(This post contributed by guest author Guy Heston, whose professional career started with a broadcast position at a small radio station. He has long enjoyed finding logical contradictions in the protestations of the rich and powerful.)
The
National Association of Broadcasters must be drooling with
anticipation. Breaking news—two Democrat appointees to the
Federal Communications Commission, including the chairman, have announced their
resignation, which will greatly enhance the NAB’s chances of achieving two
signature items on its agenda, neither of which would be good for consumers.
The NAB has whined for years that the FCC has refused to adopt
regulations that would force smart phone manufacturers to include FM radio
reception on all phones, and further refused to relax regulations about media
cross-ownership. I know these are not the most interesting topics for cocktail
party conversations, but stay with me because they are indicative of what is
likely to happen throughout the government with the incoming administration.
You get to be for government regulations or against them at the same time,
depending on whether or not they help your cause.
First let’s consider the FM radio reception issue. While it
complains loudly and frequently about government regulations, the NAB is
delighted to support a proposed federal regulation that would require all
smartphones include a chip enabling over-the-air FM radio reception like your
old transistor radio. The official talking point is that smartphone users
should have access to terrestrial radio in the event of a local or national
emergency just in case the internet breaks or something.
The FCC hasn’t been buying the talking point. Smartphone users
already have reliable internet access to thousands of sources in the event of
an emergency, including local radio stations. And if buyers feel strongly about
it there are smartphones available for purchase that include the FM chip.
Naturally, the chip isn’t free and adds to the cost of producing the phone, so
why should consumers be forced to pay for it if they don’t want it? Now, with
two new FCC appointees upcoming, consumers may have no choice. Although the law
requires no more than three of the five FCC commissioners be from the same
party, you can bet your Pandora app the commission will soon be controlled by
corporate and NAB-friendly appointees.
I believe what the NAB really wants is to encourage you to listen
to FM radio via a handy little icon on your phone. With roughly 30 million
subscriptions to satellite radio and millions of others opting for Pandora,
Spotify and iTunes, radio station owners are a bit antsy about all the
competition. So much so that CBS, a media company founded on radio, has decided
to spin off its radio division and let it sink or swim on its own. Lately CBS
Radio has been laying off newscasters and reporters to lower costs in
preparation for the spinoff.
But the FM chip issue pales in comparison to the FCC’s
cross-ownership rules, which the NAB deems draconian regulations. In summary,
the rules don’t allow the same company to run the local newspaper, radio and TV
stations in any market in the interest of encouraging competition. Certain
exceptions were famously made, so for instance Rupert Murdoch’s empire gets to
own two New York TV stations, including the local Fox outlet, and the New York
Post tabloid. Now there’s a lovely cross-ownership.
Many of the historic FCC rules about media ownership have been
tossed over the past 20 years, so whereas we used to limit broadcasters from
owning more than seven AM, seven FM and seven TV stations in the interest of
media competition and diversity, we now have debt-leveraged conglomerates like
iHeart Media owning 850 radio stations. We allow corporations to operate two TV
stations in one market and hundreds all over the nation. But that’s not enough
for the NAB. It wants the ability for television and radio stations and the
local newspaper in your city to be owned and operated by the same company.
Here are some examples of what happens with all of this
consolidation. According to the media monitor site
FTVLive.com, viewers who
tune in to their so-called local newscast on KPTM-TV in Omaha, Nebraska, might
be surprised to learn the newscast originates from KMPH-TV, 1678 miles away in
Fresno, California. Both stations are owned by
Sinclair Broadcast Group, the
same company that was recently reported to have laid off much of the news staff
at WNWO-TV in Toledo, Ohio, saying the Toledo newscast would instead originate
from its station in South Bend, Indiana. Broadcasters call it “hubbing”, which
is corporate talk for saying it’s cheaper to do it this way. Why pay all those
salaries in Toledo when you can pipe the newscast in from South Bend, 156 miles
away? Sinclair owns 173 TV stations across the country, so there are lots of
opportunities to pipe in broadcasts from who knows where.
Sometimes the cost reduction efforts verge on comical. So, again according
to FTVLive,
viewers of the KCEN-TV
newscast in Temple/Waco, TX, might have noticed the “new” set on the station’s
newscast. Only it wasn’t new. After being used for nine years at KUSA-TV in
Denver, the set was reportedly dismantled and shipped off to Texas. Why pay all
those Texas carpenters to build a new set when you can just take an old one and
brush it up a little bit? Both stations are owned by
Tegna, which was formed
when Gannett (owners of the USA Today national newspaper) decided to spin-off
their broadcasting division. I guess we can give a little credit to Tegna for
recycling at one of its 46 TV stations.
Across the nation, thousands of talented and experienced
broadcast anchors, reporters, producers and other staff have lost their jobs in
the interest of corporate consolidation and cost reduction. You might be
surprised to learn that your local traffic report on your morning radio doesn’t
originate from your local radio station, nor the weather forecast nor the news.
The
Los Angeles CBS all-news radio station was
recently reported to have laid off three
long-time anchors and reporters from an already dwindling news
staff. I’m sure it will make the financial statements look better as the radio
division is spun off.
With the incoming administration, it won’t be just the
media cross-ownership rules that will likely run into the ditch. And it might
well be your next smartphone has FM radio reception whether you like it or not.
Climate change, banking, etc. Pick your concern and we’ll strap ourselves in to
see where the regulatory/anti-regulatory ride takes us. As they say in
broadcasting, stay tuned!