 
data show that this drastically curtails diversity in local 
markets. Clear Channel, and I am not sure whether Mr. Levin has 
a good right or left punch, so let me not be too hard on him, 
but let me just say they own a whole lot out there and that 
prevents women and people of color from owning also and having 
something to say about the content.
    As a result, the minority-owned media company is becoming 
an endangered species, Mr. Chairman. Despite making up 34 
percent of the U.S. population, racial and ethnic minorities 
own only 7.7 percent of radio stations and just over 3 percent 
of television stations. Under Chairman Martin the situation has 
worsened. Last year alone minority ownership among TV stations 
dropped over 8 percent. The number of black-owned stations fell 
80 percent, yet the chairman continues to roll back cross-
ownership rules, and like Mr. Rush, I am frustrated that no 
plan is coming forth. This kind of special interest giveaway at 
the expense of the public is made all the more disturbing by 
Chairman Martin's effort to disproportionately regulate the 
only medium on which black-owned programmers and people of 
color have been able to gain any kind of foothold, cable 
television.
    And so I want to say, Mr. Chairman, as we go through this, 
a la carte pricing, a long-time pet project of Chairman Martin, 
would kill minority programmers because they rely on the 
bundled tier for exposure and for their advertising revenue; 
and without this benefit, their costs would soar and their 
audience would really dwindle.
    So, Mr. Chairman, the Commission's recently adopted leased 
access price cuts, for whatever good points it might have by 
definition, does nothing to increase minority ownership. I 
think the term media sharecropping has been used, and as a 
sharecropper's daughter, we definitely don't want to go back 
there, Mr. Chairman.
    Mr. Martin continues to promote these policies as helping 
minorities, but in a letter written to 13 major organizations 
and virtually the entire civil rights community, Mr. Chairman, 
Mr. Martin's agenda would set back the cause of diversity. We 
have seen this play out before. We would be happy to invite Mr. 
Martin and others to come into our communities to hear what we 
have to say and then of course try doing some of the things 
that would be helpful to us.
    I also hope that my friends in the consumer advocacy 
community will become more sensitive to our concerns as well 
and not seek to enable Mr. Martin's power grab. They are bad 
government and detrimental to diversity.
    And once again, I thank you, Mr. Chairman, for the 
opportunity to appear before your committee. And, of course, I 
will submit my entire statement for the record.
    [The prepared statement of Ms. Williams follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Dr. Williams, very much. Our next 
witness, Andrew Levin, is executive vice president and chief 
legal officer of Clear Channel Communications, a media 
conglomerate that owns hundreds of radio stations, television 
stations, and outdoor advertising. And like you, Dr. Williams, 
Mr. Levin is also a former Hill staffer, for this committee, in 
fact. So we welcome you back, Andy.

 STATEMENT OF ANDREW LEVIN, EXECUTIVE VICE PRESIDENT AND CHIEF 
          LEGAL OFFICER, CLEAR CHANNEL COMMUNICATIONS

    Mr. Levin. Thank you, Chairman Markey, Ranking Member 
Upton, Congressman Stupak. It is great to be here today. It is 
certainly an honor to be back here. I have to say if there is 
anything I have learned since I left, it is a lot more fun to 
be on that side than it is on this side. But I appreciate the 
opportunity to be here, and I thank you for inviting me.
    The focus of the hearing obviously was the FCC Chairman's 
proposed changes in newspaper/broadcast cross-ownership rules. 
Chairman Martin has made it clear he doesn't intend to propose 
changes to any other ownership rules, including the radio 
rules. But neither the FCC review that is required by law nor 
the Third Circuit remand are limited to just the newspaper 
rule. The FCC has a legal obligation to address all of its 
ownership rules and make a decision based on the entirety of 
the record before it, not just on a small subset of that 
universe. It is my hope that members of the committee will 
focus on today's marketplace realities and agree that changes 
to the local radio ownership rule are once again necessary in 
2007.
    People often forget, and it has been mentioned a few times 
today, that prior to the Telecom Act of 1996, more than 60 
percent of the Nation's radio stations were operating in the 
red, and many of them were facing the threat of going silent 
entirely. Congress recognized that crisis, took action, and it 
worked. And now we are sitting here 12 years later, and radio 
companies are again facing major operating challenges. Radio 
industry revenues have grown less than 1 percent a year over 
the last 5 years. Projections going forward are all flat to 
negative. This is unsustainable for our industry.
    A seismic shift has taken place in the competitive 
landscape. The rapid growth in new, unregulated digital 
services, including satellite radio, iPods, and Internet radio, 
is significantly eroding the amount of time spent listening to 
free broadcast radio. In the space of only the last 4 years, XM 
and Sirius increased their subscribership from less than 1 
million customers in 2003 to over 16 million customers today. 
Likewise, I doubt that anyone in this room could have imagined 
in 1996 that 110 million iPods and other MP3 players would be 
in consumers' hands by now.
    Clear Channel by no means begrudges these new technologies 
for their success, quite the contrary. But free radio 
broadcasters, who ironically are the only ones who serve the 
local needs of their communities, are still shackled by these 
outdated regulations that not only limit their growth but by 
extension limit their ability to deliver important local 
services. The FCC simply can't look the other way. Regulatory 
reform is needed, and there is ample room for more ownership 
flexibility in the radio market without causing excessive 
concentration.
    Just look at the facts. The top 20 radio companies in this 
country make up less than half of the total radio market. Clear 
Channel itself owns just 8 percent of U.S. radio stations. By 
contrast, nearly 90 percent of the recording industry is 
controlled by just four companies. And the top seven cable 
companies control 85 percent of that market. The Commission 
can't simply ignore the change that has occurred in the 
marketplace, and if the Commission does the unthinkable and 
approves the XM/Sirius merger, it will make repeal of the local 
ownership limits an absolute imperative. A combined XM/Sirius 
would control more spectrum than both the AM and FM bands 
combined in every local market.
    If the FCC approves the creation of a spectrum monolith 
like this, without at the same time revising rules for local 
free radio, it would be both a dereliction of its statutory 
mandate and profoundly unfair to the broadcast industry and the 
American public. As Ranking Member Upton and other members of 
the subcommittee have recognized, at a minimum, the FCC should 
raise the current caps in the largest markets, as Chairman 
Martin is proposing to do with newspapers. That action would be 
exceedingly modest, but it is the bare minimum needed to ensure 
that radio does not become something that only people who can 
afford to pay for it can listen to.
    Finally, and very importantly, I agree with Dr. Williams 
that immediate action is needed to improve the disgraceful 
state of minority media ownership. One way is for Congress to 
reinstate the minority tax certificate program, which Clear 
Channel has supported for years. Clear Channel also urges the 
Commission to take immediate action and adopt the bold 
proposals of the MMTC and 26 other minority media groups, 
including Rainbow Push and LULAC, who support repeal of both 
the AM/FM subcaps and adoption of an incubator program that 
they believe will provide an immediate spike in minority and 
women ownership.
    In closing, I implore the members of the committee to not 
leave free, over-the-air radio behind. It is an opportunity to 
protect the future viability of free broadcast radio service, 
and thank you very much.
    [The prepared statement of Mr. Levin follows:]
    
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    Mr. Markey. Thank you, Mr. Levin, very much. And our next 
witness, Jim Winston, came before the subcommittee many times 
in the past. He is the executive director of the National 
Association of Black Owned Broadcasters, the largest trade 
organization representing the interests of African-American 
owners of radio and television stations. Welcome back, Jim. 
Whenever you are ready, please begin.

  STATEMENT OF JAMES L. WINSTON, EXECUTIVE DIRECTOR, NATIONAL 
            ASSOCIATION OF BLACK OWNED BROADCASTERS

    Mr. Winston. Thank you, Mr. Chairman. Thank you and the 
members of the subcommittee for inviting me to speak this 
afternoon.
    I am here today to make three requests of the subcommittee. 
Please support reinstatement of a minority tax certificate 
policy to promote minority ownership of broadcast facilities. 
Please prevent the Federal Communications Commission from 
further relaxing its broadcast ownership rules until it has 
adopted meaningful policies to promote minority ownership of 
broadcast facilities. Third, please investigate Arbitron's new 
portable people meter audience measurement system, because it 
appears that within its design is a critical flaw in the 
gathering and processing of the audience data.
    We have had very good discussion about the need for a 
minority tax certificate policy. I will cut my comments short 
there other than to note that Congressman Charles Rangel has 
introduced H.R. 3003, and Congressman Bobby Rush has introduced 
H.R. 600, both designed to reinstate the tax certificate 
policy. NABOB requests that the members of the subcommittee 
join Congressmen Rangel and Rush in working to reinstate the 
tax certificate policy.
    With respect to the FCC's media ownership proceeding, 
again, we have had a great deal of discussion about that today. 
And NABOB requests the subcommittee direct the Commission to 
adopt policies either specifically designed to promote minority 
ownership or at a minimum adopt policies to promote ownership 
by socially and economically disadvantaged businesses. Also, 
the subcommittee should direct the Commission to delay any 
action on changes in its ownership rules until a task force to 
establish policies to promote minority ownership as proposed by 
Commissioner Jonathan Adelstein has been created and it has 
completed its work and reported back to the Commission with its 
recommendations.
    What I would like to do is to take this opportunity to 
bring to the subcommittee's attention a new threat to minority 
ownership of broadcast stations coming from the portable people 
meter audience measurement system adopted by Arbitron. Arbitron 
maintains a monopoly of the business of measuring audiences of 
radio stations, which means that if radio stations do not 
subscribe to Arbitron's rating service, the radio stations will 
have no ratings data to present to advertisers who purchase 
advertising time on radio stations. Arbitron has recently 
created the PPM methodology, an unaccredited electronic 
audience measurement tool, to replace a paper diary 
methodology, an accredited methodology, which Arbitron has used 
for decades. Initial results from the PPM system have shown 
drastic declines in the audiences for stations serving African-
American and Hispanic audiences. The failure of Arbitron to 
obtain Media Ratings Council accreditation for PPM in 
Philadelphia and New York and its failure to obtain 
reaccreditation in Houston is a situation that calls for an 
investigation by this subcommittee, because that failure 
suggests that there are other deficiencies in the methodology 
that are not yet apparent.
    NABOB therefore requests that the subcommittee investigate 
the PPM methodology and obtain information on the PPM 
accreditation process from Arbitron and the Media Ratings 
Council. There is precedent for such a request. Congress 
requested such information from Nielsen and the Media Ratings 
Council when the local people meter was being investigated by 
Congress in 2004.
    NABOB applauds the subcommittee's decision to investigate 
the Federal Communications Commission's efforts to allow 
further consolidation of ownership in the broadcast industry. 
However, NABOB submits that the committee must investigate this 
even more sinister threat to minority ownership of media 
properties posed by Arbitron's PPM system. If Arbitron was 
allowed to use its monopoly system in the audience rating 
business to force its defective PPM methodology on stations 
nationwide, the loss of minority media ownership that may 
result could be far more devastating than the loss which may 
result from the proposed further relaxation of the FCC's 
ownership rules being proposed by Chairman Martin.
    We thank you in advance for considering this request, and 
we look forward to working with you to investigate and rectify 
this very serious situation. Thank you for the opportunity to 
appear today.
    [The prepared statement of Mr. Winston follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Mr. Winston, very much. Our next 
witness, John Sturm, is the president and chief executive 
officer of the Newspaper Association of America. Welcome back 
to the subcommittee, Mr. Sturm. Whenever you are ready, please 
begin.

   STATEMENT OF JOHN F. STURM, PRESIDENT AND CEO, NEWSPAPER 
                     ASSOCIATION OF AMERICA

    Mr. Sturm. Thank you, Mr. Chairman, Mr. Upton, Mr. Towns, 
Mr. Stupak. I appreciate the opportunity to testify today. I 
will try to address the goals of competition, diversity, and 
localism, which is what we are here about in the context of the 
32-year-old ban on newspaper/broadcast cross-ownership. Let me 
be clear, however, at the outset. In our humble opinion, 
Chairman Martin's proposal is extremely limited. It is limited 
only to the top 20 markets. For all other markets, essentially, 
the ban remains in place. It would be subject to waiver 
criteria that for the first time ever presumes newspaper/
broadcast cross-ownership to be against the public interest. So 
you are presumed guilty before you come into the FCC to seek a 
waiver. In fact, our position is and always has been that the 
across-the-board ban should be eliminated across the board.
    As was mentioned earlier today when the Commission 
testified, this is the only ownership rule that was enacted by 
the Commission in the 1970s that has not been changed, 
modified, or eliminated since that time, a time when there were 
three stations per market and a handful of radio stations. 
Since that time, broadcast stations, the number of them, has 
more than doubled. We have cable, satellite, wireless, 
Internet, and all the things that you have heard referred to 
earlier today. This is the largest, the biggest, the most 
enormous expansion and explosion of media in the history of the 
world, and during that period of time, only newspapers have 
contracted.
    Process. This is the sixth time in the last 11 years that 
the FCC has a proceeding to review the newspaper/broadcast 
cross-ownership rule in some fashion. My association has filed 
12 sets of comments on this issue over the last 11 years. I 
last testified on this exact issue on September 15, 1999, in 
front of this committee. Very little has changed in that time 
as far as the application of the rule is concerned, but what 
has changed is that there is more competition, more 
competitors, more choices, more diversity, and much more 
difficult times for newspapers.
    We have had a unique situation with this rule and that is 
the grandfathered markets where the rule has been inoperative 
since 1975, and Mr. Upton referred to one of those, shows that 
there is no harm to the public through cross-ownership; and in 
fact, all of the studies also indicate by the FCC and other 
sources that more news and public affairs is the one 
differentiator between newspaper ownership of a station and 
ownership by any other. It is the single differentiator. It is 
the only difference. More news, more public affairs for local 
audiences. Eliminating the rule would be pro-competitive 
because it would allow newspapers to reach audiences just like 
everybody else does.
    Diversity. There is a wealth of viewpoint diversity. Not 
only is there talk radio, national newspapers, blogs, local 
Internet services but an increasing desire in local markets for 
the Internet to provide truly hyper-local news. These things 
are developing. Many of you saw just the other day in the 
Washington Post a story of digital sports. That is a local, 
Internet-based sports newsgathering organization that will 
compete with local newspapers.
    Localism, an important part of the FCC's criteria. Local 
newspapers are simply the most local of all media. Local 
autonomy and local editorial control is the culture of 
newspapers. No one else does local news like newspapers, and 
broadcast stations and their audiences would benefit from 
relaxation under this rule. Local news is not being invested in 
by anyone these days. You should not count on Google or Yahoo 
to do local news.
    Newspapers have been kept out of the market for 32 years. 
It is time for newspapers to be allowed to compete just like 
everyone else. In order to be ineligible to hold a broadcast 
license, you have to be either a foreigner, a convicted felon, 
or a newspaper publisher. That is the way it has been since 
1975. In today's world, not the world of 1975, that is 
unconscionable, it is unwarranted, and even as the court said 
in 2004, unnecessary.
    Thank you for your time and your attention.
    [The prepared statement of Mr. Sturm follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Mr. Sturm, very much. The next 
witness, Juan Gonzalez, is past President of the National 
Association of Hispanic Journalists, an organization dedicated 
to the recognition and professional advancement of Hispanics in 
the news industry. We welcome you, sir.

    STATEMENT OF JUAN D. GONZALEZ, PAST PRESIDENT, NATIONAL 
              ASSOCIATION OF HISPANIC JOURNALISTS

    Mr. Gonzalez. Thank you, Mr. Chairman. Good afternoon, Mr. 
Chairman and committee members. And I have prepared some 
written remarks, which I have submitted to you, but I will also 
change it a little bit on the basis of the testimony.
    My name is Juan Gonzalez. I am here representing the 
National Association of Hispanic Journalists, a non-profit 
organization with more than 2,000 members who work in 
television, radio, and newspapers in the United States in both 
English and Spanish language medium. I am founder and former 
president of the Association, a staff columnist for the New 
York Daily News, and a co-host of the national radio program 
Democracy Now. In nearly 30 years as a professional journalist, 
I have never testified before any government body on any issue, 
but I and the members of my Association are here today to plead 
for your help because the profession that we love and the media 
industry in which we labor has repeatedly and profoundly failed 
the public interest, convenience, or necessity of a huge 
portion of our population, the approximately 100 million 
Americans of African, Hispanic, Asian, and Native descent.
    Even as our Nation has become ever more diverse racially 
and ethnically, we all know as much as 35 percent of our 
population is now minority. Minority ownership of the broadcast 
companies that provide the public essential news reports and 
interpretations of daily events has remained at shockingly low 
levels. The Free Press report released last week found the 
percentage of minority-owned stations declined from an already 
paltry 3.45 percent in 2006 to 3.1 percent and that among 
African-Americans, it plummeted from 25 stations in 1998 to 19 
in 2006 to eight to 2007. Black ownership of television 
stations in America is disappearing. Since 1998, even though 
the total number of commercial television stations has 
increased by about 13 percent, the number of minority-owned 
stations has stagnated.
    And radio is hardly much better. A 2006 study by Free Press 
concluded that minorities own just eight percent of the 10,000 
commercial radio stations in the country. In contrast, overall 
minority ownership in the general non-farmed sector of business 
in America reached nearly 18 percent in 2002, the last year for 
which we have comprehensive government data. That is five times 
better than television and twice the level of radio.
    Chairman Martin's plan to permit expanded cross-ownership 
by newspapers and television stations places the future of 
minority ownership in even greater jeopardy. Under the 
chairman's plan, all 19 minority-owned television stations 
operating in the top 20 markets would become potential targets 
for purchase by local newspapers.
    Some might ask why we as journalists place so much emphasis 
on the racial and ethnic composition of media owners. It is 
simple. Direct experience has shown us that ownership matters 
when it comes to diversity in newsroom employment and more 
importantly when it comes to diversity of voices and meeting 
the news and information needs of minority communities. Not 
surprisingly, the percentage of journalists of color working at 
local TV stations and at daily newspapers also declined last 
year, and minority employment in both local broadcasting and 
newspapers continues to lag behind overall population.
    For 11 years, our association has issued annual reports on 
the coverage of Hispanics by the evening news broadcasts of the 
major television networks. Year in and year out the results are 
inevitably the same, less than 1 percent of network news has 
been devoted to stories that specifically focus on Hispanics. 
Depending on that year, anywhere from 30 to 45 percent of that 
small universe of stories has centered on two main issues, 
immigration and crime. A more marginalized and distorted image 
of the Latino population in America could not be imagined.
    In 2001, NBC spent $1.9 billion to buy a bunch of local 
Telemundo stations. At the time, NBC executives personally 
assured me as president of the Association and the FCC that the 
merger was in the public interest and would provide more 
resources and news to the Hispanic community. After gaining 
regulatory approval, merging its back office operations, in 
2006 NBC laid off 700 workers and announced that it was 
eliminating local news staffs at Telemundo stations in five of 
the Nation's biggest cities, San Diego, Phoenix, Houston, San 
Antonio, Denver, and consolidating them in a regional newscast, 
in a regional local newscast in Dallas. Only in the Orwellian 
world of our major media broadcast companies can you improve 
local news coverage by eliminating it in local cities and 
piping it in from 1,000 miles away.
    Previous FCC studies have confirmed a direct nexus between 
minority ownership, workforce diversity, and the content of 
news. NAHJ and more than 20 civil rights groups----
    Mr. Markey. Mr. Gonzalez, please summarize.
    Mr. Gonzalez. Yes--have called on the FCC to address 
minority ownership, and I would just like to say that next year 
represents the 200th anniversary of the Hispanic press in 
America and of the black press, 180 years ago, and we are still 
fighting those fights to require adequate representation of the 
concerns of the minority community. We urge the committee to 
please stop these proposals of Chairman Martin until full 
understanding of the implications for minority media is 
resolved. Thank you, sir.
    [The prepared statement of Mr. Gonzalez follows:]
    
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    Mr. Markey. Thank you. Chairman Markey is, like, good. Next 
we will turn to Jerald Fritz, who is the senior vice president 
of legal and strategic affairs for Allbritton Communications, a 
Washington, DC-based owner of local television stations 
affiliated with ABC. Welcome.

STATEMENT OF JERALD N. FRITZ, SENIOR VICE PRESIDENT, LEGAL AND 
      STRATEGIC AFFAIRS, ALLBRITTON COMMUNICATIONS COMPANY

    Mr. Fritz. Thank you, Mr. Chairman, Mr. Upton, Mr. Towns, 
Mr. Stupak. I appreciate the invitation.
    If Congress or the FCC were to design a media company 
today, it might want to use the Allbritton organization in 
Washington as its model. WJLA, the ABC affiliate here, is the 
local news leader. Its commitment to extensive local service 
and news is award winning. Combined with News Channel 8, the 
first local, all-news cable service in the country that 
Allbritton founded 15 years ago, the two television stations 
program a remarkable 18 hours of live news per day. These 
channels of course are supplemented by rich Internet websites 
that expand information options to those viewers who are 
unwilling or unable to sit and watch traditional television.
    WJLA also recently launched two digital subchannels focused 
exclusively on local community interests. Local Point is a 
fast-paced, short form channel that features local filmmakers, 
local bands, local comedians, local news, and local 
entertainment. WJLA's other digital subchannel is its unique 
24-hour local weather channel. As many of you know, the 
addition of Politico and Politico.com to the information mix 
was driven by Robert Allbritton's vision of a specialty website 
and print publication that would take coverage of politics to a 
new level. The depth of its articles and range of all things 
political is reflected in the recent survey from Editor and 
Publisher Magazine, which ranked Politico.com as one of the 
top-25 rated newspaper websites in the entire nation after only 
10 months of existence. This is powerful evidence of changing 
information habits. Politico shares its infrastructure with 
WJLA, News Channel 8, and Local Point. In fact, that is the key 
point to this media platform model in Washington.
    More information is generated by these co-owned platforms 
together than possibly could be accomplished separately. The 
ability of the broadcast and cable channels to rely on 
information from each other is critical to the journalistic and 
economic success of both. Similarly, Politico's reliance on the 
television stations' infrastructure enhances both 
organizations. The Allbrittons have created these platforms 
from scratch with their own capital and the vision to enhance 
locally-owned media that serves the needs of the local 
community.
    Now, as you may know, this multiple media platform 
organization was born out of the tragic loss of one of the 
region's great newspapers, the Washington Star. In fact, the 
Washington community and Joe Allbritton in particular are among 
the victims of the unintended consequences of the newspaper/
broadcast cross-ownership rule. In 1975, the Star was losing $1 
million a month, a lot of money in those days. Joe Allbritton 
had recently purchased the Washington newspaper/broadcast 
combination in hopes of saving it. He came to the FCC 
requesting a waiver of the newly-adopted rule so that he could 
redirect money from the television station into the paper to 
keep it alive. The FCC said no. Commissioner Robert E. Lee 
wrote a dissent to that decision prophetically entitled, ``Au 
Revoir Etoile, Goodbye to The Star.'' Allbritton wanted to keep 
the paper and try to swap WJLA for a station in Oklahoma City. 
The Commission didn't like that, either, because he would keep 
a non-voting stock interest in WJLA, even though he would have 
absolutely no control over the station. The Commission 
threatened to unscramble the proposed deal by making any rule 
changes retroactive to him. So he reluctantly sold his locally-
owned newspaper to Time magazine based in New York, which kept 
it for a year or so and then shut it down, ironically leaving a 
monopoly newspaper in the shadow of the FCC and in the 
Congress's backyard. So much for diversity.
    Much has changed in the ensuing 30 years. We have so many 
channels of information available to us now that it takes well 
over 5 minutes just to scroll through most television program 
guides. Adding the information from the Internet simply 
explodes the premise of the ownership rules. The threat that 
any organization can dominate the information flow to the 
public is a long-retired notion, if it ever had any viability. 
Broadcasters are not calling for an end to all ownership 
regulation. We merely want to modernize out-of-date 
restrictions that do not reflect current competitive realities. 
Reasonable reform of outmoded limitations will permit 
broadcasters to compete more effectively against multi-channel 
media and Internet providers and maybe even save some 
newspapers. As the FCC has recognized, maintaining 
competitively viable stations serves the public interest. It 
allows them to provide significant presence in their 
communities and offer costly services such as local news. 
Reform of broadcast-only local ownership limitations can help 
those stations do just that.
    Thank you.
    [The prepared statement of Mr. Fritz follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Mr. Fritz. And our final witness, 
one of the most frequent witnesses in the history of the 
Telecommunications Subcommittee, Andrew Jay Schwartzman, one of 
the very few witnesses who everyone knows his middle name as 
well, is president and chief executive officer of the Media 
Access Project, a 35-year-old public interest media and 
telecommunications outfit. Welcome back.

 STATEMENT OF ANDREW JAY SCHWARTZMAN, PRESIDENT AND CEO, MEDIA 
                         ACCESS PROJECT

    Mr. Schwartzman. Thank you, Mr. Chairman. I am going to 
skip my prepared remarks and try to address some of the things 
that have come up on this panel, which means I don't have a 
sense of time, so I would appreciate if you would give me a 
high sign after 4 minutes.
    Thank you, Mr. Chairman, Ranking Member Upton, Mr. Towns, 
Mr. Stupak. For 30 years, I have been coming here and sitting 
on panels with some of the very best and most responsible 
broadcasters in the country. This is not about the Skip Blisses 
of the world, this is not about the Allbrittons. The 
responsible broadcasters who do a good job, are close and 
responsive to their communities, would make it unnecessary for 
us to have a regulatory scheme. This is about the broadcasters 
who don't do their jobs, who abuse the licenses that they have 
to serve the public interest. The simple fact is that in a 
community of 60,000 people in Wisconsin, one daily newspaper 
and two radio stations is enough, and the cost of diversity to 
the public would be too great to change those rules. That is 
just the way it is.
    The simple fact is that most of the synergies that can come 
from common ownership from newspapers and broadcasting 
companies can come from joint ventures without ownership. As I 
detailed in my testimony, there are hundreds of those. Just 
last week I heard Newscorp and Channel 9 in New York talk about 
their joint venture with the Bergen Record in northern New 
Jersey to improve their coverage of northern New Jersey. They 
take more use of the services of the Bergen Record in northern 
New Jersey than they do the commonly-owned New York Post in New 
York. It is just not necessary to own these properties in order 
to get the synergies that can come from combining the sources 
of news organizations and without the cost to the loss of 
diversity.
    As I said, I deal with some of the best broadcasters in the 
country here, but that brings me to Mr. Levin and Clear 
Channel. Not always. Thousands and thousands of comments have 
been filed before the FCC, hundreds of witnesses have 
testified, not one member of the public of which I am aware has 
called for greater local consolidation in radio. It comes from 
Clear Channel, and it comes from the NAB and nowhere else. 
Local radio consolidation means less diverse formats, more 
imported formats, less localism. Clear Channel just laid off 
four programming people in Chicago in favor of adding sales 
people--more distant programming, less attention to regional 
taste. There is no need to change the local radio rules.
    With respect to the fact that the XM merger would somehow 
justify changing the radio ownership rules, I know it takes a 
lot of chutzpah for a company that has owned 8 million shares 
of XM radio to complain about that merger and then say it 
justifies letting them own more radio stations. I also point 
out that Clear Channel benefits from the news digital radio 
formats that allow multiple program feeds. Again, Clear Channel 
is a major owner of iBiquity, the company that has the 
exclusive license for that technology. So they have ample means 
for dealing with alleged competition from XM and Sirius radio.
    Back to newspaper cross-ownership in the time I have 
remaining. Newspaper/broadcast cross-ownership results in a 
loss of a diverse voice in the community, and as the studies 
have shown, the FCC's own data unequivocally shows that on a 
market-wide basis, newspaper/broadcast cross-ownership means 
less news to the community. Yes, some, but not all, newspaper/
broadcast combinations increased the amount of news created by 
that television station, but they crowd out their competition 
and result in a loss of diversity; and when you control for 
grandfathered cross-ownership, even that difference goes away.
    Finally, with respect to the discussion about what the 
court held in Philadelphia, the court held in Philadelphia 
that, based on the record the FCC had in 2003, it could 
properly conclude that there was no continuing need for a 
newspaper/broadcast cross-ownership rule. The thousands of 
pages of additional information filed, including what I just 
referred to, gives the FCC an ample basis going forward to 
conclude based on the record available to it in 2007, or I hope 
in 2008, provides a powerful basis for retaining the existing 
newspaper/broadcast cross-ownership rules; and there is nothing 
contrary to what was said this morning, nothing that the court 
said that requires the FCC to change those rules.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Schwartzman follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Markey. Thank you, Mr. Schwartzman, and that completes 
the time for opening statements from our witnesses. The Chair 
will now recognize himself for a round of questions.
    Earlier you heard the chairman of the FCC talk about what 
happens under his proposal outside the top 20 markets. One of 
the criteria is in order to receive a waiver, there would have 
to be proof that merger between a newspaper and a television 
station would result in more news. Mr. Sturm, how would you 
quantify more news? What is the test?
    Mr. Sturm. I am not sure that I can absolutely quantify 
right off the top of my head, but clearly let us say that a 
first local news service by a broadcast station, radio or 
television, would seem to me clearly to be in the public 
interest. If that station is not doing news and it can be 
acquired by a newspaper which is going to put news on that 
station, that I can assure you, that would certainly fulfill 
the criteria.
    Mr. Markey. OK. Let me go to Mr. Bliss. What would your 
test be? Can you use the microphone, please?
    Mr. Bliss. I am in the business of local news. That is what 
I do, that is what my people do, that is what we are best 
staffed to do. We have a staff of 25 full-time committed 
journalists at our newspaper. We have four full-time broadcast 
journalists at our radio stations. There are no locally-staffed 
news operations in anywhere of half-a-dozen radio stations in 
my market. My definition would be that I would apply what my 
newspaper is capable of doing and take that staff of 20 to 30 
people and apply that to a broadcast situation. I would 
enhance. I think it is fairly clear what I bring to that 
organization.
    Mr. Markey. Mr. Schwartzman, how would you define it?
    Mr. Schwartzman. I don't think it is possible to quantify 
on a market-wide basis, which as I have indicated has to be the 
test. If the effect of newspaper/broadcast cross-ownership is 
to crowd out the other competitors in the market, it is going 
to mean less news and much less diversity in that community. 
You can have a standard which I think would be terrible, that 
an applicant simply raises his hand and promises that he will 
do more news, and goodness knows how that is going to be 
enforced years later when the license comes up for renewal. It 
is not possible to make every other broadcaster in the 
community raise their hand and make the same promise. So I 
don't think it is a workable standard.
    Mr. Markey. OK. Back to you quickly, Mr. Sturm. Is there 
something else that you----
    Mr. Sturm. Yes, there is. I think if a newspaper came in in 
a proposal for a waiver with a tough standard that the 
Commission has proposed, a very difficult standard, can show 
there is going to be a substantial increase in local news and 
public affairs over what is being provided by the station at 
the present time. That, too, should be a criteria, at least one 
of the criteria, to undergird a waiver of the rules.
    Mr. Markey. I have to just quickly move on. I am sorry. Dr. 
Williams, elaborate on the importance of minority and female 
ownership of media properties. Why is it so significant?
    Mr. Williams. Mr. Chairman, I believe it is important 
because we, particularly women of color, have been so 
denigrated that we believe we need the opportunity to speak for 
ourselves and to speak freely; and when the media are owned by 
someone else, then we do not have the opportunity to paint that 
picture of us. So I think it would give us more time in the 
media, we think it would give us an opportunity to speak and 
speak loudly about who we are. Malcolm X once said, unless we 
know who we are, the world will never know who we are. And some 
of us have been working particularly in the Women's Coalition, 
which was here not long ago that is made up of the National 
Organization for Women, Feminist Majority, Black Civic 
Participation, women from Rainbow Push. All of these 
organizations, including women in labor and sports and others, 
we believe that we have come together, and we have been able to 
define what we want to see, but we don't have the opportunity 
to present who we are and to influence our children because now 
we are seeing too much negative out there.
    Mr. Markey. Mr. Gonzalez, could you answer the same 
question? Why is it so important?
    Mr. Gonzalez. Well, I think it has been demonstrated both 
in some of the FCC's own studies that minority ownership has an 
effect on the kind of news it is covering, on the employment 
situation within many of these news organizations, minority 
owners are more likely to regard minority journalists as 
qualified to do the job than other owners, and I think that the 
choices that are made over what gets covered is critical; and 
that is why we have so much marginalization of news that 
affects the minority community in the existing local television 
stations, local newspapers as well, although newspapers 
generally have done a better job on this. Mr. Sturm, I agree 
that newspapers provide an enormous amount of local news, but 
television stations could provide. No one is saying the 
television stations are distressed financially. Even newspapers 
are not distressed, but television stations could provide more 
news, they just choose not to do so. They choose not to do so 
with their huge profit margins.
    Mr. Markey. Thank you, Mr. Gonzalez. My time has expired. 
The Chair recognizes the gentleman from Michigan, Mr. Upton.
    Mr. Upton. Thank you, Mr. Chairman, and I want to make the 
observation as we look at all the members that are here on this 
panel, I dare say that all of us are news junkies. When we are 
at home and when we are here as well, we want to know what is 
going on in our communities. We want to be able to help those 
in need, we want to be able to be responsible using the 
position that we have, and I have to say, as I have traveled 
the great State of Michigan, when I was up in Marquette, it was 
the local TV and broadcasters that I saw, whether it be weather 
or other issues that might impact me. And Mr. Sturm, I know I 
have seen you on the plane to South Bend on a lot of Saturdays, 
maybe not as many this year, but you will be back next year, I 
know. But as we all visit, my district is a microcosm of the 
country. I have got a large city like Kalamazoo, I got Chicago 
media and obviously we get South Bend, Elkhart, Grand Rapids, 
Kalamazoo, and as I visit my newspapers, large and small, Mr. 
Bliss, I really connect with your side of the State of 
Wisconsin, because that is not unlike mine. They are very 
similar. And as I watch my local station, not Chicago, but the 
one, South Bend particularly, they are there. They got news 
trucks that are there on traffic, I mean a whole variety of 
things, much like I see here, just as I identified to the 
Washington scene with Allbritton. Channel 7 is a great station, 
and I know that at any time I can go to Channel 8 on my Comcast 
cable and I can see the weather, the time, I can see all the 
things that are happening. I look at the Post, which is 
delivered to my office. They have got a special section on 
Virginia that comes. I mean, just a whole variety of things 
that connects the media conglomerates with what is going on on 
the local scene, whether it be in a smaller community like 
Alexandria where I live here or obviously back home. And I was 
glad to hear Dr. Williams, your comment against a la carte as 
well, because I am a believer that the broader that base is, 
that has allowed for channels that would never be there without 
that because they have got to share some of those costs. And to 
me, that is what this lifting the ownership does. It shares 
some of those costs, like it has in my little niche in South 
Bend between the newspaper in the 89th largest market, the 
radios, and the TV together so they can share that staff. And I 
have seen the same thing when I walk the streets of Michigan 
Avenue in Chicago where I can see WGN broadcasting live right 
on Michigan Avenue, and when you go inside you see the 
connection that is made with their TV as well as their radio. 
And in terms of local content, man, you can't beat that flavor 
as it relates to the Chicagoland region.
    As I get to my question, let me say, Mr. Levin and Mr. 
Fritz, when it comes to the cable and the satellite services, 
whether it be audio or video, it is the ability to program 
large numbers of channels that allows the providers to offer 
the consumers that wide choice, diverse, find your own niche, 
and I made the comment earlier in my opening statement, as I 
traveled halfway across the country three times in the last 
couple weeks during the Thanksgiving break, multitude of 
stations, everything that you could imagine you could get. And 
it took forever to get that seek button to actually recycle all 
the way through as I traveled from Michigan through literally 
10 to 12 States coming back to DC. Ironically, isn't it the 
broadcast ownership caps that force the broadcasters to aim 
more at the mass market; and therefore, if you lifted that cap, 
you would provide more diversity so that you would find all the 
different niches that the consumers are going to want to find 
and keep?
    Mr. Levin. Mr. Upton, you hit the nail right on the head, 
and if you look at the actual data from 1996 until today, the 
number of unique formats that are on the air on radio have 
increased dramatically, despite Mr. Schwartzman's comments. In 
fact, we have gone from I think 35 formats in the radio 
industry to at least 80 since 1996. And the concept is exactly 
as you described. The more outlets that an operator is allowed 
to program, the more diverse, the more niche----
    Mr. Upton. They share those expenses.
    Mr. Levin. Absolutely. Cost sharing as well as taking a 
risk that some new format, an untested format, may not be 
successful.
    Mr. Upton. I am running out of time so I want to get my 
question in before the gavel comes down. Mr. Sturm, what will 
be the fate of the newspaper industry if the FCC fails to 
reform these caps?
    Mr. Sturm. If the newspaper industry continues to not be 
able to compete with the same platforms, the same opportunities 
to gather audience that other forms of media have, the 
newspaper industry trends will continue to go down. All of the 
vital signs of the newspaper industry now are negative. That is 
very difficult for me to say, but it is true. Note Mr. Fritz's 
testimony about the wonderful local services that are provided 
by Channel 7, News Channel 8, and indeed other channels that 
they are bringing online to the Washington area community. 
Interestingly enough, that is all competition for the 
Washington Post and Washington Times because it is local news.
    Also interestingly enough, he can own Channel 7 and own 
News Channel 8. The Washington Post can't own a broadcast 
station that competes with his offerings in the Washington 
market.
    Mr. Markey. But you do very well competing against the 
Politico. The gentleman's time has expired. The Chair 
recognizes the gentleman from Michigan, Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Markey. Mr. Bliss, I live in the 
Upper Peninsula of Michigan, so I know quite well your stations 
and your newspaper. A string of public interest groups have 
submitted an analysis of the FCC that allegedly shows that 
cross-ownership reduces the total amount of local news and 
eliminates the independent voice. And there is supposed to be a 
Localism Task Force within the FCC which really hasn't been 
functioning much in recent years. Have you had any contact with 
the Localism Task Force? Have you worked on that, anyone from 
your papers been involved with it?
    Mr. Bliss. No, sir, I am not familiar with it.
    Mr. Stupak. OK. So the hearing they had on October 31st 
here in Washington, DC, you had been made aware of it?
    Mr. Bliss. No, I was not aware of it.
    Mr. Stupak. OK. Let me ask this question. Mr. Gonzalez, I 
mention in my questioning of the Commissioner the studies. I 
find the studies to be rather flawed, especially when it comes 
to the minority and women ownership issue. In fact, study one 
looks at how people receive their news; and its use of data 
basically excluded Latinos in that study. Do you believe the 
FCC had properly considered minority media ownership especially 
as it relates to Latinos as they have come up with this 
proposal?
    Mr. Gonzalez. No, I don't think it has. I mean, I think it 
is pretty clear that even in analyzing its own reports filed by 
the media companies in terms of ownership, I think the Free 
Press study documented that it missed quite a few minority 
owners.
    Mr. Stupak. Like two thirds of them.
    Mr. Gonzalez. Two thirds. And when we wrote to the NTIA 
last year to find out why the NTIA had stopped doing its own 
survey, we were told that it as an agency had no plans to do 
any further surveys and referred us to the FCC. So we find the 
situation where there is basically no government agency that 
has accurate data on what is the level of minority ownership. 
How can they resolve the problem when they don't even have the 
proper data on the problem?
    Mr. Stupak. Right. In fact, on some of them they used the 
census data. But where did you get your data then when you 
testified? You had specific numbers and----
    Mr. Gonzalez. Well, I based it on the Free Press study that 
was done.
    Mr. Stupak. OK.
    Mr. Gonzalez. They actually, as they explain in their 
study, they took all of the FCC 323 data, but they actually 
manually reviewed it as opposed to doing a computerized 
analysis of it, which is how the FCC ended up with inaccurate 
data, an inaccurate summary of its own data.
    Mr. Stupak. Mr. Schwartzman, do you believe that the FCC 
has adequately researched and addressed the important issues 
relating to minorities and localism?
    Mr. Schwartzman. No, I don't. The FCC's failure, as has 
been discussed, to have any meaningful awareness of minority 
ownership is a stunning failure in light of the court's 
directive that it ensure that it take minority ownership into 
account in connection with any new rules that it would adopt. 
So the answer is that I think the Commission has fallen very 
far short of that. Its Localism Task Force has been, as you 
have indicated, somnambulant until the last few weeks, and 
there is no reason to expect that the powerful viewpoints 
expressed at the Commission's hearings is going to be reflected 
in whatever the Commission puts out. So I think it is falling 
short.
    Mr. Stupak. Well, they have referred to this proposed rule, 
as this proposed rule with the loophole that would allow the 
newspaper/broadcast combination in all markets. Would you see 
that as a loophole?
    Mr. Schwartzman. Yes, absolutely I do. While we could 
discuss it at great length, I would point to one thing in 
particular. Instead of the current standard for a permanent 
waiver, which is financial distress, until last Friday when 
Tribune received a waiver it didn't ask for in Chicago, there 
had been exactly four permanent waivers in history, four 
stations which have qualified for this difficult test. Instead 
of that, it is substituting for financial distress, financial 
conditions; and financial conditions is anything that three FCC 
Commissioners say it is.
    Mr. Stupak. Well, the Tribune waiver, I guess I am still 
confused on that one. How do you not get a ruling but yet you 
get a waiver or if you go to court you get a 2-year waiver? How 
do you undo the work you have done those 2 years? Wouldn't 
you--shouldn't there be a stay or something? How do you put it 
back together if at the end of 2 years you find the waiver 
wasn't appropriate and it is denied then? It is a crazy one.
    Mr. Schwartzman. What the FCC did last Friday is cunning, 
devious, and highly questionable.
    Mr. Stupak. Ever been done before?
    Mr. Schwartzman. Never been done before. Whether the court 
will be able to sort it out, we can only begin to tell.
    Mr. Stupak. More questions but I am out of time, I think.
    Mr. Markey. We will come back. We will do a lightning round 
of 2 minutes. We will recognize Mr. Radanovich, and anyone else 
that has a final question we will be able to accommodate. The 
gentleman from California.
    Mr. Radanovich. Thank you, Mr. Chairman.
     I am wondering if anybody in the panel can speak up then 
and advise me that if it were accepted that the minority view 
was not necessarily represented in the court case and FCC 
rulings, then if they were represented, would that change 
anybody's opinion that is supportive of the FCC ruling, would 
it change the results? Mr. Sturm, I am thinking that you might 
have a comment on that. If the minority status, if it is 
accepted that that view wasn't adequately represented in the 
reviews and such through the courts and all, if they were, then 
how would that change things? Because of the media platform 
explosion since 2001 and the ability to access media now is so 
great that----
    Mr. Sturm. I am not sure I fully understand your question, 
but I think what you are saying is if minorities were fully 
represented in broadcast ownership, would that change anything? 
Do I understand you correctly?
    Mr. Radanovich. My question is because I am hearing a lot 
from folks here that those reviews that substantiate the FCC 
position, the court rulings were based on inadequate data. Is 
that correct or not correct? I mean, that is the accusation.
    Mr. Sturm. I am not familiar with the data, the studies 
that have been done with regard to the minority ownership part 
of this thing. I am familiar with the studies that have been 
done about newspaper/broadcast cross-ownership for the last 
dozen years or so. And I would just say, I am not sure this is 
responsive, but all those studies find that newspaper ownership 
of broadcast stations increases local news and public affairs 
on those stations. And I would also say that we have had 
several references to a study that suggests that there is some 
sort of a contraction in the marketplace because of newspaper/
broadcast cross-ownership. That was one study done by an 
advocate, versus all of the government's studies and all the 
independent studies that have been done over the last 12 years. 
I believe it is statistically invalid, that study, but in order 
to reach its conclusion, interestingly enough, it has to assume 
the validity of all the FCC studies and the independent studies 
that in fact show that newspaper/broadcast ownership increases 
local news on those stations.
    Mr. Radanovich. Dr. Williams, can you kind of walk me 
through this on your position that improved access through your 
community is being denied given the increase in media platforms 
that are available to the public now.
    Mr. Williams. Well, sir, if we, not just in the black 
community but in the people of color, are nearly 35 percent of 
the population but own such a small or miniscule percent of 
radio and television, I don't think then media ownership would 
be going down as it has been under the current FCC Chairman 
Martin. I believe if we had more ownership, then we could give 
better images of ourselves. I think it is fine when other 
people want to speak for us, but we want to speak for 
ourselves, and we want to have the opportunity to do that; and 
the only way we can do that is to increase our ownership, 
because only then are we free to say what must be said.
    Mr. Radanovich. Under the current proposal, then, you 
believe that your ability to own and control your own stations 
and media outlets is hampered by this proposal?
    Mr. Williams. Yes, I think so.
    Mr. Radanovich. Maybe I understand your FCC position but 
the courts and the justification that they need to do this--I 
guess I want to be able to understand how that FCC ruling 
backed up by the courts would make it less able for your 
community to have station ownership but also on your purpose of 
getting your message out in the community and how that would 
hamper it.
    Mr. Winston. May I speak to that, sir?
    Mr. Radanovich. Yes.
    Mr. Williams. Thank you.
    Mr. Winston. As a trade association of African-Americans 
who own radio and television stations, what we know is that the 
consolidation of the media industry over the last decade 
resulting from the Telecommunications Act of 1996 has increased 
the prices of stations, which means that minorities have not 
been able to buy into the industry, so that when you allow 
further consolidation, you further increase the value of 
existing stations, making it more difficult for minorities to 
buy into the industry.
    So consolidation has the immediate effect of pricing us 
out, and as all the witnesses have been talking about, the 
studies clearly indicate that the minority community is best 
served by its own outlets. And this is both an economic issue 
as well as a voice issue. Half of the general managers of radio 
stations in America who are minorities are employed by African-
American owned stations. We are 2 percent of the stations. We 
employ half the general managers. OK? That is the kind of thing 
that is affected by excluding us from being industry owners.
    Mr. Williams. And I accept Mr. Winston's position as my own 
since he is the expert.
    Mr. Schwartzman. May I add something, Mr. Radanovich?
    Mr. Markey. Very quickly, please, Mr. Schwartzman.
    Mr. Schwartzman. Mr. Radanovich, perhaps this will help. 
The chairman's proposal would allow acquisition of stations 
which are outside of the top four in their market. Every single 
minority-owned television station in the top 20 markets falls 
outside of the top four, and therefore it becomes an 
acquisition target for a local newspaper; and we strongly 
believe that the chairman's proposal if adopted will have a 
dramatically adverse effect in reducing the number of minority-
owned television stations in the top 20 markets.
    Mr. Markey. The gentleman's time has expired. The Chair 
recognizes--Mr. Sturm?
    Mr. Sturm. Can I comment on that? Thank you. The notion 
that somehow the rules should not be changed because of those 
19 stations, and I will certainly accept Mr. Schwartzman's 
number, in fact it is like I might want to buy your house but 
you don't have to sell it to me. In fact, what will happen is 
the value of those stations, if you change the rules as Mr. 
Winston just said, will go up. So those minorities that own 
those stations will have a better property, certainly a more 
valuable property, than they do now. They don't have to sell it 
to anybody.
    Mr. Markey. OK. Got it. Thank you.
    Mr. Radanovich. Thank you, Mr. Chairman.
    Mr. Markey. Thank you. The gentleman from Michigan, Mr. 
Stupak, is recognized for 3 minutes. Mr. Radanovich went over 2 
or 3 minutes, so we will give you another 2 or 3 minutes.
    Mr. Stupak. Thanks. It has been brought up repeatedly here 
today there are other ways that people get their news and all 
that, but if we go back and look at the real statistics and you 
start talking about the Internet and you can access it there, 
in one of these peer reviews they indicated that many people 
don't have access to it. Ninety-nine percent of the public has 
a television in their home, yet only 47 percent of Americans 
have broadband access. Twenty-nine percent of the public state 
they have no Internet access, 27 percent don't own a computer. 
When you break it down, 71 percent of white Americans have 
Internet access compared to 60 in the African-American 
community and 56 in Latinos. So the different diverse media 
outlets we can get our news from for diversity I don't think 
really exists. I think the problem is more compounded.
    Let me ask you this one, though. Mr. Winston, can you 
explain further how that Arbitron PPM system threatens minority 
ownership of properties, because you were just talking about 
point share and all this?
    Mr. Winston. Yes. Let me just take a minute. I have written 
it up in my written testimony, but let me try to break it down 
very simply. What happened when Arbitron introduced the first 
PPM data in Houston, the minority-formatted stations' ratings 
fell, like, to two, from 89. And let me give you these 
hypothetical numbers. I don't have the exact numbers in front 
of me. In Philadelphia, a minority station goes from two to 14. 
In New York, a minority station goes from two to 12. None of 
them has changed anything they are doing, but suddenly their 
ratings are different. So now the advertising community comes 
in and says, oh, you got much less audience than you had 
yesterday, so now your rates that you want to charge us, well, 
you can talk about half that price.
    Mr. Stupak. Well, then the value of your station would go 
down?
    Mr. Winston. The station goes down, you have got to lay off 
people, and when we met with Arbitron about this and described 
the problem to them, they said, well, what you need to do is to 
program to the data, which means go from the black format to a 
white format, which would undermine exactly everything we are 
trying to be about.
    So the answer is not that we need to change, the problem is 
that we didn't do anything different under the diaries than 
that we are doing under PPM. There is something wrong with 
their methodology, and it needs to be looked at.
    Mr. Stupak. Mr. Sturm, let me ask you this. Mr. Schwartzman 
mentioned about joint ventures, and there you wouldn't have to 
worry about the ownership stuff. You could put the economic 
resources there and go into joint ventures. Why wouldn't that 
joint venture that he suggested work to what you were trying to 
do, what you are trying to advocate on behalf of newspapers?
    Mr. Sturm. Two points. It can work in certain situations 
perhaps. The most local one that I can think of recently was 
the Washington Post had a programming arrangement with 
Bonneville here in the Washington market to do a sort of a news 
kind of service, and it didn't work for whatever reasons. There 
are cultural differences between the station and the programmer 
in so many cases. And the last point I would make, and I will 
confess that if anything I thought of coming here today, I 
didn't think I would quote Commissioner Adelstein, but when he 
complained about the concept or the idea of having minorities 
lease channels on cable systems, he called that media 
sharecropping versus media ownership. And I guess the same 
principle applies. There is no substitute for ownership.
    Mr. Markey. The gentleman's time has expired. Thank you. We 
thank----
    Mr. Radanovich. Mr. Chairman, just one more question?
    Mr. Markey. Mr. Radanovich, you have one final question, 
please.
    Mr. Radanovich. Thank you, Mr. Chairman. Mr. Fritz, if I 
can engage you here for a second. Much attention has been 
placed on the current newspaper/broadcast ownership ban, but 
both the DC Circuit in 2002 and the Third Circuit in 2004, the 
Prometheus decision, ruled that the FCC has failed to justify 
the current radio and television ownership restrictions. In 
your opinion, does section 202(h) demand that these limitations 
be revised as well?
    Mr. Fritz. I don't think it demands it, but I think that 
the evidence suggested in the multiple filings to the 
Commission justifies it.
    Mr. Radanovich. Thank you very much, and thank you, Mr. 
Chairman.
    Mr. Markey. I thank the gentleman from California. So that 
completes the questions from the subcommittee members. We thank 
our witnesses. This is an important subject. Newspapers are 
vital. They serve important functions in our communities and in 
our democracy. Advocates for and against relaxing the 
newspaper/broadcast cross-ownership ban both argue that their 
view will result in more news, diversity, and localism. This 
argues at a minimum that the FCC should give Chairman Martin's 
proposal the time it merits to fully address these issues and 
its impact. I have urged him to do that, and I hope that he 
will. This has been a full day. These issues have been aired 
out I think in a very constructive fashion. We thank our 
witnesses. It was a great panel.
    With that, this hearing is adjourned.
    [Whereupon, at 3:05 p.m., the subcommittee was adjourned.]
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