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Daily Democracy

Ryan Blethen discusses the press, media and democracy. Daily Democracy is part of the Democracy Papers, a series of articles, essays and editorial opinion examining threats to our freedoms of speech and the press.

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May 1, 2008 3:33 PM

NAA's lobbying of Congress

Posted by Ryan Blethen

The Newspaper Association of America is lobbying Congress to reject a resolution that would scrap the new media cross-ownership rule adopted by the Federal Communications Commission last December. Why, you ask, would the association that represents newspapers be in favor of policy that undermines a diverse marketplace of ideas?

A simple answer really. Because of media consolidation. Most newspapers are now owned by large corporate chains. Those chains dominate many of the industry's organizations, especially NAA, which is the group for publishers.

The Seattle Times has not been a member of NAA for some years. The Times agrees with NAA on some issues, but we sharply diverge on media ownership.

I came across a letter from NAA's president and CEO John Sturm to Senate Majority Leader Harry Reid. The letter urges Reid, D-Nevada, to work against the "resolution of disapproval," which has been passed out of the Commerce Committee for a full vote in the Senate. The resolution was introduced by Sen. Byron Dorgan, D-N.D. and has bipartisan support. The House's resolution was introduced by Reps. Jay Inslee, Bainbridge Island and Dave Reichert, R-Auburn.

I would be surprised if Reid or many Democrats in the Senate and House vote against the resolution. Democrats have been fairly solid against media consolidation since the FCC tried to rewrite the rules in favor of more consolidation under the immediate past chairman Michael Powell in 2003.

Republicans should look to Maine Senators Olympia Snowe and Susan Collins for leadership on this issue. Both have long supported the old cross-ownership rules, which ban a company from owning a newspaper and television station in the same market. Republicans should also take notice of the broad coalition opposed to lifting the cross-ownership ban, which includes the likes of many Christian broadcasters.

The letter, which can be found below, should be easy for Reid to ignore. The letter begins by stating that the media is nothing like it was in 1975 therefore the cross-ownership ban is outdated.

True, the media has changed since 1975. Sturm falters when he claims that new technological advances require the regulations to be eliminated. The press has been ravaged by consolidation since 1975. Because the shrinking of a multiple number of media voices we actually need more regulation and serious thought needs to be done on how to promote independent ownership.

Just because people can access news on everything from an iPhone to the old crinkly newspaper does not mean the media market is diversified. Technology has only multiplied the options for getting news not who is producing the news.

Sturm continues:

"Let's face it...it is difficult for newspapers to compete in a hypercompetitive media marketplace with one hand tied behind our backs while new media has the good fortune to flourish unencumbered by outdated regulations."

What encumbrances does a newspaper have? The government does not regulate newspapers. And newspapers are finding plenty of ways to innovate and reach new readers through the Internet. I do not see new media competition running out and buying TV stations. It seems only some of the largest newspaper companies that long ago got into TV want to keep using a model that has not worked. If cross-ownership of print and broadcast was such a good deal why are many of the companies that pushed the notion of "synergy" a decade ago struggling as much as the rest of the newspaper industry?

I could go on, but I won't. Read for yourself. Sturm's letter and an e-mail he sent out are below.

John F. Sturm President and CEO

April 28, 2008

VIA HAND DELIVERY / TOTAL – FIVE PAGES

The Honorable Harry Reid
Senate Majority Leader
S-221 Capitol Building
United States Senate
Washington, DC 20510

RE: Senate Joint Resolution 28 – FCC Order on Newspaper/Broadcast Cross-Ownership

Dear Majority Leader Reid:
In 1975, the Federal Communications Commission (FCC) banned the joint-ownership of local newspapers and broadcast stations because local markets were once dominated by only a handful of newspapers and broadcast stations for news coverage. But those days are long gone. Just take a look at your satellite TV, read your favorite online blog, or open your cell phone to scan the news of the day to confirm this fact. Nothing about today's media landscape resembles 1975, yet S.J. Res. 28, a "Resolution of Disapproval" would re-instate a 1975 regulation on newspapers in a climate of unprecedented economic challenges for our industry.
The Newspaper Association of America (NAA) respectfully requests that you oppose this resolution.
With growing fragmentation in the media marketplace, there has been an undeniable decline in the prominence and economic performance of local daily newspapers. Unprecedented pressure on circulation and revenue is threatening newspapers' ability to cover local news and execute its historical watchdog function through investigative journalism. (See attached article from Advertising Age on the state of the newspaper industry.) Let's face it...it is difficult for newspapers to compete in a hypercompetitive media marketplace with one hand tied behind our backs while new media has the good fortune to flourish unencumbered by outdated regulations.
While the NAA and its members believe the current marketplace warrants full repeal of this cross-ownership ban, the FCC’s December 2007 Order only relaxed the ban in the top 20 markets. In contrast, the FCC in 2003 attempted to relax the cross-ownership ban in the top 170 markets. Even in the top 20 markets the hurdle is high for the FCC to look favorably on a proposed combination: (1) the newspaper may own one TV station or one radio station - not both; (2) the television station cannot be ranked among the top 4 in the market; and (3) at least eight "major media voices" must remain in the market post-transaction. Outside these circumstances, there would be a presumption against cross-ownership.
This is hardly a regulatory formula that will lead to the type of rampant "media consolidation" that proponents of the resolution claim will occur under the FCC's rule.
The Honorable Harry Reid
April 28, 2008
Page Two
The FCC's rule change is in response to a congressional mandate in the Telecommunications Act of 1996 directing the agency to review all of its local broadcast ownership rules. The FCC is also responding to a Third Circuit Court of Appeals Order, setting aside the 2003 media ownership rules. While sending the 2003 rules back to the FCC, the Third Circuit agreed with the Commission that the 1975 prohibition on newspaper/broadcast cross-ownership was no longer in the public interest.
Proponents of S. J. Res. 28 are fighting a battle from the last war.
As you may remember, the FCC's 2003 Order would have changed all of the media ownership rules, including a controversial rule that would have raised the national network-affiliate ownership cap from 35 to 45 percent. After the National Association of Broadcasters ("NAB") and other organizations opposed this particular change in the media ownership rules, the Senate passed a "Resolution of Disapproval" to rescind all of the 2003 media ownership rules with many Senators citing the national ownership cap as the major reason why they supported the resolution. Congress eventually codified a national television ownership cap of 39 percent, which remains in effect today. (It should be noted that NAB shares NAA's view that the Senate should reject S.J. Res. 28.)
The circumstances surrounding the vote on S.J. Res. 28 are much different than the Senate vote in 2003. The FCC's December 2007 Order only changes one of the local media ownership rules - the newspaper broadcast cross-ownership prohibition - which is the only rule that has not been altered since the 1970's to reflect the changing composition of the media marketplace. The FCC’s Order does not affect the national network-affiliate ownership cap or any of the other rules that were proposed in 2003. And, as described above, the FCC is making limited changes to the cross-ownership prohibition.
Majority Leader Reid, the media marketplace has changed since the 1970's as consumers have more media choices than ever before. It is also widely known that newspapers today are facing fierce competition which is threatening the health and viability of the industry. While the FCC's rule is not all that we wanted, it provides some relief that has the potential to help newspapers weather this current economic climate.
I respectfully request that you Vote No on S.J. Res. 28 - which, in effect, re-imposes a 1975 regulation on newspapers.

Sincerely,

Cc: NAA Members in Nevada
Encl.



John F. Sturm
President and CEO
April 29, 2008

Via Facsimile and E-mail (Total Pages – 3)

Legislative Alert - Action Needed
Senate Resolution to Stop Newspaper Deregulation

Dear Publisher:

In the coming days, the United States Senate will consider Senate Joint Resolution 28, a resolution to rescind the Federal Communications Commission’s (FCC) December 18, 2007 Order relaxing the 1975 prohibition on newspaper/broadcast cross-ownership in the same market.

For 33 years, local newspapers have been forced on the sidelines while national companies located outside of a community have been able to buy television or radio stations. Now that the FCC has provided a minor loosening of this outdated prohibition, some Senators want to overturn this modest rule change.

Please contact your Senators today to ask them to oppose S.J. Res. 28 when it comes up for a vote this week or early next week. The Capitol Switchboard is (202) 224-3121.

Claims that the FCC's new rule will lead to massive media consolidation are not supported by the facts. The FCC's new rule would reverse the prohibition and allow a newspaper to buy one television or one radio station - not both - but only in the top 20 markets, if certain challenging conditions are met. In smaller markets, a newspaper could reverse a presumption against cross-ownership if it is applying to buy a television or radio station that does not produce local news and the newspaper commits to producing at least 7 hours of local news programming a week. This is clearly in the public interest. More details on the new rule are described in the attached sample letter sent to all senators yesterday.

While NAA would have preferred a complete repeal of the newspaper/broadcast cross-ownership prohibition, we believe a modest amount of regulatory relief is better than none. As you know through competition in your own market, there has been an explosion of media sources of news and information over the last three decades, and threats to newspaper revenues seem to be coming from every direction. In this environment, it is incomprehensible that newspapers should continue to be shackled by a 1970's prohibition in today’s hypercompetitive media marketplace.

We appreciate your help in encouraging your Senators to oppose S.J. Res. 28. Thanks for reading.

Sincerely,

Cc: Executive Directors, State and Regional Press Associations


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