TV Owners Need New Rules To Keep Pace

We are living in the platinum age of television. Consumers are enjoying an abundance of movies, news, sports, and entertainment, available anytime and anyplace, in-home or out.  Every communications medium from wireless phones to the worldwide web is in the business of broadcasting content over its platform. Although we now call it “video,” at the core, it is television nonetheless, and the world cannot get enough of it. For legacy broadcasters, this is both a blessing and a bane.

Before the end of the year, the Federal Communications Commission (FCC) will finalize its mandatory review of the national ownership rules – set of regulations governing television and radio station ownership in the U.S. The FCC is expected to expand, and perhaps eliminate, the national ownership cap. If it does, broadcasters will be dealt an unprecedented, but fortuitous, break that will change the media landscape for the foreseeable future. It would be a follow-on to the FCC’s 2017 decision to reinstate the UHF discount, an arrangement that allows broadcasters to count UHF stations as only 50 percent toward the national ownership cap.

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Speaking Up for a Free Press

Something quite remarkable – unprecedented, actually – is scheduled to take place on Aug. 16. More than 100 newspapers across the country will mount a coordinated editorial response to President Trump’s increasingly frequent attacks on the media. Responding to a rallying cry from the Boston Globe, papers ranging from large metropolitan dailies to small weeklies will publish editorials defending freedom of the press and their critical role in this democracy. They will be joined by members of the broadcast media as well, with the strong support of the Radio-Television Digital News Association.

These editorial writers will be reacting to the constant stream of messages from the president, in tweets and speeches, that the mainstream media are “the enemy of the people,” “fake, fake disgusting news,” “fake news media,” and so forth.

One school of thought has held that replying to such charges is pointless because the president’s pronouncements are either hollow rhetoric or impulsive ramblings or political fodder for his base – or some combination of the three. Furthermore, since the First Amendment guarantees freedom of the press, and the courts are willing to uphold that freedom, the president’s words can have no real effect on the media. Thus, this line of thinking concludes, the act of replying to hollow assertions becomes a hollow act itself.

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Advertising Deductibility: For the Sake of Speech

 The “Tax Cuts and Jobs Act,” introduced amid great fanfare on Nov. 2, has now been passed by the U.S. House of Representatives along an essentially party-line vote. The Senate’s version, introduced Nov. 9, is still undergoing intense scrutiny as groups from every quarter weigh the bill’s proposed cuts in tax rates versus the elimination of certain deductions, credits, and other tax breaks.

As ideas for reforming the tax code were tossed around in recent months and even years, one proposal – or some variation of it – would surface from time to time. This was the idea that the tax deduction for business advertising expenses should be eliminated.

This has always been an ill-considered idea (as we shall discuss below), and thus we were relieved that it did not find its way into the new tax bills of either the House or Senate. But since these bills are only the opening salvos in the difficult battle to revise the tax code, it would be worthwhile to examine why this ad-related provision should not be a part of the measure that finally reaches the president’s desk.

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Repealing Media Ownership Regulations: It’s About Time

FCC Chairman Ajit Pai has proposed the most reasonable of actions: repealing or revising 40-year-old media ownership rules that long ago outlived any marginal usefulness they might’ve once had.

This should be a no-brainer. But, Washington being what it is, entrenched interests and politicians bent on maintaining the status quo for their own purposes have pilloried Pai for trying to do something that should’ve been done decades ago.

First, the facts. On Oct. 26, Chairman Pai released an Order on Reconsideration and Notice of Proposed Rulemaking. This proceeding seeks to accomplish the following:

  • Eliminate the Newspaper/Broadcast Cross-Ownership Rule;
  • Eliminate the Radio/Television Cross-Ownership Rule; and
  • Revise the Local Television Rule to eliminate the Eight-Voices Test and to incorporate a case-by-case review provision in the Top Four Prohibition.

The proceeding would also seek to eliminate the attribution rule for television Joint Sales Agreements; retain the disclosure requirement for commercial television Shared Services Agreements; keep the Local Radio Ownership Rule; and create an incubator program to encourage new and diverse voices in the broadcast industry.

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Free Speech Week: Much To Celebrate

Free Speech Week is upon us. Or, as the headline of a story about the week written by Amy Mclean in Cablefax puts it: “What a Time for Free Speech Week.” What a time, indeed.

Just last week we saw the president raising the specter of whether the government should revoke television licenses based on the content of televised news coverage. The same president has wondered aloud (via Twitter, of course) whether the National Football League should have federal tax benefits revoked if owners continue to allow players to kneel during the National Anthem.

Speech on college campuses continues to be stifled in a variety of ways, from disinviting controversial guest speakers to relegating the expression of opinions by individuals to out-of-the-way “free speech zones.” On some campuses, students are supposed to be warned by professors before controversial topics are discussed in class, lest the students be traumatized. Continue reading “Free Speech Week: Much To Celebrate”

Keep Big Bird, Ditch the News: A Path Forward for PBS With Budget Cuts

As was the case a half-dozen years ago, PBS and NPR are again the subject of a contentious debate about their taxpayer funding, this time courtesy of President Trump. The problem with that debate, then and now, is that like so many policy disputes, the arguments employed oversimplify the facts and ignore the obvious. I wrote about this matter in 2011 in a piece published in the now-defunct app called The Daily. What follows is an update of that piece.

For years, Republicans and conservatives have accused NPR and PBS of ideological and political bias. Things came to a head in 2010 when NPR fired Juan Williams as a commentator for allegedly making anti-Muslim remarks, and NPR successfully solicited funding for local reporting from a foundation controlled by the uber liberal George Soros.

This perception of bias would be noteworthy enough even if these broadcasters were not financially supported by taxpayers, conditioned on explicit statutory language requiring objectivity and balance. Since, however, they are, the ubiquity and durability of this perception becomes very nearly miraculous. Surely it’s not easy to so thoroughly offend one of the two major parties that, in the House vote in 2011, virtually every Republican member voted to defund NPR » Read More


Maines is president of The Media Institute. The opinions expressed are his alone and not those of The Media Institute, its board, advisory councils, or contributors. The full version of this article appeared in The Hill on March 21, 2017.

The FCC’s Wheeler of Fortune

LAS VEGAS – Federal Communications Commission (FCC) Chairman Tom Wheeler’s speech yesterday to broadcasters attending the NAB (National Association of Broadcasters) Show here dealt primarily with broadcast-specific subjects.  But as expected, he also used the occasion to tout the Commission’s new Open Internet Order, arguing that broadcasters should support it because, like the must-carry rules, the order “assures that your use of the Internet will be free from the risk of discrimination or hold-up by a gatekeeper.”

To characterize this claim as 100-proof claptrap would be to understate the case.  Put simply, no Internet service provider has, or would have, the tiniest interest in discriminating against anything broadcasters might want to put online.  Indeed, net neutrality is widely embraced by the phone and cable companies.

The real issue is the way in which the FCC – through Title II regulation – proposes to define and enforce net neutrality in the future.

Much has been said about the inefficiencies and investment-reducing effects of Title II regulation, and most all of it is true.  But the less-well-discussed aspect is the potential in it for activist groups and ideologues like Free Press and kindred organizations to exploit this order in attempts to impose certain types of content controls.  >> Read More

Aereo and the Future of Content and Copyright

A case being petitioned for review by the Supreme Court will, if accepted, tell us a lot about the future of broadcasting. More importantly, it will tell us a lot about the future of all the content media, and of the nation’s copyright laws generally.

The case in question concerns the business practices of an outfit called Aereo, which streams for a fee over-the-air TV programming to the company’s subscribers.  Because this programming is delivered through the Internet, it is accessible when and where the subscriber wants it.  Sounds good, right?

Bu there’s a hitch.  Unlike cable and satellite systems, which pay the broadcasters for the right to retransmit their copyrighted programming, Aereo pays nothing. And how are they able to do this?  Well, that’s the heart of the Supreme Court petition filed last month by the four big broadcast networks, ABC, CBS, NBC, and Fox.

When cable and satellite operators distribute broadcast programming to their subscribers this is deemed a “public performance,” which is why those operators have to pay the broadcast copyright holders for the privilege.  When, however, an individual records a copyrighted program on his DVD this is deemed a “private performance,” and requires no compensation to the copyright holder.

Aereo’s business plan plainly exploits this public/private dichotomy by the simple device of installing tens of thousands of dime-sized antennas, each of which stream the over-the-air programming to Aereo’s subscribers individually, thereby qualifying, according to Aereo, as a private performance.

Lest you think for a minute that this is a triumph of engineering, rest assured it is not.  As noted by Rod Smolla, the lawyer who filed a brief for The Media Institute in support of the petition for review: “If a picture tells a thousand words, a thousand antennas tell the picture.”

Nor is Smolla the only person who sees through this scheme.  Denny Chin, an appeals court judge who was part of a panel that earlier ruled against an injunction against Aereo, wrote this in his stinging dissent:

The [Aereo] system employs thousands of individual dime-sized antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law. 

Because the Supreme Court agrees to review less than one percent of the cases brought before it, it’s no sure thing that Aereo will be reviewed, even though Aereo has declined to oppose the petition for review.  Much may depend on the decision in another appeals court, which is considering a case concerning a company with an Aereo-like setup.  If that court rules against the company, there will be a conflict between two appeals courts (the Second and Ninth circuits), something that would increase the chances that the Supreme Court would agree to review the case.

The importance of this case is not just whether broadcasters can derive revenue for their programs from third-party Internet distributors.  The importance is in what it will tell us about the future of all the content industries and of copyright itself.

To put it another way, you don’t have to be a fan of broadcasting (or Hollywood, or the recording industry, etc.) to have a high regard for copyright.  Like the First Amendment, copyright is enshrined in the U.S. Constitution, and in practice it is copyright that provides the incentive that leads to the creation of the content that the First Amendment protects!

Seen this way (and even acknowledging that there is always some tension between the First Amendment and copyright, usually over arguments about the reach of “fair use”), both of these concepts are not just important in their own right, they’re the opposite sides of the same coin.

Today, however, those industries that rely on copyright protection – the so-called content media like newspapers, magazines, motion pictures, recording companies, book publishers, and broadcasting – are being decimated by piracy and/or the copyright-skirting practices of Internet companies like Google.

Whether the Supreme Court reviews the case or not, Aereo won’t be the last word on the subject of copyright protection.  But if Aereo, or any company, can escape paying copyright fees simply by creating a service that turns on a technological sham like Aereo’s, it’s not just content producers that will suffer; it’s the content-consuming public and copyright law generally.

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils. A version of this article appeared in the online edition of USA Today on Dec.16, 2013.

 

The Revolting Truth

Among the unhappier facts of life in America these days is that more than a few people support the suppression of speech.

The latest evidence of this is the formation earlier this month of a group called Truth Revolt.  Created by David Horowitz, a conservative activist (and erstwhile leftist), TR says its mission is to:

Unmask leftists in the media for who they are, destroy their credibility with the American public, and devastate their funding bases….

Truth Revolt works to make advertisers and funders aware of the leftist propaganda they sponsor – and bringing social consequences to bear to create pressure on such advertisers and funders.

True to their word, the group published a story last week asking advertisers to drop their support of Al Sharpton’s MSNBC program, Politics Nation. If this sounds familiar, that could be because it bears a striking resemblance to the actions of another group, Media Matters. Founded by liberal activist (and one-time conservative) David Brock, MM has targeted advertisers on shows like Rush Limbaugh and cable’s FOX News

Given their past ideological affinities, and their colorful take on things today, it would be amusing to see Horowitz and Brock duke it out in a debate.  But apart from the muckraking both of them relish, there’s a serious problem with campaigns that seek to silence the speech of those with whom they disagree.

Contrary to popular opinion, however, that problem is not that such campaigns violate the First Amendment.  In fact, the First Amendment doesn’t come into play at all here, except to the extent that these organizations’ right to engage in such behavior is protected against any governmental efforts as might seek to curtail them.

Indeed, when groups like Truth Revolt or Media Matters conjure up campaigns against their ideological enemies, and even when they attempt to silence individuals or media companies by attacking their commercial supporters, they are engaging in fully protected constitutional speech. But that doesn’t mean it’s right, or that it’s consistent with any decent regard for freedom of speech.

The First Amendment exists primarily to protect against governmental interference or control over speech, political speech especially, but the point of it is the protection of speech.  To put it another way, we don’t venerate the First Amendment because it protects the First Amendment; we venerate it because it recognizes the value in, and the basic human right of, the expression of one’s opinions.  Indeed, many countries practice a substantial degree of free speech without even having a First Amendment or its equivalent.

Campaigns mounted against the advertisers of disfavored programs or individuals cross the line between criticism and suppression.  The same could be said of certain attempts by third parties to use government agencies like the FCC to censor TV content they dislike.  Petitioning the FCC is legal, but calling for government censorship threatens the freedom of speech of the writers and copyright holders of those shows.

Because it’s been launched just this month, we don’t yet know what kind of reception or impact Truth Revolt will have.  But if the example of Media Matters is any guide, we can be fairly sure that it will scare away some advertisers, and that the media will cover its actions uncritically … or maybe not.

Founded in 2004, and financially supported by people like George Soros and the wealthy group of liberals that comprise the Democracy Alliance, Media Matters has the ear of many mainstream journalists and news organizations.  And given the liberal bent of much of the mainstream media, it may well be that Truth Revolt will have to depend more on the so-called conservative media for coverage of its campaigns, but probably not always, and not without effect.

Though it’s been reported that Democracy Alliance has moved in recent years more in the direction of a partisan organization favoring Democrats, rather than a progressive infrastructure-building group, the irony of its support of outfits like Media Matters can be seen in its description of itself as a group that “strives to foster an open, vibrant democracy.”

How that is consistent with funding an outfit that traffics in the 21st century’s version of book burning is something perhaps only a “progressive” can explain. And it’s something to ponder as the country celebrates Free Speech Week this month.

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils. A version of this article appeared in the online edition of USA Today on Oct. 17, 2013.

 

Reconsidering the FCC’s Political File Rule

The FCC’s recently minted rule requiring certain broadcast stations to post their political ad files online rather than, as is currently the case, in their local public inspection files, is not the kind of issue that is likely to stir the nation’s passions.Regardless of how challenges to the rule pan out, very few people are going to run off and join the circus if things don’t go a certain way.

Still, it’s a more interesting issue than, on its face, it would appear to be – and there’s evidence that defenders of the rule, along with reporters, are not paying attention to some of the finer points being made in opposition to it.

As of today there are three separate challenges to the rule – one at the FCC, one at the Office of Management and Budget, and one in the U.S. Court of Appeals for the D.C. Circuit.  The petition for reconsideration at the FCC, signed by 12 TV station groups, is the most nuanced of the complaints.

As with the others, the FCC petitioners are mostly concerned about having to reveal online their spot-by-spot ad rates, but with this difference: The petitioners propose to aggregate such data in a way that would not reveal their ad rates but would actually make it easier for everyone, journalists included, to understand who is contributing to whom, and in what amounts, and in addition to include online the same kind of information for state and local candidates, something the FCC rule does not require.

Why the broadcasters are opposed to having to reveal online their political ad rates, when they already provide this information in their local public files, takes a little explaining.

Currently, broadcasters are required by law to offer political advertising to candidates for federal office at the “lowest unit rate,” which is the rate they charge their best commercial advertisers.  But these data are not that user friendly, and in any event requires that someone physically go to a TV station for the purpose.  (For anyone so disposed, the cumbersomeness in this only grows, as the date of an election draws near, because TV stations update their political files more frequently at that time.)

Campaign representatives sometimes do check these files to ensure that their candidates are not being charged more than their opponents, but commercial advertisers do not, and that fact touches on one of the main worries among the broadcasters: They fear that if they have to reveal online their spot-by-spot ad rates, some of their commercial advertisers (knowing that the political rates are based on what the stations charge their best commercial customers) will demand these rates for themselves.

It’s also bothersome to broadcasters that their media competitors, both in broadcasting and cable, would have access to this information, and it’s further been suggested that, as written, the FCC rule may encourage trial lawyers to file frivolous lawsuits against TV stations on behalf of losing candidates.

So in the case of the FCC petitioners, the question isn’t why broadcasters don’t want to provide their political files online (they are willing to do that), but why defenders of the FCC rule insist on requiring the online display of stations’ ad rates?

After all, one of the main goals of the campaign finance laws is to provide, in a timely way, information about candidate and issue expenditures.  It’s not the goal of these laws to compel TV stations to divulge their competitive secrets about ad rates and the like.

When asked about the unwillingness of the FCC to approve this simple modification to its rule – the Commission had this suggestion before it prior to its vote in late April – a communications lawyer prominently involved in the matter said that, in the wake of the Citizens United decision, everything touching on campaign finance has taken on a kind of “religious aspect,” such that advocates of campaign finance laws are these days unwilling even to grant such harmless accommodations as those presented by the petitioners.

Notable by their absence from the FCC petition are the station groups owned and operated by the Big Four TV networks.  Lawyers for the petitioners note that the networks supported the suggested “aggregation” approach prior to the FCC’s vote, and aver that they support the petition now.

That may be right, but if so it’s hard to confirm.  It may be, instead, that the networks don’t like the odds that the FCC will accommodate the petitioners, or that they are unhappy about the petitioners’ proposed inclusion of political ad information about candidates for local office.

For its part, the National Association of Broadcasters has appealed the FCC’s rule to the OMB, claiming that the obligation to put the political files online is unduly burdensome, and in conflict with the Paperwork Reduction Act.

There may well be real merit in these other concerns, and in the arguments to be fleshed out in the broadcasters’ lawsuit in the D.C. Circuit, but it’s the modest proposal made by the FCC petitioners that shines the brightest light on how hard it is these days to forge reasonable compromises in a deeply divided nation.

                                  

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.