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Dec 13, 2017

What’s the FCC got to do with newspapers? Lately, a Lot.

My latest column for the South Carolina Press Association... 

Most actions by the Federal Communications Commission affect television and radio broadcasters, not newspapers. But the FCC, under Chairman Ajit Pai, is working on two rule changes which could impact the newspaper industry, with the effect on individual newspapers determined by several factors including the newspapers’ size, market dominance, and ownership.

Cross-Ownership Rule: One of the FCC actions that will affect the newspaper industry is changes to the commission’s media ownership rules. In addition to rescinding limits on how many television stations that a single entity can own in a media market (which retain such limits for radio), the commission also voted in November to rescind a 42-year-old rule that barred common ownership of a full-power broadcast radio or television station and daily newspaper in the same market.

A newspaper owner could own TV and radio stations in other markets where it did not own a newspaper. Existing dual ownerships were grandfathered in, and over the years the FCC loosened the rules in markets with more radio and television stations. The commission also granted exemptions to the rule when combined ownership was deemed necessary for both the station and newspaper to remain economically viable.

The goal of the rule was to promote diversity in media ownership, and to prevent a single entity from monopolizing the media in a particular area.

David Chavern, chief executive of the News Media Alliance—formerly the National Newspaper Association—supported the FCC’s vote, saying that the prior rules “do not make sense, particularly when newspapers compete with countless sources of news and information every day.”

After the FCC vote to rescind the rule, Pai was triumphant. “After too many years of cold shoulders and hot air, this agency finally drags its broadcast ownership rules into the digital age,” he said in a statement. Pai has argued that in the modern media landscape there are outlets for multiple perspectives, including the deluge of material available online, making the rules’ stated goal of increasing media “voices” superfluous.

But FCC Commissioner Mignon Clyburn—the daughter of South Carolina Congressman James Clyburn—voted against the change. “Mark my words,” she said. “Today will go down in history as one when the FCC abdicated its responsibility to uphold the core values of localism, competition and diversity in broadcasting.”

The commission consists of two Republicans, two Democrats, and a chair nominated by the President. The vote to rescind the newspaper-broadcast cross-ownership rule was three to two. It is likely that the rule change will be challenged in court.

Net Neutrality:
On Thursday, Dec. 14, the FCC is scheduled to vote to rescind its rules barring internet service providers from either favoring or disfavoring certain online content over other content by providing faster, prioritized access to the favored content. Similar to the cross-ownership rule, a three to two vote is expected.

This issue has had a convoluted history. The commission tried to enact similar rules in 2008 and again in 2010, both of which were struck down by the courts because broadband access was classified an “enhanced information service,” which is subject to little regulation, rather than as a “basic telecommunications service,” which is more highly regulated. So in 2015 the FCC reclassified internet access as a “basic service,” and imposed new net neutrality regulations under that classification. With the reclassification, the commission’s net neutrality rules were upheld by the courts last year.

Now the commission is poised to again classify internet access as an enhanced service, and rescind the net neutrality regulations. Pai has said that if internet service providers unfairly favor some online content over others, the issue should be handled by the Federal Trade Commission as an anti-competitive business practice.

It is important to note that many of the concerns of net neutrality advocates are so far primarily theoretical. But without net neutrality regulations, internet service providers could favor content from their corporate siblings or subsidiaries, or from content providers that have paid for such priority.

Without net neutrality rules in place, the accessibility of individual newspapers’ websites and cellphone apps could depend on the specific circumstances in their markets, and their relationships with local internet access providers. Chain-owned newspapers may, for example, be able to afford prioritization from ISPs. And dominant newspapers may have enough customer support to avoid being deprioritized, so that customers will object if an ISP blocked or limited access, while smaller and independent newspapers may not.

Like the cross-ownership rescission, if it passes, the FCC’s elimination of the net neutrality rules is likely to be challenged in the courts.

With court challenges to both of these FCC actions likely, newspapers watching the fate of these provisions need to borrow a phrase from the broadcast industry: “Stay tuned.”




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