[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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45-289 WASHINGTON : 2008
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Washington, DC 20402-0001
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
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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
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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
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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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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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