December 21, 2007

Who Pulls the F.C.C.'s Strings?

In two recent posts, Kevin Martin's Contempt for the Public He Serves and The Arrogance of Kevin Martin, I described Federal Communications Commission (F.C.C.) Chairman Martin's headlong rush to relaxed media ownership rules, contrary to both thoroughly expressed public sentiment and the will of Congress. In his latest attempt to serve someone other than the people who pay his salary, on December 18th, Mr. Martin forced the vote he had threatened to allow major media corporations to control more of what the public sees and hears. The new media ownership rules passed the out of the F.C.C. on a 3-2 party-line vote:
Martin pushed the vote through despite intense pressure from House and Senate members on Capitol Hill to delay it. The chairman, however, has the support of the White House, which has pledged to turn back any congressional action that seeks to undo the vote.
[Commission] Democrats Michael Copps and Jonathan Adelstein ... were bitterly opposed to his media ownership rule.

The two men criticized Martin for making changes to his proposal "in the dead of night" and just prior to the meeting that they said created new loopholes in the rule instead of closing them, as Martin pledged during a recent hearing on Capitol Hill.

"Anybody who thinks our processes are open, thoughtful or deliberative should think twice in light of these nocturnal escapades," said Adelstein.

Adelstein said Martin's proposal "will allow for waivers for six new newspaper-broadcast combinations and 36 grandfathered stations."

In a lengthy statement, Copps described the commission's action as a "terrible decision."

"In the final analysis, the real winners today are businesses that are in many cases quite healthy, and the real losers are going to be all of us who depend on the news media to learn what's happening in our communities and to keep an eye on local government," he said.
Four days earlier, a bipartisan group of 26 senators sent Chairman Martin a letter making it clear that they believe he not only shortchanged the public comment period prior to the vote, but that they would move immediately to introduce legislation unraveling the new rules if he proceeded. With the precedent of having overturned previous F.C.C. Chair Michael Powell's efforts to loosen media ownership, and it initially appeared that this might happen quickly. That changed, however, when a letter from Commerce Secretary Carlos Gutierrez to Senate Majority Leader Harry Reid came to light making it clear that the White House opposes any delay on consideration of media ownership rules, "or any other attempt to delay or overturn these revised rules by legislative means."

A significant political battle appears to be, once again, in the offing, but no matter what happens, Kevin Martin has been duly exposed as a shill for big media. [Hat tip BuzzFlash.] Broadcasting & Cable, a television business trade publication, reported earlier this month that:
It didn't take long for Tribune [Company] to take the Federal Communications Commission to court over its decision to grant temporary waivers for the company's newspaper-broadcast cross-ownerships in five markets.

The company filed suit in the D.C. Court of Appeals Wednesday, saying the decision was "contrary to law, arbitrary and capricious, an abuse of discretion, and not supported by substantial evidence."

Why would Tribune sue a commission that just saved its buyout deal? Because it still gets the waiver whether it sues or not. And if it wins, the newspaper-broadcast cross-ownership ban could get thrown out altogether - a step the chairman has signaled he is unwilling to take. As expected, the filing took aim at the ban in its entirety as well. "[T]he commission's ongoing enforcement of its newspaper/broadcast cross-ownership rule in its existing form is unconstitutional," Tribune told the court.

Tribune had asked for indefinite waivers. The company said it needed to get the waivers in five markets at least 20 business days before the end of the year so that it could get the deal done by January 1 or risk having it fall apart and having the company sold for parts. The F.C.C.'s Republican majority denied permanent waivers, agreeing only to two-year waivers or six months after the end of any litigation over current or future ownership rules. Commission Democrats opposed the waivers, with commissioner Michael Copps anticipating Tribune's move.

"If the majority simply granted a two-year waiver to Tribune - which would have been the straightforward thing to do - Tribune would have been unable to go to court because a party cannot file an appeal if their waiver request is granted," Copps pointed out in his dissenting statement. "So what does this order do? It denies the waiver request but offers an automatic (and unprecedented) waiver extension as soon as Tribune runs to the courthouse door. Presto! Tribune gets at least a two-year waiver plus the ability to go to court immediately and see if they can get the entire rule thrown out."

Copps also opined that Tribune would be able to appeal to the "more sympathetic" D.C. Circuit, bypassing the Third Circuit, which remanded the general ban back to the commission, although even that court indicated that the F.C.C. could make a case for modifying or lifting the ban.
What all this means is that the Tribune Company colluded with the Federal Communications Commission to bring suit against the F.C.C. The F.C.C. is helping to sue itself in order to assist Tribune in subverting the regulatory process without legal exposure and to keep it's leveraged buyout - which is dependent on looser ownership rules - afloat. On top of permitting Tribune to game the regulatory system, this tactic also allows the company to challenge the entire process of regulating cross-ownership in court. All courtesy of Kevin Martin.

It is hard to argue that consolidation in the media industry would, in many cases, bring both savings and profits to major media corporations. What is apparently lost to both President Bush and our current F.C.C. Chairman however, is that the airwaves belong to the public, and as a public asset the first and overriding consideration when modifying rules for their use is this: Does this change better serve the public? The answer to the this question in regard to the new media ownership rules is a resounding no.

In my December 12th post I wrote:
Rich rewards for his advocacy of industry over public interest and a plum position almost certainly await Mr. Martin when he leaves the F.C.C., public opinion and reaction be damned. While the Senate appears to be making the right moves to counter the chairman, it is clear that, while he is still collecting a U.S. government paycheck, he almost unquestionably serves a master other than the American people...
It appears we now know exactly who is pulling Kevin Martin's strings.

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