FCC Boss Demolishes Media Ownership Rules In Massive Gift To Sinclair Broadcasting

from the the-big-get-bigger dept

FCC boss Ajit Pai has been busy ignoring the public while he kills popular net neutrality rules. But he's also been working hard to weaken broadband deployment standards to obfuscate a lack of broadband competition, to gut programs that provide broadband to the poor, killing previous FCC efforts to improve cable box competition, to protect prison telco monopolies from oversight, and to make it easier for business broadband monopolies to rip off smaller competitors. All while proclaiming to be a stalwart defender of the little guy and a champion for bridging the digital divide.

But Pai has also been taking heat for his pursuit of another pet project: gutting media consolidation and ownership rules solely for the benefit of Sinclair Broadcasting, which is seeking approval for its $3.9 billion bid for Tribune. In the last few months, Pai has, as promised, been "taking a weed whacker" to rules intended to protect local reporting, media competition, and opinion diversity. That has included killing an 80 year rule intended to protect local competitors and journalism from unchecked monopoly control of a market, and taking an axe to some protections but bringing back others solely to Sinclair's benefit:

"On Tuesday, the FCC eliminated a requirement for broadcasters to keep a local studio. A day later, Pai called for easing ownership restrictions, potentially taking pressure off Sinclair’s $3.9 billion deal for Tribune Media Co.’s TV stations. Earlier, he had restored an obsolete rule, making the deal possible. On Thursday, the agency moved toward blessing a new broadcasting standard that may enrich Sinclair as it offers viewers sharper pictures."

As he prepares to axe yet more media consolidation protections over the coming months, Pai has trotted out the growing power of Google and Facebook as partial justification for eliminating rules he declares no longer necessary:

"The marketplace today is nothing like it was in 1975. Newspapers are shutting down. Many radio and TV stations are struggling, especially in smaller and rural markets. Online competition for the collection and distribution of news is even greater than it ever was. And just two Internet companies [Google and Facebook] claimed 100 percent of recent online advertising growth. Indeed, their digital ad revenue alone this year will be greater than the market cap of the entire broadcasting industry. And yet the FCC's rules still presume that the market is defined entirely by pulp and rabbit ears."

Obviously the argument that "Google and Facebook are big" and therefore media consolidation rules are unnecessary doesn't hold a whole lot of water. And while it's true that many newspapers and local news outlets are "struggling," that's more a failure of adaptation than a justification for gutting media consolidation restrictions that still aid smaller, regional news outlets. Unsurprisingly, fellow FCC Commissioners like Jessica Rosenworcel have called for an investigation into Pai's giant, sloppy kiss to Sinclair:

"It has reached a point where all of our media policy decisions seem to be custom-built for this one company," Jessica Rosenworcel, a Democratic FCC member, said Wednesday at a congressional hearing. "It’s something that merits investigation.”

This mindless obsession with mergers and consolidation (with little thought as to the impact on markets or competition) has been a hallmark of the Trump administration. But opposition to this growth-for-growth's sake has been increasingly bipartisan in nature, with many smaller Conservative outlets worried they'll be unable to compete with giants like Comcast NBC Universal, Sinclair/Tribune, and soon AT&T Time Warner. Smaller organizations like the American Cable Association (ACA) applauded and supported Pai's rise to power, now seem surprised as his policies focus almost exclusively on aiding the biggest and wealthiest companies:

"ACA urges the Federal Communications Commission to deny the Sinclair-Tribune transaction because it would violate existing FCC rules while at the same timing failing to meet the obligation to demonstrate it would serve the public interest. Even if the transaction were not per se unlawful, it would create a broadcasting behemoth with unprecedented control over both the national and local television markets,” ACA President and CEO Matthew M. Polka said."

Whether it's gutting net neutrality solely for the benefit of a few giant ISPs, or gutting media consolidation rules exclusively to aid one giant media empire, Pai's legacy at the FCC will be one of brutal myopia, obfuscated by tall tales about his relentless dedication to the little guys he seems blatantly intent on ignoring.


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  • identicon
    JEDIDIAH, 2 Nov 2017 @ 12:13pm

    The rest of the story...

    This would be the measure that even NPR agrees with.

    Pretty much every other story in the media on this subject has acknowledged that.

    reply to this | link to this | view in chronology ]

    • identicon
      Thad, 2 Nov 2017 @ 1:16pm

      Re: The rest of the story...

      Well if even a major media company agrees that consolidation of major media companies is a good thing, then obviously it must be!

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Nov 2017 @ 12:20pm

    "failing to meet the obligation to demonstrate it would serve the public interest."

    It failed this a long time ago and every still refuses to admit it. you get what you get... keeping your heads buried in the sand and waiting until its too late to actually change your position on how to fix this!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Nov 2017 @ 2:27pm

      Re: obligation?

      "failing to meet the obligation to demonstrate it would serve the public interest."


      .......Does Microsoft, McDonald's, or Amazon have some legal 'obligation to serve the public interest' ?

      Who decides what the public interest is ... and where do they get that supposed legal authority ?

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Nov 2017 @ 5:57pm

        Re: Re: obligation?

        Who decides what the public interest is ... and where do they get that supposed legal authority ?

        47 USC § 309(a) - Considerations in granting application

        Subject to the provisions of this section, the Commission shall determine, in the case of each application filed with it to which section 308 of this title applies, whether the public interest, convenience, and necessity will be served by the granting of such application, and, if the Commission, upon examination of such application and upon consideration of such other matters as the Commission may officially notice, shall find that public interest, convenience, and necessity would be served by the granting thereof, it shall grant such application.

        (Highlighting added.)

        The “Commission”, in this chapter of Title 47, refers to the FCC. (See 47 USC 154(a).)

        reply to this | link to this | view in chronology ]

      • icon
        Zen (profile), 2 Nov 2017 @ 6:01pm

        Re: Re: obligation?

        1) The laws of physics require that only one broadcaster can use the same spectrum in or near the same area without interference.

        2) The authority comes from the Radio Act of 1927. Among other things it established that frequencies could not be owned only licensed.

        3) One of the criteria the FCC must use when conducting granting a Broadcast License is whether or not the it will serve the public interest.

        Among other things this prevents companies from purchasing leases on the frequencies required by electronic devices like WiFi Routers and what not.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 2 Nov 2017 @ 6:57pm

          Re: Re: Re: obligation?

          The authority comes from the Radio Act of 1927.

          Sections 4 and 9 (among others) of the Radio Act of 1927 actually used the phrase, “public convenience, interest, or necessity.”

          The current Chapter 5 of Title 47 is usually cited as the “Communications Act of 1934.” (See 47 USC § 609 - Short Title.)

          Note that in other contexts, or with respect to other sections of the chapter, it may be more appropriate to cite as the Communications Act of 1934 as amended by the Telecommunications Act of 1996.

          But yes, the public interest requirement is traceable back to the Radio Act of 1927.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 2 Nov 2017 @ 8:07pm

            Re: Re: Re: Re: obligation?

            … the public interest requirement is traceable back to the Radio Act of 1927.

            Fwiw, the 1927 act's predecessor, the 1912 “Act to regulate radio communication” (Pub. L. 62-264), contains zero occurrences of the keywords “interest”, “convenience”, or “necessity”.

            reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Nov 2017 @ 12:32pm

    Sinclair Broadcasting ... just another source of fake news

    reply to this | link to this | view in chronology ]

  • icon
    Ryunosuke (profile), 2 Nov 2017 @ 12:36pm

    It gets worse as Sinclair is eyeing to buy WGN, arguably the largest non-network affiliated station. Now... the problem here is that they aren't gobbling up independent stations, there are a LOT of Network affiliated stations that they own. Now I am not a fan of Fox News, BUT... Local Fox stations are really better than national Fox (if that makes sense). What I mean is that Fox 59 (Indy) doesn't run say Sean Hannity, but rather focuses on more local news than national news.

    With Sinclair, they would be, and have been, telling their stations to do exactly that, in the form of "Must run segments". In other words, they are passing opinion pieces off as "news" not unlike what Fox News (National 24 hours) did with O'Reilly. Only on a more local level.

    Also, there is the problem, as not as obvious, with competition. They own, or are buying up a lot of stations primarily in traditionally blue states; 13 in California, 7 in Central Illinois (WGN pending would be 8), 9 in Oregon, 7 in Washington, the rest of their properties are in the 3-4/state span. Exepting Texas (8) and Florida (they have 12 in Florida/Mobile AL).

    reply to this | link to this | view in chronology ]

    • icon
      Dark Helmet (profile), 2 Nov 2017 @ 12:49pm

      Re:

      Yes, what Sinclair is doing is pretty obvious once you can convince anyone to actually look at their actions. They're building the biggest nationalism propaganda machine in planetary history. And they're being aided in this by the nationalists in the current administration.

      If that doesn't look like fascism to you, you aren't looking hard enough....

      reply to this | link to this | view in chronology ]

      • icon
        ShadowNinja (profile), 2 Nov 2017 @ 1:01pm

        Re: Re:

        The craziest part of this is it's not that far from the truth.

        Watch John Oliver's segment on Sinclair if you've never heard of them.

        The kind of content they force local news stations to put on the news (while pretending that it's local news) is just right-wing propaganda.

        The guy who Oliver shows who rants about college students is incredibly offensive. And this is what people are seeing on local news, as if it's just another late night Fox News talking head.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 3 Nov 2017 @ 6:29am

        Re: Re:

        There was a movie not too long ago with a plot line very similar to this, can not remember the name. Guy takes over the world via his media news conglomerate. My google fu is not good this morning.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Nov 2017 @ 1:10pm

    How is this not textbook racketeering?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Nov 2017 @ 1:12pm

    "Smaller organizations like the American Cable Association (ACA) applauded and supported Pai's rise to power, now seem surprised as his policies focus almost exclusively on aiding the biggest and wealthiest companies:"

    Translation - we thought he was going to help us screw over the littler guys, not the bigger guys screw us.

    reply to this | link to this | view in chronology ]

  • identicon
    David, 2 Nov 2017 @ 1:23pm

    Well:

    The U.S. is in for a world of Pai.

    reply to this | link to this | view in chronology ]

  • icon
    MyNameHere (profile), 2 Nov 2017 @ 1:31pm

    No Surprises here

    Not surprised by the choice, but not for the reasons you would like to push.

    What I think is interesting is that more than half of Karl's posts are about cord cutting and how people are moving away from mainstream media sources. That includes things like Spotify instead of over the air radio stations.

    So it's not really a surprise to find out what media companies are working to consolidate. They know that the single path towards profitable operations and survival is to have one set of services for as many stations / channels / operations as possible. Cutting the number of people and amount of office space per station is a way to make the bottom line work out.

    There are also big benefits in things like formats, common advertising, and the like.

    Iheatradio was the original in this field, and it's only really having problems because of extreme leveraging during the buyouts and consolidations. They have way too much debt and no simple way to pay it off. Otherwise, they are actually doing well and their popular app is letting them bridge the gap to the digital world.

    Consolidation is a normal state of affairs, blocked only by rules put in places decades ago, long before the internet was a thing. Everyone around here says the internet changes everything, so why shouldn't it?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Nov 2017 @ 6:35am

      Re: No Surprises here

      "They know that the single path towards profitable operations and survival is to have one set of services for as many stations / channels / operations as possible."

      Sure it is - in the 20th century. Guess what ... that was a long time ago and things have changed a bit.

      reply to this | link to this | view in chronology ]

  • icon
    discordian_eris (profile), 2 Nov 2017 @ 1:33pm

    Proof that sometimes you do get exactly what you paid for. Or as any good Republican would put it, this is just more proof that free market capitalism works. At least as far as buying politicians and bureaucrats is concerned.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Nov 2017 @ 1:46pm

      Re:

      this is a product of capitalism but not a product of free market.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 3 Nov 2017 @ 6:40am

        Re: Re:

        A product of greed - that is all.

        Watching the political antics these days reminds me of the cartoon Pinky and the Brain. It was funny because we all knew it was a cartoon ... fast forward to present and it's horrifying.

        And come to think of it, Pinky and the Brain were not as insane as some of our present political "leaders".

        reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 2 Nov 2017 @ 2:06pm

    This will accelerate the death of broadcast and cable TV

    Predictions:

    Cable and Broadcast TV will become a vast wasteland just like "automated" radio DJs are today.

    Networks, such the XBC television network, have affiliates. But as those affiliates become automated, consider: There is BREAKING NEWS right now in Uncanny Valley NJ. We're taking you to our local affiliate right now who has a reporter on the scene. what? is that right? I have just been informed that our local affiliate is completely automated and there is no local studio and no local reporters.

    reply to this | link to this | view in chronology ]

    • identicon
      Thad, 2 Nov 2017 @ 2:50pm

      Re: This will accelerate the death of broadcast and cable TV

      Let's see what people are saying on Twitter!

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Nov 2017 @ 6:43am

      Re: This will accelerate the death of broadcast and cable TV

      The local reporters will be robots, should be quite entertaining.

      Do robots have rights? Can the cops beat the crap outta robots or will said robots actually take their orders from the cops?

      reply to this | link to this | view in chronology ]

      • identicon
        Andrew D. Todd, 3 Nov 2017 @ 11:49am

        Re: Re: This will accelerate the death of broadcast and cable TV

        You can always get a "stringer" cheap. You hire someone who works at some other job, maybe selling real-estate, which is a good way to accumulate local knowledge, and only works for the station, and only gets paid, when there is news. The stringer keeps her camera in her car, and when something happens, she goes and reports it. The big newspapers have always had stringers, who were usually reporters for local newspapers. Nowadays, the choicest source of TV footage is the cellphones of people who happen to already be there.

        However, the basic function of local news is not to just sit there until something national-headline-worthy happens. The basic function of local news is to keep track of local government, and keep it from becoming too corrupt. Commercial local news does pay someone to go and sit on the city hall steps, as long as necessary, until the mayor comes out. Local news is traditionally handled as a byproduct of entertainment and advertising, but this is breaking down. I think that in the last analysis, local government will simply have to be made to pay for having itself investigated.

        An immediate measure will be "sunshine laws," adapted to the internet. The essence of a sunshine law is that secret proceedings are illegal, and null and void. The last three words are the important part. A building contractor, for example, wants a properly signed and sealed building permit, which he can show if challenged. It is not all that difficult for officials to illegally meet in secret, but such a meeting has no legal standing. A contractor with a building permit signed at a meeting which [officially] never took place is in an invidious position. The danger lies in the "public" meeting, which is not actually attended by the public, or by a member of the press. Well, sunshine laws just have to be adapted to the internet. The technical details will have to be worked out, of course. They will probably include automatic deposit of records of public proceedings with a higher level of government, and making these records available to the general public. An interested party would then be able to employ someone in India to go through the records, and make notes of the interesting parts.

        I am not quite clear why Sinclair wants to build up a network of local television stations with no local content. By and by large, people who want to watch television have either cable television, or a satellite dish, or even internet-based service. Satellite dishes are no respecters of national frontiers, and it is only a matter of time before foreign countries begin breaking into the American satellite dish broadcasting market in a serious way. Satellite dishes are _really_ ubiquitous in red states. You see them on all the mobile homes. The highest and best use of the frequencies employed by broadcast television is 5G cellphone service, specifically, a cellphone for a farmer driving a tractor out in the middle of nowhere.

        reply to this | link to this | view in chronology ]

  • icon
    Spaceman Spiff (profile), 4 Nov 2017 @ 8:08am

    Finances?

    An investigation into the FCC chair's finances after this may be "interesting"...

    reply to this | link to this | view in chronology ]


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