[Senate Hearing 110-1104]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1104
 
                LOCALISM, DIVERSITY, AND MEDIA OWNERSHIP

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 8, 2007

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation



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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska, Vice Chairman
    Virginia                         JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 GORDON H. SMITH, Oregon
MARIA CANTWELL, Washington           JOHN ENSIGN, Nevada
FRANK R. LAUTENBERG, New Jersey      JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas                 JIM DeMINT, South Carolina
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
   Christine D. Kurth, Republican Staff Director and General Counsel
                  Paul Nagle, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on November 8, 2007.................................     1
Statement of Senator Cantwell....................................     7
Statement of Senator Dorgan......................................     1
Statement of Senator Inouye......................................     9
    Prepared statement...........................................    10
Statement of Senator Kerry.......................................     5
Statement of Senator Lott........................................     7
Statement of Senator Nelson......................................     3
Statement of Senator Pryor.......................................    54
Statement of Senator Smith.......................................     6
Statement of Senator Snowe.......................................     8
Statement of Senator Stevens.....................................     4
Statement of Senator Thune.......................................    50

                               Witnesses

Blethen, Frank A., Publisher and CEO, The Seattle Times..........    14
    Prepared statement...........................................    15
    Articles, dated September 9, 2007, from The Seattle Times, 
      entitled 
      ``Fasten Your Seat Belts: Full-Speed Media Ahead'', 
      ``Democracy, The Press at A Critical Juncture'' and ``Do we 
      Currently Have a System That Would Make our Founding 
      Fathers Proud?''.......................................17, 18, 19
    Articles, dated September 10, 2007, from The Seattle Times, 
      entitled ``Failures of the American Airwaves'' and 
      ``Dispersed Media Ownership Serves Democratic Values''.....    21
    Articles, dated September 16, 2007, from The Seattle Times, 
      entitled ``Build Broadband'' and ``Free the Internet''.....22, 23
    Article, dated September 26, 2007, from The Seattle Times, 
      entitled ``The Local Voice of Radio has Been Muffled by 
      Greed''....................................................    23
    Article, dated October 3, 2007, from The Seattle Times, 
      entitled ``FCC Fiddles While Nation's Broadband Falls 
      Behind''...................................................    24
    Articles, dated November 4, 2007, from The Seattle Times, 
      entitled ``Headlong Into the Murk of Media'' and ``Defy 
      News Corp.''...............................................25, 26
Goodmon, James F., President and CEO, Capitol Broadcasting 
  Company, Inc...................................................    32
    Prepared statement...........................................    34
Lavine, John, Dean, Medill School of Journalism, Northwestern 
  University.....................................................    36
    Prepared statement...........................................    38
Nogales, Alex, President and CEO, National Hispanic Media 
  Coalition......................................................    10
    Prepared statement...........................................    12
Winter, Timothy F., President, Parents Television Council........    26
    Prepared statement...........................................    29

                                Appendix

Letter, dated November 7, 2007 to Senators Daniel K. Inouye and 
  Ted Stevens from Jean M. Prewitt, President and CEO, 
  Independent Film & Television Alliance.........................    67
National Association of Broadcasters, prepared statement.........    59
Response to written questions submitted by Hon. Frank R. 
  Lautenberg to:
    James F. Goodmon.............................................    70
    Alex Nogales.................................................    68
    Timothy F. Winter............................................    69


                LOCALISM, DIVERSITY, AND MEDIA OWNERSHIP

                              ----------                              


                       THURSDAY, NOVEMBER 8, 2007

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m. in room 
SR-253, Russell Senate Office Building, Hon. Byron L. Dorgan, 
presiding.

          OPENING STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. We'll call the hearing to order this 
morning. This is a full committee hearing on localism, 
diversity, and media ownership of the Senate Commerce, Science, 
and Transportation Committee.
    Senator Inouye will be here in about 10 minutes. He is 
stuck in traffic, which is a pretty usual condition here in the 
Washington, D.C., metropolitan area. But, Senator Inouye will 
be with us, as well other colleagues. I welcome my colleague 
from Florida, to be with us, as well.
    This hearing is a result of some testimony we heard 
recently, that the Chairman of the Federal Communications 
Commission was proposing to wrap up, by the end of this year, a 
proceeding that would relax media ownership rules. We were 
surprised, on this committee, by that. The announcement was not 
made to the Congress, but, rather, inside the Federal 
Communications Commission.
    It is certain that a relaxing of the media ownership 
restrictions is intended, by those who push it, to allow 
greater concentration in the media. Now, I don't think there is 
anything that either requires or encourages the relaxing of 
ownership rules or limits. There's nothing that I know of that 
requires it or even encourages it. I know of no one in the 
country, let alone this room, who wakes up in the middle of the 
night in a cold sweat and says, ``You know what? We've got a 
very serious problem. We need to have much more concentration 
in the media.'' If that person exists, I'd love to have a quiet 
visit with them and propose some medication.
    The fact is, we have galloping concentration in the media, 
have had it for some long while--radio, television, and 
newspapers. It has been galloping concentration in a manner 
that I think is, frankly, unhealthy. We are now told by some, 
and I am told by the chairman of the Federal Communications 
Commission, that there needs to be additional concentration, 
including cross-ownership opportunities with newspapers, and it 
raises some very significant questions. Let me describe a few 
of the opening questions.
    Number one, the issue of localism and the issue of public 
interest are both issues that are very, very important. A task 
force on localism was begun 4 years ago, by then Chairman 
Powell. There has not been a proceeding on localism, and the 
task force itself has not completed its work, or the work on 
localism was not completed. If it was completed, it wouldn't 
have been a task force--or, rather, a proceeding, in any event. 
A proceeding on public interest was started in the year 1999, 
has never been completed. So, public interest--we're talking 
about 8 years ago--a task force on localism--we're talking 4 
years ago; neither of them completed. And now we are told that 
the chairman of the Federal Communications Commission wishes to 
march briskly to a December 18 date to develop a new rule, 
which has not yet been disclosed, on relaxing ownership rules.
    I think that is a horrible idea, one that is counter to the 
public interest, but others will probably have other notions of 
it, as well, and there is certainly room for some discussion.
    I do think that proceedings must be completed first on the 
issue of public interest and localism before one has any 
opportunity to evaluate ownership issues. Now, I met with the 
Chairman recently, and we talked about a number of things that 
they are doing. The issue of reporting requirements by 
broadcast operators, they are going to ask for much greater 
reporting, because the reporting will tell them what is 
actually happening with this increased concentration. But that 
reporting doesn't yet exist, and so, the knowledge base or the 
base of facts don't exist. And, in addition, I asked about 
things like voice tracking. The answer was, ``We don't have 
that information.'' I said, ``Well, wouldn't you need that 
information in order to determine what has happened out there 
in the panoply of radio- and television/newspaperland and the 
concentration of ownership? Wouldn't you need to know those 
things before you start trying to answer the question, `What 
kind of a rule would we like with respect to relaxing 
ownership?' ''--if, in fact, it should be relaxed at all; I 
would take the opposite position.
    The answer is, ``Yes, you need to know those things before 
you even begin thinking about a new rule.'' One of the concerns 
I have, and a significant one, is, there will be, it appears to 
me, perhaps a month, maximum, for the American people to weigh 
on a new rule that will be proposed for final action on 
December 18. That doesn't meet any test of reasonableness or 
any standard that I know that makes any sense.
    I will be introducing legislation today, called the Media 
Ownership Act of 2007. The bill will be cosponsored by myself 
and Senator Lott, with Senators Snowe, Obama, Kerry, Nelson of 
Florida, Cantwell, and Feinstein, and I expect we'll be joined 
by other Members of Congress, as well. And we would call for a 
90-day comment period on the actual rules, but, even before 
that, we believe that there needs to be the completion of a 
separate proceeding on localism, with 90 days of comment on 
recommendations for improving localism.
    First and foremost, do that, provide the requisite 90 days 
before you even begin with respect to the issue of ownership 
rules, which themselves should have at least 90 days.
    The last time the Federal Communications Commission 
attempted to do this, the U.S. Senate voted to block it, by 55 
to 40, September 16, 2003, on a Resolution of Disapproval. The 
Federal courts then stayed the rule. This, as you've heard my 
description of who will introduce the legislation today, is a 
bipartisan concern about potential actions of the Federal 
Communications Commission, that will occur within the next 6 to 
7 weeks, that will have substantial impact and consequences for 
the American people. We need to get this right. And in my 
judgment, the chairman of the Federal Communications 
Commission, having not completed the proceeding on public 
interest, having not completed the proceedings on localism, is 
not in a position where he can credibly suggest we ought to 
have a rule completed by the Federal Communications Commission 
on December 18 dealing with media ownership. That is not a 
thoughtful approach, and not the right way to proceed.
    We will hear testimony from people. There's plenty of room 
for disagreement here. I feel strongly, as you can tell, but 
we'll hear testimony from both sides.
    Senator Stevens, Senator Inouye has called, and is stuck in 
traffic, but will be with us, I think, in 10 minutes to 15 
minutes. Let me--and Senator Stevens--Senator Inouye just got 
out of traffic--
    [Laughter.]
    Senator Dorgan.--and we welcome him here. Do you want to--
--
    The Chairman. May I ask that my statement be made a part of 
the record.
    Senator Dorgan. Without objection, the statement of Senator 
Inouye will be made a part of the record.
    Senator Dorgan. Senator Stevens, you wish to defer to 
Senator Nelson?
    Senator Stevens. Yes, please.
    Senator Dorgan. Senator Nelson?

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Bill Nelson. Mr. Chairman, I feel strongly about 
this, as you do.
    And when you go back to the initial Act, it was 1934 that 
Congress had passed the Communications Act, and it laid out the 
principle that the Nation's airwaves belong to the people, and 
that the broadcasters are the trustees of those airwaves, and 
that they ought to serve the public interest.
    Well, a lot has changed, and the technology has moved on. 
And now, it's cable television, in addition to the 
broadcasters, it's satellite radio, and it's television even on 
the Internet. But one thing that hasn't changed is that the 
airwaves still belong to the people, and the broadcasters still 
have a responsibility to serve and respond to the local 
community needs. And I feel strongly about this, and you've 
already made reference to the fact that we have an 
understanding that the Federal Communications Commission 
Chairman Martin intends to call a vote, no later than December 
18, on an order that may substantially relax or repeal some of 
the current media ownership rules.
    Now, I hope that the FCC will reconsider that plan. The 
media landscape in this country has changed drastically in the 
last 10 to 15 years, and I certainly want to examine the ways 
of creating incentives for new media voices.
    What I oppose, Mr. Chairman, is the proposals that will 
allow one company or one consortium to control the media 
landscape in the local community. Competition and diversity are 
good. And competition, that we all extol up here in the private 
marketplace ought to work with regard to delivering the best 
product at the best price for the consumers of the media, as 
well.
    And I just want to give one example. People often point 
out, ``Well, there is not a problem in Tampa, Florida, because 
Media General owns the Tampa Tribune and also one of the main 
TV stations, the NBC affiliate, Channel 8, WFLA.'' But what 
they ignore is the fact that the Tampa Tribune is not a 
monopoly of the newspaper market. That is a very competitive 
market between the St. Petersburg Times and the Tampa Tribune, 
so there is the competition there.
    Go 90 miles away to Orlando, the Orlando Sentinel has a 
monopoly in most of the Orlando market of the television 
stations. And if you combined them, you would basically have 
monopoly of the entire delivery of most of the news through one 
particular ownership. And I simply don't think that that's in 
the interest of the public.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Nelson, thank you very much.
    Senator Stevens?

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Thank you very much.
    You know, I've remarked before to this committee about my 
experience with television, as a father of five kids, when I 
refused to buy it until the mayor, who lived about three doors 
down from me, came and told me that my kids were sprawled out 
in his living room every time he came home, and why in the hell 
didn't I buy a television? So, I do think that we ought to keep 
in mind that it's still a changing entertainment world, still a 
changing information world. Today, those kids could probably 
watch even worse things than I had dreamed of on their computer 
in their individual rooms. And we're dealing with such change 
that, whether video is delivered from broadcast signal, a 
storage device, or an Internet package, the policy issues 
Congress faces are very diverse, but we do have to focus on 
them.
    Two very important issues are localism and diversity. 
They're at the core of our country's values, and they should 
remain the core of our communications platforms. But, at the 
same time, we need to understand that those platforms are 
changing. Just Tuesday, the latest numbers revealed that the 
number of print subscriptions to most newspapers continue to 
decline. Meanwhile, Internet advertising is soaring. I don't 
think we know yet where that change is going to go and what it 
will mean for people who communicate, know what it means for 
people who try to find ways to own the entities that provide 
the information stream. It's my hope that our committee and the 
Federal Communications Commission will look at all of the ways 
we need to pursue to preserve localism and diversity, and, as 
much as possible, try to understand the changes in the 
marketplace.
    Thank you very much.
    Senator Dorgan. Senator Stevens, thank you very much.
    Senator Kerry?

               STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Kerry. Mr. Chairman, thank you. And I thank the 
chair of the full committee for helping us to move down this 
road. I just have a brief comment I'd like to make, if I can.
    We've been here before. There's a Groundhog Day component 
to what's going on here. And I guess when I think of the FCC 
chairman's recent comments on media ownership, we're all 
reminded of Ronald Reagan's famous line in the debate, ``Here 
we go again.'' We have a different FCC chairman, but it appears 
that we are now headed down the very same ill-advised path, 
which we all understand where it leads to.
    In 2003, the FCC issued rules designed to loosen 
restrictions on broadcast media ownership, and that decision 
was met, thank God, with a public outcry and a backlash that is 
rarely seen in the telecom and media world. And, in fact, the 
Congress itself was emboldened to move in a sort of rare 
repudiation--because it was then a Republican-controlled 
Congress--in a repudiation of its own administration.
    At the time, I wrote the FCC chairman, opposing those 
changes, and several of us worked on a resolution to disapprove 
them, and the courts eventually recognized the dangers of those 
changes and pushed back.
    So, fast forward, 4 years. We have a new FCC chairman, and 
now we have a new attempt to consolidate media, even though we 
have unfinished business at the FCC, business which Senator 
Stevens just referred to, on localism and minority ownership, 
which is critical to the overall mosaic of ownership and access 
to media in our country. We have an insufficient process, at 
this point, by which the public can even judge the changes 
currently being proposed.
    So, little has changed in the approach of the 
Administration. I don't think that Americans are going to 
accept, nor should they accept, excuses in the future about 
unintended consequences that might come out of these changes. 
People have already seen too much, and they know too much.
    The FCC chairman has announced--I think, relatively 
arbitrarily--that the Commission is going to vote on December 
18. But what are they going to vote on? They haven't shared 
their thoughts with us, specifically, on the changes they'd 
like to make, or on the input that has been received regarding 
those changes, or the potential unintended consequences. And I 
think the FCC needs to know that that approach will not stand 
and the Congress is not going to allow it.
    These rules influence the competitive structure of the 
entire industry, and they protect the public's access to 
multiple sources of information. Changes need to be considered 
with great caution and with diligence.
    The ongoing proceedings that I've referenced are going to 
impact the media market. The localism proceeding and the 
proceeding on minority media ownership are topics that I've 
followed very closely. Senator Obama and I wrote a letter 
recently and introduced some concepts regarding it. But let me 
just very, very quickly point out the key points.
    Mr. Chairman, in cities with large minority populations, 
such as New York, Washington, Atlanta, and New Orleans, there 
is not a single black-owned television station. Not one. Since 
1998, there has been a 40-percent decline in the number of 
minority-owned broadcast television stations. So, who in their 
right mind can look at this and say that this is an acceptable 
direction to move in? Proceedings dealing with those very 
issues have to conclude, and we have to provide concrete and 
enforceable recommendations, before broader rules are 
contemplated.
    The FCC's first responsibility is to ensure diversity, 
competition, and localism. It has no responsibility to 
facilitate the business plans of a major network or any other 
narrow economic interest. It has a public interest to respect 
and to enforce. And there is no doubt that the rules with 
respect to diversity and localism are going to have a very 
significant impact on that.
    So, we've seen the consequences before, Mr. Chairman, and I 
think it's critical that, as the television industry continues 
to consolidate, as a handful of national networks acquire local 
stations across the country, that we guarantee that local and 
independent voices are not lost. It's critical to the kind of 
country that we are, and it's critical to the access to, and 
flow of, information.
    Senator Dorgan. Senator Kerry, thank you very much.
    Senator Smith?

              STATEMENT OF HON. GORDON H. SMITH, 
                    U.S. SENATOR FROM OREGON

    Senator Smith. Thank you, Mr. Chairman.
    Listening to my colleagues, I'm--I share many of their 
goals, and certainly recognize that localism and diversity and 
competition are all valuable. And we ought to look for things 
that we can do to facilitate that. And yet, we do it against 
the backdrop, not just of competition, but superheated 
competition, where so many of these traditional outlets, 
whether they're television, newspapers, or whatever, they're 
going under. They're going under. They're not profitable. And a 
lot of these things are cross-pollinating, if you will, because 
they have to, to meet a bottom line. And so, I think that is 
really the challenge we have. But I share the goal. But we 
can't demand the market perform in a certain way when the 
economics aren't there.
    Senator Dorgan. Senator Lott?

                 STATEMENT OF HON. TRENT LOTT, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Lott. Well, thank you, Mr. Chairman, for having 
this hearing, and for requesting this hearing. And I have been 
pleased to join with you now in cosponsoring legislation that's 
being introduced today on this important subject.
    This is an area that I've been involved in almost all my 
life and that I care very much about, and I'm very concerned 
about what is at risk with the localism and diversity and 
cross-ownership. I've expressed that. I joined you a few years 
ago, when we introduced that Resolution of Disapproval, and I'm 
prepared to do it again, if it's--if the FCC moves 
precipitously, without carefully complying with the full 
consideration of these areas of concern, and without some 
action that has been thoughtful and carefully developed. And I 
don't think they're there yet.
    So--but, I think we did need--we're talking to the FCC, 
we're hearing from the FCC. I think it's important we hear from 
a different point of view. And so, I look forward to hearing 
the testimony of these witnesses.
    Senator Dorgan. Thank you very much.
    Senator Cantwell?

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman. And thank you 
for holding this important hearing.
    And I, too, share a lot of the beliefs that my colleagues 
have expressed. And to my colleague from Oregon, who I respect 
very much, I guess I would say, about this issue and the 
consolidation that's happening in the market, is--a lot of 
consolidation is happening, big players taking over smaller 
players. And the one thing that I think our committee can do 
best in the next era of the Digital Age in media consolidation 
is to make sure that we look at the Constitution, and we look 
at our constituents, and we think about how we are protecting 
our constituents' rights and access to a diverse array of 
opinion. And I think that will be challenged, since most of the 
times our hearing rooms are filled with those who represent the 
business interests on both sides of these equations, but I 
think our constituents do deserve to have diversity, and that 
diversity protected.
    I'd like to thank the panel for being here today, 
especially Mr. Frank Blethen, who is the owner of the Seattle 
Times. It is one of the few remaining major dailies in the 
United States that's independently owned, and owned by a local 
family, and the newspaper has been publishing in Seattle, in 
one form or another, for over 100 years, so they have been 
unique in continuing to speak out on this issue.
    I believe that ownership of the broadcast and print media 
touches some of the most important American values: freedom of 
speech, open and diverse viewpoints, vibrant economic 
competition, and local diversity. And attention to that 
diversity and localism has served America well in expanding 
economic opportunity and energizing the civil discourse that's 
so important.
    Diversity and localism promote competition and choices, 
even for advertisers. They create opportunities for small 
businesses, for minorities, for women. They improve innovation 
and find an outlet for a variety of voices. And I am troubled 
that I heard press reports that Chairman Martin intends to wrap 
up this current examination of the FCC's media ownership rule 
by December 18. I ask him, What is the hurry? The last media 
ownership public hearing is scheduled for tomorrow in Seattle, 
and there was only 4 days of notice provided, so I certainly 
support my colleague for calling into question this practice of 
giving the public very little notice on this issue.
    Is the public going to get ample time to comment on any 
proposed rule before the Commission votes? There is a sense 
that the die has already been cast in favor of increased media 
competition, and that the new rules will eliminate the 
prohibition on broadcast/newspaper cross-ownership and further 
relax the local radio ownership cap. This is the wrong 
direction.
    Diversity in media energizes our democracy. The viewpoint 
and program diversity is very important. Outlet diversity, 
source diversity, and, as I said, women and minority ownership 
diversity, makes us a stronger nation. And the importance of 
localism--that is, producing some of this programming within 
the communities so that the programming can be heard by the 
community's choices--is critically important. And, while 
increased media consolidation might be good for Wall Street, it 
is certainly bad for Main Street.
    So, I hope that at this hearing today, we can pay attention 
to these issues.
    I'd just like, Mr. Chairman, to point out one more 
statistic. That is because I think statistics sometimes are 
things we can all agree on and help us see a path. The cost of 
radio advertising has nearly doubled since the 1996 Telecom Act 
has passed. The Consumer Price Index has increased by 29 
percent during the same period. So, in other words, while the 
Consumer Price Index increased by approximately 3 percent over 
the past decade, the annual growth rate of radio prices has 
increased approximately 10 percent. So, just imagine how that 
will increase if we continue to see further consolidation.
    Again, thank you, Mr. Chairman, for holding this important 
hearing.
    Senator Dorgan. Senator Snowe?
    And then we will go the witnesses. I believe we have a 
vote, or votes, starting about 11:45. So----
    Senator Snowe?

              STATEMENT OF HON. OLYMPIA J. SNOWE, 
                    U.S. SENATOR FROM MAINE

    Senator Snowe. Thank you. Yes, thank you, Mr. Chairman, and 
I'll move very quickly.
    I appreciate the fact that we're having this hearing to 
highlight and underscore the whole likelihood of the FCC moving 
forward to, again--once again, to address the question of media 
consolidation and to pursue an ill-advised loosening of those 
restrictions regarding the consolidation of corporate ownership 
of media. And I think that that is truly disturbing. We've 
already been there. And it seems like, ``Here we go again,'' in 
this pursuit of easing up on these restrictions and regulations 
where the U.S. Congress, the U.S. Senate--even the Third 
Circuit Court indicated its objection in the way in which the 
FCC pursued this in the past, because it had none of the data 
necessary or essential to underscoring and to buttressing their 
recommendations to ease up on these media rules and 
regulations.
    And I want to welcome Frank Blethen here today, because he 
has been one who has effected national leadership in 
galvanizing the public's attention on this question so 
passionately and eloquently. He owns newspapers in the State of 
Maine. As Maria indicated, it's part of an independent, family-
owned operation for four generations now, which is critically 
important, but really, I think, underscoring the perils and 
ramifications of further consolidation in the media 
marketplace.
    So, after nearly 5 years, examining this question before 
the Committee--and the fact is, we rejected what the FCC did 
previously, when they sought to weaken those ownership 
restrictions. We passed a joint resolution in the Senate. We 
passed a statutory provision limiting the national ownership 
cap to 39 percent. And, as I mentioned, the Third Circuit Court 
of Appeals rejected the attempts at revising these rules as 
capricious and arbitrary, after finding that the FCC had no 
factual base in which to establish that.
    So, it clearly is disturbing that the FCC would move pell-
mell to move in this direction once again, without--
insufficient information. And I would call everybody's 
attention to the comments that were submitted to the FCC in 
response to the speculation about their attempts to revise 
these rules, but also on the basis of the ten studies, that 
there is a real question about the integrity of those studies, 
that they have not been peer-reviewed, a question of the 
methodology, a question of their research. And the consumer 
commenters submitted very extensive analysis of the FCC 
reports, and it's clear that localism was not even regarded or 
considered as part of the overall process in what is going to 
happen to diminish localism and diversity in the media 
marketplace.
    And so, I would urge that the FCC consider the comments 
that are made here today, but, most importantly, we do 
everything that we can to reject this attempt on one--on the 
question that we have revisited and rejected in the past.
    Senator Dorgan. Senator Snowe, thank you very much.
    Senator Inouye?

              STATEMENT OF HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. Thank you very much, Mr. Chairman.
    Yesterday, I had a meeting with Chairman Martin to discuss 
matters of diversity, localism, and competition, and stressed 
to him my strong belief that rushing to judgment before the end 
of this year would be a serious mistake. And, therefore, we 
have scheduled this hearing this morning to listen to the 
important independent voices of the industry.
    We are scheduling a hearing with the Chairman and the 
Commission in December. I think it will be about the 13th of 
December, but it has not been finalized yet. It should give the 
Commission sufficient time to listen to our voices, our 
concerns, and I hope they'll make the right decision.
    Thank you very much, sir.
    [The prepared statement of Senator Inouye follows:]

 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
    Let me begin today by stating that I am very troubled by efforts at 
the FCC to allow greater consolidation of our media. This is an area 
that requires tremendous caution, because the media is a tremendous 
force. It can inform, educate, and entertain, as well as nourish our 
democratic dialogue. Yet is also has less savory powers. In recent 
years, we have seen an increase in coarse and violent programming, but 
a decrease in local news and hard-hitting journalism. As our media 
grows more concentrated, we see less and less of the diversity of our 
Nation. When programming is the same from coast to coast, we risk 
having our airwaves no longer reflect the rich mosaic of our country 
and our citizens.
    Four years ago, the FCC substantially relaxed the rules that govern 
media ownership in this country. Millions of Americans contacted the 
FCC to complain. The U.S. Senate voted to support a ``resolution of 
disapproval'' in response to the FCC decision. Next, the courts got 
involved, and the Third Circuit shipped the agency's handiwork right 
back to the FCC.
    So we are back at square one. The FCC is poised to review its media 
ownership rules yet again. There are whispers, too, that the FCC may 
want to roll the rules back before the end of the year. So let me 
caution the agency now: we are watching. Rather than rushing to 
judgment on broad new rules, the FCC should focus on completing pending 
proceedings on localism and public interest obligations that have long 
languished for lack of attention. If rule changes are required, the 
American people deserve to be informed and provided a reasonable period 
of time for comment and discussion. I have discussed these matters with 
Chairman Martin, and have stressed my belief that rushing forward 
before the end of the year would be a serious mistake.
    Against this backdrop, we hold today's hearing. It provides us with 
an opportunity to hear from our witnesses on the state of media 
ownership, localism, and diversity. I look forward to their testimony 
on this important topic.

    Senator Dorgan. Mr. Chairman, thank you very much.
    We have a very distinguished panel today, and we have five 
witnesses. We will begin with Mr. Alex Nogales, the President 
and CEO of the National Hispanic Media Coalition.
    The prepared testimony from all of the witnesses will be 
included, as prepared, in the entire record of the Committee, 
and we would ask that the witnesses summarize.
    Mr. Nogales, you may proceed.

STATEMENT OF ALEX NOGALES, PRESIDENT AND CEO, NATIONAL HISPANIC 
                        MEDIA COALITION

    Mr. Nogales. Good morning, Mr. Chairman and members of the 
Committee. Thank you very much for the opportunity to testify.
    My name is Alex Nogales, and I am the President of the 
National Hispanic Media Coalition. The National Hispanic Media 
Coalition is a 21-year-old nonprofit civil rights and advocacy 
organization created to improve the image of American Latinos 
as portrayed by the media, and to advocate for media and 
telecommunications policies that benefit the Latino community, 
as well as other communities of color.
    I'm here today to deliver a message of profound importance 
to our community. It is simply this: the state of minority 
ownership in the American broadcast industry is in crisis. Our 
country is diversifying, but our media are not. More than a 
third of Americans are people of color. Yet they own less than 
3 percent of commercial television stations and less than 3 
percent of radio stations, and these numbers are in decline. 
This is a dangerous and disgraceful situation. Ownership 
determines the content in our media system, and if the media 
structure rests on inequality, it will breed inequality in 
representation, culture, and politics. We cannot build a just 
society if the mass media remains in the hands of the few at 
the expense of the many. That is why the Congress instructed 
the Federal Communications Commission to promote minority 
ownership in 1996 in the Telecommunications Act.
    But the FCC has neglected its responsibility. First, the 
FCC has never produced an accurate count of how many broadcast 
licenses are owned by people of color. It is hard to believe 
this could be the case, but it is.
    Second, the FCC has long supported policies that permit 
further media consolidation, despite clear evidence that it 
shuts out minority broadcasters.
    Third, the FCC has ignored instruction from Congress and 
the courts to advance the cause of minority ownership.
    In short, minority ownership is in crisis, because the FCC 
does not seem to care about minority ownership and has done 
nothing meaningful to address the problem.
    As we speak, the FCC is preparing to allow more 
consolidation at the expense, once again, of minority owners. 
Let me assure you that, while the FCC neglected this issue, 
communities of color have not, and will not remain silent, not 
ever again. More than 20 national civil rights organizations, 
including not only the National Hispanic Media Coalition, but 
also the National Council of La Raza, LULAC, Rainbow PUSH, and 
the Urban League, as well as numerous congressional leaders, 
have all called on Chairman Martin to support the creation of 
an independent task force that will address the issue of 
minority ownership before the Commission considers issuing new 
rules on media ownership.
    Chairman Martin has rejected these appeals as he races 
toward a vote on new rules by year's end. His indifference is 
so brazen, because he knows such a study will demonstrate that 
media consolidations reduces minority ownership. And the 
Commission cannot support a policy of media consolidation and 
minority ownership at the same time, because they are in direct 
opposition. The severity of the problem cannot be brushed 
aside. Latinos comprise 15 percent of the U.S. population, but 
own just 15 of the more than 1,300 full-power commercial 
television stations. That is 1 percent. Radio is not much 
better. We own just over 300 of more than 10,000 radio 
stations, just under 3 percent, again.
    Here's another disturbing example. A recent survey of media 
usage conducted by the FCC asked about media usage for minority 
groups, except for Latinos. This kind of oversight is symbolic 
of the agency's attitude towards the Latino community.
    The FCC must not move forward with new ownership rules 
until it creates an independent minority ownership task force 
that is empowered to perform an accurate census on minority and 
female owners, as well as an analysis of the impact of these 
policy decisions on minority ownership.
    Concentrated media ownership leads to media content that is 
harmful to communities of color. We have seen a rapid rise in 
hate speech on talk radio programs attacking the Latino 
community as a result of the debate over undocumented workers. 
You've all heard it, you know what I'm talking about. The 
megaphone offered to the odious brand of hate speech comes with 
the compliments of radio conglomerates that own hundreds of 
stations across the country. They are not accountable to their 
local communities and care little for the political and 
cultural impact of their programming.
    Just look how fast these large companies put Don Imus back 
on the air, just months after making racist remarks about 
African-American women. Insults like the Don Imus racial slurs 
are also happening every day across and against the Latino 
community. But there is nothing but silence from the Federal 
Communications Commission. There is even one fellow, John 
Stokes, out of Montana, that is advocating for those that do 
not speak English to have an arm cut off, and that is very 
directly going against the Latino community.
    Hate speech is a symptom of the larger disease of 
inequality in the ownership of broadcast stations. Undeniably, 
more diversity of ownership will result in more diversity of 
content. Let us not forget, it is the policy of this country to 
bring the diversity of broadcast owners into alignment with the 
diversity of the population. For too long, the FCC has made the 
situation worse instead of better. It is time for Congress, for 
all of you, to reverse this disastrous course and begin to take 
the country down the long road towards equality.
    I thank you very much for your attention, and I look 
forward to your questions.
    [The prepared statement of Mr. Nogales follows:]

        Prepared Statement of Alex Nogales, President and CEO, 
                   National Hispanic Media Coalition

    Good morning Mr. Chairman and members of the Committee. Thank you 
for the opportunity to testify.
    My name is Alex Nogales, I am the president of the National 
Hispanic Media Coalition. The National Hispanic Media Coalition (NHMC) 
is a 21-year-old non-profit civil rights and advocacy organization 
created to improve the image of American Latinos as portrayed by the 
media and to advocate for media and telecommunications policies that 
benefit the Latino community.
    I am here today to deliver a message of profound importance to my 
community. It is simply this: the state of minority ownership in the 
American broadcast industry is in crisis.
    Our country is diversifying, but our media is not. More than a 
third of Americans are people of color. Yet they own less than 3 
percent of television stations and less than 8 percent of radio 
stations--and these numbers are going down, not up. This is not only a 
disgraceful situation, it is a dangerous one. Because ownership 
determines the content in our media system. And if the structure of 
media ownership rests on inequality, it will breed inequality in 
representation, culture and politics.
    We cannot hope to build a strong and just society if the tools of 
mass media and representation remain in the hands of the few at the 
expense of the many. This is why the Congress instructed the Federal 
Communications Commission to promote minority ownership in the 
Telecommunications Act of 1996. But the FCC has ignored that 
responsibility. Its record of neglect is deeply troubling. Let me 
review the agency's track record:
    First, the FCC has never produced an accurate count of how many 
broadcast licenses are owned by people of color. It is hard to believe 
this could be true, but it is true.
    Second, the FCC has long supported policies that permit further 
media consolidation despite the clear evidence in the marketplace that 
it shuts out minority broadcasters.
    Third, the FCC has ignored both the Congress and the Courts, both 
of which have instructed the agency to advance the cause of minority 
owners.
    In short, minority ownership is in crisis because the Commission 
does not seem to care about minority ownership and has done virtually 
nothing meaningful to address the problem.
    And now, it is happening once again. As we speak, the FCC is 
preparing to change media ownership rules to allow more consolidation. 
This policy will come at the expense, once again, of minority owners.
    But let me assure you, while the FCC may have neglected this issue, 
communities of color have not been silent.
    In response to the FCC's current drive toward media consolidation, 
more than 20 national civil rights organizations, including NHMC, the 
National Council of La Raza, the League of United Latin American 
Citizens, Rainbow PUSH, and the Urban League, as well as numerous 
congressional leaders have all called on Chairman Martin to support the 
creation of an independent task force that will address the issue of 
minority ownership before the Commission considers issuing new rules on 
media ownership.
    But unfortunately, Chairman Martin has rejected these appeals. 
Instead he is racing full speed ahead with plans to make rules by the 
end of the year. He will do this despite the fact that his agency has 
never addressed the potential impact on minority owners. His 
indifference is so brazen that he has not even counted the minority 
owners!
    He has refused to count minority owners and measure the impact of 
consolidation because he knows that any such study will demonstrate 
what we already know: media consolidation reduces minority ownership. 
You cannot have a policy that promotes media consolidation and minority 
ownership at the same time. They are in direct contradiction. Decision 
makers must all take a hard look in the mirror and make a choice. It is 
either one or the other. Ignoring this fundamental question is 
unacceptable.
    The severity of the problem cannot be brushed aside. Latinos 
comprise 15 percent of the U.S. population. Yet Latinos own just 15 of 
the more than 1,300 full-power commercial television stations in 
America. That is 1 percent. Radio is not much better. We own just over 
300 radio stations out of more than 10,000, just under 3 percent. This 
level of inequality is absolutely unsustainable.
    The FCC cannot solve this problem with a minor course correction. 
We need a full rethinking of the Commission's priorities. Let me give 
you another disturbing example. In a recent survey of media usage 
conducted for the FCC by Nielsen, the agency simply forgot to ask about 
Latinos. They asked about every other minority group, but left out 
Latinos. This kind of oversight is symbolic of the attitude of this 
agency toward the Latino community.
    This is why the FCC must not move forward with issuing new media 
ownership rules until it creates an independent minority ownership task 
force that is empowered to perform an accurate census on minority and 
female owners and then analyze the impact of policy decisions on 
minority ownership.
    Concentrated media ownership leads to media content that is harmful 
to communities in color in so many ways. Let me give you just one 
example before my time is up that illustrates the point. In recent 
years, we have seen the rise in hate speech on talk radio programs 
attacking the Latino community as a result of the debate over 
undocumented workers. The megaphone offered to this odious brand of 
hate speech comes with the compliments of large, radio conglomerates 
that own hundreds of stations across the country. They are not 
accountable to their local communities, and they care little for the 
political and cultural impact of their programming behind the bottom 
line.
    Just look how fast these large radio companies put Don Imus back on 
the air just months after receiving national shame for making racist 
remarks against African American women. Broadcast insults like the Don 
Imus racial slurs are happening everyday against the Latino community 
and there is nothing but silence from the FCC.
    Hate speech is a symptom of the larger disease of inequality in the 
ownership of broadcast stations. Undeniably, more diversity of 
ownership would result in more diversity of content. Let us not forget 
it is the policy of this country to bring the diversity of broadcast 
owners into alignment with the diversity of the population. For too 
long the FCC has made the situation worse instead of better.
    It is time for Congress to reverse this disastrous course and begin 
to take the country down the long road toward equality.
    I thank you for your attention, and I look forward to your 
questions.

    Senator Dorgan. Mr. Nogales, thank you very much for being 
here and for your testimony.
    Next, we'll hear from Mr. Frank A. Blethen, who is 
Publisher and CEO of The Seattle Times.
    Mr. Blethen, you may proceed.

 STATEMENT OF FRANK A. BLETHEN, PUBLISHER AND CEO, THE SEATTLE 
                             TIMES

    Mr. Blethen. Thank you, Senator Dorgan. ``There is freedom 
in a variety of voices. There is, I believe, a fundamental 
reason why the American press is strong enough to remain free. 
That reason is that the American newspaper, large and small, 
and without exception, belongs to a town, a city, at the most, 
a region. The secret of a free press is that it should consist 
of many newspapers, decentralized in their ownership and 
management, and dependent for their support upon the 
communities where they are written, where they are edited, and 
where they are read. There is safety in numbers and in 
diversity and in being spread out and in having deep roots in 
many places. Only in variety is there freedom.''
    These are the words of noted journalist Walter Lippman, 
spoken half a century ago.
    I'm Frank Blethen, the Publisher of The Seattle Times. My 
family has lived in Seattle for 111 years. My family epitomizes 
the local connection Lippman so accurately cites as the 
foundation of our freedoms. We are accountable only to our 
local community and to our heritage with its paramount 
stewardship duty of independent journalism and community 
service.
    Tragically, the essential localism and ownership diversity 
Lippman praises has been abandoned by Congress and by the FCC. 
Throughout America, in print and in broadcast, concentrated 
absentee ownership abounds. With it has come a disinvestment in 
journalism, causing serious erosion in America's public policy 
literacy and civic engagement.
    The public knows something is wrong. When given the 
opportunity, they vehemently oppose media control. They plead 
for more localism and multiple voices, which are the very 
oxygen of their community and a healthy democracy.
    As we witness the inevitable failure of the publicly traded 
and absentee ownership model which has come to dominate 
newspapers and broadcasts, America is at a crossroads. This 
committee has the opportunity to lead Congress down an 
enlightened path. You have it in your power to be the public 
servants Jefferson and Hamilton envisioned when they championed 
a free press as the essential fourth leg on the democratic 
stool.
    You are told conglomerate owners need more consolidation 
because the business model is broken. Nothing is further from 
the truth. After decades of milking newspapers and TV stations 
for some of the highest pre-tax profit margins imaginable, 
often as high as 30 percent for newspapers and 50 percent for 
broadcast, it has become impossible for these financially 
driven owners to sustain these small margins.
    We are simply going back to the future, when I started in 
the industry, 40 years ago, when newspapers were nice, locally 
owned, single-digit margin businesses, generating good cash-
flow to operate the business and invest in journalism and 
community. And there is no reason to believe that local 
newspapers and local broadcasters can't continue to sustain 
successful businesses and fulfill their public mandate, going 
forward. Even today, amid the false claims you hear that the 
economic model is broken, the publicly traded newspaper sector 
is reporting 16 to 18 percent profit margins.
    You have the opportunity to save our free and local press, 
to rejuvenate America's civic engagement, and to lay the 
foundation to preserve our democracy longer than any the world 
has seen. To do so, you must keep all current FCC ownership 
restrictions and public service mandates in place, including 
the all-important local cross-ownership ban. You must insist 
that the egregiously unenforced mandates of minority ownership, 
female ownership, and public-service air time be vigorously 
enforced. You must craft new FCC mandates to ensure Internet 
freedom. You need to institute a ban on cross-ownership of 
print and national broadcast outlets, as a companion to the 
local cross-ownership ban. You must boldly put forth limits on 
newspaper ownership, and create incentives and rewards for 
owners who invest in journalism.
    I implore you to look to the future and create public 
policy which allows our Nation's free and local press to again 
thrive, and thus, ensure our democracy. This is a historical 
moment. The American citizen needs your leadership.
    Thank you.
    [The prepared statement of Mr. Blethen follows:]

      Prepared Statement of Frank A. Blethen, Publisher and CEO, 
                           The Seattle Times

    Chairman Inouye, distinguished Senators, thank you for the 
opportunity to share my perspectives with you today.

        There is freedom in a variety of voices.

        There is, I believe, a fundamental reason why the American 
        press is strong enough to remain free. That reason is, that, 
        the American newspaper, large and small, and without exception, 
        belongs to a town, a city, at the most to a region.

        The secret of a free press is that it should consist of many 
        newspapers, decentralized in their ownership and management, 
        and dependent for their support--upon the communities where 
        they are written, where they are edited and where they are 
        read. There is safety in numbers, and in diversity, and in 
        being spread out, and in having deep roots in many places.

        Only in variety is there freedom.

        These are the words of noted journalist Walter Lippman, spoken 
        half a century ago.

    I'm Frank Blethen, publisher of The Seattle Times. My family has 
lived in Seattle for 111 years. We epitomize the local connection 
Lippman so accurately cites as the foundation of America's freedoms. We 
are accountable only to our local community and, to our heritage with 
its paramount stewardship duty of independent journalism and community 
service.
    Tragically, the essential localism and ownership diversity Lippman 
praises has been abandoned by Congress and the FCC. Throughout America, 
in-print and broadcast, concentrated absentee ownership abounds. With 
it has come a disinvestment in journalism, causing serious erosion in 
America's public policy literacy and civic engagement.
    The public knows something is wrong. When given the opportunity 
they vehemently oppose more media control. They plead for the localism 
and multiple voices which are the very oxygen of community and of a 
healthy democracy. As we witness the inevitable failure of the publicly 
traded and absentee ownership model which as come to dominate our 
newspapers and broadcast, America is at a crossroads.
    This Committee has the opportunity to lead Congress down an 
enlightened path. You have it in your power to be the public servants 
Jefferson and Hamilton envisioned when they championed a free and 
independent press as the essential fourth leg on the democratic stool.
    You are told conglomerate owners need more consolidation because 
the business model is broken. Nothing is further from the truth. After 
decades of milking newspapers and TV stations for some of the highest 
pre-tax profit margins imaginable, often as high as 30 percent for 
newspapers and 50 percent for broadcast, it has become impossible to 
sustain these false margins.
    We are simply going ``back to the future'' when I started in this 
industry 40 years ago. When newspapers were nice, locally owned, single 
digit margin businesses, generating good cash-flow to operate the 
business and invest in journalism and community. There is no reason to 
believe that local newspapers and broadcasts can't both sustain 
successful business and fulfill their public service mandate going 
forward. Even today, amid false claims, the economic model is broken, 
the publicly traded newspaper sector is reporting 16-18 percent profit 
margins!
    You have the opportunity to save our free and local press, to 
rejuvenate America's civic engagement and, to lay the foundation to 
preserve our democracy longer than any the world has seen.

   To do so, you must keep all current FCC ownership 
        restrictions and public service mandates in place, including 
        the all-important local cross ownership ban.

   You must insist that the egregiously unenforced mandates of 
        minority ownership, female ownership and public service air 
        time be vigorously enforced.

   You must craft new FCC mandates to ensure Internet freedom.

   You need to institute a ban on cross ownership of national 
        print and national broadcast outlets as a companion to the 
        local cross ownership ban.

   You must boldly put forth limits on newspaper ownership and 
        create incentives and rewards for owners who invest in 
        journalism.

    I implore you to look to the future and create public policy which 
allows our Nation's free and local press to again thrive and thus 
ensure our democracy.
    This is a historic moment. The American citizen needs your 
leadership. Thank you.



                The Democracy Papers--September 9, 2007

             Fasten Your Seat Belts: Full-Speed Media Ahead

        By James F. Vesely, Seattle Times Editorial Page Editor

    The American press is often reluctant to report on itself, but the 
overwhelming trends in media consolidation and in fragile instruments 
of democracy such as low-power radio lead these opinion pages to a 
series of editorials and essays titled ``The Democracy Papers.''
    The media are much talked about but rarely read about in the 
country's newspapers. Yet, the press--a better word than ``media''--is 
the coaxial cable that runs through the heart of the country and keeps 
us in touch with each other.
    That voice and its counterpart, the public ear, have evolved into a 
cacophony of sounds and images, exactly what the Federal Communications 
Commission warned of when it first established government as the umpire 
of the Nation's airwaves. The umpires are long gone from the world of 
blogging, podcasting, text messaging, 24/7 news cycles and community 
channels. The thud on the front porch that is the newspaper at 5:30 
a.m. is a delivery system of the 19th century, now sophisticated enough 
to give near-precise directions for every paper sent flying through the 
dawn.
    But delivery is not message and message is not the same as content. 
The press and democracy are one interlocking tree and root system, but 
its branches are spreading and the cost of keeping single voices 
independent and in the sunlight is becoming high.
    The series begins today with an essay from FCC Commissioner Michael 
J. Copps, who begins the narrative with an important government 
meeting, closed to the media, that produced a 5,000-word document that 
is known as the U.S. Constitution.
    Since that storybook time, the role of the media in America has 
been embellished by technology, but its function should--and must--stay 
the same.
    In the coming weeks, we will test that theory, that a free press is 
waning in America and with it the strength of our democracy. Writers on 
media consolidation, the music industry, the role of the press as 
unofficial signatory to democratic government, and the future of 
broadcast and print will be examined in editorials and guest essays.
    Monday's opinion pages will continue the examination of the role of 
the FCC with an editorial about the commission's failures, and an essay 
by Edwin C. Baker, professor of law at the University of Pennsylvania 
and author of ``Media Concentration: Why Ownership Matters.''
    The Seattle Times' editorial pages will have reports on how 
democracy fares with or without a free press in Uganda, China and 
Russia. We will examine how journalism is taught at the college level 
and look back at the scoops and blunders of Northwest journalism in the 
years of Seattle's booms and busts.
    Finally, the series will examine open government in our state. A 
new oversight committee is supposed to do just that--yet the editors of 
broadcast and print news all over Washington understand government's 
innate and almost unconscious resolve to protect itself from critical 
news stories.
    The press's mutual dependence on government, big-league sports, 
business interests and organized labor for news and information has 
been disrupted--often for the good--by the individual journalist, a 
blogger with a keypad. We will profile some of them and try to 
understand their frustrations and anger with America's press.
    It's a big swoop and it will take us several months to try to tell 
this story and shape some opinions about it. But it begins now.
                                 ______
                                 

                  The Seattle Times--September 9, 2007

   The Newspaper's View, Democracy, The Press at a Critical Juncture

    American democracy is suffering. The natural strain on our 
political system after more than two centuries is accelerating with the 
purposeful weakening of the press.
    This erosion has been fueled in recent decades by politically 
calculated legislation, and regulatory agencies not regulating. 
Political aggression coupled with bureaucratic acceptance has led to 
the massive consolidation of American and global media.
    The Federal Communications Commission can realign democracy with 
the Founders' vision by acting in the public's interest on a number of 
issues, such as network neutrality, cross-ownership and broadband. If 
the FCC missteps, the United States is in danger of losing its 
independent news organizations.
    The press--newspapers, radio, television and magazines--plays a 
role in democracy every bit as important as Congress, the Executive 
Branch and the judiciary. That watchdog role is in danger now that 
newspapers, which are the driving force behind most original reporting, 
are being strained by consolidation.
    Why should Americans care who owns the press?
    Because a democracy ceases to be a political system that promotes 
liberty when the press is muzzled.
    Ownership still matters. The corporatization of news has laid bare 
how woefully unwilling strictly market-driven conglomerates are to 
fielding aggressive news organizations with a public-service mission.
    Citizens should look at the press as part of democracy's structure. 
When viewed through this lens, it becomes apparent that a national 
discussion is needed about the press, its function, who owns it, and 
what can be done to ensure it stays vital and independent.
    The courts and the FCC have historically recognized the importance 
of the press and its relation to democracy. Rulings such as the 
Associated Press v. United States in 1945 and New York Times Co. v. 
Sullivan in 1964 demonstrated the court's position. These rulings are 
now part of a sentimental past.
    In 2003, the FCC voted to loosen the rules governing cross-
ownership so that one company could own a newspaper, three television 
stations, eight radio stations and an Internet service provider in the 
same market. The commission bucked millions of public comments against 
such an undemocratic arrangement.
    Thankfully, the courts put the FCC's plan on hold. Unfortunately, 
the U.S. 3rd Circuit Court of Appeals did not completely block the new 
rules. The court sent the rules back to the FCC to be reworked. Lifting 
the ban is still a possibility. Even though the FCC has a new chairman 
since the 2003 debacle, the majority Republican commission has 
indicated it likes the idea of big media as a complement to big 
government.
    The government's penchant for bigness is obvious. Radio has been 
consolidated to minuscule numbers of owners who favor generic play 
lists. Adding to the corrosion of American creativity is the loss of 
radio news--too expensive for the big companies. The gutting of local 
radio has also blocked minorities and women from the most accessible 
entry point to media ownership.
    Television news has devolved into a cliche. Weather, crime and car 
accidents fill airspace that was once the domain of substantive reports 
from city hall and the capitol. The trends have not been much kinder to 
newspapers. The majority of readers need a score card to keep track of 
which corporation owns their newspaper.
    The press is going through a radical transformation. The old way of 
doing business is dead. Press opponents know this, and are spending a 
lot of money in Washington to transform the news into a commodity every 
bit as purchasable, and salable, as toilet paper.
    The Federal Government has largely failed to protect an independent 
press. Instead, policies have been tailored for big corporations that 
are blindly beholden to the market, and increased quarterly profits.
    Democracy does not simply happen. It requires nurturing. It needs 
the public to be aware of assaults against it, small and large. The 
courts must rebuff debilitating press laws, and politicians should 
champion media reform.
    It is not too late. American democracy and the press are at a 
critical juncture. What started as a boisterous grand experiment 
powered by the pen, has become background noise to American life. 
Democracy's frequency has to be returned for all to hear.
    The press--its state, and how it can be saved--is the right place 
to begin the discussion.
                                 ______
                                 

                  The Seattle Times--September 9, 2007

Democracy and Media, Do We Currently Have a System That Would Make Our 
                        Founding Fathers Proud?

           By Michael J. Copps, Special to The Seattle Times

    An important government meeting was once called but closed to the 
media. The assembled leaders produced a 5,000-word document, finalized 
early enough to be manually typeset by the close of the proceedings.
    Within weeks, it was reproduced by newspapers in every state. It 
came to preoccupy the Nation's signed and unsigned editorialists, as 
well as its political reporters. It prompted conventions across the 
nation--which we know far more about because they were all open to the 
media.
    The document was ultimately endorsed with some additions, most 
notably language addressing the role of journalism in a free society.
    The document is of course the U.S. Constitution, the string of 
anonymous op-eds is now known as the Federalist Papers, and the little-
debated addition is the First Amendment.
    James Madison's original draft in the House of Representatives 
spoke of the press as one of the ``great bulwarks of liberty,'' echoing 
language first put forth by the Virginia ratifying convention. But 
Congress adopted the more economical formulation we know today.
    It is enormously revealing that our Nation's popular press 
literally predates our foundational political document, and played a 
key role in its formation. After all, in Europe, where the power of 
government remained solidly in the grasp of elites at the end of the 
18th century, there was no obvious need or demand for a popular press 
covering--let alone criticizing--the acts of government. But in a 
democracy--where every citizen is allowed and expected to vote--a 
professional, independent, objective media is fundamental.
    Today, the U.S. is vastly more powerful and richer than in the 
heady days of Madison and the Constitutional Convention. But do we 
currently have a media system that would make our Founding Fathers 
proud?
    I fear not. We have a system that has been buffeted by an endless 
cycle of consolidation, budget-cutting, and bureau-closing. We have 
witnessed the number of statehouse and city hall reporters declining 
decade after decade, despite an explosion in state and local lobbying. 
As the number of channels has multiplied, there is far less total local 
programming and reporting being produced. These days, if it bleeds, it 
leads.
    Interested in learning about local politics from the evening news? 
About 8 percent of such broadcasts contain any local political coverage 
at all, including races for the House of Representatives, and that was 
during the 30 days before the last Presidential election.
    Interested in how TV reinforces stereotypes? Consider that the 
local news is four times more likely to show a mug shot during a crime 
story if the suspect is black rather than white.
    What has caused this appalling degeneration of our media? One 
factor, I am ashamed to say, is the abdication of responsibility by 
regulators at the Federal Communications Commission. We allow the 
Nation's broadcasters to use spectrum worth billions of dollars, 
supposedly for programming that serves the public interest.
    Once upon a time, the FCC actually enforced this bargain by 
requiring a thorough review of a licensee's performance every 3 years 
before renewing the license. But during the market absolutism of the 
Reagan years, we pared that down to ``postcard renewal,'' a rubber 
stamp every 8 years with no substantive review.
    It is time to do better. The FCC needs to reinvigorate the license-
renewal process. We need to look at a station's record every three or 
four years. And let's actually look at this record. No more rubber 
stamps. Did the station show original programs on local civic affairs? 
Did it broadcast political conventions? In an era where too many owners 
live thousands of miles away from the communities they allegedly serve, 
have these owners met with local leaders and the public to receive 
feedback?
    Another factor is the FCC's woeful record of stepping aside to 
allow wave after wave of consolidation in the broadcast and print 
business. Though there are rules on the books designed to prevent too 
much cross-ownership of TV, radio and print properties in a single 
market, we have not enforced them with the rigor they deserve.
    Far more troubling was what the FCC tried in 2003--over my strong 
objection--to relax the cross-ownership rules. The agency actually 
voted 3-2 to allow a single company to own up to three TV stations, 
eight radio stations, the daily newspaper (a monopoly in most towns), 
the cable system and the Internet service provider.
    Thank heavens Congress and the courts stepped in to overturn that 
terrifyingly bad decision. But now the agency is considering changes to 
these very same rules.
    I say this is hardly the time to rush headlong into more of what we 
know has not worked given the wreckage caused by our decades-long 
flirtation with the notion that Wall Street always knows best when it 
comes to journalism.
    As the FCC and America move forward into the brave new world of 
media in the 21st century, I hope we can agree the public interest is 
not just another way of saying ``corporate profit maximization.''
    President Franklin D. Roosevelt, my personal hero, once said in a 
letter to newspaper publisher Joseph Pulitzer, ``I have always been 
firmly persuaded that our newspapers cannot be edited in the interests 
of the general public from the counting room.''
    The same is true of broadcast journalism. Consider the fact that 
the existence of local news in Spanish in a market can boost election 
turnout among Spanish speakers by more than 10 percent. No dollars-and-
cents calculation is going to take account of that extraordinary boost 
to our Nation's democracy.
    If technology and changes in the economics of the news business 
have made the old ways impossible, we need to find new ways to develop 
a media system that can serve democracy. That is not a luxury, it is a 
necessity.
    I take great comfort from the conclusion of another critic of the 
current media system, Walter Cronkite, who said, ``America is a 
powerful and prosperous nation. We certainly should insist upon, and 
can afford to sustain, a media system of which we can be proud.''
    Let's work together to show that it can be done. Our democracy 
demands it.
                                 ______
                                 

                 The Seattle Times--September 10, 2007

        The Newspaper's View, Failures of the American Airwaves

    The Federal Communications Commission has failed the people and the 
democratic system it is supposed to protect.
    The many failures reached ridiculous heights in 2003 when the 
majority Republican commission split along party lines to gut the 
cross-ownership ban. The change would have allowed a single company to 
own a newspaper, three television stations, eight radio stations and an 
Internet service provider in the same market.
    The sinister move did not go unnoticed. The FCC was flooded with 3 
million comments. Clearly, the American public is attuned to the threat 
media consolidation poses to democracy.
    America's press, and other sectors of the media, will continue to 
be marginalized unless politicians act on the currents of energy 
created by the growing media-reform movement. Politicians, both 
Republicans and Democrats, should push back on the FCC.
    The FCC can act on a number of issues that will quickly begin the 
revival of an independent press and a healthy democracy.
    Cross-ownership. The bloating of the world's media conglomerates 
begs lawmakers to reexamine this rule. Not only does it need to be 
better enforced, the rule needs to be expanded on a national level. No 
company should be allowed the reach and power of News Corporation. The 
FCC has to be alarmed that the conglomerate now owns the New York-based 
Wall Street Journal, Fox News, two television stations and a daily 
newspaper in the city. News Corporation is also launching a national 
financial channel.
    Licensing. The FCC should use a licensing program requiring 
television stations to go through a rigorous renewal every 3 years. The 
current system has almost no impact, and renewal is done every 8 years. 
Stations simply send in a postcard.
    Network neutrality. This awkwardly named proposal would keep 
network providers--such as AT&T or Comcast--which supply the pipes 
through which the Internet moves, from implementing different pay 
scales for different levels of service. This law would ensure the 
Internet remains a place for innovation and is not controlled by the 
companies that own broadband.
    These are just a few actions the FCC and lawmakers could take to 
perpetuate the press's indispensable role in a democracy. It is time 
the FCC acted in the best interests of the people it was created to 
serve, instead of large corporations.
                                 ______
                                 

                 The Seattle Times--September 10, 2007

          Dispersed Media Ownership, Serves Democratic Values

             By C. Edwin Baker Special to the Seattle Times

    The Federal Communications Commission is considering whether to 
reduce restrictions on broadcast-station ownership, an action that 
would permit greater media and press concentration.
    This is a bad idea. Bad for audiences, for citizens, and for 
democracy. Dispersed media ownership, ideally local ownership, serves 
democratic values, while conglomerate ownership and media mergers, 
which would be the result of reduced ownership restrictions, do the 
opposite.
    Equality--one person one vote--provides the proper standard for the 
distribution of power and voice in a democracy. Maximum dispersal of 
media ownership can enable more people to identify a media entity as in 
some sense speaking for and to them.
    Dispersed ownership also reduces the danger of inordinate, 
potentially demagogic power in the public sphere. As the FCC once 
recognized, many owners creates more independent decisionmakers who can 
devote journalistic resources to investigative reports. Finally, 
dispersal reduces--without eliminating--potential conflicts of 
interests between journalism and an owner's economic interests.
    In contrast, media mergers put papers and broadcasters into the 
hands of executives whose career advancement depends on maximizing 
profits. Mergers require owners to squeeze out more profits to pay off 
debt created by the high bid made to secure the purchase. As too many 
recent examples show, the most consistent method to reduce expenses is 
to fire journalists.
    Smaller owners, free from the financial burden of paying for 
mergers, have more room to maintain a commitment to quality. They can 
be interested in how their paper contributes to their community, not 
merely to their family's wealth. While certainly not true in every 
case, research shows that, holding other factors constant, smaller 
owners tend to hire more journalists and commit more resources to 
journalism than do the conglomerate owners.
    For the media to have a single-minded emphasis on the bottom line 
is dangerous for democracy. Unlike many companies whose main business 
is providing individual consumers with goods they value, the press 
provides value to the public at large. Non-readers benefit when the 
press identifies government corruption or corporate malfeasance. News 
organizations that practice aggressive investigative reporting can 
benefit the public without even producing a story to sell readers when 
their reputation for reporting deters wrongdoing.
    Of course, the newspaper does not profit from providing these 
benefits to those who do not purchase the paper. Papers concerned 
primarily with profits have inadequate incentives to provide this kind 
of beneficial journalism. Only a commitment to traditional journalistic 
values leads to the commitment of the journalistic resources necessary 
to provide this public good.
    It is precisely because the press can provide the public with these 
kinds of benefits that it is the only private business to receive 
special constitutional protection. This explains why the FCC has long 
restricted concentration of ownership of broadcast stations and the 
cross-ownership of a local broadcast station and a newspaper within a 
community.
    Large media companies often claim that any restraint on their 
freedom to merge violates their rights under the First Amendment. But 
in writing for the Supreme Court, Justice Hugo Black, famous for his 
absolute commitment to the First Amendment, rejected this claim, 
stating: ``Surely a command that the government itself shall not impede 
the free flow of ideas does not afford non-governmental combinations a 
refuge if they impose restraints upon that constitutionally guaranteed 
freedom . . . Freedom of the press . . . does not sanction repression 
of that freedom by private interests.''
    The Supreme Court strikes down any law censoring what the media can 
say. At the same time the court consistently follows Black's logic by 
upholding any law that can be reasonably defended as furthering a more 
democratic structure of the press.
    Rather than reduce restrictions on media ownership, the FCC should 
expand ownership restrictions and create regulatory preferences for 
more diversified and more local ownership.
    The FCC or Congress could extend the ban on cross-ownership to 
prohibit ownership both of a national newspaper or a large newspaper 
chain and of a national broadcast or cable network. This rule would, as 
it should and constitutionally could, require undoing the recent 
purchase by Rupert Murdoch's News Corporation of The Wall Street 
Journal.
    Widely dispersed ownership of independent media serves both 
democracy and the First Amendment. It embodies a commitment that is 
good for everyone in a democratic society.
    C. Edwin Baker, author of ``Media Concentration: Why Ownership 
Matters,'' is a professor of law at the University of Pennsylvania.
                                 ______
                                 

                 The Seattle Times--September 16, 2007

               The Newspaper's View . . . Build Broadband

    The Internet is an important conduit to commerce and innovation, a 
medium that has wildly exciting communication potential. Yet, the 
United States' paltry broadband network lags behind most of the 
industrialized world. Our weak Internet infrastructure not only puts 
the Nation at a competitive economic disadvantage, it threatens 
democracy.
    Japan and South Korea have cheaper Internet service that is many 
times faster than that in the U.S. To get an idea of how far behind 
Japan we are, think of our network as a Soviet-era grocery store and 
Japan's as Whole Foods.
    At least a dozen countries have zipped by America because of smart 
government regulations that encouraged the build-out of networks and 
promoted competition. It is time Congress and the Federal 
Communications Commission did the same.
    A national discussion about what we want, and need, for the 
Internet of the future is part of the solution.
    Should it be treated like the airwaves, which belong to the public? 
Can network providers like AT&T be forced to allow broadband startups 
onto their lines? Could a system modeled after public utility districts 
help broadband reach areas that are not attractive to network 
providers?
    So far, the discussion has been defined by lobbyists for the 
telecom and cable companies, which have spent many millions of dollars 
opposing network neutrality and any legislation that would force 
competition. How much will their networks be worth if all the brightest 
minds migrate to where their talents can contribute to society and be 
monetized? Americans should be worried about the current level of 
service. This is a serious problem that goes beyond the annoyance of 
slow-loading Web pages. Many rural and poor areas still use painfully 
slow dial-up Internet connections and will not get broadband anytime 
soon. Those with no access, or prohibitive access, will be silenced as 
more communication, services and news media jump to the Internet. Not 
only does the U.S. risk falling behind its partners and competitors, a 
large swath of American voices will disappear if broadband is left to 
network providers. That's a great loss for a democracy.
                                 ______
                                 

                 The Seattle Times--September 16, 2007

              The Newspaper's View, Free the Internet. . .

    Democracy is meaningless without structure. It requires support and 
infrastructure to become a word capable of giving entire nations voice 
and freedom.
    The architects of America's democracy knew this. The Founding 
Fathers made sure newspapers and magazines were widely distributed by 
allowing periodicals to utilize low postage rates. Technologies like 
the airwaves, which were enshrined as the public's ownership, have also 
been federally regulated to be used as democratic tools.
    Lawmakers have another opportunity to use technology to bring the 
Nation's democratic discussion to more people. The Internet has become 
home to modern-day pamphleteers, community discussion and innovation. 
Like any valuable resource, the Internet is in need of protection.
    The Federal Communications Commission and Congress can provide this 
by passing an Internet-neutrality law. Congress can act this fall on a 
net-neutrality bill sponsored by Sen. Olympia Snowe, R-Maine, and Sen. 
Byron Dorgan, D-N.D., that is before the Commerce Committee.
    Working against such common-sense legislation are corporations such 
as Comcast, Verizon and AT&T. These corporate octopuses vehemently 
oppose any laws that will erode their considerable influence as network 
providers.
    The legislation seeks to prevent companies from manipulating the 
content that flows through the networks they have built. Currently, 
there is nothing stopping Comcast from slowing down content it did not 
create or from degrading content from competitors. AT&T illustrated the 
danger when it deleted comments made by Pearl Jam singer Eddie Vender 
during a concert webcast through its Blue Room Website.
    Constructive regulation is needed to allow the Internet to grow and 
mature. It has the potential to connect people from the country's 
remote corners to residents of the biggest cities. The Internet is a 
place where ideas catch fire, where like minds find refuge and debates 
can rage. The Internet cannot belong to a couple of gigantic 
corporations. A handful of telecommunication and cable companies should 
not be entrusted with something as precious as our diverse, national 
dialogue.
                                 ______
                                 

                 The Seattle Times--September 26, 2007

           The Local Voice of Radio Has Been Muffled by Greed

              By Bill Wippel Special to The Seattle Times

    Local radio stations, left independent, are the best examples of 
freedom and democracy. Most are located in small markets where they 
mirror the community's image.
    Take Pullman. Station KOFE in 1964 decided to turn over the entire 
station's proceeds for one day to the local chamber of commerce. 
chamber members bought spots and wrote their competitors' commercials 
and read them over the air.
    Seafirst Bank wrote: ``Pullman National Bank has a clock out front 
because inside they won't give you the time of day!'' and, Pullman 
National bank wrote: ``You think that thermometer out front gives the 
temperature? No, it's Seafirst's rate of interest.'' (The broadcast was 
made in July when the thermometer read 85.)
    In all that fun, including newscasts read by chamber members 
complete with botched pronunciations and laughter, $4,000 was raised. 
It bought most if not all of the Christmas decorations for the town.
    Earlier, in Pomeroy, Garfield county, which does not have a radio 
station, KOZE in Lewiston, Idaho, broadcast a play-by-play description 
of the Pomeroy Day Parade. The big news was that an area farmer had 
paid cash that day for a new Edsel. Interviews of local folks made them 
``famous'' in that small farming community!
    Genesee, Idaho, never had a station, either. But once a year, 
Pullman's KOFE did a broadcast from the farming community from 6 a.m. 
to 6 p.m. for Genesee Days. No other commercials were broadcast except 
those from Genesee. Crowds were huge.
    Interviews with city leaders, farmers and business owners told of 
the small town's pride and joy: wheat farming and soil conservation.
    Owners of large radio conglomerates today would call this 
``hokey.'' They would also call this exercise ``looking back, when we 
should be looking forward.'' Today, many broadcasters exhibit just the 
opposite of community resourcefulness. There are exceptions, but they 
are few and far between.
    There are radio stations located in the Seattle area that have left 
their original City of license. Stations that used to broadcast the 
hometown news and community events of suburban King, Pierce and Kitsap 
counties now involve themselves almost solely with Seattle or some 
other nonlocal focus.
    None of this is illegal, thanks to the Federal communications 
commission. The FCC has watered down what is required to receive a 
radio--* broadcast license. Each station can renew its license by just 
a postcard. No promise of news, community involvement or public service 
is necessary to renew its license.
    Proponents of further relaxation of FCC broadcast rules argue that 
we have so many news venues that democracy is in good health.
    Not when a few own so much of the media.
    Imagine if Rupert Murdoch, coming off his acquisition of The Wall 
Street Journal, added our local press or radio and television stations 
to his worldwide stable of traditional and new media. Where would we 
turn for diversity of coverage in news, sports and opinion? It would be 
a catastrophe for the Puget Sound region.
    We have allowed greed to replace enterprise. We have allowed the 
local voice of radio, for all intents and purposes, to be stifled.
    Guglielmo Marconi must be rolling in his grave. The voice of 
democracy and independent thought on radio are all but dead.
    Bill Wippel of Normandy Park has been in radio for 58 years and is 
a former owner of KOFE in Pullman. He now directs Tape Ministries NW, a 
nonprofit lending library of Christian books on tape for blind and 
sight impaired people, www.tapeministries.org.
                                 ______
                                 

                   The Seattle Times--October 3, 2007

           FCC Fiddles While Nation's Broadband Falls Behind

              By John Muleta Special to The Seattle Times

    As the economy of the mid-20th century boomed, government action to 
provide consumers with free over-the-air television and radio changed 
forever the way Americans engaged in the life of their nation.
    For the first time, news and entertainment from around the corner 
and around the world were delivered directly into our living rooms. 
America became a truly interconnected society as our country's 
perspective on events like the civil-rights movement and the Vietnam 
War were defined by the widespread adoption and availability of free 
consumer communication services.
    In the 21st century, broadband has the potential to similarly 
reshape our democracy through the interactive power of the Internet. 
Unfortunately, there is growing evidence that the current Federal 
Communications Commission (FCC) is failing the American people in 
maximizing use of the airwaves to serve the ``public interest.''
    When it comes to broadband communications, the FCC's policy is to 
consistently favor media megaconglomerates by throwing up roadblocks to 
competition and failing to protect consumers. The FCC has protected 
entrenched incumbents by building an obstacle course for innovative new 
entrants.
    While the FCC coddles AT&T and Verizon, more than 100 million 
adults and their children still do not have broadband connections, and 
our country has fallen to 24th in the world--behind Estonia--in global 
broadband-adoption rankings.
    Congress has found that broadband services in the United States are 
delivered by a duopoly of incumbent telephone and cable companies, 
leading to high prices and low adoption rates. Prices for broadband 
have only declined 10 percent over the past decade while prices for 
computing have dropped by more than 90 percent. Computer makers are 
regulated by the marketplace, while broadband providers are regulated 
by the FCC--and therein lies the problem.
    The result is that broadband adoption has stalled at below 50 
percent while the economic and racial disparities in connectivity have 
grown. In America today, poor, rural and black families have broadband 
service at half the rate of their rich, suburban and white 
counterparts. This is un-American and unacceptable.
    Given this sad state of affairs, one might assume the FCC would be 
open to considering new and innovative approaches to using America's 
airwaves to spur broadband adoption. Sadly, this is not the case.
    The experience of my company, M2Z Networks, is an example of how 
hard it is for innovative ideas to enter the marketplace. Backed by the 
same Silicon Valley innovators that brought you Amazon.com and Google, 
we proposed to build a free, fast and family-friendly nationwide 
wireless broadband Internet network without a government subsidy. Such 
an innovative service would be an unprecedented step toward breaking 
down the socioeconomic barriers that divide our country and extending 
the great opportunities of broadband into the homes of every American 
family.
    Of course, these networks require licenses from the FCC to use the 
public airways. After 16 months of inaction, the FCC recently announced 
that it would need more time to consider our proposal--despite 50,000 
Americans and hundreds of Federal, state and local officials telling 
the FCC that our service was in the public interest.
    Despite this overwhelming public support, the FCC sided with seven 
incumbent telephone companies that said a slow decision on our license 
application was in the public interest.
    The real issue when it comes to broadband is that America's 
airwaves are managed by an FCC that is content to fiddle while American 
broadband falls behind.
    The FCC's duty is to serve the public interest by promoting 
competition and protecting consumers through the use of the ``public'' 
airwaves. It is high time the FCC act in the public interest of 
American consumers and stop acquiescing to the special interests of 
incumbent phone companies and media conglomerates.
    John Muleta is co-founder and CEO of Silicon Valley-based M2Z 
Networks (www.m2znetworks.com). He is a longtime Internet and 
telecommunications entrepreneur who also headed the FCC's Wireless 
Telecommunications Bureau between 2003 and 2005.
                                 ______
                                 

                  The Seattle Times--November 4, 2007

         The Newspaper's View, Headlong into the Murk of Media

    The Federal Communications Commission must slow down. Nothing good 
can come from squeezing major changes to the laws that govern media 
ownership by year's end.
    FCC Chairman Kevin Martin wants a vote on media-ownership rules by 
Dec. 18. Never mind that the FCC has not held its required sixth and 
final hearing on media ownership. That hearing is now scheduled for 
Seattle on Nov. 9.
    Expect the hearing to be a rushed affair. An FCC hearing to explore 
how broadcasters are serving communities was announced at the same time 
as the Seattle media-ownership hearing. The broadcaster--or localism--
hearing was finalized the night of Oct. 24, giving the public only five 
business days to prepare. The localism hearing was not only degraded by 
its timing, but also by its venue. The hearing was tagged onto the end 
of a regularly scheduled FCC meeting on Halloween.
    There is no logical reason for Martin to be in such a hurry other 
than to work something out for the sale of media conglomerate Tribune 
to Chicago developer Sam Zell. Zell wants the deal to go through by the 
end of the year. He also wants the deal to include Tribune's television 
stations, many of which operate in the same cities as its newspapers.
    The current FCC cross-ownership ban bars a company from owning a 
television station and newspaper in the same city. Tribune has been 
able to operate in a number of cities under the ban with a waiver that 
does not transfer with the sale.
    It is reasonable to believe Martin will be pushing the Commission 
to drop the cross-ownership ban. In 2003, he voted with the former 
Chairman Michael Powell to allow a company to own in one market a 
newspaper, a television station, eight radio stations and an Internet 
service provider.
    These rule changes prompted the public to act through a court 
challenge. The FCC was flooded with nearly 3 million letters in 
opposition to the changes. Then, the 3rd Circuit Court of Appeals in 
Philadelphia sent the rule changes back to the FCC.
    The FCC should be more concerned about structuring rules that 
ensure an independent and diverse press and media, and not so worried 
about appeasing the conglomerates that believe a cross-ownership ban is 
standing in the way of more revenue.
    This is too important an issue to be rushed. The FCC needs to 
facilitate a national discussion about how the American press and media 
can best serve democracy. That cannot be achieved by Dec. 18.
                                 ______
                                 

                  The Seattle Times--November 4, 2007

                 The Newspaper's View, Defy News Corp.

    News Corporation's purchase of Dow Jones signals a frightening new 
phase of media ownership that demands scrutiny.
    At least one person in a position to do something about it agrees. 
Michael Copps of the Federal Communications Commission sent a letter 
last week to FCC Chairman Kevin Martin asking that the commission take 
a hard look at the sale of Dow Jones, which includes The Wall Street 
Journal. Copps says that News Corporation's extensive media holdings 
should be of concern. He is right. News Corporation's media holdings 
are too prodigious for a democracy.
    Unfortunately, it is not clear whether the FCC can do anything 
about it. Martin is not likely to try to hold up the deal, and the FCC 
does not have a nationwide cross-ownership rule that would prohibit a 
company from simultaneously owning a national newspaper and a national 
news station.
    Just because there is no ban does not mean there should not be one. 
The American press and media have been condensed into the grip of a 
handful of companies. Rupert Murdoch's News Corporation already owns 
everything you watch with the word FOX in the name. He also owns Direct 
TV, MySpace, TV Guide and HarperCollins Publishing.
    The acquisition of Dow Jones will solidify News Corporation as the 
dominant news voice in New York City, and across the country. 
Nationally, the Murdoch conglomerate will own the New York-based Wall 
Street Journal, FOX News, and a soon-to-be-launched financial channel. 
News Corporation already owns two television stations and a daily 
newspaper in New York City.
    The FCC should listen to Copps. News Corporation, or any company, 
for that matter, need not have such a dominating media presence. It is 
time the FCC expanded its local cross-ownership ban nationally to 
ensure Americans are served by a dispersed, diverse press and media.

    Senator Dorgan. Mr. Blethen, thank you very much for your 
testimony.
    Next, we will hear from Mr. Tim Winter, who is President of 
the Parents Television Council.
    Mr. Winter, you may proceed.

          STATEMENT OF TIMOTHY F. WINTER, PRESIDENT, 
                   PARENTS TELEVISION COUNCIL

    Mr. Winter. Good day, Senator Dorgan, Chairman Inouye, Mr. 
Vice Chairman, and Senators. Thank you for inviting me to be 
here with you this morning. It is a personal honor for me to be 
here once again before this committee on whose staff I had the 
pleasure to serve under your good friend and former colleague 
Warren Magnuson.
    My name is Tim Winter, and I'm president of the Parents 
Television Council, with more than 1.2 million members across 
the United States. The PTC is a nonpartisan, nonprofit, 
grassroots organization dedicated to protecting children and 
families from graphic sex, violence, and profanity in 
entertainment.
    At first blush, there would seem to be very little 
connection between the PTC's mission and the media ownership 
issues which bring us here together today, but there is 
compelling evidence that the consolidation of media outlets has 
led to a coarsening of television content, a destruction of the 
concept of community standards of decency, an unresponsive, 
irresponsible news media that routinely ignores news stories to 
protect its parent corporation, and a cable television industry 
that effectively functions as a cartel.
    Mr. Chairman, a few years ago the PTC stood shoulder to 
shoulder with a remarkably diverse group of public policy 
advocates to decry the loosening of media ownership rules--the 
National Organization for Women and Concerned Women for 
America, the Salvation Army and Common Cause, Consumers Union, 
the National Rifle Association, MoveOn.org, and others. As PTC 
founder Brent Bozell noted at that time, when all of us are 
united on an issue, then one of two things has happened; either 
the earth has spun off its axis and we've all lost our minds, 
or there is universal support for a concept.
    I believe the FCC's recent localism hearings across the 
country have once again demonstrated universal support for a 
concept. Big media companies have not conducted themselves in a 
manner which merits them owning even more media outlets. The 
strongest voices in favor of allowing big media companies to 
grow even bigger have come from those within those very 
companies.
    Let me explain why the ownership issue is so important to 
the Parents Television Council:
    With very few exceptions, network-owned television stations 
do not consider community decency standards, even though the 
terms of their broadcast licenses demand it. During the summer 
of 2003, the FOX Broadcasting Network aired an episode of a 
crime show called ``Keen Eddie,'' where criminals trying to 
sell horse semen on the black market hired a prostitute to 
perform a particular act on the horse in order to extract the 
semen. Although the act itself was not displayed on the 
program, the dialogue was so coarse that I am uncomfortable 
mentioning it here to you today. A member of the PTC in Kansas 
City wrote a letter to the FOX-owned and operated television 
station in his market, expressing his concern, and I wish to 
read aloud the response he received from the station's general 
manager, quote, ``We forwarded your letter to the FOX network. 
The network, not the station, decides what goes on the air for 
the FOX-owned and operated stations.''
    When station general managers in cities and towns across 
the country take their orders directly from headquarters in New 
York or Hollywood, it comes as no surprise that they would toe 
the company line with programming decisions. How does this 
serve the public interest?
    We have heard repeatedly and privately from independent 
local broadcasters around the country who are threatened, by 
the major networks, that they will lose their affiliate status 
if they preempt network programming. Fortunately, there are a 
few notable exceptions of broadcasters pushing back on the 
networks, including Mr. Goodmon here and others like Pappas 
Communications. But when local programming decisions are 
dictated or prohibited by corporations thousands of miles away, 
the public interest cannot be served.
    Media consolidation has led to a self-serving news media 
that seeks to protect interests of their own corporate parents. 
When the broadcast networks recently challenged the FCC's 
ability to enforce indecency standards, they convinced two 
Federal judges in New York City that they have the right to air 
the ``F'' word at any time of day, even when they know millions 
of children are watching.
    Although dozens of concerned family groups, including the 
PTC, were shocked that a court could reach such a preposterous 
conclusion, there has been only limited public outcry over that 
decision. The reason for this is simple. In large measure, the 
American people don't know that it has happened. In the wake of 
that court decision, not a single national news broadcast 
organization saw fit to cover the story, and, even with a host 
of 24-hour-a-day news channels on cable, there was near-zero 
coverage of a decision that will impact every family in the 
country, as well as the policies determining appropriate use of 
the airwaves that they themselves own.
    Why no coverage? We believe that the corporate news 
divisions knew the public would be incensed by the arrogance of 
a media conglomerate arguing for the right to air profanity in 
front of their children early in the day over the airwaves that 
they own.
    It should be noted that the Second Circuit ``F''-word 
lawsuit and the now-pending Third Circuit lawsuit, which 
alleges that the Janet Jackson Super Bowl striptease was not 
indecent, were not brought by local broadcasters, like Mr. 
Goodmon here; rather, these lawsuits were filed by the major 
television networks, those same corporations who now want an 
even greater control of America's media.
    If you think media consolidation has stifled the broadcast 
industry, please listen carefully to the following statistics 
on cable. At my office in Los Angeles, there are 48 cable 
networks bundled together on the expanded basic cable tier. Of 
those 48 cable networks, Viacom owns all or part of eight of 
them, NBC owns all or part of eight of them, Disney owns all or 
part of eight of them, News Corp. owns all or part of six, 
Liberty Media owns all or part of six, and the local cable 
operator, Time Warner, owns all or part of seven of them. By 
using the retransmission consent rules, these conglomerates are 
able to use their TV station broadcast licenses in an 
extortion-like way to force unwanted cable networks onto our 
cable systems and onto our cable bills.
    There has been much attention paid recently to the 
acquisition of the Wall Street Journal by News Corporation. 
Imagine the outrage if Mr. Murdoch demanded that subscribers to 
the Journal now take and pay for the New York Post. But that is 
precisely what he is doing with his new FOX business network. 
News Corporation is able to force its new business network onto 
cable systems across the country, regardless of whether a 
single consumer wanted another business cable network. Such 
bundled programming arrangements may be great for Wall Street, 
but not for Main Street, and it does not serve the public 
interest.
    There has been a great deal of discussion about the lack of 
diversity in the American media landscape as it relates to the 
ownership of media properties. And rightfully so. Most 
Americans can name one network that caters to African 
Americans: BET. But can you name a second or a third? You 
can't, because they simply don't exist as an option on most 
basic cable systems. The Black Family Channel, the only black-
owned and operated cable television network for African-
American families, is now only distributed via the Internet. 
Because it is independently owned and cannot apply the same 
bundling leverage that conglomerates can, Black Family Channel 
was effectively shut out from carriage. In an environment 
dominated by media giants, there has developed no market that 
would allow additional minority programming to be created and 
distributed.
    Mr. Chairman, how can media conglomerates be afforded the 
additional public trust to hold even more broadcast licenses 
when they behave in this manner? This committee, the Congress, 
and the FCC must work in concert to protect the interests of 
the public, the very owners of the airwaves. In the strongest 
terms, I urge the Congress to consider these issues carefully 
as it evaluates any appropriate action on the issues of 
localism, diversity, and media ownership.
    Thank you.
    [The prepared statement of Mr. Winter follows:]

          Prepared Statement of Timothy F. Winter, President, 
                       Parents Television Council

    Good day, Mr. Chairman, Mr. Vice-Chairman and Senators. Thank you 
for inviting me to be here with you this morning. It is a personal 
honor for me to appear once again before this Committee, on whose staff 
I had the pleasure to serve under your good friend and former 
colleague, Warren Magnuson.
    My name is Tim Winter and I am President of the Parents Television 
Council. With more than 1.2 million members across the United States, 
the PTC is a non-partisan, non-profit, grassroots organization 
dedicated to protecting children and families from graphic sex, 
violence and profanity in entertainment.
    At first blush, there would seem to be little connection between 
the PTC's mission and the media ownership issues that bring us together 
today. But there is compelling evidence that the consolidation of media 
outlets has led to a coarsening of television content, a destruction of 
the concept of community standards of decency, an unresponsive, 
irresponsible news media that routinely ignores news stories to protect 
its parent corporation, and a cable television industry that 
effectively functions as a cartel.
    Mr. Chairman, a few years ago the PTC stood shoulder-to-shoulder 
with a remarkably diverse group of public policy advocates to decry the 
loosening of media ownership rules: the National Organization for Women 
and Concerned Women for America, the Salvation Army and Common Cause, 
Consumers Union, the National Rifle Association and MoveOn.org. As PTC 
Founder Brent Bozell noted, ``When all of us are united on an issue, 
then one of two things has happened. Either the earth has spun off its 
axis and we have all lost our minds, or there is universal support for 
a concept.'' I believe the FCC's localism hearings across the country 
have once again demonstrated universal support for a concept: big media 
companies have not conducted themselves in a manner which merits them 
owning even more media outlets. The only voices in favor of allowing 
big media companies to grow even bigger has come from voices within 
those very companies.
    Let me explain why the ownership issue is so important to the 
Parents Television Council. With very few exceptions, network-owned 
television stations do not consider community decency standards, even 
though the terms of their broadcast licenses demand it. This is not 
just a problem in a small number of markets, but rather it is a problem 
across this Nation. Four years ago the PTC conducted a survey of 
approximately one hundred television stations around the United States 
which were owned and operated by one of the four major television 
networks. That survey concluded that only one station--in one 
instance--had ever preempted a network program based on community 
standards of decency, and that one instance occurred over a dozen years 
ago.
    During the summer of 2003, the Fox Broadcasting Network aired an 
episode of a crime show called Keen Eddie. Criminals trying to sell 
horse semen on the black market hired a prostitute to perform a 
particular act on the horse in order to extract the semen. Although the 
act itself was not displayed, the dialog was so coarse that I am 
uncomfortable repeating it here. A member of the Parents Television 
Council in Kansas City wrote a letter to the Fox owned-and-operated 
station in his market, WDAF-TV, expressing his concern for such content 
airing at 8 p.m. I wish to read aloud the response he received from the 
station's General Manager in a letter dated July 25, 2003:

    ``We received your letter dated June 30, 2003 regarding the content 
of the Keen Eddie show that aired on June 10, 2003 at 8pm. We forwarded 
your letter to the FOX Network. The Network, not WDAF TV4, decides what 
shows go on the air for the FOX Owned and Operated Television 
Stations.''

    When station general managers in cities and towns across the 
country take their programming orders directly from the network 
headquarters in New York or Hollywood, it comes as no surprise that 
they would toe the company line. How does this serve the public 
interest?
    We have heard privately--and repeatedly--from independent local 
broadcasters around the country who are threatened by the major TV 
networks that they will lose their affiliate status if they preempt 
network programming. Fortunately there are a few notable exceptions of 
broadcasters pushing back on the networks, including Capitol 
Broadcasting's Mr. Goodmon, and others like Pappas Communications. But 
when local programming decisions are dictated or prohibited by a 
corporation often thousands of miles away, the public interest cannot 
be served.
    We have also seen instances of bad faith by TV station duopolies: 
i.e., where one company owns two (or more) TV stations in the same 
city. In those instances, network affiliates preempted programs, 
allegedly for indecency reasons. But those very same programs, deemed 
too indecent for one station, aired in their entirety on the other 
station in the same city owned by the same parent company. This 
programming sleight-of-hand is nothing more than a publicity stunt, 
intended to garner higher ratings for the non-network-affiliated 
station. This does not serve the public interest; it exploits the 
public interest.
    Media consolidation has led to self-serving news media that seek to 
protect the interests of their own corporate parents. The FCC has been 
empowered by Congress to uphold broadcast decency standards on the 
public airwaves at the times when children are most likely to be in the 
audience and the Supreme Court has upheld Congress' right to do so. 
Unfortunately, the broadcast networks have challenged the FCC's ability 
to enforce these standards and even convinced two Federal judges in New 
York City that they have a ``right'' to air the F-word at any time of 
day, even when they know millions of children are watching. Although 
dozens of concerned family groups, including the PTC, were shocked that 
a Federal court could reach such a preposterous conclusion, there has 
been only limited public outcry over that decision. The reason for this 
is simple: in large measure, the American people don't know that it has 
happened. In the wake of that court decision, not a single national 
broadcast news organization saw fit to cover it, and even with a host 
of 24-hour-a-day news channels on cable, there was near zero coverage 
of a decision that will directly impact every family in the country as 
well as the policies determining appropriate use of the airwaves that 
they themselves own.
    Why no coverage? We believe that the corporate news divisions did 
not cover their parent companies' lawsuits because they knew the public 
would be incensed by the arrogance of a media conglomerate arguing for 
the ``right'' to air profanity in front of their children early in the 
day over the airwaves that they--the public--own. In those instances 
where it has been mentioned in the print media, the story has been 
intentionally watered down and presented as a ruling on so-called 
``fleeting'' profanity. This is ironic considering that all profanity, 
by its very nature, is fleeting.
    It should be noted that the Second Circuit F-word lawsuit, and the 
now-pending Third Circuit lawsuit alleging that the Janet Jackson Super 
Bowl striptease was not indecent, were not brought by broadcasters like 
Mr. Goodmon. Rather, these lawsuits were filed by the major television 
networks: those same corporations who want an even greater share of the 
media industry.
    The proposed elimination of the newspaper cross-ownership rule 
threatens the important check that media outlets have on each other. If 
a television station and newspaper in a given market share ownership it 
follows that they will share editorial outlook on policy. Even if they 
don't, how likely is it that a newspaper would criticize a local 
broadcaster for anything--much less a violation of community standards 
of decency--if both entities are owned by the same company?
    Recently, I was told by a reporter who covers entertainment news 
for a prominent newspaper that his stories had been edited or even 
killed when they were unflattering to television programs produced by, 
or airing on, its television network.
    Some argue that a newspaper and a TV station in the same market may 
find economic efficiencies in news gathering. I do not believe, 
however, that in such a case the corporate interest outweighs the 
public interest. Much as networks have a chokehold over the programming 
decisions of their affiliates, so too would an ownership group exercise 
editorial control over its media properties in the same market. Other 
public interest groups with greater expertise in this area have 
testified powerfully on this effect before the FCC over the past year.
    I'd like to illustrate another way in which media consolidation has 
an adverse affect on families.
    If you think media consolidation has stifled the broadcast 
industry, please listen carefully to the following statistics on cable. 
At my office in Los Angeles, there are 48 cable networks bundled 
together on the expanded basic cable tier. Of those 48 cable networks, 
Viacom owns all or part of 8 of them; NBC owns all or part of 8; Disney 
owns all or part of 8; News Corporation owns all or part of 6; Liberty 
Media owns all or part of 6; and the local cable operator, Time-Warner, 
owns all or part of 7 of those networks. By using the retransmission 
consent rules, these conglomerates are able to use their TV station 
broadcast licenses in an extortion-like way to force unwanted cable 
networks onto our cable systems and onto our cable bills.
    There has been much attention paid recently to the acquisition of 
The Wall Street Journal by News Corporation. Can you imagine if Mr. 
Murdoch demanded that subscribers to the Journal must now take and pay 
for the New York Post? Of course not. But that is precisely what he is 
doing with his new Fox Business Network. News Corporation is able to 
force its new business network onto cable systems across the country, 
regardless of whether or not a single consumer wanted another cable 
business news network. And if, by using its broadcast network as 
leverage, it is able to charge the same 90-cents-per-month fee that the 
other business news network, CNBC, receives, it will be on a path to 
fleece several hundred million dollars each and every year from 
consumers--before a single penny of advertising is sold. This holds 
true for all networks owned by major media conglomerates, which 
comprise upwards of 90 percent of all cable television content, because 
they are only sold to distributors in this bundled way. Consequently, 
consumers and families have no ability to make a market-based decision 
about what programming to choose and pay for and are forced to pay for 
enormous amounts of unwatched, unwanted programming just to access what 
they may be interested in. These bundled programming arrangements may 
be great for Wall Street, but it is not good for Main Street, and 
clearly it does not serve the public interest.
    There has been a great deal of discussion about the lack of 
diversity in the American media landscape as it relates to the 
ownership of media properties, and rightfully so. Most Americans can 
name one network that caters to African-American audiences, but can you 
name a second or a third? You can't, because they simply don't exist. 
For example, the Black Family Channel, the only black owned and 
operated cable television network for African American families, is now 
only distributed via broadband Internet. Despite years of success, it 
was effectively shut out from carriage on many cable platforms because 
it is independently owned and thus could not leverage itself in the 
same way conglomerate-owned programming does. In an environment 
dominated by media giants, there has developed no free market in 
programming that would compel additional minority programming to be 
created and distributed. Again, the solution is simple: allow consumers 
to make their own decisions about what programming they want to pay 
for.
    Rather than take their public interest obligations seriously, the 
broadcast networks have exhibited a pattern of behavior that reflects 
contempt for the owners of the very airwaves from which they profit. In 
November 2004, Viacom--then the corporate parent of the CBS television 
network--entered into a Consent Decree with the FCC wherein it admitted 
airing indecent material, paid a fine and committed itself to a 
detailed compliance plan to prevent the further airing of indecent 
material.
    There is no evidence that compliance plan was followed, and just 
within the past 2 weeks, CBS meekly explained to the FCC that it 
understood the terms of the Consent Decree applied only to live 
programming. Since it was CBS' own attorneys who negotiated the terms 
of this contract and there is no such stipulation in it, it is 
preposterous and outrageous that CBS made this claim. If media 
conglomerates cannot be trusted with something as simple as making a 
good faith effort to prevent the airing of indecent material, then how 
can they been trusted to be good stewards of the public airwaves and 
given even more access to them?
    I sat in this very room a few years ago when FCC Commissioner Copps 
reminded this Committee that the term ``public interest'' appears no 
less than 112 times in the original Communications Act. Can this 
Committee and the FCC forthrightly assert that the corporate interests 
have conducted themselves in a manner that truly serves the public 
interest, so that they should be given the additional public trust to 
hold even more broadcast licenses than they do today?
    My answer to this question is an emphatic NO, they have not. In 
fact the major media conglomerates which now hold so many broadcast 
licenses have not only failed to act in the public interest, they have 
repeatedly acted with complete and utter disregard for the public 
interest. Not only have many acted in such a manner as to be denied any 
additional licenses, others have acted, and continue to act, in such a 
manner as to warrant the suspension or revocation of their existing 
licenses.
    This Committee, the Congress and the FCC must work in concert to 
protect the interests of concerned families--the very owners of the 
airwaves--and not merely grant every wish conjured up by those who 
would exploit their use of this precious resource.
    In the strongest terms, I urge the Congress to consider these 
issues carefully as it evaluate any appropriate action on the issue of 
localism, diversity and media ownership.
    Thank you.

    Senator Dorgan. Mr. Winter, thank you very much.
    Next, we will hear from Mr. Jim Goodmon, President and CEO 
of Capitol Broadcasting Company, in Raleigh, North Carolina.
    Mr. Goodmon, you may proceed.

   STATEMENT OF JAMES F. GOODMON, PRESIDENT AND CEO, CAPITOL 
                   BROADCASTING COMPANY, INC.

    Mr. Goodmon. Chairman Inouye, Chairman Stevens, Senator 
Dorgan, and Senators, thank you very much.
    My name is Jim Goodmon. I am President of Capitol 
Broadcasting Company, in Raleigh, North Carolina. We own radio 
and television stations in North Carolina. It's a family owned 
company. I'm proud to say I'm the third generation of my family 
to operate the company. The fourth is on the payroll, sent me a 
memo this week that he wasn't paid enough. I got real mad, 
until I remembered I sent the same kind of memo to my 
grandfather. So, we'll get through it.
    Now, I am the self-appointed number-one fan of digital 
television in the U.S. of A. WRAL TV in Raleigh was the first 
television station in the United States to go digital high 
definition. I think it's the greatest thing that's ever 
happened to broadcasting. I think it means broadcasting is 
relevant now into the digital future, and it's just wonderful. 
You're going to think I'm nuts when I tell you I almost started 
crying, Sunday, in the New England/Indianapolis game, because 
of that beautiful high definition. Did you see it in high 
definition? Do you realize how much better we are in high--I 
mean, it's just--digital television works.
    Now----
    Senator Kerry. I thought you were going to cry because New 
England was behind for a while.
    [Laughter.]
    Mr. Goodmon. OK. It was just--it was just terrific. I've 
never seen pictures like that.
    OK. Now, I want to tie digital television into ownership 
and localism. The first point I want to make is, we're getting 
ready to go digital. We're going to turn off our analogs, early 
2009, and we're going to be a digital broadcast universe.
    Now, we're not sure how that's going to come out. But, 
remember, I own one TV station, one analog. When I go digital, 
I'll own four TV stations. I mean, ownership is changing, just 
because we're going to digital. Now, I can't tell you how 
that's going to work out. But, you know, we're all going to be 
high definition, we're going to do multicasting--what's all 
going to happen to that. But going to digital is going to be a 
big change, and there are lots of unknowns. And, by the way, 
we're digital radio now. You know, my digital FM station--I 
have a FM analog station, I have a digital FM station. 
Remember, that's two more stations. So, I don't own one FM 
station, I own three. Right? And there are going to be lots of 
changes. How is all this going to come out?
    So, my point is, we're at the end of an era. Right? Things 
are going to really change. So, why in the world would you 
change ownership now? I mean, we've finished with that other 
time, and we're going into a new era, and we really all need to 
see what's going on before we look at ownership. Doesn't make 
sense to me to work on ownership now.
    Now, OK, if you don't buy that, let's talk about how we got 
into so much trouble in the last ownership proceeding. The way 
we got into so much trouble is, we had a group off working on 
radio, and, you know, how many radio stations can you own? And 
they thought about it, and worked and worked on it. Then we had 
a group saying, how many TV stations can you own? And they 
worked on that. And then we had a different group saying, 
``Well, you know, you ought to let TV stations own 
newspapers,'' and they worked on that, and they fought and they 
fought. They put all that together, right? The first time 
anybody had ever seen it was when it was all together on a 
piece of paper. And what they said was, ``You can own two TV 
stations. In some markets, you could own three. You could own 
eight radio stations. Same market now. Two or three TV 
stations, eight radio stations, and the local newspaper.'' I 
mean, that is such local dominance nobody could--that's why 
everybody fell to pieces.
    Senator Dorgan. Mr. Goodmon----
    Mr. Goodmon.--when you put it together.
    Senator Dorgan.--and the cable company, in the same 
community.
    Mr. Goodmon. Right. I was going to--you know, the cable 
company was not an FCC ruling, it was a court ruling. You know, 
we've got to get Justice to work on that.
    So, what could happen in my market is, I could own the 
cable company--or, let's say the cable company could own two 
television stations, five or six radio stations, and the local 
newspaper. Now, that's beyond--when you put all that together, 
it doesn't make any sense.
    So, the notion that the Chairman wants to just talk about 
newspapers, that also doesn't make any sense to me. If we're 
going to work on ownership, we've got to put it, you know, 
together. We've got to put all that stuff together and say, how 
does all this work? And I'm not talking--you know, cable 
channels, Internet sites, magazines--you know, it goes on and 
on and on.
    That's my first two reasons. We're doing a digital 
transition, and, second, we're not doing it all at the same 
time.
    If I haven't convinced you with the first two, the third 
is, if you just want to talk about newspapers--and it kind of 
bothers me to say this, being a broadcaster--the newspaper, the 
local newspaper sets the local agenda. In the broadcasting 
business, we're the breaking-news people. We're going to give 
you the spot news before anybody else. That local newspaper 
sets the local agenda. They are the power, they're the 
political power in the market. And I don't know why we also 
want to let them have television. I--that's just kind of a--I 
don't get that, because they're already the most powerful crowd 
in town, in terms of the political agenda.
    So, I'm just saying, even if you don't like the first two 
things I'm talking about, I don't see letting a newspaper have 
two TV stations and five radio stations and the cable company. 
That just doesn't make sense.
    Now--so, what we need to do--here's the plan. We're getting 
ready to go to digital. Now, before we go to digital, we need 
to do the minimum public-interest standards proceeding that's 
before the Commission. Y'all--everybody sort of fusses at us 
about not doing a good job. You've got to remember, there 
aren't any standards. There aren't any public-interest 
standards for digital broadcasting. I've been a digital 
broadcaster for 10 years, and there aren't any public-interest 
standards. And we've been asking the Commission, ``OK, guys, 
let's do public-interest standards. Tell us what you want us to 
do.'' And we've also said, ``By the way, you know, we've got 
people who say broadcasters do a good job, broadcasters do a 
bad job.'' I'm on the ``Do a better job''--I'm on the ``Do a 
good job,'' but, in any event, nobody knows, because there is 
no reporting. So, we've got a proceeding at the Commission, on 
disclosure. So, we do minimum public-interest standards, we 
come up with the disclosures so we can really see how we're 
doing, some information that makes sense, we do the digital 
transition, and then we look at ownership. Right? To me, 
considering ownership now is just--it's just out of order. I 
mean, it's just out of logical order to get us to the digital 
transition. Right? So, that's my story, and I'm sticking to it.
    I'll be happy to answer any questions. Thank you.
    [The prepared statement of Mr. Goodmon follows:]

      Prepared Statement of James F. Goodmon, President and CEO, 
                   Capitol Broadcasting Company, Inc.

    My name is Jim Goodmon. I am President & CEO of Capitol 
Broadcasting Company, Inc., and I am proud to say that I am the third 
generation in my family to serve as President. Capitol operates radio 
and television stations in North Carolina.
    Personally, I have never been more excited about broadcasting. As 
many of you may remember, I am the self-appointed nation's most 
enthusiastic digital television cheerleader. WRAL-DT signed on July 23, 
1996 becoming the Nation's first commercial high-definition (``HD'') 
television station. In 2001, WRAL-DT began multicasting allowing our 
viewers to watch CBS network and local programming in HD on one channel 
and 24-hour local news, sports and weather in standard definition on 
another channel. When needed, WRAL-DT can become four or more stations 
giving our viewers additional local and/or diverse programming.
    Three and a half years ago I testified before this Committee on the 
same issues being addressed at today's hearing. Much of my testimony 
remains the same, but there are two striking differences. First, by 
11:59:59 p.m. on February 17, 2009, television broadcasters must turn-
off their analog channels signaling the end of one era and the 
beginning of another. Second, digital radio is now a reality with over 
1500 radio stations broadcasting in HD. As broadcasters move from 
analog to digital, now is not the time to revise the media ownership 
rules.\1\
---------------------------------------------------------------------------
    \1\ The one exception to this is the so-called UHF discount rule. 
Pursuant to the UHF discount rule, UHF television stations continue to 
be attributed with only 50 percent of the television households in 
their Designated Market Areas (``DMAs'') for purposes of calculating 
the 39 percent national television ownership cap. Many VHF analog 
stations are (or will become) UHF digital stations, so it is very 
important that the UHF discount issue be resolved prior to February 17, 
2009 for calculation purposes.
---------------------------------------------------------------------------
    That is my first point today--I repeat, with the transition to 
digital, now is not the time to revise the media ownership rules. As 
previously noted, WRAL-DT is actually two channels and can be three, 
four or more, and many HD radio stations are already offering two or 
more channels, including WRAL-FM. In effect, Capitol's two digital 
television stations in Raleigh-Durham can be eight television channels, 
and its two radio stations can be six or more radio channels. I urge 
Congress and the FCC to wait and carefully evaluate the impact of the 
digital transition on localism, diversity and competition before 
changing the current media ownership rules.
    My second point is that the media ownership rules remanded by the 
Third Circuit must be resolved by the Commission in a comprehensive 
fashion, taking into consideration the interrelationship between the 
various rules on a national, state and local level. In 2003, although 
the Commission reviewed its new media ownership rules individually, 
with guidance from the now infamous Diversity Index, there is no 
indication that the Commission analyzed the collective impact of the 
new rules on the public interest and the Commission's core values of 
localism, diversity, and competition. Applying the Commission's new 
2003 rules, in Raleigh-Durham, Capitol could own two television 
stations; five or more radio stations; and the Raleigh and Durham daily 
newspapers, The News & Observer and the Durham Morning Herald 
respectively. In North Carolina, Capitol could own 11 television 
stations; more than 30 radio stations; and the daily newspapers in 
Raleigh, Durham, Charlotte, Asheville, Greensboro, High Point and 
Winston-Salem. Without antitrust intervention, Capitol could also own 
Time-Warner Cable and an unlimited number of cable channels, Internet 
websites and magazines.
    By ignoring the interplay of its new rules, the Commission violated 
its own stated policy of concentrating too much potential power in the 
hands of a single media outlet and created the absurd results noted 
above. The Commission's 2003 Media Ownership Order \2\ notes the 
following at  28, 29 and 38:
---------------------------------------------------------------------------
    \2\ See 2002 Biennial Regulatory Review--Review of the Commission's 
Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 
202 of the Telecommunications Act of 1996, 18 FCC Rcd 13620 (2003) 
(``2003 Media Ownership Order''), aff'd in part and remanded in part, 
Prometheus Radio Project, et al., v. F.C.C., 373 F.3d 372 (2004), stay 
modified on rehearing, No. 03-3388 (3d Cir. Sept. 3, 2004), cert. 
denied, 73 U.S.L.W. 3466 (U.S. June 13, 2005) (Nos. 04-1020, 04-1033, 
04-1036, 04-1045, 04-1168, and 04-1177).

        Further, owners of media outlets clearly have the ability to 
        affect public discourse, including political and governmental 
        affairs, through their coverage of news and public affairs. 
        Even if our inquiry were to find that media outlets exhibited 
        no apparent ``slant'' or viewpoint in their news coverage, 
        media outlets possess significant potential power in our system 
        of government. We believe that sound public policy requires us 
---------------------------------------------------------------------------
        to assume that power is being, or could be, exercised.

        The record contains evidence that reporters and other employees 
        of broadcasting companies alter their news coverage to suit 
        their companies' interests. This suggests that whatever 
        financial interest that media companies may have in presenting 
        unbiased news coverage, those incentives are not the only 
        factors that explain news coverage decisions.

        As we have explained, ``the greater the diversity of ownership 
        in a particular area, the less chance there is that a single 
        person or group can have an inordinate effect, in a political, 
        editorial, or similar programming sense, on public opinion at 
        the regional level.''

    In 2007, let's not repeat the mistakes of 2003. Because of the 
overlap among various media ownership rules, a holistic, harmonized 
approach is required to comply with the Third Circuit's remand.
    My third point is minimum public interest standards and reporting 
requirements are needed for digital broadcasters. The Commission's 
digital pubic interest notice of inquiry was adopted in 1998, a 
standardized disclosure rulemaking was adopted in 2000, and the 
localism notice of inquiry was announced in 2003 and adopted in 2004. I 
urge the Commission to complete these three rulemakings before moving 
forward with any changes to the media ownership rules. As I noted 
earlier, WRAL-DT has been on the air for more than a decade without 
digital public interest rules.
    Every broadcaster I know, myself included, believes they are 
following the Commission's rules and doing a good job of serving their 
local communities, but there is always room for improvement. The 
problem is as I see it that we are an industry with few standards . . . 
either mandatory or voluntary . . . and with only a few exceptions, we 
don't really know what is expected of us. The Commission's present 
reporting system does not provide much information, so we really don't 
know how well we are doing.
    Minimum public interest standards will make clear to all 
stakeholders of the public airwaves what is expected. Will broadcasters 
do more than the minimum? Yes, I think we will. Over the course of the 
last few years, the public--our viewers--have become increasingly aware 
that the airwaves belong to them and that we, as broadcasters, are 
accountable. Standardized reporting and defined minimum standards will 
at least give them and us a way to begin measuring how well we are 
doing.
    In addition, stations should be required to develop methods for 
determining or ascertaining the primary issues, needs and interests in 
the community. Public input should be invited on a regular basis to 
serve as a guideline for stations to address those community interests 
through news, public service announcements, and public affairs 
programming. And then, on a quarterly basis, station licensees should 
report to the FCC and the public on how ascertained needs are being 
served through local programming.
    To summarize, I respectfully submit that the Commission should 
complete its public interest and localism proceedings before the 
Commission addresses media ownership changes; the Commission should 
understand the impact of the digital transition on localism, diversity 
and competition before changing its media ownership rules; and the 
Commission should do a comprehensive review of the media ownership 
rules to understand the interplay of the rules to avoid the results 
created in the 2003 proceeding.
    Thank you for inviting me to testify today. I look forward to your 
questions.

    Senator Dorgan. Mr. Goodmon, thank you very much for your 
testimony.
    And, finally, we will hear from Mr. John Lavine, the dean 
of the Medill School at Northwestern University.
    Mr. Lavine. Thank you, Mr. Chairman. Good morning.
    Senator Dorgan. Mr. Lavine, you may proceed. Thank you very 
much.

 STATEMENT OF JOHN LAVINE, DEAN, MEDILL SCHOOL OF JOURNALISM, 
                    NORTHWESTERN UNIVERSITY

    Mr. Lavine. Good morning, members of the Committee. I am 
the dean of the Medill School at Northwestern, but this morning 
I speak only for myself.
    I'm pleased to be here. I want to talk about one facet of 
all of this, which is the newspaper/broadcast cross-ownership 
ban.
    I know it's popular to say that the--and it's almost the 
accepted wisdom--that the ban is in the public interest. But 
the facts, which were referred to earlier this morning, simply 
paint an opposite picture. So, let's look at some of the facts.
    The court decision that brought all this back--singled out 
the ban and said that it was not necessary to localism and 
diversity, and singled out that it ought to be reviewed 
separately.
    By the way, as an aside, I think that in 50 years, no 
broadcaster has ever bought a newspaper. But that's a fact that 
just fits in the picture.
    Let me tell you, however, that my feelings about this are 
not simply academic. In 1974, I bought a daily newspaper, in 
northern Wisconsin, the newspaper owned a radio station. At 
that time, I said, ``No, I don't want to buy the radio 
station.'' And that was a year before the ban. I could have, 
but it didn't seem to me right for one person to own the radio 
station and the newspaper in a small town, so I didn't. But 
that was then, and this is now. And what was right then is not, 
in my opinion, right today.
    Let me explain. In the testimony that I've submitted, in 
the appendices, you will see that the facts, again, simply blow 
up the myth that media competition in Shawano, Wisconsin, or 
Chicago, where I now live, has not exploded in the years since 
1974. So, what would have been one owner owning all the outlets 
in 1974 is just the opposite today.
    But what is not growing, and what is not changing, is 
watchdog, penetrating, trustable journalism that enhances 
public knowledge and the lives of citizens. I would argue that, 
thinking about this subject, that ought to be the place we 
start these considerations. We ought to start with how can we 
have an informed citizenry? And what are the facts? The facts 
are that people today have almost no local news from local 
radio in middle and small markets, and only a handful of news 
stations in major markets do really informed, original news, 
not syndicated, on the radio side. Television, in net terms, 
does about 22 minutes of news in a half hour of show, which 
simply means that the preponderance of covering the news falls, 
indeed, to local newspapers.
    So, what are the economics of newspapers? Eighty to Eighty-
five percent of every revenue dollar for a newspaper comes from 
advertising. For most paper, if they are lucky, circulation 
pays for the paper on rolls and the ink in barrels, that's it. 
Advertising pays for everything else. And, in advertising, 
classified is the big profit engine to buoy up the newspaper. 
And classified advertising has taken, of course, enormous hits 
with the Internet. Craigslist has taken nearly $100 million out 
of San Francisco in the past year alone. It is not small wonder 
that that newspaper is losing the kind of money it is. Think of 
the list--gone are Knight-Ridder and Pulitzer. Split into two, 
Scripps and Belo. Dropping--amazingly, dropping out of TV and 
selling several hundred radio stations, Clear Channel. Emison, 
the New York Times, out of television. Troubled, the Tribune.
    And most of America's daily newspapers are not large. 
Seventy-five percent of them are under 50,000 circulation, 50 
percent of them are under 25,000 circulation. Their markets are 
really struggling. These are not myths. These are facts.
    So, if this continues, and we're going to have an informed 
public, what role do the newspapers play? Let me take a moment 
on that with some examples.
    Yesterday in my town, Senator Klobuchar's story about 
unsafe toys from this committee was front-page news in the 
Tribune. Today's story is the same, and you saw the story on 
the front of the USA Today about people falling asleep running 
America's air traffic system. Then there are terrific stories 
about Major League Baseball and steroid use; indeed, in San 
Francisco, where all of those problems are. Let's not go 
overboard. Big media is not always bad. You have a 
responsibility, we all do, to ensure that when Katrina comes or 
there are stories like ones I just listed or when there are 
these big national stories happen or a war takes place, there 
are big media to cover them. But if we care about the small, 
rising citizen media--and I sure do--they too most desperately 
need the big media to cover the 24/7 and then let the citizen 
media go deeper in their communities or analyze what comes out. 
There is no way that bloggers or anyone else can cover my town 
like the major media can, but, boy, they can add a whole lot 
once the major media has laid out what's going on.
    And do not think, by the way, that Yahoo! or Google are 
going to be able to replace all of that. They don't originate 
anything. They rely on the media, large and small, for whatever 
they present.
    So, that leads me to two final points. One, what happens if 
we do away with the cross-ownership ban? Members of the 
Committee, I must tell you, you have an answer to that. You 
have an amazing answer to that. For 32 years, we have had 
grandfathered newspaper and radio or television stations cross-
owned in this country in significant number, and there are a 
whole set of studies, including the FCC's own studies, that say 
that cross-owned papers and stations did, always, a better job 
of covering politics and news and public affairs, because they 
are owned by news companies. So we don't have to guess what's 
going to happen. We have the perfect experiment. We had markets 
where cross-ownership was blocked, and we had ones where cross-
ownership was not blocked, and the ones that were cross-owned 
did a better job. If that isn't in the public interest, I 
just--I don't know what is. I do know, at the same time, 
however, that only in big cities are those news stations in 
existence. And I worry desperately that, in Shawano, Wisconsin, 
where I didn't buy the station, today radio has one 
newsperson--one--and there are four stations today. They have 
one newsperson, who basically covers sports. The only way there 
is a chance for the people in that town to know what's going on 
is the newspaper and its news staff and the one news 
broadcaster to team up to give that area news that really 
matters.
    And, finally, my other point is, let's talk about minority 
ownership. I think it is just scary, disgraceful, that we would 
all say, ``This is very important''--I say it, I know you say 
it, we all believe it--and yet, the cross-ownership ban stops 
minority daily newspapers from owning a radio station in their 
own community. It makes no earthly sense to me that the energy 
behind a Black or Latino or Native American or Asian newspaper, 
the fulcrum of the community, cannot own a radio station to 
better serve that community's interests. It just makes no 
sense. We can't have that happen, because those entities are 
also part of the same economics affecting the entire industry 
and because of this ban.
    So, in closing, I urge you to recognize the myths and 
embrace the facts and allow the FCC to look at what they've 
been looking at for 10 years, and finish it, the cross-
ownership ban must go. It's been on the books for three 
decades. For all the reasons I've cited, it doesn't work. And 
we must, in the public interest, to have informed citizens, 
drop that ban so that we can get news in most of the towns in 
America where it now doesn't exist.
    Thank you.
    [The prepared statement of Mr. Lavine follows:]

 Prepared Statement of John Lavine, Dean, Medill School of Journalism, 
                        Northwestern University

    Good morning, Mr. Chairman, I am John Lavine, the Dean of the 
Medill School of Journalism at Northwestern University, but this 
morning I speak only for myself, and I am pleased to be here.
    First when I was a journalist and now as a professor of journalism 
and media strategy, I have two overriding passions:

   To foster penetrating, watch-dog, trustable journalism that 
        enhances public knowledge and the lives of citizens.

   To educate the next generation of journalists and media 
        leaders so they can share these goals.

    The foundation for my comments today are those goals--which I hope 
you share--and I will focus solely on the decades-old, newspaper/
broadcast cross-ownership ban.
    It may be popular to say that the ban is in the public interest . . 
. but the facts support the opposite conclusion.
    My comments are not just academic; they are also based on real-
world experience.
    At the end of 1974, I completed negotiations to purchase the 
Shawano Leader, a small daily newspaper in Wisconsin.
    As part of that purchase, I said ``No'' to buying the only local 
radio station because I believed that it was not good for the community 
to have one owner for its two news outlets.
    That was the right decision then. . . . It is the wrong decision 
today.
    Why? . . . Because there has been an intervening explosion in 
``traditional media'' voices and digital media have changed our world.
    Here are five standards that you should consider if you truly want 
free, quality broadcast news in the public interest:

        1. Increase media competition.

        2. Remove this ban to allow the public to receive more local 
        news--when and how they want it.

        3. Remove the cross-ownership ban to enhance minority and news 
        organizations' voices.

        4. Even though it seems contradictory--protecting the public 
        interest requires that you ensure that large, quality news 
        organizations endure.

        5. Increase the growth of the new, enormously diverse citizen 
        media. Let's briefly look at those standards.

    (1) The facts quickly dispose of the myth that media competition 
has diminished.
    Shawano, Wisconsin and Chicago in 1975 versus 2006-07 illustrate 
this point.
    If you review the Appendices that I have submitted, you will see 
that competition has increased significantly and meaningfully in both 
markets--just as it has everywhere in the country--whether they be 
small markets or large markets.
    Competition is growing, and there is no end in sight. What's not 
growing is news.
    Let's turn to Standards 2 and 3 to address that concern.

    (2) What would happen to local news if the cross-ownership ban was 
not in place?
    Interestingly and uniquely, there is a 32-year record of what 
happens when the ban is not present. Just look at the performance of 
stations in the so-called ``grandfathered'' markets from the size of 
Miles City, MT to Chicago.
    My Appendices cite multiple studies, including some by the FCC 
itself, that demonstrate that the only distinguishing feature of 
broadcast stations owned by newspapers as compared to other stations is 
that the cross-owned stations do more and better local news and public 
affairs programming.\1\
---------------------------------------------------------------------------
    \1\ In the FCC study done by Jeffrey Milyo, he found that cross-
owned television newscasts contained more minutes of news, more local 
news, 30 percent more news coverage of state and local political 
candidates, more time for candidates to speak for themselves and no 
difference a partisan slant than any other stations.
    Jeffrey Milyo, Hanna Family Scholar, Center for Applied Economics 
University of Kansas School of Business and Associate Professor, 
Department of Economics and Truman School of Public Affairs, University 
of Missouri. FCC PUR 07000029: The Effects of Cross-Ownership on the 
Local Content and Political Slant of Local Television News, June 13, 
2007.
---------------------------------------------------------------------------
    Isn't that the essence of the public interest?
    And that's it, there are no other differentiators. The studies 
confirm that the ban is an obstacle to the public having more local 
news.
    As part of this, have you ever asked yourself why only the largest 
cities in this country have true all-news radio stations? Not 
syndicated talk shows, I mean all-news, with local news and local 
reporters.
    The answer is that all-news stations are very expensive to operate 
and can only be supported in a few large markets unless the cross-
ownership ban is removed.
    If the ban is gone, small and middle American cities can tap the 
local news which is the core product of local newspapers, and more all-
news and local news on radio will be the inevitable result.
    And, don't count on Google or Yahoo! to cover the local school 
board or city council. They have no journalists. They derive their news 
from newspapers and other sources.
    Next, let's look at standard number 3.
    (3) Remove this ban if you want to enhance minority and news 
organizations' ownership and voices.
    Because of the ban, any non-news outlet can own a broadcast 
station, but minority-owned newspapers cannot.
    The minority press is struggling, and in the public interest I urge 
you to enable them to compete, to provide news to their communities 
when, where and how those citizens want it. This ban thwarts those 
essential minority voices, and that is just plain wrong.
    In the digital world, citizens--and especially the young--will use 
every medium--newspapers, broadcast stations, cell phones . . . all of 
it.
    If you allow minority owned newspapers to own a station, that is 
the only way they can compete, for competition in media from here on is 
creating a portfolio of media outlets where the community's advertisers 
can reach their customers, but, most important, where the minority 
media can put on the air, for example, music, that the leaders and 
parents in the Black community demanded at the FCC hearing I was at in 
Chicago a few weeks ago.
    It is music young people like, but it is not the poisonous kind 
that those parents said was violent and hurting their community.
    Then, the newspapers can tell the community that ``their station'' 
is available, and the parents and young people will have a local news 
and culture outlet that they need.
    Isn't that in the public interest?
    (4) Even though it seems contradictory--protecting the public 
interest requires that you ensure that large, quality news 
organizations endure.
    We need the large players because this is a huge (300 million 
population) society. When the next 9/11 or Katrina or Amber Alert 
happens, we need major media outlets. No blogger can adequately cover 
these happenings.
    Here are a few of the recent stories that would not have been 
reported to you or to the public without the resources and commitment 
of a major news organization:

   Last week's disclosure about the chair of the Consumer 
        Product Safety Commission and her predecessor taking industry 
        paid-for trips.

   The unsafe and deteriorating conditions at Walter Reed Army 
        Medical Center.

   The revelation of secret CIA prisons in Eastern Europe.

   Disclosures of the National Security Agency's secret 
        telephone call database and wiretapping program.

   Rampant steroid abuse in major league baseball.

   Safety violations in nuclear weapons manufacturing processes 
        and nuclear power plants.

    Big is also not always bad, and when it comes to news and matters 
of large scale or complexity, big is essential for an informed and 
assured citizenry.
    (5) Increase the growth of the new, enormously diverse citizen 
media.
    Larger, traditional news organizations also provide the fuel that 
many citizen media need to thrive.
    The Chicago Tribune, WGN radio and TV are mainstays in the radar 
screen in my hometown that citizen media must have to learn, 24/7, 
what's happening locally and around the world.\2\
---------------------------------------------------------------------------
    \2\ I have my criticisms of the Tribune's news coverage in Chicago, 
but there is no question that its hundreds of reporters at the Chicago 
Tribune and the news staffs of WGN-TV which has an hour not a half hour 
evening news show, and the news coverage of CLTV, Hoy, RedEye and WGN 
radio--which is all news and local, not syndicated news and talk--
contributes far more news and information to this market than anyone 
else.
    If we are committed to providing tough, demanding, quality 
journalism to an ``informed public'' and to enhancing the public 
interest, localism and minority voices, there is no defensible 
rationale to prohibit one newspaper from serving citizens with a 
combined news staff on paper and over the air.
---------------------------------------------------------------------------
    With that information, citizens can find stories, test and analyze 
them, and use those reports as a jumping off place to develop their own 
news and information.
    In summary, I urge you to recognize the myths, embrace the facts 
and allow the FCC to complete its 10-year examination of the cross-
ownership ban.
    It has been on the books for over three decades without change. 
Now, even as the world has changed radically and permanently--we must 
move beyond 1975.
    Removing the ban will go a long, long way toward fostering quality 
journalism, minority voices, and localism and news in the public 
interest.
    It will also help ensure the viability and public service of local 
broadcast stations. Thank you.

                               Appendix I

Competition since the 1975 Cross Ownership Ban
   In 1975, the presence of UHF/TV and FM radio was small 
        compared to today.

   There was no satellite or cable television, Internet, cell 
        phones or digital broadcast.

   The number of terrestrial broadcast networks went from three 
        in 1975 (ABC, NBC, CBS) to today's ABC, NBC, CBS, FOX, PBS and 
        CW. And in February 2009, they will morph into myriad more with 
        the switch to digital.

                              Appendix II

Competition in Shawano, WI and Chicago 1975 vs. 2006/07
    Today in Shawano: More Competition: Less News.

   The census shows that the county grew from 32,650 in 1970 to 
        40,664 in 2000, the last census.

   There is a cable system with numerous channels.

   There are now four radio stations in that small town, but 
        their collective news staff has diminished to one person.

   The Shawano Leader is still there, but its circulation is 
        down and its news staff of 6.5 full time and three part time 
        has diminished.

   There is also an online, ``local'' newspaper that appears in 
        a Google search; it scrapes other media outlets.

    Today in Chicago: Unbounded, Increasing Competition: Inadequate 
Diverse or Citizen News.

   In 1975, there was a tiny amount of TV derived in Chicago by 
        ADS (alternative delivery systems; not cable.) By 2006, cable 
        had penetrated 63 percent of the Chicago households and ADS 
        (primarily satellite) has another 20 percent. So, 83 percent of 
        the households had multiple TV channels coming in from cable or 
        ADS. (Source: Nielsen).

   National (U.S.) online household penetration for dial-up and 
        high speed broadband in 1975, 2000 and 2007: There were no 
        online connections in 1975. In 2000, 51 percent of the 
        households had dial-up connections and 5 percent had high speed 
        broadband. By 2007, 27 percent had dialup connections while 58 
        percent had high speed broadband. (Source: Jupiter Research)

   In Chicago Newspaper Designated Market (NDM) circulation 
        divided by NDM households (using a 7-day average) was 28 
        percent in 1975 versus 17 percent in 2006. (Source is Audit 
        Bureau of Circulation (ABC) and Publishers' Statements).

   The 7 day average circulation for Chicago Tribune in 2000 
        was 668,000. In 2006, it was 617,000. (Source: Scarborough)

   Revenues for the Chicago Tribune in 2000 were $882,013,000. 
        In 2006 they were $862,660,000, a decline of -2.2 percent for 
        the same period WGN revenues fell from $145,839,000 to 
        $135,480,000, a decline of -7.1 percent. (Note: The decline in 
        constant dollars would be more substantial.) (Source: Tribune 
        internal data)

   The late night TV news ratings in Chicago in 1975 were 45. 
        By 2006 Nielsen reports it was 24. During that same period, 
        Tribune's WGN went from a 7 rating and 12 share in 1975 to a 5 
        rating and a 7 share in 2006. Note: Chicago is the 3rd largest 
        Designated Market Area as defined by Nielsen. (Source is 
        Nielsen data provides by Telerep).

   In both Shawano and Chicago, cable plays a major role with 
        Charter Communications Cable in the former and Comcast and 
        others in the Windy City. The number of news competitors on 
        cable and satellite is on a growth curve with news networks 
        from Aljazeera English and Arabic, CNN, ESPN, Golf, BBC News, 
        Chinese, Japanese, etc., etc. The national average number of 
        cable channels per system is 223.\3\
---------------------------------------------------------------------------
    \3\ In the Matter of Annual Assessment of the Status of Competition 
in the Markets for Delivery of Video Programming, Eleventh Report, MB 
DKT No. 04-227, FCC 05-13.
---------------------------------------------------------------------------
                              Appendix III

Empirical Studies Showing Cross-Owned Broadcast Stations Produce More 
        and Better Local News
   Jeffrey Milyo, University of Kansas School of Business; 
        Department of Economics and Truman School of Public Affairs, 
        University of Missouri, The Effects of Cross-Ownership on the 
        Local Content and Political Slant of Local Television News, 
        August 2007.

   Daniel Shiman, FCC, The Impact of Ownership Structure on 
        Television Stations' News and Public Affairs Programming, 
        August 2007.

   Craig Stroup, FCC, Factors that Affect a Radio Station's 
        Propensity to Adopt a News Format, August 2007.

   Project for Excellence in Journalism, Does Ownership Matter 
        in Local Television News: A Five-Year Study of Ownership and 
        Quality, 2003.

   Thomas C. Spavins, et al., FCC, The Measurement of Local 
        Television News and Public Affairs Programs, 2002.
                              Appendix IV
          Cross-Owned and Major Television Stations by Market

------------------------------------------------------------------------
   DMA Rank and Name          Cross-Owned            Non Cross-Owned
------------------------------------------------------------------------
1 New York, NY          WWOR, WYNY (NY Post)     WABC, WCBS, WNBC
                         and WPIX (Newsday)
2 Los Angeles, CA       KTLA (Los Angeles        KABC, KCBS, KNBC, KTTV
                         Times)
3 Chicago, IL           WGN (Chicago Tribune)    WBBM, WFLD, WLS
6 Dallas, TX            WFAA (Dallas Morning     KDAF, KDFW, KTVT, KXAS
                         News)
9 Atlanta, GA           WSB (Atlanta Journal     WAGA, WGSL, WXIA
                         Constitution)
12 Tampa, FL            WFLA (Tampa Tribune)     WFTS, WTSP, WTVT
13 Phoenix, AZ          KPNX (Arizona Republic)  KNXV, KPHO, KSAZ
16 Miami, FL            WSFL (Sun Sentinel)      WFOR, WPLG, WSVN, and
                                                  WTVJ
28 Hartford, CT         WTIC (Hartford Courant)  WFSB, WTNH, WVIT
32 Columbus, OH         WBNS (Columbus           WCMH, WSYX, WTTE, and
                         Dispatch)                WWHO
33 Cincinnati, OH       WCPO (Cincinnati Post)   WKRC, WLWT, WXIX
34 Milwaukee, WI        WTMJ (Milwaukee Journal  WDJT, WISN, WITI
                         Sentinel)
35 Salt Lake City, UT   KSL (Deseret News)       KSTU, KTVX, KUTV
58 Dayton, OH           WHIO (Dayton Daily       WDTN, WKEF, WRGT
                         News)
77 Spokane, WA          KHQ (Spokesman-Review)   KAYU, KREM, KXLY
80 Paducah, KY          WPSD (Paducah Sun)       KFVS, WSIL
88 South Bend, IN       WSBT (South Bend         WNDU, WSJV
                         Tribune)
89 Cedar Rapids, IA     KCRG (Cedar Rapids       KFXA, KGAN, KWWL
                         Gazette)
92 Tri-Cities, TN-VA    WJHL (Bristol Herald     WCYB, WEMT, WKPT
                         Courier)
93 Baton Rouge, LA      WBRZ (Morning Advocate)  WAFB
95 Waco-Temple-Bryan,   KCEN (Temple Daily       KWTX, KXXV
 TX                      Telegram and Killeen
                         Herald)
103 Youngstown, OH      WFMJ (Vindicator)        WKBN, WYFX, WYTV
105 Myrtle Beach-       WBTW (Morning News)      WFXB, WPDE
 Florence, SC
119 Fargo, ND           WDAY (Forum)             KVLY, KVRR, KXJB
128 Columbus, GA        WRBL (Opelika-Auburn     WTVM, WXTX
                         News)
156 Panama City, FL     WMBB (Jackson County     WJHG, WTVY
                         Floridian)
171 Quincy, IL          WGEM (Quincy-Herald      KHQA
                         Whig)
------------------------------------------------------------------------
Source: Federal Communications Commission.


    Senator Smith. Mr. Chairman, may I ask for a point of 
personal privilege?
    Senator Dorgan. Yes.
    Senator Smith. Mr. Chairman, I want my friend from 
Washington, I want all of my colleagues, to know that I 
support, entirely, the diversity requirements. That's why 
Senator McCain and I have reintroduced legislation to achieve 
that.
    But I come from a very rural part of Oregon. I tend to see 
the world through the eyes of my neighbors. And where I'm--come 
from, radio stations go out of business all the time, because 
they can't make it. Television stations out of Tri-Cities 
occasionally change hands. Recently, the Wallowa Chieftan was 
purchased by the newspaper in my town because it was in 
desperate financial shape.
    And so, to the professor's point, that is the prism in 
which I made my comments. From the comments of people of rural 
Oregon--I'm sure, rural Washington--I know I'm told by the 
owners of the Oregonian, their circulation is shrinking 
dramatically because of the pressure from the Internet and in 
the digital age, that there are--there are big producers that 
are probably making a lot of money. And that's why I support 
diversity and would like to make sure we craft this in a way 
that brings more Latinos, more African Americans, more Native 
Americans into ownership. But in rural places of our country, 
some of the things that might be considered don't help, they 
really, really hurt. And that's where I'm at, and that was the 
basis and the prism from which I made my comments.
    Thank you, sir.
    Senator Dorgan. Thank you, Senator Smith.
    Let me make two points, and then I want to ask a couple of 
questions, then I will turn to my colleagues.
    First, some while ago, in one of our larger communities in 
North Dakota, a Texas radio station owner hired a Salt Lake 
City consultant to try to determine what a Fargo, North Dakota, 
audience wanted. Strange, isn't it? Texas owner hires a Salt 
Lake City consultant to evaluate the needs and wants of a local 
audience. Number one.
    Number two, yesterday in the newspaper in North Dakota, two 
Fargo radio stations, both owned by different companies in 
Texas, decided, under a lease-management arrangement, to 
consolidate their evening newscasts. So, what for several 
decades has always been competing newscasts will now, because 
of two Texas companies separately owning the stations, reaching 
a lease-management arrangement of some type, will now only be 
one newscast. Once again, out-of-state ownership, reduction in 
the news staff and the newscasts.
    Let me ask this question. Mr. Winter first, then Mr. 
Lavine.
    Mr. Winter, Mr. Lavine says, and many others do, ``There 
are more choices and more voices. What are you talking about? 
More choices, more voices, the Internet. For God's sake, there 
are all kinds of competition.''
    You testified in a very interesting way, saying that in 
your city, with 48 cable channels, 43 of them are owned by the 
six large, dominant media enterprises. Is that more choices and 
more voices, or is it more voices and one ventriloquist, or 
several ventriloquists?
    Mr. Winter. I don't--Senator, thank you for the question--I 
don't see this as more choices. When you have more of different 
products offered by the same editorial voice, it's the same 
board room, the same board of directors, it's the same 
shareholders that are profiting from their bundled package that 
I described to you.
    With regard to the Internet, I think it's interesting to 
point out that most people get their news on the Internet from 
the major media conglomerates that have news sites. MSNBC, CNN, 
FOX News, these are where people get most of their news on the 
Internet, by and large. And so, again, it is still the same 
voice, same editorial control, and same decisions being made in 
the same board rooms.
    Senator Dorgan. I'm going to ask Mr. Blethen a question, 
and then come to Mr. Lavine.
    Mr. Blethen, Mr. Lavine said, as many do, that the major 
newspapers are losing money or that, quote, ``newspapers are 
losing money,'' generally--losing subscriptions. You're a 
newspaper person. What is happening to the newspapers in our 
country?
    Mr. Blethen. Well, this is what I call ``back to the 
future,'' back to 30 years ago, when we were single-digit 
margin businesses. What I referred to earlier, over the last 30 
years we've seen the rise of a financially driven investor in 
newspapers and broadcast. And what's happened is, they have a 
short-term investment mentality. And the degree to which you 
hear the business is failing, what's failing is, their 
investments have failed. Ultimately, the people who overpaid 
and overpaid and finally the market that milked these high 
margins--as I said earlier, you know, when I testified in this 
committee 4 years ago, the industry was pulling down 50-percent 
broadcast margins and 30-percent newspaper margins. Even today, 
newspapers going through some unprecedented downturn and 
classified advertising, which was temporary to begin with, are 
pulling down 16 to 18 percent profit margins.
    And the point, Senator Smith, on rural communities is a 
very good one. My family operates papers in Augusta, Maine; 
Waterville, Maine; Walla Walla, Washington; and Yakima, 
Washington, about as rural and low demographic, for the most 
part, as you can possibly get, save for all the wine people 
that are now moving to Walla Walla. And I can tell you, we make 
very good profit margins. We're losing revenue, we're 
transforming into the new age of lower classified and Internet. 
We make good margins. And in Yakima, which is a low demographic 
farm community, we have a 40,000-circulation paper doing very 
nicely, with three independent television affiliates and 
several radio stations. We're all making money. And it's good 
competition, it's good for the advertisers, it's good for the 
communities.
    Senator Dorgan. Mr. Blethen, thank you.
    Mr. Lavine, as you might know from publicity from this 
committee, there was a study that was done by the Federal 
Communications Commission, among several others, that was not 
disclosed to the American people or to this committee. A study 
was done in 2004 by a couple of FCC researchers, concluding 
that local ownership of television stations adds news content 
to broadcasts, above that which is coming from foreign 
ownership, out-of-State ownership. So, that was a study that 
was done that concludes what one would expect to be the case, 
and yet, it was withheld and only released by the FCC under 
pressure from this committee.
    Are you aware of that study? And do you think that study--
that study is obviously at odds with what you are telling the 
Committee. How do you explain that?
    Mr. Lavine. First of all, Senator, I'm not saying to the 
Committee--I didn't address myself to the question of 
ownership, I addressed just the cross-ownership ban. They are--
they are really separate issues. Can I try to answer your 
question in two ways?
    Senator Dorgan. Sure.
    Mr. Lavine. I don't think anyone says that the industries 
involved are losing money. That's not true. Here are the facts, 
as I know them. What is happening to newspapers is that their 
advertising, particularly in classified online, is plummeting. 
If you look at what can be charged by those companies as they 
move online to maintain the news staffs that they need to do 
the job I think we all agree they should do, it's a fraction of 
what they can charge now. And at no foreseeable time in the 
future is the money that they can charge anywhere near equal to 
what it takes to support the news and editorial staffs that we 
all believe need to be there. It's simply that you're--the 
steep downward trajectory. If you wish, I have spent, because 
I'm a professor and I do that, part of the last few days 
looking at two huge notebooks, which I would be happy to leave 
before the Committee, that lay out a whole bunch of studies 
that surround this point. It isn't loss, but it is downward 
trajectory.
    I think the other point is--and I just want to be real 
clear about this----
    Senator Dorgan. Well, would you respond to Mr. Blethen's 
point of downward trajectory from 40- or 50-percent net down to 
15-or--I mean, you know, downward trajectory----
    Mr. Lavine. A group of the publicly traded newspaper 
companies make 16 to 18 percent, rapidly falling downward. 
There's another study, which--Frank and I are old friends--
which we both have worked with, that is done across public and 
private companies, and the smaller the property, the more 
rapidly into the single digits that falls, and, in some very 
large cities--this is also a problem; I mean, I'm not telling 
you anything out of school--the San Francisco Chronicle is 
losing a million dollars a week. This is not a viable future 
for that newspaper if that continues.
    Can I add the news point? Because I think it undergirds the 
economics.
    To say that MSNBC is where people get news may or may not 
be fine, talking about national news, but I don't think that's 
what we're talking about. I think we're talking about local 
news. And, Senator, with respect, I come from Duluth, so I live 
up in the country that you come from and we both love. And I 
remember, with enormous pain, what happened in Minot. And, I 
must tell you, when that rail car started to leak and those 
stations didn't go on the air and deal with it--I mean, beyond 
being horrified--it seemed to me that is a sort of classic 
example where, if a--one station in that market was owned by 
the local newspaper, a news organization, it would have been on 
the air, and it would have been available to the community. And 
that's--we may disagree on that, but at least--I've seen more 
examples of that over the last 30 years in the newspaper/
station-owned markets than not, because they are news 
organizations.
    Senator Dorgan. Mr. Lavine, I've exceeded my time. Let me 
just observe, however, that, if those six stations had not been 
owned by one company in Texas, instead had been owned by six 
individual owners in Minot, I guarantee you they'd have tracked 
an owner down. It needn't have been owned by the newspaper to 
have had an opportunity to have some local content that night 
during that tragedy.
    I've exceeded my time, and I apologize to my colleagues for 
doing that. Mr. Goodmon, if you could give me just the briefest 
answer. Is it counterintuitive to suggest or imply that local 
ownership would have less news? I mean, it seems to me that the 
studies and other suggestions are, with respect to the----
    Mr. Goodmon. All the----
    Senator Dorgan.--radio----
    Mr. Goodmon. All the FCC studies suggest that there is more 
local news with local ownership. And, in fact, Senator, an FCC 
study was just released that suggested that in markets in which 
there is currently newspaper/television cross-ownership in that 
market, there is less local news----
    Senator Dorgan. That's local news----
    Mr. Goodmon.--in the total market.
    Senator Dorgan.--in total in the market.
    Mr. Goodmon. Yes.
    Senator Dorgan. I have exceeded my time. I apologize to my 
colleagues.
    Senator Inouye?
    The Chairman. Mr. Nogales, we've heard the testimony of the 
professor, who suggested that the ban of cross-ownership would 
increase the possibility of minority media ownership. Do you 
agree with that?
    Mr. Nogales. Absolutely not. First of all, let's take Los 
Angeles. Minorities cannot buy a property because it is so 
expensive. The prices have been driven up by consolidation to 
where a minority doesn't have the money to do that. And if they 
have a newspaper and they buy if they have the money to buy a 
radio station, you can be sure that that conglomerate will come 
in and snap them up if there is any money to be made. So, do I 
agree? Absolutely not. We have seen too many examples of that 
not coming across. That's why the numbers of minorities buying 
properties are so low. And the numbers speak for themselves. We 
don't have to invent them, we don't have to speculate on them. 
The numbers are there. They're very, very clear.
    The Chairman. What is your solution to your problem?
    Mr. Nogales. We've got to stop consolidation. We cannot 
allow the FCC Chairman to gallop on in December and make new 
ownership rules that are going to prohibit minority ownership.
    You know, as I--all of you believe very much in the public 
interest, our public interest. Over 33 percent of the U.S. 
population are people of color. We're left out. We don't have a 
voice, because we can't afford it, because the companies that 
control media at this point are so large, and to allow them to 
get larger and larger makes no sense whatsoever. It becomes a 
club, a very small club that excludes too many people from it.
    The Chairman. I thank you very much.
    Senator Dorgan. Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman.
    Mr. Blethen, we've heard from Mr. Lavine this morning about 
some studies, which I'm happy to look at, most of them 
commissioned by the FCC, about the cross-ownership ban. Why do 
you think it's so important that we maintain the current ban on 
cross-ownership? What do you think is likely to happen if the 
ban was lifted?
    Mr. Blethen. Well, I think if the ban was lifted, what 
you're going to have is--we've already seen a terrible 
reduction in voices across America and in all of our 
communities, irrespective of size, and we're going to see even 
fewer voices. And, with it, we're going to see disinvestment, 
further disinvestment in journalism and further disinvestment 
in minority employment.
    Listening to Mr. Nogales, I mean, one of the things--this 
is beyond the Committee's purview, but if they took a look at 
the minority employment in newspapers in the era of 
consolidation in this decade, they will find that one of the 
most egregious failures of my industry, and one of the most 
embarrassing, is our failure in minority employment. So, we 
can't even get it right on minority employment, let alone make 
stations affordable and available to them. But I don't think 
there is any question that cross-ownership would reduce 
journalism, reduce employment, drive up ad rates, and take 
voices out of communities, even small ones.
    Senator Cantwell. And so, how do you think we answer these 
questions about economics, or do you think there are studies 
and analysis out there on the other side that also show that 
the economics can work in these communities?
    Mr. Blethen. Well, absolutely. I mean, I find--I only 
really got involved with FCC issues this decade. And one of the 
things that has just shocked me is the lack of credibility in 
FCC studies, both their methodology, then how they interpret 
them, and then how, when they find something that says 
something they don't like, they hide it from the public. You 
know, I think this committee needs to go beyond the FCC studies 
and make sure that there is some credible input out there. And 
they talk to people like me and like Mr. Goodmon who actually 
run stations and run newspapers on a daily basis, and not 
large, financially driven conglomerates who are really focused 
on their financial return, in a global sense, not whether or 
not the operations are still operating.
    These are good businesses. We're going through immense 
transformation, but we are going to--I have no doubt that 
newspapers and broadcast stations can continue to make an 
adequate profit to keep their business going and to invest in 
local journalism. They cannot sustain the appetite of large 
financially driven companies, though.
    Senator Cantwell. And to the scalability issue--I'm sorry 
my colleague Senator Smith left, because, you know, I do feel 
bad that, in the last election cycle in Pendleton, he probably 
had to watch a lot of my television ads coming out of the Tri-
Cities, and--
    [Laughter.]
    Senator Cantwell.--I'm sure that got old after a while.
    But to this point about scalability and being able to 
propose the notion that you have to have some cross-ownership 
to reach that scalability, do you think that there are 
statistics that probably show that there are ways--or do you 
think we have to make any change in that?
    Mr. Blethen. Well, I don't think you need to make any 
change. I think you keep the rule in place and get more 
aggressive on new rules, as I suggested in my testimony. At our 
smallest paper in Walla Walla, Washington, which is only 14,000 
circulation, there is a local free distribution classified that 
has been there for 30 years, changes hands every 4 or 5 years. 
There's a local radio station, it changes hands every 4 or 5 
years. It's amazing how the marketplace will take care of these 
things, even in a small market. And that's what's supposed to 
happen.
    Senator Cantwell. And I wanted to follow up, Mr. Winter, on 
your point. Do you have a list of other complaints that have 
been filed related to, you know, any objections on content that 
have again been referred to the individual corporations, as 
opposed to individual stations responding?
    Mr. Winter. Senator, the letter that I have here--and I'm 
happy to leave it here for the record--is, I think, the most 
egregious example of a general manager taking no responsibility 
whatsoever for what he or she put on the air in his or her 
community, and abdicated entirely to the network. It is the 
most egregious example I've ever seen.
    I am only aware of other broadcasters who have told me 
privately that they are forced to make those decisions, whether 
they want them or not.
    Senator Cantwell. Thank you.
    And maybe that's something we could follow up in collecting 
more data and information on.
    I thank the Chair for this----
    Senator Dorgan. Senator Cantwell----
    Senator Cantwell.--hearing.
    Senator Dorgan.--thank you very much.
    Senator Snowe?
    Senator Snowe. Yes, thank you.
    First of all, Mr. Lavine, have you read the FCC's studies?
    Mr. Lavine. Almost all of them, Senator.
    Senator Snowe. Yes. And what's your analysis of them?
    Mr. Lavine. Well, the study--again, I only looked hard at 
one point, which was the cross-ownership ban. It seems to me 
that the overwhelming preponderance of them came all to the 
same conclusion, which was that more politics, public 
information, public policy was covered in--on stations, radio 
and television, owned by newspapers than not. And it makes 
common sense, since these are news organizations, and so, they 
do that.
    I did not analyze the studies with reference to the other 
questions that you're considering today, but I did look at----
    Senator Snowe. On the issue of localism, for example?
    Mr. Lavine. Well--yes. I mean, localism is certainly--local 
news is, indeed, what I'm addressing. But I didn't look at the 
broader issue of localism, since there are many other 
mechanisms in the proposal that the Commission has raised, and 
I--that was not the point of my testimony.
    Senator Snowe. Well, you know--and I'd like to have Mr. 
Blethen comment, as well--but the--there are dual challenges 
here. One is, of course, that the FCC, you know, based on 
speculation in the media that they're going to issue rules 
regarding easing ownership, and that could come as early as 
November 13, only have a 30-day comment period, which is an 
impossibility; it's trying to mute the public's voice on this 
serious question, a question on which the Congress has been 
heard repeatedly and resoundingly repudiated the FCC's 
direction in the past.
    Second, there already have been questions about the 
integrity of the report by a collective group of consumers that 
submitted--and I don't know if you've had a chance to look at 
their submission--but they were pretty critical of the FCC's 
methodology, that it wasn't peer-reviewed, that it was 
incoherent, that they were really pursuing a foreordained 
conclusion. That's deeply troubling. And they say that, in 
fact, if you use the FCC's own data, that it shows that 
lessening newspaper/broadcasting cross-ownership rules results 
in a net loss of the amount of local news; that, in fact, it's 
a loss of an independent voice, as well as a decline in 
marketwide news production. Would you agree with that? I mean, 
they come to some very strong conclusions----
    Mr. Lavine. Yes. Senator----
    Senator Snowe.--first and foremost, and we--you know, and, 
again, the analysis is disconcerting, and certainly it's 
something that we should be examining. They have not really 
separately considered the question of localism in conjunction 
with this whole cross-ownership. That should be, given where we 
are today. So, I think it's in all combinations. And the court 
decision concluded the limits were not supported by the 
research and the data that had been put forward by the FCC in 
the past. That was the whole question, and it's a question that 
we're confronting now.
    Mr. Lavine. Senator, I have three quick answers.
    One, the court did separate out the ban on cross-ownership 
from the rest of what you've described, and said they didn't 
see that that held up. So, the court, on its own, is saying 
diversity and localism--the ban on cross-ownership is not--is 
not thwarting that.
    Two, we have 32 years and a whole lot of studies far 
removed from the FCC that have been done in the academy and 
elsewhere, looking at all the markets that have been cross-
owned and that were grandfathered in before the ban took place. 
That's why I'm comfortable saying we don't need more time on 
that. I understand what you're saying about the other larger 
issues, and I understand the complexity of that.
    I guess, if I had to make an argument, I would make it that 
32 years, the courts saying it, and seeing that history, I feel 
very comfortable saying we can set aside the FCC studies and 
still reach the conclusion we're going to get more local news. 
That's what we need.
    Now, whether that applies to the other issues you're 
talking about, I'm not prepared to say. I'm happy to look at 
it, but I didn't come prepared to do that. And I do understand 
it's a more complicated question.
    Don't mix the two. This one has been sitting there for 10 
years, we've had plenty of time to look at it. And, for the 
small towns in just the kind of discussion we had, I think you 
can--we can deal with it, and then move on to the larger 
question in a timetable that you find wise.
    Senator Snowe. Well, the court affirmed the FCC's decision 
with respect to eliminating the newspaper/broadcast cross-
ownership rule, but it also concluded the specific limits 
selected by the FCC were not supported by reasoned analysis. 
So----
    Mr. Blethen?
    Mr. Blethen. Well, you know, it's like this--to me, it has 
never really been rocket science. You've got the free press, 
which is made up of broadcast and newspapers, and, 
increasingly, the Internet. And it is essential to our 
democracy, and it is essential to local communities. And we 
have a lot of large companies now, and individuals, who have 
been conglomerating and taking control of these markets, both 
on a local basis and on a national basis. And as we get fewer 
and fewer owners of both our national media and our local 
media, it just doesn't make sense that that's good for 
advertisers, for citizens, or for democracy.
    You know, we can kick studies around--Consumers Union, 
Committee of Concerned Journalists--I mean, there are a number 
of organizations who have looked at the kind of massive 
disinvestment that has gone on when you get absentee and 
conglomerate owners. The first thing that happened was, about a 
decade ago, as the rise of absentee newspaper owners took over, 
was a huge disinvestment in statehouse coverage, which was 
written about by Gene Roberts and Tom Kunkel at the University 
of Maryland Press. And today what we have for statehouse 
coverage across America is a shadow of what it used to be.
    In Olympia, Washington, we used to have several radio 
stations, several TV stations, and several newspapers down 
there covering it, and we have more than most now, and it's 
still a shadow of what it was.
    And then, you look at the national level, and the argument 
that big is better and I've never really seen big be better, 
but there has been a massive disinvestment in foreign 
reporting. You know, we are becoming illiterate on what's going 
on in our own statehouses, as well as what's going on in other 
countries. And this is by organizations where the news entities 
are still profitable, not as profitable as they were 15 years 
ago, but still profitable, and should continue to be 
profitable, but don't make sense for financial investors or 
people who have some other motive, in terms of controlling the 
information we receive.
    Senator Snowe. Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. I don't know which of you were here first. 
Senator Thune?
    Senator Thune, you may proceed.

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman. And thank you for 
holding the hearing. It's a timely one, considering the 
challenges that are facing us and the action that the FCC is 
undertaking.
    I think that the competitive, open, and diverse media is, 
just, an important foundation of our democracy, and I think we 
have a responsibility, on the Committee, to debate legislation 
that protects that diversity and localism and media, and also 
to monitor the activities of the FCC, which regulates all those 
various media outlets. And I think that this debate is--as I 
said, is a timely one, and one that those of us who represent 
rural areas of the country, where we don't have, sometimes, as 
many options for media outlets as they, perhaps, have in a more 
populated area, it's a very important debate for us.
    I'd like to have--just pose a couple of questions for some 
of the panelists. And I thank you for being here and for your 
input. That's very helpful.
    Mr. Lavine, in your written testimony, you discuss the 
potential for one-sided news and philosophical ideas when there 
is a lack of diversity in media ownership. And I guess the 
question is, how do you counter the argument when you're--that 
argument--when you're promoting the concept of a larger, more 
centralized approach to news outlets?
    Mr. Lavine. Senator, I'm not--I guess I'm puzzled by the 
``larger, more centralized news elements.'' I'm saying 
something very specific. Most of the backbone of the 24/7 kind 
of coverage that goes on comes from local newspapers. They look 
at the world through the prism of being a news organization. It 
seems to me, when--the facts simply are, we only have radio 
with full-time real news, not syndicated, but local, in major 
markets. We have almost no radio coverage in the country--not 
totally, but darn near totally--in middle or smaller markets. 
And what I'm saying is, it is certainly far better to have the 
local newspaper join the one or none--no radio news people to 
bring news to that market.
    Number two, when I was a boy, if you owned a radio station 
or a television station, it was, if you looked at the 
economics, almost a license to steal. Didn't matter whether it 
was the first or the eighth station, or the first or the third 
television station.
    These days, that's not true. The cost of producing news is 
really, really high. It's not an accident that news doesn't 
exist in middle and small markets, or even in some large 
markets. It's too expensive.
    So, all I'm arguing for is--we've got 32 years of watching 
the markets, where a newspaper owns a radio or a television 
station, and all of the studies, academic and FCC, say those 
stations, on--as a group, have always done consistently better 
coverage of real news. We need those voices.
    Number two, for diversity, the world coming at us can be 
summed up pretty quickly. Digital means there is fragmentation 
of the market, more and more choice, and competition for 
everybody's time. And all of us, especially the younger we 
get--my generation reads; but the younger you get, that goes 
away--all of us use a portfolio of media. It's not one, it's 
many. And I look forward to the opportunity for a minority 
newspaper to buy a struggling or on-the-ropes radio station, 
and bring to it something no big company can bring, which is 
the ability to say, ``This is the voice of the community.'' Say 
it in the newspaper, say it on the station.
    I was at the FCC hearing at Operation PUSH, about a month 
ago, and I listened to a father berate the Commission for stuff 
that was on the air, and say, ``Give us one place we can send 
our kids.'' Boy, oh, boy, I have no doubt, if The Defender in 
Chicago, a legendary, wonderful black newspaper, owned a small 
radio station, quite quickly it would become the fulcrum of the 
community, and that opportunity would exist. And this ban stops 
that. And, oh, by the way, the station would have news on it, 
because The Defender doesn't know how to do anything without 
news, whether it's a small station in a general purpose, or a 
small station for a minority community like that. That's all 
I'm saying. That's a very targeted thing that could be done, 
and could be done now, and we've had--even the courts said this 
is not a problem.
    The other issues are separate, and that's bigness and 
complicated. And I probably will end up on your side on many of 
those. But, on this issue, we need to act.
    Senator Thune. All right. Well, I--if you--if the ban is 
lifted--and, you know, it seem, to me at least, that creating 
competition, more voices is the goal and the objective here, 
and I just don't know how a local, small news outlet competes 
against a company that's triple or quadruple its size.
    Mr. Lavine. Because it has local news, because those big 
companies don't cover local markets, and don't know how. Trust 
me, The Defender or the Shawano Evening Leader are the big 
player in that community, and they know how to cover everything 
local and that is there, and they will aggregate an audience 
around it, and they will be quite successful in doing it. We've 
stopped them. We've stopped them. We can't do that. Because you 
look in markets where they are crossed-owned, and there are 
more news on those stations, and it's local news, it's not 
something syndicated from far away.
    Senator Thune. Mr. Winter, you had referenced in some of 
your concerns about, you know, the vulgar content in a 
television show and comments from the station's general 
manager. The--I guess the question is, what type of control, if 
any, do general managers at network affiliates have over 
programming? And is there a mechanism whereby they could refuse 
to show a program that's put forward by the network?
    Mr. Winter. Well, the policies that we've heard from the 
major networks is that the stations always have such a right to 
preempt if they feel there is a violation of community decency 
standards. Senator, a few years ago, actually, the same time we 
received this letter from Kansas City, the station, we 
conducted a survey, a phone survey. We called 100--actually, it 
was about 98--television stations owned and operated by 
networks that were around the country. And we asked the 
questions to the programming director, when have you preempted 
a program based on community decency standards? The answer was 
shocking to us. One instance. On one occasion, one station had 
ever decided to preempt a program based on community decency 
standards out of the 100 or so that we polled. The reason is 
simple: they take their orders from their corporate 
headquarters, they get the same stock options as the folks back 
at the headquarters, they are financially motivated to toe the 
company line. There is, based on our analysis, very little 
ability for them, or desire for them, to change a network 
programming decision.
    Senator Dorgan. Senator Thune, you have additional time, if 
you wish.
    I have to go to an energy and water panel right now, and 
Senator Pryor has agreed to chair until it's completed. But I 
just wanted to thank the witnesses, myself, for being here.
    And, Mr. Goodmon, I think you wanted to respond to the last 
point Mr. Lavine made, about cross-ownership producing more 
local news, and I wish you would also respond, for the record, 
on the issue Mr. Winter has raised, because, in your prior 
testimony before this committee, you talked about a local 
affiliate deciding not to air something as a result of local 
standards. You have firsthand and fascinating experience with 
that very issue.
    So, Senator Thune, why don't you proceed. Let me apologize 
for having to leave, but Senator Pryor will preside, and I very 
much appreciate that.
    Senator Thune. Thank you, Mr. Chairman.
    And, Mr. Goodmon, you want to----
    Mr. Goodmon. Right.
    Senator Thune.--elaborate on this?
    Mr. Goodmon. Just for a little reality check here, let me 
tell you what I think--if the [FCC] Chairman gets his rule 
passed, here's the deal. I could own 11 TV stations in North 
Carolina, 30 radio stations, and the local newspaper in 
Raleigh, Durham, Charlotte, Asheville, Greensboro, Winston-
Salem, and High Point. I mean, we're not talking about a little 
radio station and a little newspaper in this--we're talking 
about just an unbelievable extension of media consolidation. 
And, by the way, I could own the cable systems in all those 
places. So, getting this down to, how are we going to help the 
little newspaper and the little radio station in a small market 
is not what's going on here. What's going on here is, we have 
some really good companies, now, really good, large companies--
Tribune, Belo, all these--all great, fine companies. They want 
to own newspapers. They're not sitting there saying, ``We want 
to do a better job of local news.'' They want to own those 
newspapers. They're trying to own more stuff. That's why we're 
having this hearing. That's why the chairman is doing it. So, 
let's be honest about what--about what we're really talking 
about here.
    I think there is no way--it's a--there is a loss of a 
voice. I really get upset when the newspaper people say, ``You 
know, we'll do better news than TV people.'' Now, I don't know 
what ``better news'' is. What we want is a whole lot of people 
doing the news, you know, and we might like some of it. The 
notion that a newspaper would say, ``Well, we'll do better news 
than the TV people,'' I don't--no, I don't--come on. That's 
just part of it. But we've got to be realistic about what we're 
doing.
    And please consider, this is--I didn't even want to talk 
about what we should do, I wanted to talk about: this is not 
the time to do it. We're in a huge change, a gigantic change. 
It's not the time to do it.
    And one other thing. This also sounds a little bit, to me, 
like the newspapers are saying, ``We need a financial rescue.'' 
Right? ``We've got to own these TV stations, because we've got 
these financial problems.''
    Senator Thune. Well--and if----
    Mr. Goodmon. Well, I've got it, too. My point is, my 
audience is going down. Newspaper readership's going down. It's 
all going down because of the Internet. And my industry and 
their industry, we've got to adapt to the Internet. The notion 
that ``to save each other, we have to own each other,'' doesn't 
fit.
    Senator Thune. Well, and that's--to Mr. Lavine's point, 
that was the question or the--I guess, his argument was that 
this is a matter of survival of----
    Mr. Goodmon. No.
    Senator Thune.--those that are out there.
    Mr. Goodmon. Now, the other thing I'd point out is, 
whenever I've looked at a financial statement--and I'm not that 
kind of guy, now; I want to be a little careful, here--whenever 
you look at that income statement, there is always a lot of 
debt in there. And what you've got to understand is, a whole 
lot of companies paid a whole of money--we're McClatchy market, 
it's a great company--McClatchy bought the local newspaper in 
our market, then they just bought Knight-Ridder and all these--
paid a lot of money for them. Now, they're working real hard to 
figure out how to pay for that. So, in my mind, when you 
include your debt service in your operating statement, you're 
putting an unrealistic position as to whether you are 
profitable or not. And if people pay too much for what they 
buy, they pay too much for what they buy. That's not a--see 
what I mean? I mean, normally that debt service is in there, 
and I don't include that when I talk about whether it's a 
profitable operation or not.
    Senator Thune. Thank you, Mr. Chairman.
    Thank you, all.

               STATEMENT OF HON. MARK L. PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor [presiding]. Thank you.
    It looks like we're going to have a vote on the Senate 
floor within the next 5 minutes, assuming the Senate stays on 
schedule, which it always does, right?
    [Laughter.]
    Senator Pryor. So, I'm going to ask questions fairly 
quickly. I have a few. But, at some point I'll need to break 
off and get down to the floor and vote.
    But, let me start, if I may, with a general question for 
the entire panel. And that is, Commissioner Copps has advocated 
five steps before loosening the existing media ownership rules. 
One is to act on the minority ownership proposals. Two is to 
complete the 2004 proceeding on broadcast localism. Three is to 
put any proposed new ownership rules out for public comment 
before a vote. Four is to abide by a process that is 
transparent, open, and fair. And five is to address media 
ownership rules comprehensively.
    I'd like, if we could, just very quickly, go down the list, 
here, of the panel, and just give me your thoughts on whether 
you support what Commissioner Copps is suggesting, or whether 
you think we ought to take a different route.
    So, why don't we start with----
    Mr. Nogales. We wholeheartedly support the Commissioner. It 
is fair. It is comprehensive. It will allow all of us to 
understand the facts of the situation, and particularly in 
relation to minority media ownership. And, again, we're locked 
out. And to rush to have a vote without a task force first 
making a study as to what ownership is like out there, and 
coming out with comprehensive recommendations as to how to 
better those numbers, is silly.
    Mr. Blethen. Absolutely. Although I think that's strictly 
the minimum. I think Congress--as I said in my points at the 
end of my prepared remarks, there are several things that 
Congress should do to go beyond what Commissioner Copps and the 
FCC are doing, in terms of new public policy, bold public 
policy, which starts ensuring that we have localism and a 
variety of voices throughout the country.
    Mr. Winter. I agree with the Commissioner's plan. I think 
it's precise. I think it will yield the answers that need to be 
yielded before decisions are made. I support it.
    Senator Pryor. Right.
    Mr. Goodmon. Yes.
    [Laughter.]
    Mr. Lavine. I think you should separate cross-ownership, 
after 10 years, eight hearings, 12 sets of responses, and 32 
years of watching banned and cross-owned side by side, and get 
that done. I think transparency and adequate time to do the 
rest is a good idea.
    Senator Pryor. Well, just for the record, I support what 
Mr. Copps is proposing, as well.
    Let me also ask, if I may--and, I'm sorry, is your name 
pronounced ``Blethen''?
    Mr. Blethen. Blethen, yes.
    Senator Pryor. When you testified earlier, you talked about 
one of the things you were surprised about is the FCC's studies 
basically lack credibility. And I guess you called into 
question the integrity of that process, when the FCC does 
studies and the findings and--sounds like, you know, you feel 
like they may be sort of preordained on what they're trying to 
conclude, and if they don't work out to exactly what they want 
to hear, then they are not interested in following those 
recommendations.
    But I would like to get--and Senator Snowe asked kind of a 
related question, as well--but I would like to get everybody's 
thought on these FCC studies, and just about that process, and, 
are they credible? Do these studies have value? Is the FCC 
following the advice or the recommendations found in the 
studies, or are they just too biased, or whatever? So, again, 
if we can just run down the panel very quickly on those.
    Mr. Nogales. I should tell you that the studies are very, 
very inaccurate, that the ones that have been brought out by 
Free Press are much, much better, and they're recent, they have 
the recent numbers on minority ownership, as well as ownership 
as a whole. So, I wholeheartedly support those, and reject the 
ones from the Federal Communications Commission, who they 
themselves have said are not accurate.
    Mr. Blethen. The same public-service law firm that dealt 
with Chairman Powell's attempts to overturn the restrictions 
in--a few years ago, recently, in a FOIA request, uncovered 
some e-mails between the Chairman and staffers, basically with 
staffers asking the Chairman who they should use for a study so 
they can get the outcome that he wants. You know, it's just one 
more piece in the lack of credibility that the FCC now has in 
this arena.
    I know, in my world, when that credibility is lacking, it 
takes a long time to rebuild it, and I think this committee 
probably needs to figure out, How do you go beyond that 
committee to get some input and some studies? And there are 
people out there that can do that stuff. Don't take the FCC off 
the hook, just make sure they're getting peer-reviewed, they're 
getting checks, they're getting balances, and they're being 
held accountable for their studies.
    Senator Pryor. Mr. Winter?
    Mr. Winter. Senator, I honestly, sir, don't know the answer 
to your question. I'm not qualified to answer it.
    Mr. Goodmon. Right. I only know from what I'm--from what 
I've read, so I'm not in a position to comment.
    Senator Pryor. That's fair enough.
    Mr. Lavine?
    Mr. Lavine. I certainly haven't looked at the studies to 
analyze them in that degree. But let me offer a suggestion, and 
that is that, on those topics, there is a whole body of work 
that goes beyond the FCC studies, and, in my world--and, you 
know, the earlier comments notwithstanding--I don't--I'm a 
professor, I'm no longer involved--doing television, as I once 
did, or doing newspapers. I would urge you to take a look at 
the body of work, because I'm not sure you need more studies, I 
think you just need to do a metastudy--it's called a 
metastudy--look at what's out there, and really see where they 
come out. Much of this has been really ground that's been 
heavily plowed. You will always come up with some differences 
of opinion, but I'd do that first, before I'd say, ``Now we're 
going to spend X more time going back over it,'' if we've got 
it at hand, if we just do it smartly. Look at the total 
research that's there.
    Senator Pryor. Mr. Winter, I just have about 5 minutes here 
before I have to leave and go vote, but let me ask you a 
question, something you said in your testimony. You had an 
observation about the negative impact that media consolidation 
has had on the coarsening of television content. And I'd like 
to go back to one of the points you made. You said, ``If a 
television station and newspaper in a given market share 
ownership, it follows that they will share editorial outlook on 
policy. Even if they don't, how likely is it that a newspaper 
would criticize a local broadcaster for anything, much less a 
violation of community standards of decency, if both entities 
are owned by the same company?''.
    If you could, I'd like for you to elaborate on that point.
    Mr. Winter. Yes, Senator. I think, just by way of example--
it was a recent conversation I had with a newspaper reporter 
who works for a megaconglomerate that also owns a television 
network. And he covers the Hollywood beat, as it were, the 
entertainment industry. And I asked him, point blank, if his 
editors had ever told him to sanitize a story that would 
otherwise be harsh to his parent organization. And he said yes. 
He said that he will not get instructions from the editor to 
actually change a story that is, to make it untrue, but it will 
certainly be watered down or killed entirely and not see print 
if they feel that it is too harsh on its broadcast property.
    That was one data point, Senator. And another is going back 
to this Second Circuit ``fleeting profanity'' lawsuit. We don't 
see news outlets talking about that the broadcasters now claim 
the right to use the ``F'' word in front of children at any 
time of the day. And I believe that the reason for doing that 
is very clear, they don't want to call this out and let the 
public be aware of it. And I believe that it is that type of 
mentality, where you have, again, the same stock options, same 
financial incentives, you lose the objectivity to criticize, 
become a media watchdog for those in your own industry. I think 
an independent media from the print side is vital to actually 
run an oversight of broadcast television.
    Senator Pryor. Well, this has been a great panel, and I 
appreciate y'all's time and your preparation and your 
commitment to be here today. And also, for the audience, 
because there are a lot of people out there who are very 
interested in this, I appreciate everyone attending, today.
    Let me just say that I want to add my voice to those urging 
Chairman Martin not to rush a vote on media ownership rules on 
December 18. I think this is really the sense of the Congress, 
and certainly the sense of the Senate and this committee, and I 
would add my voice to those who say that he shouldn't do that.
    Let me pause just for a minute here and ask the Committee--
we're going to keep the record open, here, for 2 weeks in order 
for Senators to ask questions or if, during your testimony 
there are documents that you want to provide to the Committee 
staff, and have those made a part of the record, but, because 
of our voting schedule and committee schedule and just end-of-
the-year rush here, there were a few Senators that couldn't 
come that had hoped to, so we'll leave that open for 2 weeks. 
If the staff contacts you with questions from Senators, we'd 
love for you to respond to those as quickly as possible.
    Senator Pryor. And so, with that, we'll adjourn the 
meeting. And, again, thank you all for being here and 
participating.
    [Whereupon, at 11:55 a.m., the hearing was adjourned.]

                            A P P E N D I X

     Prepared Statement of the National Association of Broadcasters

    The National Association of Broadcasters (NAB) respectfully submits 
this statement for the record in the Commerce Committee's November 8, 
2007, hearing on Localism, Diversity and Media Ownership. NAB is a 
trade association that advocates on behalf of more than 8,300 free, 
local radio and television stations and also broadcast networks before 
Congress, the Federal Communications Commission and the Courts. Radio 
and television broadcasters provide a free, over-the-air service that 
reaches virtually every household in America, keeping local 
communities--and your constituents--informed and connected. Our members 
serve listeners and viewers throughout the country with entertainment 
and informational programming, including news and public affairs and 
vital emergency information.
    NAB believes that localism is best sustained by permitting 
broadcasters to compete effectively in the digital multichannel 
marketplace. The real threat today to locally-oriented services, 
including costly services such as local news, is not the joint 
ownership of broadcast stations, but the stations' inability to 
maintain their economic vibrancy in the face of multichannel and other 
competitors that are not constrained by restrictions on local ownership 
structure. Only competitively viable broadcast stations supported by 
adequate advertising revenues can serve the public interest effectively 
and provide a significant local presence. Broadcasters are not calling 
for an end to all ownership regulation, but for the modernization of 
out-of-date restrictions that do not reflect current competitive 
realities in the Internet age. Reasonable reform to outmoded ownership 
restrictions will enhance the ability of local stations to serve their 
diverse audiences and local communities.

Creating an Uncompetitive and Undercapitalized Broadcast Industry 
        Through Maintenance of Out-of-Date Restrictions on Media 
        Ownership Will Not Serve the Public Interest
    Some parties in the media ownership debate continue to argue that 
the broadcast ownership rules should not be modernized in any respect. 
Indeed, a few contend that restrictions on local broadcasters should be 
increased. However, to support such views, one must believe that the 
media marketplace has not changed over the past several decades or that 
the media marketplace is less competitive and diverse than before the 
development of digital technology, numerous multichannel video and 
audio services, and the Internet. Such a position is clearly untenable.
    The Federal Communications Commission (FCC or Commission) 
originally adopted its local broadcast ownership restrictions decades 
ago in a very different media environment. In fact, the FCC first 
implemented local ownership restrictions starting with radio in 1938. 
The ``newest'' local ownership rule--the newspaper/broadcast cross-
ownership ban--was adopted in 1975 and has never been updated. 
Moreover, these restrictions on local broadcasters do not apply to any 
other industry, even those as highly concentrated as cable and 
satellite. Broadcasters believe that these decades-old rules should be 
brought up-to-date to reflect the dramatic technological and 
marketplace developments that have occurred over the past 30 years, and 
to level the playing field so that local stations can compete against 
other outlets, including large cable and satellite companies.
    Beyond ignoring all the changes that have occurred in the media 
marketplace in recent decades, those calling for no change to, or for 
increases in, media ownership restrictions also ignore the state of the 
broadcast industry in the early 1990s before some of the ownership 
restrictions were reformed to permit more economically viable ownership 
structures. In 1992, for example, the Commission found that, due to 
``market fragmentation,'' many in the radio industry were 
``experiencing serious economic stress.'' \1\ Specifically, stations 
were experiencing ``sharp decrease[s]'' in operating profits and 
margins. FCC Radio Order, 7 FCC Rcd at 2759. By the early 1990s, ``more 
than half of all stations'' were losing money (especially smaller 
stations), and ``almost 300 radio stations'' had gone silent. Id. at 
2760. Given that the radio industry's ability ``to function in the 
`public interest, convenience and necessity' is fundamentally premised 
on its economic viability,'' the Commission concluded that ``radio's 
ability to serve the public interest'' had become ``substantially 
threatened.'' Id. Accordingly, the Commission believed that it was 
``time to allow the radio industry to adapt'' to the modern information 
marketplace, ``free of artificial constraints that prevent valuable 
efficiencies from being realized.'' Id.
    Motivated by such concerns, Congress in the 1996 Telecommunications 
Act acted to ``preserve and to promote the competitiveness of over-the-
air broadcast stations.'' \2\ Congress found that ``significant 
changes'' in the ``audio and video marketplace'' called for a 
``substantial reform of Congressional and Commission oversight of the 
way the broadcasting industry develops and competes.'' House Report at 
54-55. Congress specifically noted the ``explosion of video 
distribution technologies and subscription-based programming sources,'' 
and stated its intent to ensure ``the industry's ability to compete 
effectively'' and to ``remain a vital element in the video market.'' 
Id. at 55.
    NAB respectfully submits that the Committee should not forget these 
important lessons of the past. Arguments that the broadcast-only local 
ownership restrictions should not be reformed are based on a refusal to 
recognize all the factors that have transformed today's media 
marketplace, including the development and spread of new technologies; 
growth in competition for viewers and listeners among greater numbers 
and different types of outlets and providers; changing consumer tastes, 
especially among younger viewers and listeners; and dramatic changes in 
the advertising marketplace, which affect free, over-the-air broadcast 
stations more than subscription-based media. Policies turning back the 
regulatory clock would create a fragmented, undercapitalized broadcast 
industry and place broadcasters at an even greater competitive 
disadvantage against multichannel and other information/entertainment 
providers and outlets. As the FCC recognized in its 1992 Radio Order, 
only competitively viable broadcast stations sustained by adequate 
advertising revenues can serve the public interest effectively, provide 
a significant presence in local communities, and offer the valuable 
programming and services that local viewers and listeners want and 
expect.
    Despite the claims by some opposing any modernization of the 
broadcast ownership restrictions, NAB also observes that the FCC is not 
rushing to judgment in its current statutorily-required review of the 
ownership rules.\3\ The Commission began its reexamination of the 
newspaper/broadcast cross-ownership ban in 1996 with a notice of 
inquiry on newspaper/radio cross-ownership, and commenced the still-
pending review of the newspaper/broadcast prohibition in 2001. The 
Commission also commenced a review of radio ownership in 2001. The 
Commission's review and revision of the television duopoly and radio/
television cross-ownership rules in the 1990s resulted in a 2002 court 
appeal finding the revised duopoly rule to be arbitrary and capricious, 
and sending the FCC's decision back to the agency for further 
consideration. See Sinclair Broadcast Group, Inc. v. FCC, 284 F.3d 148 
(D.C. Cir. 2002). This remand remains pending, with the arbitrary and 
capricious duopoly rule still in effect. In addition, the Commission 
reexamined the local broadcast ownership rules in its statutorily-
required 1998, 2000 and 2002 biennial reviews (the last of which 
remains pending at the FCC after an appeal and decision by the Third 
Circuit Court of Appeals remanding the agency's decision for further 
consideration). See Prometheus Radio Project v. FCC, 373 F.3d 372 (3rd 
Cir. 2004). Given the number of years that the Commission has been 
considering reform of the local broadcast ownership restrictions, and 
the voluminous empirical and anecdotal evidence that has been submitted 
by those urging reform of these rules, the opponents of reform have no 
basis for their claims that the Commission is somehow rushing to 
judgment or that another decade of delay is necessary.

The Existing Local Ownership Restrictions Are Not Needed to Prevent 
        Broadcasters from Exercising Market Power in Today's 
        Multichannel Marketplace
    In a multichannel environment dominated by consolidated cable and 
satellite system operators, local broadcast stations are clearly unable 
to obtain and exercise any undue market power. For this reason, the 
traditional competition rationale for maintaining a regulatory regime 
applicable only to local broadcasters and not their competitors is not 
a proper basis for keeping the current rules. Indeed, the primary 
competition-related concern in today's digital, multichannel 
marketplace is the continued ability of local broadcasters to compete 
effectively and to offer the free, over-the-air entertainment and 
informational programming upon which Americans rely. Due to 
technological advancements, the growth of multichannel video and audio 
outlets and the Internet, and an expansion in the number of broadcast 
outlets, an FCC report concluded that, even 5 years, traditional 
broadcasters were struggling to maintain their audience and advertising 
shares ``in a sea of competition.'' \4\ This competition has only 
intensified in the past 5 years.
    Specifically, NAB has documented in detail the audience 
fragmentation and increasing competition for listeners, viewers and 
advertising revenue experienced by broadcast stations, as the result of 
new entry by cable television, satellite television and radio, numerous 
Internet video and audio applications, and mobile devices such as iPods 
and other Mp3 players. For example, in the first 3 months of 2007, 
Internet advertising set new records by taking in $4.9 billion, a 26 
percent increase over the previous year.\5\ Meanwhile, advertisers are 
expected to spend 5 percent less on local and national spot advertising 
in 2007 than they did last year.\6\ U.S. Internet advertising spending 
is now predicted to overtake radio advertising in 2007.\7\ Cable's 
share of local television advertising has also grown substantially, 
with cable local advertising revenues increasing 12.2 percent from 2003 
to 2004 and 12.0 percent from 2004 to 2005.\8\ Local cable system 
advertising revenue experienced compound annual growth of 10 percent 
from 1999-2004, with local television station revenue experiencing only 
2 percent compound growth in those same years.\9\ In light of this 
undisputed evidence about enhanced competition in the advertising 
market, the local ownership rules should be structured so that 
traditional broadcasters and newer programming distributors--which 
clearly compete fiercely for advertising revenue--can all compete on an 
equitable playing field.
    A more level regulatory playing field is particularly urgent, given 
that local broadcasters' most prominent competitors enjoy dual revenue 
streams of both subscriber fees and advertising revenues. Broadcasters, 
of course, are almost solely dependent on advertising, and local 
stations today must struggle to maintain needed revenues in a vastly 
more competitive advertising market. Any realistic assessment of 
today's media marketplace leads to the conclusion that competition 
considerations dictate change in the broadcast ownership rules.\10\

Consumers' Interests in Diversity Are Unquestionably Being Fulfilled 
        Nationally and in Local Markets
    The existing broadcast-only local ownership restrictions are not 
necessary to maintain diversity in today's media marketplace. The 
proliferation of broadcast outlets and the rise of new multichannel 
video and audio programming distributors and the Internet have produced 
an exponential increase in programming and service choices available to 
viewers and listeners. This proliferation has been documented by 
numerous surveys of the numbers of media outlets and owners in local 
markets.\11\ An FCC study of selected radio markets from 1960 to 2000 
showed an increase in the number of outlets of almost 200 percent and 
an average increase in the number of owners of 140 percent over the 40-
year period.\12\ Empirical studies have also shown that consumers 
routinely access many additional ``out-of-market'' outlets, thereby 
adding to the diversity of entertainment and information sources widely 
accessible to viewers and listeners in local communities.\13\ The 
public's interest in receiving diverse content is therefore being met 
both nationally and on a market basis.
    Numerous studies, including those by independent parties, have 
confirmed that the post-1996 changes within local broadcast markets, 
especially among radio stations, have enhanced the diversity of 
programming offered by local stations. Indeed, independent studies have 
concluded that ``increased concentration'' in radio markets has 
``caused an increase in available programming variety.'' \14\ A 2007 
study commissioned by the FCC concluded that ``consolidation of radio 
ownership does not diminish the diversity of local format offerings.'' 
Indeed, ``[i]f anything, more concentrated markets have less pile-up of 
stations on individual format categories, and large national radio 
owners offer more formats and less pile-up.'' Station Ownership and 
Programming in Radio at 44.
    A 2006 study by BIA Financial Network also showed that radio 
stations are providing a wide range of programming targeted for diverse 
audiences, including minority groups and groups with niche tastes and 
interests. For example, between 2000-2006, the number of Spanish-
language radio stations increased by 45.5 percent; as a result, over 
half (50.4 percent) of the Hispanic population in Arbitron metro areas 
receive over-the-air 10 or more Spanish-language radio stations, with 
more than three-quarters (79.5 percent) receiving six or more of these 
stations. The number of news/talk stations grew by 20.6 percent between 
2000-2006 so that more than half (55.5 percent) of the population in 
Arbitron metros receive at least six news/talk radio stations and 70.8 
percent have over-the-air access to at least four such stations.\15\ 
Given the diversity benefits stemming from joint ownership of radio 
stations, and the lack of any competitive harm from such ownership, 
there is no basis for cutting back on the permitted levels of common 
ownership in local radio markets, but in fact the continued relaxation 
of these limitations should be considered.
    Beyond increasing diversity of content, numerous other studies 
indicate that the joint ownership of media outlets in local markets 
does not inhibit the expression of diverse viewpoints by the commonly 
owned outlets. For instance, two studies examining the diversity of 
information and viewpoints expressed by commonly owned newspaper/
broadcast combinations regarding the 2000 Presidential campaign 
concluded that commonly owned outlets did not speak with a single voice 
about important political matters.\16\ One of the new studies 
commissioned by the FCC examined the partisan slant of television news 
coverage, finding that there is no difference between newspaper cross-
owned television stations and other major network-affiliated stations 
in the same market.\17\ In fact, the most recent research casts 
considerable doubt on the long-assumed (but never proven) link between 
ownership and viewpoint and shows instead a link between consumer 
preferences and the viewpoint or slant of media outlets, whether print 
or broadcast. For instance, a 2006 academic study of newspaper slant 
found that ``ownership does not account for any of the variation in 
measured slant,'' but concluded that the political orientation of 
newspapers is driven more by the ideology of the targeted market than 
by ownership and that ``newspapers' actual slant is close to the 
profit-maximizing level.'' \18\ Similarly, an FCC-commissioned 2007 
study examining the political slant of television stations found that 
the partisan slant of local television news was associated with average 
partisan voting preferences in the local market, rather than ownership 
patterns. Milyo Television News Study at 23-24. In other words, the 
most recent research has found that any media slant is in direct 
response to consumer preferences--not the ideology of any particular 
owner.
    The ability of consumers to obtain diverse content and viewpoints 
is only enhanced by the growing level of substitutability between media 
for both entertainment and informational purposes. Studies conducted 
for the Commission and other surveys on media usage reveal considerable 
substitutability between media for various uses. Indeed, the recent 
studies showed that multichannel outlets and the Internet compete 
with--and substitute for--the use of traditional media including 
broadcast and newspapers for both entertainment and information, 
especially among younger consumers. For example, Arbitron/Edison Media 
Research recently found that the Internet is now regarded by consumers 
as the second ``most essential'' media in American life, and 
researchers predict that ``it is likely that the Internet will soon'' 
move into ``first place.'' \19\ One of the recent FCC-commissioned 
studies confirms that the Internet is gaining as a competitor to 
traditional media outlets.\20\ Respondents to the Nielsen Media 
Research survey in FCC Study I reported greater weekly Internet usage 
(12.8 hours) than usage of both broadcast television (10.4 hours) and 
radio (6.2 hours). FCC Study I at 4, 30, 72. When compared to similar 
survey results from 2002, this new Nielsen survey also strongly 
indicates that the extent to which consumers are substituting the 
Internet for television and radio is increasing over time. In just the 
5 years between the two Nielsen surveys, the percentage that responded 
that they did not use the Internet fell sharply from 31.3 percent to 
only 5.4 percent.\21\ These Nielsen surveys also showed that other 
outlets, particularly cable television, are important sources of news 
and information, including local, national and international.
    Opponents of reform, however, continue to insist that the effect of 
the Internet in the media marketplace generally, and especially as a 
source of news, is minor. This position is contrary to reality. 
Obtaining news and information (along with sending or reading e-mail) 
are the most popular on-line activities. As of early 2007, 72 percent 
of all Internet users (and 79 percent of home broadband users) report 
that they ``get news'' online, with 37 percent of all Internet users 
(and 45 percent of home broadband users) reporting that they got news 
``yesterday'' online.\22\ Online video, including news videos, now 
reach a mainstream audience, with 57 percent of online adults using the 
Internet to watch or download video and nearly one-fifth (19 percent) 
doing so on a ``typical day.'' \23\ More than three in four (76 
percent) young adult Internet users (ages 18-29) report online 
consumption of video, with 31 percent watching or downloading some type 
of video on a typical day. News content is the most popular type of 
online video overall and with every age group, except for the youngest. 
Overall, 37 percent of adult Internet users report watching news 
videos. Pew Online Video Report at i-ii.
    Thirty-one percent of all Americans (and 46 percent of all Internet 
users) used the Internet during the 2006 campaign to obtain political 
news and information and discuss the races through e-mail.\24\ Fifteen 
percent of all American adults reported that the Internet was their 
``primary source for campaign news'' during the 2006 mid-term 
elections, up from only 7 percent in the 2002 mid-term elections. 
Broadband users under age 36 said that the Internet was a ``more 
important political news source than newspapers.'' Pew 2006 Election 
Report at i-ii. Moreover, the Internet is already proving more integral 
than ever to political candidates in the upcoming 2008 elections. 
Candidates are spending large sums on Internet advertising and relying 
heavily on the Internet to communicate with supporters, while potential 
voters looking more to the Internet to find political information, 
either directly from candidates or from blogs and other online news 
sources.\25\ Clearly, the number of Americans relying on most 
traditional media, such as newspapers, magazines and television, for 
political/election news has declined significantly since the 1990s as 
on-line sources have become much more important. See id. at i.
    In sum, continued claims about the miniscule impact of the Internet 
in the media marketplace cannot be credited, and certainly cannot be 
used to justify retaining the current broadcast ownership rules 
unchanged. Given the growth of multichannel video and audio outlets and 
consumers' ability to access content as ``diverse as human thought'' 
via the Internet,\26\ claims that, for example, allowing a television 
broadcaster to own two stations in a local market could somehow 
substantially reduce the diversity of ideas and views available to 
consumers is not sustainable.

Localism Is Best Preserved by Permitting Broadcasters to Compete 
        Effectively in the Digital Multichannel Marketplace
    As shown by NAB in the Commission's pending localism proceeding, 
local stations provide a wealth of local news and public affairs 
programming, political information, emergency information, other 
locally produced and responsive programming, and additional, unique 
community service (including billions of dollars of free air time for 
local and national public service announcements and billions of dollars 
in monies raised for charities, other local organizations and causes, 
and needy individuals).\27\ But given the relentless competition for 
audience and advertising shares from the vast array of other media 
outlets, the real threat today to the extensive locally-oriented 
service offered by television and radio broadcasters is not the group 
ownership of stations. Rather, it is the challenge stations face in 
maintaining their economic viability in a market dominated by 
consolidated multichannel providers and other competitors. To maintain 
a system of competitively healthy commercial broadcast stations 
offering free, over-the-air service to local communities, stations must 
be allowed to form efficient and financially sustainable ownership 
structures.
    Studies almost too numerous to recount have shown that local 
service is enhanced if local broadcasters are able to jointly own media 
properties in the same market. For example, several of the recent FCC-
commissioned studies concluded that television stations owned by in-
market newspapers aired more news programming overall, more local news 
programming specifically, and more political news coverage.\28\ Similar 
empirical evidence from earlier studies \29\ persuaded the Third 
Circuit Court of Appeals to agree with the Commission's determination 
in its 2002 review of the broadcast ownership rules that the blanket 
ban on newspaper/broadcast cross-ownership no longer served the public 
interest. Prometheus, 373 F.3d at 398. The Court concluded that 
``newspaper/broadcast combinations can promote localism,'' and agreed 
with the Commission that a ``blanket prohibition on newspaper/broadcast 
combinations is not necessary to protect diversity.'' Id. at 398-99. 
NAB fully agrees with these earlier determinations, and urges the FCC 
in its pending ownership review to reaffirm its repeal of the complete 
ban on newspaper cross-ownership.
    One of the recent FCC studies similarly concluded that the co-
ownership of two television stations in the same market ``has a large, 
positive, statistically significant impact on the quantity of news 
programming.'' Shiman Ownership Structure Study at I-21. ``For each 
additional co-owned station within the market,'' this study found ``an 
increase in the amount of news minutes by 24 per day about a 15 percent 
increase.'' Id. A November 2007 study by Economists Incorporated found 
that same-market television stations that are commonly owned or 
operated are significantly more likely to carry local news and public 
affairs programming than other television stations, even after 
controlling for other factors.\30\ Two earlier studies by BIA Financial 
Network demonstrated that the acquired stations in duopolies experience 
increases in their local audience share and revenue share following 
their acquisition.\31\ As this evidence makes clear, the formation of a 
duopoly allows the acquired station to offer programming more 
attractive to viewers, thereby better serving their local audiences.
    Interestingly, recent research from certain opponents of ownership 
reform indicates that television ``duopolies may lead to more local 
news and public affairs.'' \32\ Although these parties generally 
continue to insist that, ``[a]s market concentration increases, local 
news and public affairs decreases,'' they also conclude that 
``duopolies appear to work in the opposite direction.'' Comments of 
Consumers Union, et al., at 98. Thus, the research of those opposing 
reform of the local ownership rules provide further evidence of the 
public interest and localism benefits that flow from the common 
ownership of television stations in local markets. Indeed, even before 
these recent studies, the Third Circuit Court of Appeals agreed with 
the Commission that media other than broadcast television contributed 
to viewpoint diversity in local markets, and agreed that common 
ownership of television stations ``can improve local programming.'' 
Prometheus, 373 F.3d at 414-15.
    Given these established public interest benefits flowing from 
television duopolies, NAB supports allowing duopolies more freely in 
markets of all sizes, especially in smaller ones where the need for 
television stations to form more competitively viable ownership 
structures in the most acute.\33\ As the FCC has previously recognized, 
``the ability of local stations to compete successfully'' in the video 
marketplace has been ``meaningfully (and negatively) affected in 
midsized and smaller markets,'' primarily because ``small market 
stations are competing for disproportionately smaller revenues than 
stations in large markets.'' \34\ Reform of the television duopoly rule 
would thus enable local television stations, especially those in medium 
and small markets, to compete more effectively and thus ultimately to 
better serve their local communities.
    Finally, NAB observes that, despite exaggerated claims by those 
opposing any modernization of the local ownership restrictions, local 
owners and small owners have not disappeared from the broadcast 
industry. According to the Commission, the number of locally owned 
television stations increased approximately 3 percent from 2002-
2005.\35\ In 2005, 6,498 radio stations (out of 13,590) were locally 
owned. FCC Media Robustness Study at 11. As of 2006, nearly 37 percent 
of all radio stations in Arbitron markets were either standalone (i.e., 
the only station owned within its market by its station owner) or part 
of a duopoly (i.e., part of a two station group within that local 
market).\36\ Nationwide, there were, as of 2005, 4,412 unique radio 
station owners and 480 unique television station owners. FCC Media 
Robustness Study at 11. These figures do not even include the 
additional owners of thousands of low power television and low power FM 
stations. Given these large numbers of separate owners, it is hardly 
surprising that radio and television station ownership is less 
concentrated than other media sectors and less concentrated than other 
leading industries.\37\

NAB Supports Numerous Initiatives to Increase Minority and Female 
        Participation in the Broadcast Industry
    Broadcasters have regularly supported programs that promote 
minority and female participation in the media business. Through our 
partnerships with the National Association of Broadcasters Education 
Foundation (NABEF) and Broadcast Education Association, NAB has helped 
create a comprehensive educational structure that has brought hundreds 
of new participants, from all backgrounds, into the broadcast industry. 
NABEF, for instance, conducts seminars and programs that nurture 
participants at every level of career development--from entry-level 
media sales institutes,\38\ to managerial-level professional fellowship 
programs at major universities, to executive-level Broadcast Leadership 
Training (BLT) for those who aspire to own stations. To date, more than 
15 percent of BLT graduates have gone on to acquire stations, and many 
others are in various stages of station acquisition.
    As NAB has frequently explained, the public interest is best served 
by policies designed to encourage minority and female participation in 
a competitively vibrant broadcast industry. Creating a fragmented, 
undercapitalized and uncompetitive broadcast industry via undue 
restrictions on broadcast ownership would not represent an effective 
means of promoting minority and female ownership.\39\ Instead, Congress 
and the Commission should look for solutions promoting the long-term 
viability of women and minority entrants into broadcasting. To that 
end, NAB strongly supports policies that would help ameliorate the lack 
of access to capital that everyone agrees inhibits small and minority- 
and female-owned businesses from entry into the broadcasting and other 
communications-related industries. NAB has long supported the 
reinstatement of a tax incentive program as the most effective way to 
promote diversity of ownership in broadcasting. NAB also supports a 
range of other proposals made by the Minority Media and 
Telecommunications Council to promote the entry and participation of 
minorities and women in broadcasting.\40\ The best way to reach this 
goal is through public/private partnerships and market-based stimulants 
that will promote entry and the long-term viability of female and 
minority entrants in a competitively healthy broadcast industry.
    NAB further observes that the assumption that permitting the common 
ownership of broadcast stations automatically has a deleterious effect 
on minority participation in the broadcast industry is questionable. 
One study purporting to find that the very limited relaxation of the 
duopoly rule in 1999 had a negative impact on minority and female 
ownership of television stations \41\ was found to be ``fatally 
flawed'' by a peer reviewer of that study.\42\ Other parties have also 
criticized this duopoly study for its ``non-transparent, biased 
methodology'' and its ``unsupported conclusions and biased 
statements.'' \43\ The data provided by some parties claiming that 
increased common ownership ``unambiguously'' leads to reduced minority/
female ownership does not support their claim. For instance, according 
to data assembled by Consumers Union, et al., members of minority 
groups owned a greater number of television stations in 2006 than they 
did before the FCC modestly relaxed the television duopoly rule in 
1999.\44\ Earlier studies found that ``minority groups increased their 
radio ownership'' after 1996.\45\
    Thus, any data purporting to link common ownership with a decline 
in minority and female ownership must be carefully evaluated. Rather 
than refusing to modernize the local broadcast ownership rules due to 
questionable and unproven assumptions about such a link, NAB urges 
Congress and the FCC to implement policies that will ensure a 
financially viable radio and television industry, taking into account 
ever-increasing competition from a myriad of new sources. Initiatives 
to promote the greater participation of women and minorities in 
broadcasting--which, as explained above, NAB strongly supports--would 
be moot in an environment where radio and television broadcasters are 
held back from effectively competing in today's digital media 
marketplace.

Conclusion
    Broadcasters are not calling for an end to all ownership 
regulation, but for the modernization of out-of-date restrictions that 
do not reflect current competitive realities in the Internet age. 
Reasonable reform to outmoded limitations will enable free, over-the-
air broadcasters to compete more effectively against multichannel video 
and audio operators and Internet-based media providers, many of which 
earn subscription fees yet also compete against broadcasters for vital 
advertising revenues unencumbered by local ownership restrictions. As 
the FCC has previously recognized, only competitively viable broadcast 
stations supported by adequate advertising revenues can serve the 
public interest effectively, provide a significant presence in local 
communities, and offer costly local services such as local news. Above 
all, broadcasters want to be able to continue to serve their local 
communities and audiences effectively. Reform of broadcast-only local 
ownership limitations can help local stations do just that.

Endnotes
    \1\ Revision of Radio Rules and Policies, Report and Order, 7 FCC 
Rcd 2755, 2756 (1992) (FCC Radio Order).
    \2\ H.R. Rep. No. 204, 104th Cong., 2d Sess. at 48 (1995) (House 
Report).
    \3\ Section 202(h) of the Telecommunications Act of 1996 (1996 
Act), as amended, requires the FCC to review its broadcast ownership 
rules every 4 years and determine whether those rules remain 
``necessary in the public interest as the result of competition.'' Pub. 
L. No. 104-104  202(h), 110 Stat. 56 (1996), as amended by 
Consolidated Appropriations Act, 2004, Pub. L. No. 108-199,  629, 118 
Stat. 3 (2004).
    \4\ Jonathan Levy, Marcelino Ford-Livene, Anne Levine, OPP Working 
Paper Series #37, Broadcast Television: Survivor in a Sea of 
Competition (Sept. 2002).
    \5\ Internet ads hit another milestone, Chicago Tribune, June 7, 
2007.
    \6\ Jack Myers Media Business Report, 2007 Advertising and 
Marketing Communications Forecast, Nov. 1, 2006.
    \7\ Louis Hau, Web Ad Spending To Eclipse Radio In 2007, 
forbes.com, Aug. 29, 2007.
    \8\ See Annual Assessment of the Status of Competition in the 
Market for the Delivery of Video Programming, Twelfth Annual Report, 21 
FCC Rcd 2503, Table 4 (2006). This report also documented the continued 
growth in viewing shares of cable/satellite television, at the expense 
of broadcast television.
    \9\ Local Television Market Revenue Statistics, Attachment F to NAB 
Comments in MB Docket No. 06- 121 (filed Oct. 23, 2006).
    \10\ Claims by opponents of reform that post-1996 ownership changes 
in the radio industry have resulted in competitive harm are unfounded. 
A recent study commissioned by the FCC concluded that ``consolidation 
in local radio has no statistically-significant effect on advertising 
prices'' and that ``[n]ational ownership has a statistically 
significant, negative effect on advertising prices.'' Tasneem Chipty, 
CRA International, Inc., Station Ownership and Programming in Radio at 
40-41 (June 24, 2007) (emphasis added). This study is consistent with 
previous academic studies on advertising and consolidation in the radio 
industry.
    \11\ See, e.g., BIA Financial Network, Media Outlets Availability 
by Markets, Attachment A to NAB Comments in MB Docket No. 06-121 (Oct. 
23, 2006) (an examination of 25 Designated Market Areas of various 
sizes from 1986-2006 found an average increase of 39.0 percent in the 
number of full power television stations; an average increase of 42.3 
percent in the number of full power radio stations; an increase in 
multichannel video programming service penetration from 52.0 percent to 
86.5 percent; and an increase in the average number of cable delivered 
channels in use from 31.7 channels in 1986 to 283.3 channels in 2006). 
This BIA Financial Network study also showed that, on average, there 
were 8.8 different owners of the 11.7 full power television stations, 
and 37.6 different owners of the 73 radio stations, in these DMAs.
    \12\ See Scott Roberts, Jane Frenette and Dione Stearns, A 
Comparison of Media Outlets and Owners for Ten Selected Markets (1960, 
1980, 2000) (Sept. 2002).
    \13\ See BIA Financial Network, A Second Look at Out-of-Market 
Listening and Viewing: It Has Even More Significance, Attachment C to 
NAB Comments in MB Docket No. 06-121 (filed Oct. 23, 2006).
    \14\ Steven Berry and Joel Waldfogel, Mergers, Station Entry, and 
Programming Variety in Radio Broadcasting, National Bureau of Economic 
Research, Working Paper 7080 at 25-26 (April 1999). Accord Steven Berry 
and Joel Waldfogel, Do Mergers Increase Product Variety? Evidence from 
Radio Broadcasting, 116 Q. J. Econ. 1009 (Aug. 2001); BIA Financial 
Network, Has Format Diversity Continued to Increase?, Attachment A to 
NAB Comments in MM Docket Nos. 01-317 and 00-244 (filed March 27, 
2002); Bear Stearns Equity Research, Format Diversity: More from Less? 
(Nov. 2002); BIA Financial Network, Over-the-Air Radio Service to 
Diverse Audiences, Attachment G to NAB Comments in MB Docket No. 06-121 
(filed Oct. 23, 2006).
    \15\ Over-the-Air Radio Service to Diverse Audiences at 9-10; 13-
14. This study also documented growth in the number of Urban programmed 
stations and Asian language stations. See Id. at 10-12.
    \16\ See David Pritchard, A Tale of Three Cities: ``Diverse and 
Antagonistic'' Information in Situations of Local Newspaper/Broadcast 
Cross-Ownership, 54 Fed. Comm. L.J. 31 (2001); David Pritchard 
Viewpoint Diversity in Cross-Owned Newspapers and Television Stations: 
A Study of News Coverage of the 2000 Presidential Campaign (Sept. 
2002). An examination of 2004 Presidential endorsements similarly found 
no pattern among the endorsements made by commonly owned newspapers, 
with newspapers owned by the same company frequently endorsing 
different candidates. See Comments of Media General in MB Docket No. 
06-121, Appendix 6 (filed Oct. 23, 2006).
    \17\ See Jeffrey Milyo, The Effects of Cross-Ownership on the Local 
Content and Political Slant of Local Television News (June 13, 2007) 
(Milyo Television News Study).
    \18\ Matthew Gentzkow & Jesse Shapiro, What Drives Media Slant? 
Evidence from U.S. Daily Newspapers at 4-5, 43-44 (Nat'l Bureau of 
Econ. Research, Working Paper No. 12707, 2006).
    \19\ Arbitron/Edison Media Research, Internet & Multimedia 2007 
Report Summary, at 1, June 26, 2007.
    \20\ Nielsen Media Research, Inc., Federal Communications 
Commission Telephone Study: May 7-27; May 29-31; June 1-3, 2007 (FCC 
Study I).
    \21\ Compare Nielsen Media Research, Inc., Consumer Survey on Media 
Usage (Sept. 2002), at 88, 90, 94, with FCC Study I at 4, 30, 72 
(showing that number of respondents not using traditional media, 
including radio and television, increased substantially between 2002 
and 2007).
    \22\ John Horrigan and Aaron Smith, Pew Internet & American Life 
Project, Home Broadband Adoption 2007 at 11-12 (June 2007).
    \23\ Mary Madden, Pew Internet & American Life Project, Online 
Video at i (July 25, 2007) (Pew Online Video Report).
    \24\ Lee Rainie and John Horrigan, Pew Internet & American Life 
Project, Election 2006 Online at ii (Jan. 17, 2007) (Pew 2006 Election 
Report).
    \25\ See NAB Ex Parte in MB Docket No. 06-121 at 14-15 (filed Nov. 
1, 2007) (giving numerous examples of the growth of the Internet in the 
2008 campaign).
    \26\ Reno v. ACLU, 521 U.S. 844, 870 (1997).
    \27\ See Comments of NAB in MB Docket No. 04-233 (filed Nov. 1, 
2004) Reply Comments of NAB in MB Docket No. 04-233 (filed Jan. 3, 
2005).
    \28\ See Milyo Television News Study; Gregory Crawford, Television 
Station Ownership Structure and the Quantity and Quality of TV 
Programming (July 23, 2007); Daniel Shiman, The Impact of Ownership 
Structure on Television Stations' News and Public Affairs Programming 
(July 24, 2007) (Shiman Ownership Structure Study).
    \29\ A 2002 FCC study concluded that network affiliated television 
stations co-owned with newspapers received higher ratings for their 
local news programs, aired more hours of local news, and received a 
higher number of awards for local news than other network affiliates. 
See Thomas Spavins, Loretta Denison, Scott Roberts and Jane Frenette, 
The Measurement of Local Television News and Public Affairs Programs 
(2002).
    \30\ Michael G. Baumann and Kent W. Mikkelsen, Economists 
Incorporated, Effect of Common Ownership or Operation on Television 
News Carriage: An Update, Attachment to NAB Comments in MB Docket No. 
06-121 (filed Nov. 1, 2007) (a station in a same-market combination is 
6.2 percent more likely to carry such programming than a station that 
is not in such a local combination).
    \31\ See BIA Financial Network, Economic Viability of Local 
Television Stations in Duopolies, Attachment H to NAB Comments in MB 
Docket No. 06-121 (filed Oct. 23, 2006); BIA Financial Network, 
Television Local Marketing Agreements and Local Duopolies: Do They 
Generate New Competition and Diversity?, Attachment A to Comments of 
Coalition Broadcasters in MB Docket No. 02-277 (filed Jan. 2, 2003).
    \32\ Further Comments of Consumers Union, Consumer Federation of 
America and Free Press in MB Docket No. 06-121 at 98 (filed Oct. 22, 
2007) (Comments of Consumers Union, et al.).
    \33\ The current rule limits the formation of duopolies only to 
large markets. This rule allows an entity to own two television 
stations in the same DMA only if at least one of the stations in the 
combination is not ranked among the top four stations in terms of 
audience share, and at least eight independently owned and operating 
commercial and noncommercial full power television stations would 
remain in the DMA after the combination. In 2002, the Court of Appeals 
for the D.C. Circuit found that the FCC had failed to justify its 
exclusion of nonbroadcast media, including cable television, from the 
duopoly rule's eight voice threshold, and remanded the rule to the FCC 
for further consideration. See Sinclair, 284 F.3d at 165, 169. This 
remand remains pending at the FCC and the eight voice standard still 
remains in effect.
    \34\ 2002 Biennial Regulatory Review, Report and Order and Notice 
of Proposed Rulemaking, 18 FCC Rcd 13620, 13698 (2003) (2002 Biennial 
Review Order). NAB has further documented the ``different economics of 
station ownership depending on market size.'' Id. See, e.g., Local 
Television Market Revenue Statistics, Attachment F to NAB Comments in 
MB Docket No. 06-121 (filed Oct. 23, 2006); NAB, Ex Parte in MB Docket 
No. 06-121 (filed Sept. 25, 2007) at Attachments B, E & F.
    \35\ Kiran Duwadi, Scott Roberts and Andrew Wise, Ownership 
Structure and Robustness of Media at 5, 11 (2007) (FCC Media Robustness 
Study) (reporting 439 locally owned television stations in 2005).
    \36\ Independent Radio Voices in Radio Markets, Attachment B to NAB 
Comments in MB Docket No. 06-121 (filed Oct. 23, 2006).
    \37\ See, e.g., Percentage of Industry Revenues Earned by Top 10 
Firms in the Sector, Attachment E to NAB Comments in MB Docket No. 06-
121 (filed Oct. 23, 2006).
    \38\ NABEF sponsors Media Sales Institutes at Howard University, 
Florida A&M, and the Spanish Language Media Center of the University of 
North Texas. These intensive ten-day training programs prepare talented 
students with diverse backgrounds for sales careers in the broadcast 
industry. To date, these programs have trained over 220 students for 
media sales careers. Close to 90 percent have been hired.
    \39\ See Reply Comments of The Center for Regulatory Effectiveness 
in MB Docket No. 06-121 at 2-4 (Oct. 2007) (explaining why ownership 
restrictions artificially depress the value of broadcast stations, 
harming both current and potential female and minority station owners).
    \40\ See Comments of NAB in RM-11388 (filed Sept. 5, 2007); 
Comments of NAB in MB Docket No. 06-121 (filed Oct. 1, 2007); Reply 
Comments of NAB in MB Docket No. 06-121 (file Oct. 16, 2007).
    \41\ See Allen Hammond, et al., The Impact of the FCC's TV Duopoly 
Rule Relaxation on Minority and Women Owned Broadcast Stations 1999-
2006 (2007).
    \42\ B.D. McCullough, Peer-Review Report on ``The Impact of the 
FCC's TV Duopoly Rule Relaxation on Minority and Women Owned Broadcast 
Stations 1999-2006'' by Hammond, et al., (finding that the Hammond 
study failed to consider or control for economic, demographic or other 
differences in television markets and that such errors ``pervade[ ] 
every aspect of the analysis'').
    \43\ Comments and Data Quality Petition of The Center for 
Regulatory Effectiveness in MB Docket No. 06-121 (Oct. 2007) (arguing 
that the FCC cannot use or rely upon the Hammond duopoly study).
    \44\ See Appendix A, The Lack of Racial and Gender Diversity in 
Broadcast Ownership & The Effects of FCC Policy: An Empirical Analysis 
at Table 13 (Sept. 2007), attached to Comments of Consumers Union, et 
al., in MB Docket No. 06-121 (filed Oct. 1, 2007) (showing that members 
of minority groups owned 40 full power commercial television stations 
in 1998, 35 stations in 2000, and 44 stations in 2006).
    \45\ National Telecommunications and Information Administration, 
Changes, Challenges, and Charting New Courses: Minority Commercial 
Broadcast Ownership in the United States at 38 (Dec. 2000). See also 
Kofi A. Ofori, Radio Local Market Consolidation & Minority Ownership at 
10-12, Attached as Appendix One to Comments of MMTC in MM Docket Nos. 
01-317 and 00-244 (filed March 27, 2002) (showing increase in the 
number of minority owned and controlled radio stations since 1997).
                                 ______
                                 
                                                   November 7, 2007
Chairman Daniel K. Inouye,
Senate Commerce Committee,
Washington, DC.

Ranking Member Ted Stevens,
Senate Commerce Committee,
Washington, DC.
   Re: November 8, 2007 Senate Commerce Committee Hearing, 
                ``Localism, Diversity and Media Ownership''
    Dear Senators Inouye and Stevens:

    On behalf of the Independent Film and Television Alliance (IFTA), 
which represents independent film and television producers and has more 
than 180 member companies, I would like to submit this letter for the 
record. These companies, who produce and distribute entertainment 
programming that is financed outside of the seven major U.S. studios, 
are responsible for more than 400 films each year and countless hours 
of television programming. Collectively, they generate more than $4 
billion in distribution revenues annually. Since 1980, over half of the 
Academy Award winners for best picture have been produced or 
distributed by IFTA members, including this year's ``The Departed,'' 
last year's ``Crash,'' and the prior years' ``Lord of the Rings'' and 
``Million Dollar Baby.''
    IFTA commends the Committee for holding this hearing and for its 
continued oversight on the important issue of media consolidation. IFTA 
would like to call the Committee's attention to an important aspect of 
this debate--the inability of independent producers to distribute their 
product today in the television marketplace through either broadcast or 
cable networks. Source diversity has been virtually eliminated in 
American television, and the loser is the American viewer. IFTA has 
filed comments at the FCC, calling on the FCC to examine this aspect of 
media consolidation and to reinstitute regulatory safeguards to restore 
competition and diversity. IFTA urges this committee to encourage the 
FCC to address the issue of source diversity in the pending Media 
Ownership Proceeding. This guidance is particularly important in light 
of the FCC's decision in the previous Biennial Review to defer action 
on this issue.
    Since the elimination of the Financial Interest in Syndication 
Rules (Fin/Syn) and their related consent decree, there has been a sea 
change in the television marketplace. Through the early 1990s, for 
example, independent production companies were able to sell programming 
to broadcast networks. This provided diverse, high-quality programming 
to the American public. From 1980 through the demise of Fin/Syn in the 
early nineties, nearly half of the Emmys given for ``Best Drama'' and 
``Best Comedy'' series were awarded to independent producers. Since 
then, independent production has fallen from 50 percent in 1995 to only 
18 percent of primetime programming today.
    Independents are currently only able to sell their products to 
networks at below-cost prices and are forced to relinquish syndication 
rights. Additionally, major television networks have stopped acquiring 
independent feature films or movies-of-the-week for broadcast. And, a 
number of IFTA members have been advised by networks or cable channels 
that they would no longer acquire independently produced children's 
programming or family films unless ownership rights are included and 
they can control its content with ``traditional'' family themes being 
expressly out of favor. As a result, many Members have been forced to 
abandon production of this type of programming.
    As a result of the easing of program diversity regulation, there 
has been a decline in quality, creativity and diversity of programming. 
IFTA respectfully requests that the Congress encourage the FCC to 
reinstitute reasonable regulation to ensure program diversity. 
Specifically, IFTA seeks a 75 percent cap on the amount of self-
produced network programming that major broadcast and cable networks 
may distribute. Without such action, independent voices will continue 
to be silenced and the diversity of programming for the American viewer 
will continue to decline.
            Sincerely,
                                           Jean M. Prewitt,
                                                 President and CEO,
                                Independent Film & Television Alliance.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                              Alex Nogales

    Question 1. Are you aware of any studies on the effect of media 
consolidation on hate speech? If the FCC convenes a minority ownership 
task force, should the task force study the issue of hate speech?
    Answer. In 1993, the U.S. Department of Commerce, National 
Telecommunications and Information Administration (NTIA) published a 
report titled ``The Role of Telecommunications in Hate Crimes.'' This 
report needs to be updated to reflect the current telecommunications 
environment which includes the increase popularity of talk radio and 
the Internet. Earlier this year, Congressmen Dingell and Markey wrote a 
letter to the NTIA requesting an update on this study. Senator Menendez 
recently wrote to Commerce Secretary Gutierrez making the same request. 
It is imperative that this government study be updated to confirm or 
deny the linkage between hate speech in the media and the increase of 
hate crimes, which has already been documented.
    The Anti-Defamation League recently released a report titled 
``Immigrants Targeted: Extremist Rhetoric Moves into the Mainstream'' 
posted at http://www.adl.org/civil_rights/anti_immigrant/ that 
addresses how the strategy of blaming immigrants for all of society's 
ills is now spreading to mainstream America. The FBI released its 2006 
Hate Crime Statistics showing that in 2006 hate crimes against Latinos 
increased by 25 percent since 2004. To read the FBI's press release, go 
to http://www.fbi.gov/ucr/hc2006/pressrelease.html. Additionally, the 
Southern Poverty Law Center will soon release a report on the most 
egregious of these hate crimes. And as they note, this is not a city, 
regional, or state occurrence, it is a national one. The violence isn't 
just against the undocumented; it is also against documented Latinos 
and citizens because no one can tell one from the other.

    Question 2. What are the major obstacles to minority media 
ownership?
    Answer. The greatest obstacle to minority ownership is media 
consolidation. The majority of radio and TV licenses were granted 
during a period of time in our country when segregation was still 
legal. The history of racism in the United States has prevented people 
of color to build wealth. When segregation ended, people of color were 
still not in a position to purchase stations because of the lack of 
wealth that exist within communities of color. People of color have to 
seek bank loans if they want to buy a station. But they are less likely 
to receive a bank loan, particularly when the price of the station 
continues to increase as a result of consolidation. The historic 
barriers to ownership have only increased with consolidation.
    A recent study from the non-profit group Free Press found that the 
pressures of consolidation and concentration brought on by bad policy 
decisions have crowded out minority owners, who tend to own just a 
single station and find it difficult to compete with their big-media 
counterparts for programming and advertising revenue.
    Free Press' analysis suggests that minority-owned stations thrive 
in more competitive, less concentrated markets. Even if the size of the 
market is held constant, markets with minority owners are significantly 
less concentrated than markets without minority owners.

   The probability that a particular station will be minority-
        owned is significantly lower in more concentrated markets, even 
        if market and station characteristics are controlled for.

   White male and large corporate station owners tend to own 
        far more stations than their minority and female counterparts.

    Question 3. Do you believe that broadcast licensees should have to 
satisfy specific public interest standards? If so, what specific public 
interest standards do you recommend?
    Answer. The Communications Act of 1934 requires the broadcast 
licensees to serve the ``public interest, convenience, and necessity'' 
in exchange for their use of a scarce public asset--the airwaves--for 
free. As public trustees, the Federal Communications Commission (FCC) 
has found that broadcasters must provide reasonable access to 
candidates for Federal elective office to enhance our Nation's 
political discourse, to provide a minimum amount of children's 
educational programming, and to serve local civic, informational, 
minority and disability needs of the public.
    However, forces of consolidation over the past decade have greatly 
diminished any meaningful fulfillment of public interest obligations on 
the part of the broadcast licensees. The trends of horizontal 
conglomeration and vertical integration in the broadcast industry have 
led to drastic reduction in the amount of independently produced 
programming, a reduction in local public affairs coverage, and 
diminished reporting on local candidate races.
    We support the Broadcast Licensing in the Public Interest Act 
introduced by Congresswoman Anna G. Eshoo that would revive the public 
interest standard.

   First, the bill reduces a broadcast license term from eight 
        years to three. The 3-year term will bring greater oversight 
        and scrutiny to license renewals.

   Second, the bill requires broadcast licensees seeking a 
        renewal to demonstrate that they have made a dedication to 
        civic affairs of its community and to local news gathering. The 
        bill also mandates that broadcasters air locally produced 
        programming and make a commitment to provide a public 
        presentation of the views of candidates and issues related to 
        local, statewide or national elections.

   Finally, the bill mandates that broadcasters provide quality 
        educational programming for children.

    Question 4. How can we make sure that the digital transition 
results in more coverage of issues important to the local community and 
to a diverse population?
    Answer. The DTV transition will increase efficient use of the 
spectrum, expand consumer choice for video programming, and increase 
the amount of spectrum available for public safety and other wireless 
services. As television broadcasters prepare for their transition to 
digital television in 2009, Congress has a unique opportunity to 
improve broadcasters' service to the public by enhancing diversity of 
viewpoints, promoting civic participation, expanding local, community 
and children's programming and carrying minority networks. We support 
the creation of an FCC Public Interest Obligations task force to study 
the matter and make recommendations that will produce the desired 
results.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Frank R. Lautenberg to 
                           Timothy F. Winter

    Question. Do you believe that broadcast licensees should have to 
satisfy specific public interest standards? If so, what specific public 
interest standards do you recommend?
    Answer. Thank you very much for the question. The issue of public 
interest obligations for broadcasters has been at issue at the FCC 
since the dawn of the agency and has been magnified by the digital 
transition and the much greater bandwidth afforded broadcasters in the 
multicast era. While there are many valid and reasonable suggestions 
for public interest standards, I will focus on those consistent with 
the mission of the Parents Television Council: to protect children from 
sex, violence and profanity in entertainment.
    Broadcast licensees must commit themselves to abide by the spirit 
as well as the letter of the law as it addresses the issue of broadcast 
indecency. Unfortunately, the broadcast networks have challenged the 
FCC's adjudication of Federal broadcast decency law and have asserted a 
``right'' to air profanity at any time of day, even when we know there 
to be tens of millions of children in the audience. Even worse, CBS 
argued in Federal court in September that the Janet Jackson incident--a 
striptease in the middle of the Super Bowl--was somehow not indecent.
    In addition, broadcast licensees must commit themselves to airing 
more adult-themed programming in an appropriate and responsible manner. 
Shows with strong language, sex and graphic violence should be limited 
to the later prime time hours. As demonstrated by our research on the 
first hour of prime time--what used to be known as the Family Hour--
there is an increasing shift of more graphic content migrating toward 
the earlier times. It is in the public interest to protect children 
from this type of programming, so it should be within broadcast 
licensees' public interest requirements to adhere to a reasonable and 
time-honored restriction of adult content to the later time slots.
    Finally, PTC research has shown an alarming lack of consistency and 
transparency in the current TV Ratings system. In fact, television 
ratings are inaccurate as much as 60-80 percent of the time. Without a 
consistent, accurate and transparent ratings system, parents and 
families can have no confidence in the v-chip or any other parental 
control devices designed to protect children from graphic content. It 
is clearly in the public interest for broadcasters to give parents the 
tools they need to protect their children, and it should be incumbent 
upon licensees to adopt a new ratings system that embodies a more 
trustworthy approach.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                            James F. Goodmon

    Question 1. You have advocated holding broadcast licensees to 
minimum public interest standards. What specific public interest 
standards do you recommend?
    Answer. Since participating on the Gore Commission in 1998, I have 
advocated for the following minimum public interest obligations:

   Public Affairs Programming--two hours weekly phased in as 
        follows: six months--one-half hour; twelve months--one hour or 
        two half-hours; and eighteen months--two hours. At least 1 hour 
        of public affairs programming should be locally produced and 
        should run between the hours of 6 and 11 p.m. News should be 
        excluded from public affairs minimums. Thirty to sixty days 
        before a general election public affairs programming should 
        focus on candidate-centered election issues.

   Public Service Announcements (``PSAs'')--110 to 150 per week 
        for each station or multicast channel. At least half of the 
        PSAs should be locally produced and directed toward local 
        issues and a significant number should run in prime time for 
        television and drive times for radio.

    These minimums would clarify to all public airwaves stakeholders 
what is expected. Although I believe many broadcasters will exceed 
these standards, these will give broadcasters and the public a starting 
point.

    Question 2. What ramifications do you think there should be for 
broadcasters who fail to meet minimum public interest standards?
    Answer. With the FCC's adoption of its Standardized Disclosure 
item, our viewers will now be able to view our public files online. 
Therefore, I support leaving it to our viewers to hold broadcasters 
accountable directly and at the FCC.

    Question 3. The ``UHF discount'' rule allows UHF stations to count 
only 50 percent of the local designated market area (DMA) for purposes 
of the national television ownership cap. How will the digital 
transition on February 17, 2009 affect the UHF discount?
    Answer. As background: The UHF discount was originally adopted in 
1985 to equalize the differences in coverage between an analog UHF 
(off-air channels 14-69) and VHF (off-air channels 12-13) television 
channel. Typically, in the analog world, because a UHF station operates 
at higher frequencies, it is subject to greater terrestrial 
interference than a VHF station. As noted many times in FCC reports and 
orders, the singular purpose of the UHF discount was to compensate for 
the audience reach handicap of UHF stations. Not factoring in the 
digital transition, technological advancements and cable and satellite 
carriage have diminished the need for the UHF discount. These 
advancements include improved UHF television receiver standards that 
are markedly different than 1985 and the ability of UHF stations to 
maximize power. Also, today cable and satellite carriage exceed 86 
percent of all U.S. TV households compared to 30 percent penetration in 
1985 when the UHF discount was adopted. Mandatory cable and satellite 
carriage ensure that UHF stations can reach viewers the same as VHF 
stations within a market, resulting in no distinction between UHF and 
VHF stations.
    With the digital transition, there is more tangible evidence that 
the need for the UHF discount has disappeared. As evidence of 
improvement in UHF signal coverage, 94 percent of all digital 
television stations will be UHF. Almost all stations elected to 
``maximize'' their market coverage rather than just replicate their 
analog signals. As noted in the FCC's 2002 Biennial Review, 18 FCC Rcd 
at 12847: ``At this point, however, it is clear that the digital 
transition will largely eliminate the technical basis for the UHF 
discount because UHF and VHF signals will be substantially equalized.''
    Although Capitol has long advocated that the UHF discount should be 
eliminated for all of the above reasons, a practical question arises on 
February 18, 2009, how do you count a station that was on a VHF channel 
in the analog world, but moves to a UHF channel for digital? If the 
answer is that station is now counted at 50 percent, not 100 percent, 
then more consolidation can happen, and for all practical purposes, the 
39 percent national television cap becomes a 78 percent cap.

    Question 4. How can we make sure that the digital transition 
results in more coverage of issues important to the local community?
    Answer. Multicasting allows stations the flexibility to offer much 
more local programming. In Raleigh-Durham, Capitol launched a 24-hour 
news channel supported by our WRAL news staff. The WRAL NewsChannel 
allows WRAL to better inform its viewers on local matters, while 
continuing to entertain them with its CBS and syndicated programming on 
WRAL-DT.1. The WRAL NewsChannel does much more than recycle WRAL's 
newscasts. Here are some examples of the breadth of coverage:

   Complete coverage of the Duke lacrosse case, including gavel 
        to gavel coverage of the three hearings and trial, 6 days of 
        coverage of proceedings related to Durham District Attorney 
        Mike Nifong's actions, and the Durham/Duke Special Panel Review 
        meeting.

   Two days of coverage of former Speaker of the NC House Jim 
        Black's hearings before a state board due to misconduct.

   Hosted extended-length forums on subjects including the 
        death penalty and transportation.

   Televised the NC Court of Appeals hearing on a challenge to 
        the NC State Lottery.

   Televised the funeral of long-time Wake County Sheriff John 
        Baker.

   Televised numerous full-length press conferences.

    Based on the needs of the community, multicasting allows you to in 
effect narrowcast--something that is difficult to do in the traditional 
analog, one-channel world. In addition, Capitol supports the 
application of minimum public interest standards on each multicast 
channel. Unfortunately, there is no multicasting must carry or carry 
one/carry all. With cable and satellite carriage accounting for more 
than 86 percent of our audience, retransmission deals are critical to 
the success of any multicast channel.
    Thank you very much and please let me know if you would like more 
information.

                                  
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