FCC's Changing Role Over Broadcast Station Ownership, Programming
This article was originally featured in S&P Global. Written by Stefan Modrich
As the US Federal Communications Commission moves to deregulate broadcast station ownership, industry stakeholders are raising questions about the agency's future role in ensuring a multiplicity of viewpoints.
The FCC is moving forward on its notice of proposed rulemaking titled, "Delete, Delete, Delete," an initiative that is designed to eliminate dozens of rules and requirements for broadcasters, including some that limited broadcast M&A. At the same time, FCC Chairman Brendan Carr has proposed actions related to programming content, especially content from national broadcast networks.
During a recent panel convened by the American Enterprise Institute, free speech experts said that the FCC should extend its deregulatory efforts to end content regulation that stifles free speech.
"It's ironic that [the FCC] would have this 'Delete, Delete, Delete' proceeding and ask for comments about what regulations should be deleted at the same time the FCC is being much more muscular about trying to enforce these really moribund content regulations," said Robert Corn-Revere, chief counsel for the Foundation for Individual Rights and Expression. "If they really want to engage in serious deregulation, they should start with the content regulations."
Corn-Revere's comments come after Carr made headlines in September for saying broadcast station owners should require ABC (US) to remove "Jimmy Kimmel Live!" from its late-night schedule following remarks host Jimmy Kimmel made about the murder of Charlie Kirk. "These companies can find ways to change conduct to take action, frankly, on Kimmel," Carr said on a Sept. 17 podcast. "Or, you know, there's going to be additional work for the FCC ahead."
ABC-parent Walt Disney Co. suspended Kimmel's show for four days, and the nation's two largest station owners, Sinclair Inc. and Nexstar Media Group Inc., continued to pre-empt the show for several more before it was brought back in all markets. Carr subsequently said the companies had made a business decision to take Kimmel off the air, and the actions were not due to pressure from the federal government.
Consolidation considerations
The FCC is moving forward on its review of broadcast M&A restrictions, saying it will consider public comments on the necessity of the FCC's Dual Network Rule. The rule prohibits a merger between any of the four major broadcast networks: ABC, Paramount Skydance Corp.'s CBS (US), Fox Corp.'s FOX (US) and NBCUniversal Media LLC's NBC (US).
In a time of rising competition from internet media, lifting the ban could allow mergers that prolong the lifespan of some local broadcast news stations, said Javier Palomarez, founder and CEO of the United States Hispanic Business Council.
"The big four merger ban is becoming increasingly unnecessary as Americans, and people around the world, flock to independent journalism online," Palomarez said. "While the big four still reach millions within the United States, social media surpassed broadcast news as the dominant news source for Americans in June of this year."
Demand for diversity
The FCC's review of the Dual Network rule is a sign of the agency's acknowledgement of the internet's increasingly dominant role as a source of news and information, Palomarez said.
Beyond news, consumers also have more options than ever before for video content. Broadcasters have argued that the FCC should modernize rules that were designed for a pre-Internet era.
"Consumers are definitely going to want diversity in programming, and we see that now with all of the options. We've got streaming services, we've got historical television and radio, and then we also have Big Tech," said Julie Herzog, a partner handling corporate, securities and M&A transactions at Pierson Ferdinand. "I think it is appropriate for the FCC to reevaluate things, because the industry has changed so much."
However, some are concerned that consolidation will result in a concentration of power that distorts the information disseminated to American viewers.
"A robust marketplace of ideas requires strong protection against both public interference in open debate and the exercise of private market power that distorts or blocks public discourse," said Gene Kimmelman, a senior policy fellow at Yale's Tobin Center for Economic Policy. "While strong antitrust enforcement can play a critical role to prevent media monopolization or excessive concentration of ownership, it is not enough to ensure open debate through local and diverse players in the media ecosystem."