Tuesday, March 06, 2007

Interesting Statements From The Members of The FCC Committee

March 6, 2007

Below are statements from each of the members of the committee that will be ruling on the proposed merger of Sirius and XM. These statements were recently made as part of the hearings on Media ownership regulations. As SSG readers are aware, the NAB is currently seeking that media ownership regulations be relaxed. The FCC is looking into the matter. Readers can garner some of the stances that the various members of the committee have, and relate it to the Sirius and XM merger. SSG comments in RED:

OPENING STATEMENT OF FCC CHAIRMAN KEVIN J. MARTINPUBLIC HEARING ON MEDIA OWNERSHIPHARRISBURG, PENNSYLVANIAFEBRUARY 23, 2007

Good morning. Thank you for joining us today.

As you know, we began a comprehensive review of our rules governing media ownership last summer. This hearing is the third in a series of six media ownership hearings the Commission intends to hold across the country. We held the first of these hearings in Los Angeles last October and the second hearing in Nashville last December. The goal of these hearings is to more fully and directly involve the American people in the process. As I have said many times before, public input is critical to our process.

The decisions we will make about our ownership rules will be as difficult as they are critical. The media touches almost every aspect of our lives. We are dependent upon it for our news, our information and our entertainment. Indeed, the opportunity to express diverse viewpoints lies at the heart of our democracy.

The Commission has three core goals that our rules are intended to further: competition, diversity and localism. I recognize many of the concerns expressed about increased consolidation and preservation of diversity. Also critical to our review is exploring and understanding the competitive realities of the media marketplace. Some of our rules have not been updated for years and may no longer reflect the current marketplace. Indeed, the Third Circuit recognized this fact when it upheld the Commission's elimination of the newspaper/broadcast cross-ownership ban. It is our task then to respond to the Court by ensuring that our ownership rules take into account the competitive environment in which media companies operate and promote localism and diversity.

Clearly Mr. Martin states that the rules have not been updated in years, and that they do not reflect the current marketplace. This sentiment bodes well for the merger. Martin even goes so far as to quote the Third Circuit Court in their decision regarding newspaper/radio cross ownership.

We also need to try to find more opportunities for diverse viewpoints to be heard. Part of the problem is the limited number of channels available on broadcast television and radio and the high start-up cost of building your own station. (There can be little debate that the cost of start up for satellite radio was high. This needs to be taken into consideration by the committee. satellite does help solve the issues surrounding the ability of the consumer to get diverse programming even in the most rural of communities. satellite radio offers a viable alternative where local markets do not meet the needs.) The Commission has taken some important steps to provide more opportunity in radio with the advent of low-power FM. Low-power FM provides a lower cost opportunity for more new voices to get into the local radio market. Another idea for helping small and independently owned businesses overcome financial and resource constraints is to allow them to enter the broadcast industry by leasing some of an existing broadcaster's spectrum to distribute their own programming. Conversion to digital operations enables broadcasters to fit a single channel of analog programming into a smaller amount of spectrum. Often, there is additional spectrum left over that can be used to air other channels of programming. Small and independently owned businesses could take advantage of this capacity and use a portion of the existing broadcasters’ digital spectrum to operate their own broadcast channel. This new programming station would then obtain all the accompanying rights and obligations of other broadcast stations, such as public interest obligations and carriage rights.

In our review of ownership rules we are working to develop a record, with hearings like this one today and through the written comment process, on which to inform all of our decisions. I am pleased that we are holding our third hearing here in Harrisburg, the capital of Pennsylvania. Harrisburg, with a population of 48,950 people, is a significantly smaller city than the other cities we have visited thus far. Harrisburg residents will provide an additional unique and helpful perspective on the media ownership issues before us. I look forward to hearing your thoughts and insights on the subject of our media ownership rules. Thank you for your participation today.
- FCC -

REMARKS OF COMMISSIONER MICHAEL J. COPPS - FCC HEARING ON MEDIA OWNERSHIP - HARRISBURG, PENNSYLVANIA - FEBRUARY 23, 2007

Welcome to this third of the FCC’s six official hearings on media ownership. This meeting today will take us half way through the number of meetings the Chairman has agreed to hold, but I don’t think we’re anywhere near amassing half the information we need to have in order to make really informed decisions about the future of our media. (By this statement it appears that Copps looks into issues in depth, and from many perspectives. This could be both good and bad in relation to the proposed merger. It appears that Copps requires a good deal of input to come to what he feels is an informed decision. This could lengthen the process for sirius and XM) You know, communications accounts for about one-sixth of the U.S. economy and represents, I believe, the most powerful business in America. And when it comes to media, I don’t think anything rivals not just the economic, but the social and cultural and political impact of those who decide what we as citizens will see and hear and read. That’s why this issue about the future of our media—how few are going to be allowed to own how much, and what public interest standards media should be expected to operate under—is so important to each of us. (A clear statement of the importance Copps places on these issues) It goes to the kind of entertainment programming we receive—whether we’ll have ever more of nationalized and homogenized and often graphically violent fare—and it goes to the vitality of our civic dialogue and whether media will cover issues of real importance to the future of our local communities and our entire nation. I have been in scores of media markets across this nation over the past five years, trying to understand how various localities are faring under the tremendous consolidation that has overtaken America’s media during the past decade and more. (This statemen nt seems to indicate that Copps may lean against consolidation. If this is the case, will he feel the same relative to the proposed merger?) Today we come to Harrisburg to learn from our distinguished panel and, even more importantly, from members of this audience how you think the Harrisburg media is doing in serving you on your airwaves. We want to understand your history, your experiences, your satisfaction—or dissatisfaction—with the current media environment. We want to know whether the broadcasters who use the public airwaves—for free, by the way—are actually serving your interest, the public interest.

As I attend citizens’ meetings around the country, I try to focus on specific problems, and that’s what I’d like to do for a minute or two this morning. I think it’s especially appropriate that we’re gathered here in the capital of the Keystone State, because I can’t think of an area of more vital public concern than how well state government is covered by the press. After all, we live in an era when ever greater power is being exercised by statehouses—control over issues like energy, education in our high schools and elementary schools, higher education in our state universities, the environment, homeland security, immigration, transportation, prisons, criminal sentencing, heath care, welfare, ID cards, and the list goes on. Our nation’s 7,400 state legislators now enact around 40,000 new laws every year and allocate roughly $1.3 trillion in state funds. It’s where a lot of action takes place. My question is this: Is your Harrisburg media, your Pennsylvania media, telling you what you need to know about all this?

Now, I know some people who are really wired and plugged in and who always manage to find out what they need to know. That would be the lobbying community. Given the well-documented shift in power between federal and state authorities, the state lobbying business has sky-rocketed. There are now around 40,000 registered state-level lobbyists. That’s five for every legislator. That’s right—five lobbyists per state legislator! (Looks like Ashcroft, a lobbyist, and even the NAB, lobbyists as well, are not high up on Copps list.) Their number differs depending upon the state. New York is at or near the top with 20 lobbyists per legislator. Pennsylvania is, happily, more modest—only two per legislator! Maybe that makes you feel better, but it doesn’t do a lot for me, I’ve got to tell you. And here’s the kicker—according to the Center for Public Integrity, lobbying at the statehouse level was a $1.16 billion business in 2005.

So what does this all mean for your state and your community? Well, in preparation for today’s hearing, I looked over some of the available statistics about statehouse reporting. I couldn’t believe how bad the news was. I learned, for example, that there are only about 500 reporters these days covering statehouses in the entire country—and that is a number that has been steadily declining for decades. That works out to ten per state—for all forms of media—with only a handful, sometimes as few as two, in our smaller states.

Contrast that with what we’ve got at the FCC back in Washington. I’d say there are roughly 30 reporters who cover our little agency day in and day out for a variety of general interest publications and trade outlets. Now I certainly wish the mainstream press paid even more attention to what the FCC does—like the issues of media ownership and regulation that we are here to discuss today. But overall I think it’s correct to say that most reporters try to provide the American public with a pretty fair idea of what’s going on with federal communications regulation. And I can certainly tell you that media scrutiny is a critical check that helps direct our decisions towards serving the public interest and not just the special interests.

But what happens when entire statehouses don’t have anything close to this level of media attention? Yes, of course, a few times a year when a state legislature passes a really big bill there will usually be a story in most local papers and on most nightly newscasts. But there’s a huge difference between an occasional story by a generalist reporter and sustained attention by a beat reporter who is conversant in the substantive issues; who understands an institution’s make-up and procedures and history; and who has a roster of trusted, carefully cultivated sources that can help put the day-to-day events in a broader context.

Good, experienced beat reporters see the forest and not just the trees and can help readers or viewers understand how arcane policy debates affect their daily lives. These are the reporters who, over time, develop a sixth sense for when something isn’t quite what it appears, who can see the connections and consequences that the official version of events doesn’t disclose. These are the specialists who write groundbreaking investigative pieces about wrongdoing in the state lottery office or the trucking commission, who expose the effects of the revolving door and the links between past campaign contributions and current legislation, and who can take on the difficult task of exploring whether rules passed years ago have played out in the real world as the proponents originally promised. It can take years to develop this ability—it’s not just a matter of intelligence or hard work or getting a journalism degree; it’s also about spending month after month, year after year, learning how a complex institution actually works and how to ask the right people the right questions.

Now compare that ideal with what one dejected political reporter told the American Journalism Review about his beat: “There are some state offices, like the Department of Insurance, that haven’t seen a reporter in years.”[1] Justice Brandeis once remarked that sunshine is the best disinfectant and electric light is the best policeman. It makes you wonder what is growing in some of the government offices that haven’t been getting very much of either. And lest we forget, the huge corporations with their multi-million dollar lobbying budgets have a very good idea what the Department of Insurance and the other branches of state government are up to. Aren’t you as citizens entitled to the same? That’s what a vigorous press is all about. It brings transparency and accountability to government. It empowers citizens like you and me.

Thinking about issues like these really brings home just what is at stake when we talk about the effects of media consolidation or cross-ownership. A merger between two newsrooms usually means one less statehouse reporter. (It also typically means one less environmental reporter, one less education reporter, and so on). (hmmmm.....seems to be against mergers.) Five or six mergers in a state over a decade can mean going from hearty, vigorous competition among statehouse press correspondents for the next scoop to less than a handful of overworked reporters struggling just to keep up day-to-day. I remember one of the first media consolidation meetings I attended a few years ago—in Phoenix. A former mayor told how when he was in office and the city council was meeting and they’d decide to take a few minutes break, they’d open the door to the hallway and four of five reporters who had been trying to eavesdrop would fall through the doorway. Then media consolidation hit, community news coverage was cut back, and so nowadays when the city council takes its break and opens that door… there is often no reporter there. So we’re paying a price in many places that I’ve visited. And I want to know if you’re paying a price here in Harrisburg and across this state, too.

Don’t believe anyone who tells you that big media’s push for more consolidation has gone away. I’ve seen their very recent pleadings at the FCC. They’re still marching along behind that same Pied Piper of Consolidation they’ve been following for years. They haven’t gone away, and their lawyers and lobbyists haven’t gone away either. They have money and they have power. So if we are going to succeed in this—and go on from there to a broader national dialogue on the future of the media in our democracy—a discussion that has been too long delayed and too long denied—it will be because of citizen action from millions of Americans and testimony at hearings like this one.

I think we have a chance to repair the damage. You know, three years ago when former FCC Chairman Michael Powell rammed his ill-advised new rules allowing fewer media players to buy up more media outlets, three million people contacted the FCC to voice their outrage. (Looks like Copp is not a fan of Powell. Don't look for Sirius and XM to be including powells positive comments in their application) Congress joined in and then the Third Circuit Court of Appeals right here in this state decided those rules were badly flawed—both substantively and procedurally—and sent them back to us. Well, I’m going to be doing everything I can to make sure we don’t have a repeat of the Powell near-catastrophe. But I’m not stopping there because I think now we can stop playing just defense and go on the offense and talk about more than avoiding bad new rules—we should revisit the bad old rules that got us into this mess in the first place. And we should go on from there to restore meaningful public interest responsibilities on our broadcast media—like an honest-too-goodness licensing system that doesn’t grant licenses slam-dunk automatically but stops to judge if a license-holder is really doing its job to serve the common good. Or, making sure that all that new digital multi-cast capability we’re giving broadcasters returns something positive for our communities and local talent and civic issues coverage. So there is a lot to be done, but I’m more optimistic about it right now than I’ve been at any time since joining the Commission.

Thanks for coming out this morning and I look forward to hearing from you.

Copp could be the toughest sell on the panel for Sirius and XM

Statement of Commissioner Jonathan S. Adelstein - BROADCAST MEDIA OWNERSHIP HEARING - HARRISBURG, PENNSYLVANIA

FEBRUARY 23, 2007

I would like to thank Chairman Martin for convening this third media ownership hearing here in Harrisburg. While it would have been helpful to give area residents more advance notice of this hearing, it is a welcomed opportunity for us to get outside of Washington and hear directly from the people who will be affected by the decisions we make about how many media outlets a single company can own and control. We should remember that the public airwaves belong to you, the people – not the media companies that are licensed to use the airwaves for profit. Deciding who owns the media is fundamentally about our culture, our democracy, and our way of life. It is about who owns what you read, watch and hear. Your presence here today demonstrates that you are concerned about these important decisions that the Commission will make.

Strong statements relating to consumers rather than the owners of companies. If consumer sentiment supports the merger, it could be influential on Adelstein.

The law that governs our actions is very simple. It tells us to promote the public interest. The best way to do that is to hear directly from you, rather than thinking somehow we inside the Washington Beltway know what is best for you and your family. So I am pleased all of my colleagues are here to listen to you before acting to modify the broadcast ownership rules.

Again, Adelstein seems to indicate that he is a fan of consumer opinion.

Harrisburg is a capital city that has experienced a renaissance in its infrastructure development, economic growth, and community life. This city and the surrounding towns on the East Shore and West Shore are full of vitality and diversity. Unfortunately, like most American cities, ownership of Harrisburg’s broadcast media outlets does not reflect the communities that they are obligated to serve. Instead, local media ownership is dominated by a handful of national companies.

The question before us today is what impact this consolidation of ownership has had on the media coverage of this and surrounding communities. I have a special concern about state government because, until recently, my father served in the legislature in my home state of South Dakota. What I have learned is that here in Pennsylvania, like in most state capitals across America, the quality coverage of state legislative affairs is diminishing. Fewer media outlets cover the daily activities of the statehouse, and fewer investigative reporters are available to develop, research, and write stories that are necessary to inform the electorate. We need to hear your perspectives on this.

Sirius and XM need to demonstrate that the combined entity can deliver MORE and BETTER coverage to consumers. They need to demonstarte that they can be MORE EFFECTIVE by combining than they could ever be as stand alones. They need to demonstarte that the technology they have allows for more specific programming, and that they can deliver a platform that is capable of satisfying many diverse outlets of information and entertainment.

While there is considerable debate about what level of media consolidation is in the public interest, it is beyond a doubt that the media has a direct impact on the health of our democracy. In the landmark case, Red Lion Broadcasting v. Federal Communications Commission, which has roots in the Harrisburg media market, the Supreme Court observed, “it is the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences.” Central to our democracy is the “uninhibited marketplace of ideas,” where all sides are heard and a diversity of viewpoints allows people to make up their own minds about issues of the day.

Satellite radio can clearly demonstrate that because they broadcast nationally, that they cover the entire spectrum of content and news. Now matter the political stance, satellite radio can deliver shows that suit the purpose. Sirius and XM need to be sure to point this out.

But when you look at today’s broadcast media landscape, we see a “if it bleeds, it leads” approach to news reporting. While this may help ratings, it is the life of our democracy that bleeds when in-depth coverage of local and national elections disappears, and when real investigative journalism is replaced with video news releases, and when the positive aspects of our communities are not covered. One national study has found that community public affairs programming accounted for less than 1/2 of 1 percent of local TV programming, compared to 14.4 percent for paid programming like infomercials for ab-crunchers.

We should learn from our mistakes in 2003, when the FCC attempted to implement the most destructive rollback of our media ownership protections in the history of American broadcasting. Over the objection of Commissioner Copps and me, the Commission issued regulations allowing one media company to own up to three TV stations, eight radio stations, and the only daily newspaper in a single community.

Another person who did not seem to like Powell.

Since 2003, Congress, the courts, and the public have all rejected the Commission’s Order. Three million citizens nationwide, of every political stripe from right to left and virtually everyone in between, expressed their opposition to the rules. In 2004, the U.S. Court of Appeals for the Third Circuit right here in Pennsylvania, thanks to your own Prometheus Radio Project, sent the rules back to the Commission. It chastised the FCC for failing to consider how the proposed rules would affect minority ownership and localism. Now it is up to us to start from scratch. With your help, we can get it right this time.

Proponents of consolidation – primarily the big media companies themselves – argue we can afford less diversity because there are so many new options out there, with the Internet, iPods, satellite radio and hundreds of channels on cable and satellite. But study after study shows that broadcast radio and television are still the dominant source of local news and information, as well as entertainment programming. The broadcast industry still produces, disseminates, and ultimately controls the news, information, and entertainment programs that most inform the discourse that is essential to our democracy.

Bingo. Adelstein understand the diverse market here. he also understands that the market is still dominated by traditional media outlets. This is a very compelling reason for him to side with a merger. He acknowledges that satellite offers very diverse programming.

As I travel across the country to participate in forums like this, I hear complaints about hyper-commercialism, rampant homogenization, and an unforgivable lack of women and minority ownership, employment, and participation. Women make up over half of the U.S. population, but they own less than 5 percent of all television stations. And, minority ownership of radio and television stations is dismal: only 4.2 percent of radio stations and 1.5 percent of TV stations are owned by African Americans, Latinos and Asians.

In Harrisburg, Hispanics alone comprise nearly 12 percent of the population and African-Americans account for 55 percent, yet neither group owns a radio or television station. This lack of diversity may account for the inadequate coverage and a lack of understanding of race and ethnic-related issues in America. Despite these abysmal numbers, the Commission did not acknowledge this disappointing state of minority and women ownership in its 2003 decision. To make matters worse, the Commission repealed the only policy specifically aimed at fostering diversity of ownership.

The problem can be seen here in Harrisburg because the statistics speak for themselves. According to Consumer Federation and Free Press, just four companies control over 79 percent of the Harrisburg area news market. (A prime reason to ensure the success of satellite radio. satellite radio affers an outlet that otherwise would not be available) There are three companies that own 60 percent of the commercial radio stations, with one owning 6 stations, thus creating a market where non-local entities own nearly 75 percent of the radio stations. This is especially discouraging when considering that there are no locally owned commercial news stations. There are no full-power commercial TV stations owned by a racial or ethnic minority in the Harrisburg area, and none are owned by women.

I hear that the dominant local newspaper, Patriot News, does a good job covering local news and events. But I am concerned with what could happen if the FCC relaxes the media ownership rules and allows cross-ownership to take place. That would allow a big media conglomerate that owns television and radio stations in Harrisburg to then buy Patriot News, which would allow a single owner to control over 60 percent of the Harrisburg news market.

Satellite radio is about choices and diverse programming. Because the format allows for hundreds of channels, there is room for everyone.

I have heard great things about the Millennium Music Conference, held annually nearby in Camp Hill, Pennsylvania, which provides an outlet for local and independent artists to have their music heard. I am also pleased to see that students at Middleton High School operate WMMS 91.1 FM, giving teenagers the opportunity to provide live commentary on local high school events. We need to encourage more of this local flair in our media markets across the nation.

Congress has given us on the Commission the responsibility to oversee the broadcasting industry in a way that fosters diversity and localism, and prevents undue concentrations of power. So we are here to find out what is happening in Harrisburg and throughout the area. You deserve – and the law requires – programming that serves the unique needs of your local communities. If we are going to craft media ownership rules that best serve the public interest, we must hear from the public. We must hear from you. That is why we are here to listen.

Thank you all for coming out to share with us your views.

STATEMENT OF COMMISSIONER DEBORAH TAYLOR TATE
HARRISBURG, PENNSYLVANIA MEDIA OWNERSHIP FIELD HEARING

As a state and FCC Commissioner, I have been a proponent of outreach initiatives to solicit public input. Transparency in government decision-making is important and forms the basis of our nation’s administrative procedure laws. During our first two public hearings on media ownership – in Los Angeles, the nation’s second largest media market and one of its most diverse, and in my hometown of Nashville, Tennessee, home to a vibrant music industry – we heard from elected officials, music legends, songwriters, academics, and well over a thousand citizens. Now, I welcome the opportunity to hear from the citizens of the Harrisburg-Lancaster-York area, the 41st largest media market in the nation, as we continue our ongoing conversation regarding the FCC’s broadcast ownership rules.

Given the important role that the broadcast media play in our democratic society’s marketplace of ideas, I am committed to working with my FCC colleagues to ensure that our actions further the touchstone goals of competition, localism, and diversity. As we review our media ownership rules, however, we must be mindful of the ongoing, dramatic changes in the ways we – especially “generation-i,” those raised with the Internet – receive our news, information, and entertainment, anytime, anywhere. And our mobile phones now provide us with stock quotes and e-mail updates from sources across the globe. We must make sure that we account for these new voices and platforms, because, from a regulatory standpoint, the media marketplace of tomorrow is being shaped by our actions today.

Tate fully understands the level of competition that already exists, and also grasps that things evolve quickly. Sirius and XM need to highlight the competition, but also interject how they, as a merged company, will fit into that landscape. They should stress their diversity, and choices, and stress that they are a medium that can not only fill voids, but do it in a manner that does not threaten competition, but rather fosters it.

Thank you to all those here in Harrisburg, Pennsylvania, and to our dedicated FCC staff who worked long and hard to make this hearing possible. I look forward to hearing from our distinguished panelists and, especially, from those members of the public who are with us today.

HARRISBURG MEDIA OWNERSHIP FIELD HEARING
STATEMENT OF COMMISSIONER ROBERT M. MCDOWELL

I am pleased to be here in Harrisburg as we continue building a record of evidence for the Commission’s comprehensive review of the broadcast ownership rules. I am studying the issues with an open mind and I hope to hear as many viewpoints on the issues as I can.

McDowell expresses that he is viewing the process with an open mind. This bodes well for Sirius and XM. McDowell seems to be another who will absorb the information from all sides prior to reaching a decision.

As the Commission’s experience with the 2002 review revealed, the debate over broadcast ownership is a debate about the vitality of our democracy and the appropriate balance among competitive efficiencies, diversity of voices and local focus. The debate elicits the opinions and passions of people from all walks of life from all over the country. I am eager to learn more about the issues from the perspectives of all of the interested parties – artists, programmers, broadcasters, consumers, academics and many others.

McDowell seems to grasp very well that there will be varried opinions. He also stresses that he gathers the input of many. For Sirius and XM this bodes well. There is often a preconceived notion that consolidation is bad. McDowell seems to rise above having a preconceived opinion.

In particular I look forward to learning about competition, diversity and localism in the Harrisburg market from all of you. We need the first-hand knowledge that only you can provide about how our ownership rules affect you as businesspeople and as viewers and listeners so that we can determine whether the times demand that those rules change. To our panelists and audience members -- thank you for being here today and for participating in our hearing. We value your input.

These are the five members that will be looking into the Sirius and XM Merger. We here at SSG felt that getting a basic understanding of these members through their statements in a similar type of circumstance is valuable for investors. All to often people point to the Direct TV and Dish merger as a comparison, when there are other issues such as the media ownership issue which can actually offer more information relative to committee member sentiment. We hope you found this piece informative.

Labels: fcc, merger, sirius, xm