The Future of Music Coalition (FMC) is a Washington, DC based nonprofit research group that examines the critical issues at the intersection of music, law, technology, policy and economics. In November 2002, FMC published “Radio Deregulation: Has It Served Citizens and Musicians?” This report analyzed the effects of the 1996 Telecommunications Act on the radio industry, citizens, and musicians; it was submitted to the FCC during the comment phase of the Broadcast Ownership rulemaking.
This Petition for Reconsideration addresses the changes to the local radio ownership rules proposed in the FCC Report and Order of June 2nd, 2003 (“Order”), pp. 94-130. FMC seeks to highlight five issues raised by the Order on which we feel the FCC has not ruled properly or has misinterpreted rulings by the D.C. Circuit.
Diversity and localism are important and distinct policy goals.
The FCC Order treats diversity and localism as though they are subsumed by competition as a policy goal, and states that localism is not served by the local radio ownership rules. We disagree with this approach and urge the Commission to adopt distinct and unique methods of measuring diversity and localism in radio markets. Diversity and localism each deserve attention on their own; they are not equivalent or subordinate to competition.
The FCC should revisit the legal responsibilities of the biennial review as reflected in the DC Circuit rulings and apply that understanding consistently. In addition, it must provide clearer and more accurate evidence to support its actions.
The Fox case (280 F.3d 1027, D.C. Circuit, 2002) does not ask the FCC to abandon diversity and localism. Rather, it emphasizes the need for the FCC to provide evidence to support its assertions about media ownership rules supporting those two goals. In addition, we urge the FCC to cite better, clearer, and more accurate evidence to justify their rules. To do otherwise jeopardizes the media ownership rules in the DC Circuit.
Marketplace entry is handled inconsistently in the Order.
At one point in the Order the FCC admits that there are currently barriers to entry in the radio marketplace; later the FCC treats the current radio market structure as a model of a “competitive marketplace” that allows for new entrants. This contradiction highlights the problem when rules are predicated on economic theories instead of a reflection of the current reality of the radio marketplace.
Noncommercial stations should not be counted in the Local Radio Ownership Rule methodology.
The FMC disagrees with the Commission regarding the counting of noncommercial stations to determine market size, both because of the lack of evidence cited in the Order and because of the process by which a regulatory change of this magnitude was implemented. It is evident that this concession has no relation to the public interest or the goals of competition, diversity, and localism.
The Order seeks to defend the current Local Radio Ownership Rule against those who would repeal or relax it – without responding to calls that the local radio ownership caps be tightened.
The situation in local radio is dire – in terms of competition (i.e. market structure), diversity, and localism (e.g. local news and local musicians). We think that such evidence exists to support the Local Radio Ownership Rule, and the FCC’s Order could have provided more evidence to justify its decisions. We advocate that the FCC consider arguments that the Rule has become too relaxed, and that tightening the local ownership caps would be in the public interest given the highly consolidated nature of almost every local market in the United States.