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May 30, 2000

SEPARATE STATEMENT OF COMMISSIONER SUSAN NESS

Re: 1998 Biennial Review - Review of the Commission's Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996

I write separately regarding the Commission's review of the newspaper/broadcast cross-ownership rule (1) to explain why I support commencing a rulemaking proceeding to modify but not eliminate that rule. I also write separately regarding the Commission's decision to commence a rulemaking to revise the methodology for calculating both the total number of radio stations in a market and the number of stations owned by a party, to underscore that any modifications must be applied prospectively only.

Newspaper/Broadcast Cross-ownership Rule

The question presented to the Commission in this biennial review is whether any rule is "necessary in the public interest as the result of competition" and, if not, whether the Commission "shall repeal or modify" that rule. (2) The rule was crafted in 1975 to achieve the noble goal of ensuring that local markets enjoy not just competition for advertising dollars but also diversity of viewpoints - a diversity that can come only from a healthy number of independently-owned outlets. In its decision adopting the rule, the Commission sought to promote "the widest possible dissemination of information from diverse and antagonistic sources," (3) which the Supreme Court had found "is essential to the welfare of the public." (4) The Commission's rules, therefore, were designed to ensure that the public had access to a critical threshold of local viewpoint diversity. The Commission recognized that, at that time, broadcast services - especially television -- and newspapers were the dominant sources of local news and information. (5)

There have been sweeping changes in the media marketplace since the rule was adopted in 1975. Back then, there were only three commercial broadcast networks; today, there are six or seven. In 1975, many UHF stations were just initiating broadcast service and they were limited in number; today, the number of UHF television stations has nearly tripled. In the early 1970s, FM radio was a relatively new service; today, there are approximately 6,000 FM radio stations in operation. When the rule was adopted, the big boom in cable television franchising had not yet begun; today, cable television passes more than 97% of households, of which approximately two-thirds subscribe. At the time the Commission adopted the rule, DBS had not yet been launched; today, DBS is ubiquitously available, with more than 10 million subscribers. The rule was adopted decades before the Internet would become available for public use; today, the Internet is rapidly capturing the American imagination and consumer's free time. Given such profound changes, it is not only timely, but essential for the Commission to revisit the newspaper/broadcast cross-ownership rule to ensure that it reflects contemporary marketplace realities, preserving local viewpoint diversity while still tailoring the rule to be restrictive only where necessary.

Ironically, the rule's underlying purpose of preserving diversity and competition in local markets may be undermined in some situations by the rule's current structure. For example, radio stations that do not have their own local news organizations are prohibited from being co-owned with daily newspapers, thus reducing the potential number of news outlets in a given community. Similarly, independent UHF television stations might provide more local news and information, if they could realize efficiencies from co-ownership with a local newspaper. Struggling daily newspapers might stand a better chance of contributing to public discourse and the dissemination of local news and information if they were allowed to combine with local broadcast licensees, thereby maintaining viewpoint diversity. At the very least, the Commission should consider changes to the rule that would address these potentially counter-productive effects.

At the same time, the rule has performed a necessary function in maintaining a critical threshold of local viewpoint diversity. The Commission has recognized that broadcast services, particularly television, and newspapers still are the dominant sources of local news and information in any given market. (6) Particularly in small markets with a single daily newspaper and less than a handful of broadcast stations, the combination of newspaper and broadcast assets might well severely and significantly reduce viewpoint diversity. And keep in mind that most cable and DBS services do not independently provide local news and information so vital to an informed public. Thus, they may not yet be adequate substitutes for broadcast stations or newspapers. Therefore, the rule has served and, in my opinion, continues to serve an important function in maintaining local viewpoint diversity and competition.

I do not believe that the rapidly changing media landscape, on the one hand, and the preservation of viewpoint diversity, on the other, present a binary choice between eliminating the rule or maintaining the status quo. Rather, I believe that the Commission should carefully and methodically consider modifying the rule to make it more relevant to contemporary circumstances. For example, commenters ask whether the same rule apply to a top-ten market like New York City or Chicago, with dozens of independent media voices, and to a small city with only one daily newspaper and a few TV stations. Should radio licensees face the same newspaper cross-ownership restrictions as television licensees, or are these two media sufficiently distinguishable to apply the newspaper broadcast cross-ownership ban differently to each? Should the rule, in its current or modified form, be consistently applied to all merging combinations of newspapers and broadcast stations under a similar timeframe? Some commenters suggested that the rule could apply to varying degrees depending on market size by, for example, counting newspapers as a "voice" and allowing newspaper and broadcast cross-ownership where a certain number of independent voices remained in a market. (7)

While the record reflects a continued need to restrict newspaper/broadcast cross-ownership in some fashion, I believe that the questions concerning the possible modifications to the rule deserve a full airing and spirited debate. I have not made up my mind regarding the merits of any of these proposals; my only conclusion at this point is that an absolute ban is not necessary to achieve the purpose of the rule. It is time for the Commission to engage in a robust debate on the most appropriate ways to modify the rule to best serve the public in this information age.

Radio Market Definition

I have long supported revising our rules to correct our convoluted definition of radio markets and look forward to reviewing comments filed in the rulemaking proceeding we will initiate shortly. I believe, however, that any changes the Commission might make should be prospective only and should not undermine the legitimate investment expectations of parties who hold combinations lawfully assembled under our current rules. Whatever definition we adopt should also remain consistent with the intent of Congress under the Telecommunications Act of 1996 in relaxing the radio ownership restrictions.




1. 47 C.F.R. 73.3555(d) (the "rule").

2. Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, 202(h) (1996).

3. Multiple Ownership of Standard, FM and Television Broadcast Stations, Second Report and Order, 50 F.C.C.2d 1046, 1048 (1975), aff'd sub nom. FCC v. National Citizens Committee for Broadcasting, 436 U.S. 775 (1978).

4. Associated Press v. United States, 326 U.S. 1, 20 (1945).

5. See, e.g., Second Report and Order, 50 F.C.C.2d at 1065.

6. Further Notice of Proposed Rule Making in Television Ownership, 10 FCC Rcd. 3524, 3555-57 (1995).

7. See, e.g., Elyria/Lorain Comments at 19-20; Freedom of Expression Comments at 25-26; Gannett Comments at 38; West Virginia Radio Comments at 21-22; Newspaper Association of America, Emergency Petition, August 23, 1999.