Managing partner Chérie R. Kiser outlines challenges of the platinum age of content.
The Federal Communications Commission (FCC) media ownership rules were adopted in an era dominated by local radio and broadcast television, before the rise of the internet and cable news. The latest FCC review of those rules highlights how government regulators continue to struggle to keep pace with rapidly-changing communications technology and an exploding marketplace of consumer choices.
In 2018, the FCC issued its Quadrennial Regulatory Review Notice of Proposed Rulemaking, (2018 NPRM) announcing its latest review of its media ownership rules.
In an accompanying statement, FCC Commissioner Carr observed:
'Things have changed as today's Communications Marketplace Report notes, Netflix this year [2018] will spend more than USD8 billion on content, a quarter of which is for original shows. Amazon will spend USD5 billion, Hulu: USD3 billion. Next year [2019], Google is expected to earn USD48 billion in ad revenue, including in competition with broadcasters for local ad dollars. And Spotify and Pandora are increasingly competing for the ears of Americans whether we're at home or on the go.
The golden age of television – or the platinum age of content – is the direct result of choice. The gatekeepers of the past are no longer gatekeepers. Americans, using broadband connection, can access any content, from any device, anywhere.
As explained in the 2018 article in Media Law International, "Are the FCC Media Ownership Rules Still Relevant in the Digital Age?," the media ownership rules limit who may own a broadcast media outlet and how many outlets may be owned by the same entity in any given market. The regulations were designed to promote localism, diversity, and competition in the use of broadcast spectrum.
In its 1996 amendment to the Communications Act of 1934,Congress directed the FCC to review the media ownership rules every four years to determine whether they "are necessary in the public interest as a result of competition." Congress also directed the FCC to repeal or modify any regulation no longer in the public interest.
Every review since 2002 has been challenged in court, with those challenges taking years to resolve. The recent FCC Order on Reconsideration of the 2016 Second Report and Order is no exception. The decision is on appeal to the Third Circuit by Prometheus Radio Project, which argues that the FCC failed to take diversity sufficiently into account.
Regardless of the outcome of the appeal in Prometheus Radio Project, the FCC's 2018NPRMis moving forward. Per the 2018NPRM, the FCC will review three rules: Local Radio Ownership Rule, Local Television Ownership Rule, and the Dual Network Rule. Generally, these rules limit the number and/or type of radio/television stations that can be owned in a market. The 2018 NPRM reaches no tentative conclusions; instead it asks numerous questions and requests evidentiary support for positions taken.
In the 2018 NPRM, the presence of digital technologies such as streaming services, online distribution of programming from a variety of sources, and non-video providers of news and information such as Internet websites and social media appear likely to play a prominent part of the discussion during this review. It does seem apparent that technology may be rapidly outpacing the underlying facts and circumstances that led to the creation of the ownership rules in the first place, and the FCC hopes to respond accordingly. The only thing we can predict at this stage is that there will be more to report in 2020 – and likely more litigation to follow!
Originally published by Media Law International.
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