Broadcasting Today: Energized by Innovation

There is a saying that goes, “Everybody has a story to tell.”

My own NAB Show story began a decade ago – almost to this day, in fact – when I spoke at my first show as the new president and CEO.  On that morning, I shared the story of broadcasters’ unrelenting commitment to always be there for their communities … to inform them … and to help them.

It is a deep-rooted commitment that manifests itself in many ways that often go unnoticed – in ways that have become ingrained in everyday life for millions of Americans.

Our communities turn on the radio to find out what the weather is like before heading to work … to learn how to help their neighbors in need … or to listen to the great personalities who seem like old friends.  They turn on their televisions to watch their favorite local news anchor and to get an unbiased report of what is happening in their communities.

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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

FCC Denies Stay of Its Political File Rules

In a decision that landed a country mile from being a surprise, the FCC yesterday denied a stay requested by the NAB of its new political file rules, under which broadcasters are required to post online their spot-by-spot ad rates for candidates for federal office.

As readers of this blog will recall, a dozen broadcast station groups recently suggested an alternative approach in which the required information about political and issue ads would be posted online, but aggregated in a way that would not reveal the stations’ ad rates.  (The alternative proposal would also have provided information about political and issue ads in state and local races, something that the FCC’s new rule does not require.)

The stations were concerned that, because the political ad rates are based on the rate they charge their best commercial advertisers, the effect of posting their political ad rates online would be to encourage other commercial advertisers to demand the same low rates for their products and services.  (Broadcasters also chafed at the fact that cable and satellite companies would not have to provide this information.)

Yesterday’s denial of the NAB’s requested stay mentioned the alternative proposal only in passing, but in language that speaks volumes.  “Requiring the public to view aggregated data online and separately review complete political rate data in the paper file,” they said, “would not provide the efficiencies presented by online disclosure.”

What is missing here is what part of the “public,” other than broadcasters’ competitors and advertisers, would want to view the spot-by-spot ad rates.  The simple fact is that the proposed aggregated data would actually be more helpful to journalists and interested citizens than the disaggregated data that the FCC rule now requires.

But the best in the language of the FCC’s decision was yet to come.  In a sentence that is sure to have broadcasters rolling in the aisles with laughter, the FCC writes that “as an additional basis for rejecting the alternative proposal, the Commission finds that it would be significantly more burdensome on broadcasters because it would require both the maintenance of paper files with detailed spot-by-spot information and the creation and uploading of new aggregated files.”

In other words, the FCC denied the broadcasters own proposal because the Commission was concerned that it would be too burdensome on them – surely the first time in recent memory that the FCC has been moved to act out of concern for broadcasters’ welfare.

                                  

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

 

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.

Cute as a Button: The Schemes and ‘Confessions’ of Reed Hundt

Sorry to say, there are people in public life who, were hubris a lubricant, could forego ambulation and just glide on down the road.  Reed Hundt, the former chairman of the FCC, is one such person.

Hundt is back in the news these days because policies he clandestinely pursued while chairman are now thought by some (including Hundt himself) to be coming to fruition at the hands of his former FCC aides and confidantes, one of whom, Julius Genachowski, is now chairman.

This, and more, was revealed in a speech Hundt gave last month at Columbia University.  The subject of his address was the national broadband plan, then set to be released by the FCC just a week later, and what he characterized as a “confession or admission” of the role he played, years earlier, in using his office as chairman to systematically elevate broadband, at the expense of broadcasting, as the “common medium.”

To quote the great man himself: “The choice to favor the Internet over broadcasting was initially made in first-draft form by some of the people who are now running the FCC.”

One can only imagine how happy this revelation must have made the current FCC chairman since, if we’re to believe Hundt, not only was Genachowski a co-conspirator, so to speak, he was just a tagalong – the horse to Hundt’s Lady Godiva.

Lest you think for even a minute that the gentleman feels remorse about any of this, be advised: He doesn’t.  Quite the contrary, Hundt is pleased as punch with the way he handled things, amused even, and he wants you to see it the same way.  Rather like a school boy pulling a prank on the headmaster, Hundt sees his scheming not only as smart and justifiable but as positively cute in the way it confounded all but those few in the know.

How else to explain his characterization of his efforts to suppress broadcasting – by delaying, for instance, its transition to HDTV – as “a little naughty?”  Or his boast, re the ability of people to use the telephone network, for free, to connect to the Internet, as a case of the government “stealing the value from the telephone network and giving it to society?”

Not everyone sees the humor.  One who is particularly unamused is Gordon Smith, formerly Senator Smith, and now head of the National Association of Broadcasters. As reported in Broadcasting & Cable, Smith had this to say when asked what he thought of Hundt’s speech: “Frankly, I was rather offended, as a former member of the Senate Commerce Committee, that his secret musings were never shared with the elected representatives of the American people.”

Actually, Hundt’s Columbia performance isn’t the first time he’s spoken (what shall we call it?) “candidly.”  Years earlier there was the book, You Say You Want a Revolution, that he wrote not long after leaving the FCC.

Sandwiched between characterizations of some of his fellow commissioners as the “Gang of Three,” and innumerable accounts of the commercial rabble with whom he was obliged to spend time, Hundt wrote some things that are of a piece with his Columbia speech.

One of these describes a meeting he had in 1995 with Bill Gates. Hundt writes:

We had come to appeal to Gates’ self-interest.  As everyone on the West Coast knew, computing was heading directly toward communications….  With Gates as commander-in-chief, the entrepreneurs could win a lobbying war even against the powerful broadcasters….

I wanted Gates to go after the spectrum, because the auction was such a pure and sensible goal.  Later, depending on how the meeting went, we would ask for his help in connecting every classroom to the information highway….

If those who bought the spectrum at an open auction could ignore the networks’ deal with Congress and abandon high-definition television, they could transmit digital information to PCs….

Gates rocked in his chair.  His eyes magnified by his glasses, he stared at me, and asked urgently, "Does anyone else know about this?"

Elsewhere in the book, Hundt describes his attendance at a meeting hosted by the Gores (Tipper and Al), also in 1995, on the topic of Families and the Media:  

Then the President and Vice President each said they would support the children’s television initiative.  I had become part of the Administration’s political agenda – perhaps the first time in history that FCC issues were in the center ring of the political circus.  Al singled me out in the crowd.  I stood up.  The auditorium applauded.  The event made the national news.  It was intoxicating; it was much more important to be there in Nashville than at, say, an NAB convention.

Many people would agree that the Internet already is, or will become, the “common medium.”  And in an age when Saul Alinsky is held up as a role model, and the ends justify the means, views and acts like Hundt’s will almost certainly escape widespread censure.  But there’s this one small problem with the government picking the industrial winners and losers: What happens if they’re wrong?

Of course we know that governmental estimates and projections are never wrong.  But imagine that sometime in the future it happens.  Wouldn’t that be something?  Because, you know, in that case the government would not only have distorted the marketplace, it might have created problems it hadn’t even considered.

As it happens, there’s a claim in Hundt’s book that hints of this very problem.  In the same chapter in which he wrote of his meeting with Bill Gates, Hundt claimed that “big-screen televisions would cost so much that less than one percent of Americans would buy them.”

Imagine our surprise, then, when we check now with people at the Consumer Electronics Association, and are told that, in 2010, almost half (about 47 percent) of all TV sets sold are big screen.  Could this mean, Hundt’s furtive schemes notwithstanding, that the Internet won’t be the only common medium?  Go figure.

Cross posted at Huffington Post, April 21, 2010.

The Big, Uneventful Day

A blog about media and communications policy would be remiss if it did not mark the fact that this is a watershed date in television history – even if nothing much seems out of the ordinary.

This, after all, is June 12, the date years in the making on which television broadcasters are converting their analog signals to digital.  For TV viewers with cable or satellite (i.e., most of us) there is no difference.  For those who still rely on antenna reception of over-the-air broadcast signals, there will be no more TV until they get a converter box (for which the federal government has been offering discount coupons for months).

The good news is that most people have already taken steps to become digital-ready.  Paul Karpowicz, chairman of the National Association of Broadcasters TV Board, said at a press conference yesterday that only 1.75 million over-the-air households have not prepared for the changeover.  

The National Telecommunications & Information Administration (NTIA) said it received almost 320,000 requests for converter-box coupons yesterday alone, up from the recent daily average of 114,272.  And for those who somehow haven’t gotten the word about the switch to digital, the FCC has 4,000 operators standing by 24/7.

FCC and industry leaders acknowledge that some stations might experience a few engineering bumps.  But for broadcasters and viewers alike, the changeover is said to be going relatively (and even surprisingly) well.  

The FCC, NTIA, NAB, NCTA, and countless station engineers deserve a “well done” for making this watershed day so uneventful.