Broadcast And Spectrum Regulation I

Week 2 PPT Notes – Broadcast Regulation I

• Media ownership and cross ownership
• Courts have a love hate relationship with the FCC
• Standard of review for courts when review decisions by FCC. Courts can only overturn FCC decision if it is arbitrary or whim. Typically, the courts will defer to the agency.
• Have been instances when the courts have come in and taken away power from FCC
• Courts going to impose own decision – exceptional – cases of major importance
• Personal Tack Rule – FCC ignored the courts for a number of years, finally courts when in and took away
• Court of Appeals – sees if trial court complied with law and precedence
• Trial Courts – look at facts, decides on basis of evidence
• Typical court that relates to the FCC is in Washington, DC – Court of Appeals for DC
• Prometheus Case – petitioners chose to go to Philadelphia Court of Appeals instead of DC court
• Executive and FCC
• FCC is an independent regulatory agency – President appoints commissioners and chairman, which are approved by the Senate. Once they are confirmed, there shouldn’t be a lot of relation or interference between the FCC and the White House
• Recently, the chairman of the FCC has had a close relationship with the President and that wall has broken down
• Part of Exec branch is Dept of Justice – responsible for defending the US
• Conflicts between FCC and the Dept of Justice - try to be in sync, but are some cases where the Dept of Justice will take over
• Legislative – purse strings
• Judicial – reviews decisions
• Justice Scalia, Briar and Roberts – very knowledgeable about telecom and communications law

Broadcast History
• New technology results in regulation
• Social benefit, safety issue etc
• Titanic – was a nearby ship that had a telegraphy device to hear wireless morse code. No requirement to have someone listening to it
• Herbert Hoover – tried to regulate broadcasting
• Tried to license communications
• One of the few areas where an industry went to the government and said please regulate us
• AM radio – at night signals reflected back off atmosphere and go way farther then during the day. As a result – lot of interference and conflict.
• Serious broadcasters sought regulation – wanted certainty that their broadcast would reach population and no interference from another station
• Power wars
• Radio Act – created by Congress. Dill and White – developed basic framework. Some basic provisions are still around today
• Notion that radio waves belong to public, no private ownership of frequencies. People have lease and public trustee
• Scarcity of the spectrum

Broadcast History
• Serve the public interest
• Convenience and necessity
• Stole phrase from Interstate Commerce Commission
• Public interest – whatever majority of FCC commissioners says it is

Broadcast History – Communications Act of 1934
• Roosevelt – created a number of agencies – New Deal – FCC was one of them
• FCC consolidated everything involving wire and radio
• Common carriage – whoever is providing transmission service – essentially cannot be involved in the content. Company you go to for transport facilities

Spectrum Management
• Broadcasting – not common carriers. Broadcasters have complete discretion to who and what they are going to carry – not forced to accept everything that wants a slot. i.e. doesn’t have to accept an astrologer. However, can be held reliable for material.
• (Historical perspective) First – block of spectrum
• Now, spectrum is shared
• AM radio – if could fit signal into airway without interference, you got it. AM is more complicated than FM or TV b/c of propagation characteristics and sky issues at night resulting in greater coverage and interference.
• For FM and TV – different approach
• Equitable distribution of frequencies in the U.S. Let’s not interfere with each other and spread out opportunities through out the country
• Who becomes licensee? Table of allotments. Go to it
• Then people apply for after determined where they would go
• 1952 – FCC broke the news – all of the frequencies available and allowed apps for frequencies.
• 1950s – TV spread itself around the nation
• FM broadcasting didn’t catch on until 1960s, dominated airwaves in 1970s.
• Weren’t any FM receivers in the 50s or 60s – FCC was giving away FM licenses
• FCC has to approve the transfer of any license
• In the early days licenses were 1 year, than 3 years. Ultimately, now it is an 8 year license
• Tremendous incentive for people to file petitions to take over that station or for the FCC to deny the renewal of someone’s license
• How do you compare the proven track record of an incumbent broadcaster with the paper promises of a new broadcaster? Very difficult – Policies and rules were changed. Couldn’t file to take over – only to deny.
• If there is a vacant allotment – how do we decide who gets the license? Auction process – no longer comparing. Look at application after the money comes in.
• Wireless companies bid billions to get spectrum
• What kind of obligations should be on existing broadcasters?
• Community needs – figure out important issues in community – gotten rid of in 80s
• Were commercial time standards – kissed off in 1980s
• Regulations about non-entertainment programs – news, public affairs etc – gotten rig of in 1980s
• FCC thought with more stations – more diversity etc and got rid of the above rules. Eased regulations
• Currently, notion of restoring some of the more intrusive regulations. Ex – children’s programming – 3 hours per week.
• Symbiotic relationship between FCC and industry - relied on each other – too much conflict of interest. Little integrity with regards to the decisions the FCC was making at the time

Scarcity and Interference
• 1970s – FCC – from here on, didn’t like idea of broadcasters getting more stations locally. Provide more diversity
• FCC found 8 markets where concentration of control was enormous – ordered divesture. Forced owners to get rid of something – newspaper, broadcast etc
• 1000 new FM stations – late 70s. Economic downturn, not enough advertising money. Stations losing money.
• LMA – local marketing agreement -1990 FCC issued letters telling lawyers of stations they can get together. Revisiting public interest, community needs etc. FCC allowed stations to get together to save money, cooperation would counteract economic issue
• FCC decided in early 1990s to allow ownership of greater stations at local level – not just an AM and an FM
• 1996 – Congress – in market of so many stations, could have 8 under common ownership. Changed rules to national ownership.
• Gov’t agency – restrict ownership and avoid lawsuits – pick numbers that already exist, no more than 7, that’s what the biggest guys had.
• Telcom Act of 1996 – New Rule – the real concern is local level – national ownership rule was completely eliminated.
• The institutions that supported deregulation of ownership – the companies that wanted to grow.
• Lawry Maze – president of Clear Channel – wanted to grow. Private agenda ended up being public policy.

• Spectrum Interference
• Definition of interference can change
• Diversity of programming or better to have more stations that butt against each other
• FCC has accepted more in terms of interference to favor additional programming opportunities

U.S. Supreme Court
Case or Controversy
• Tell you when read the Constitution that courts can only take cases they are allowed to take and for which there is a substantial body of legal issue that is to be resolved at the court level
• Cases the courts are empowered to hear
• Have to be current issues
• Controversy – when one court of appeals decides one way and another court of appeals decides another way
• Can be between two parties or between two courts

Certiorari – beg Supreme Court to take your case
• Supreme Court only hears 80 cases per term, they have discretion

• Moot – cases in controversy, cases are not authorized to hear cases that don’t involve real disputes between real parties

• Per Curiam – issued in the name of the court (?)

• Original Jurisdiction – some cases come directly to Supreme Court
• Exclusive – any time there is a case between states, exclusive jurisdiction of the Supreme Court

• Personal Jurisdiction – States cannot hear cases where you have not done business. Can’t be held liable in CA if doing business in IN

• Ripeness – cannot be brought before court unless issue has brought threat to party suing
• Standing – have a stake in that proceeding. Used to be thought of as only economic standing, since 1960s – much broader view of standing

U.S. Court of Appeals
• DC gets most of the action
• Sometimes take Court somewhere else
• 3 judge panel
• If lose, can appeal en banc – ask judges to take a second look or can go directly to the Supreme Court

Executive Branch
• 4 major powers
• Control of telecom administration
• Power to appoint commissioners
• Budget bills
• Difficult to over turn a veto

Department of Commerce
• At the forefront of spectrum planning, digital tv transition
• 52% of usable spectrum is for commercial purposes

FCC Organization
• Most of work is done in the bottom row
• Wireless Bureau – auctions
• Consumer – lobbyists for FCC
• International – satellite communications

• Ex Parte – no more parties
• Rules that require that every proceeding put on public record
• So there is a transparent proceeding – know who is trying to influence outcome
• Restricted – no lobbying
• Sunshine notice – tells world what major decisions FCC will be deciding the following week and no lobbying can take place. Lobbying is done under the covers, in subtle ways. Technically, personnel should be insulated from last minute lobbying

Home Rule
• States will pass a law in power to individual municipalities
• Done at the local level
• Can be governed locally

M-dimensional Space
• Generate campaigns in advertising from M-dimensional space
• Move them closer or farther together depending on stance

The Policy Model
• All on one side – go in one way
• All spread out – won’t move
• Want to move boat closer to where want – dock
• Want more pushers on one side of the dock

Regulatory Policy Environment
• Dealing with all these players pushing issues
• All representing planes
• Put them all together in m-dimensional space, they will form a sphere

M-dimensional space
• Role of regulation
• Economics of the industry – monopoly or are you in pure competition state

NAB Strategic Plan
• Similar issue would be banning tobacco advertisements
• Difference between alcohol and tobacco – surgeon general’s warning not on alcohol bottle
• Those in Congress in favor of banning beer and wine – Mormons, Baptists
• Have to kill so it never gets out of committee

Industry Resources
• NAB has access to every TV and radio station
• Can get any public service announcement out to any station

Report Card
• Best way to get to every member of Congress – only have to get to those members who sit on influential Committees and sub committees – bring them closer to way of thinking in m-dimensional space by producing public service announcements featuring the Congress’s spouses
• In the end, never got out of Committee
• Forced the Industry to address the problem
• Only had to deal with members of Congress – did it by dealing with them back in their home district

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