Communications and Technology Subcommittee Discusses Media Ownership in the 21st Century

June 11, 2014

WASHINGTON, DC –The Communications and Technology Subcommittee, chaired by Rep. Greg Walden (R-OR), today held a hearing to assess the state of media ownership, and the rules that govern it, in the digital age. Members discussed the FCC’s inaction on the statutorily required 2010 quadrennial review of the media ownership rules, and the commission’s decision to forge ahead with new rules on joint sales agreements (JSAs) and other media ownership changes without the completed quadrennial review.

“Our laws need to reflect the reality of the world we live in today, not the world of the Ford administration.” Said Chairman Walden. “As Americans’ habits have changed, so too should the way we look at local media. We live in a competitive landscape where increasingly we cherry-pick articles; we scroll through feeds and aggregators; we have multiple national news programming options, and we DVR almost everything to time-shift the programming we love. It’s a different world, why don’t our media laws reflect these changes?”

David Bank, Managing Director of Global Media Equity Research at RBC Capital Markets, added, “Much is made of the fact that the current regulatory framework for media ownership dates back to 1975. The current regulatory framework was constructed in a media ecosystem that basically didn’t include the Internet. While it may have contemplated a broad PC based Internet consumption environment, it certainly didn’t contemplate a mobile application based ecosystem.”

“The FCC has failed to fulfill its obligation to determine whether the current broadcast ownership rules are ‘necessary in the public interest as a result of competition’ and repeal or modify regulations that are no longer in the public interest. Congress should require that the FCC complete its review in a timely manner,” added Jane Mago of the National Association of Broadcasters. “Regulatory policies that starve local media of capital investment are a proven failure. They serve no one – not current broadcasters, not possible new entrants, and most importantly, not the American people.”

Paul Boyle of the Newspaper Association of America argued that the ban on cross ownership between broadcast stations and daily newspapers is outdated and stifles innovation and harms competition in a market. “Many ideas that sounded perfectly reasonable in 1975 now appear behind-the-times. A single nationwide telephone company, gasoline rationing, bell-bottoms. Today’s media ownership regulations must reflect today’s media,” he said. “Quite simply, there are no longer any barriers to entry in local journalism, and newspapers face more competition than ever. The competition and diversity of news sources is remarkable, and it demonstrates why the newspaper-broadcast cross ownership ban makes no sense today.”

Walden concluded, “We are all committed to promoting a local media industry that is healthy; to fostering competition, localism, and diversity of voices; and to ensuring that local media continues to serve the needs of their communities. But pretending that laws designed for an era before smartphones and the Internet will get the job done is an effective death sentence for many local media outlets.”