One Reform The FCC Should Avoid

Federal Communications Commission ( FCC ) Chairman Tom Wheeler has been calling for the FCC to reconsider the broadcaster exclusivity rule. At first blush, getting rid of rules sounds like a good idea. Who doesn’t want more deregulation?  The problem is this isn’t the comprehensive video market reform that would unwind 70 years of video regulation in a way that would benefit both consumers and innovation. Instead, it’s another example of cherry-picked “deregulation” which seeks ways to advantage one competitor and/or one format over another, rather than taking a more holistic approach to reforms.

Fifty years ago, the FCC recognized the market problems caused by importing a distant broadcast signal into a local television market, so it created the first set of exclusivity rules. These rules ensure that local broadcasters have reserved local markets for their signal. This prevents distant affiliate broadcasters from cannibalizing a distant market. Exclusivity assures that a broadcaster can devote its resources on their market area and provide consumers with tailored community programming that an out-of-area affiliate cannot.  As a result, consumers have access to local news and content provided by local broadcasters, rather than solely content provided by a regional, state or national level providers. This gave local broadcasters the incentive to compete in their local community markets, rather than having neighboring broadcasters poach neighboring markets with stronger signals.

Today, we have the same issues. With the dominance of satellite and cable providers in communities across the country, these rules preserve community interests, news and programming. In this way, it provides local content for the benefit of consumers. As former chief to the FCC’s Wireless Bureau has opined – the exclusivity rule is fundamental to local television.

Though most of us see the value of local community broadcasting, you will still find some people who will call for a repeal of the exclusivity rule. However, the rebroadcast stipulations between cable and broadcasters are like any other private contract, except it relies on the FCC exclusivity rule as a backstop/enforcement mechanism, and -- unlike most FCC regulations -- this rule cost taxpayers and industry virtually nothing.

Throwing out the broadcaster exclusivity rule could thrust the entire broadcast industry into prolonged and costly contractual legal battles pitting small locally-owned broadcasters against media distribution conglomerates. As they duke it out in the courts, no matter the outcome, the local television consumer will be the loser, and so will consumers who want their community news and programming.

Frankly, the marketplace is doing great without the FCC stepping in with this kind of change. Consumers have more options than ever before with cable, satellite, Netflix , Roku, Apple TV and others. Consumers don’t need the FCC stepping in and limiting their options.

If the FCC truly wants to help the consumer, they should consider reforms such as allowing local TV broadcasters to own newspapers in the same marketplace and vice versa. This change could actually help save some local media outlets and improve local news coverage.

The FCC would do well to listen to the Democrats and Republicans in Congress who are encouraging the FCC to wait on Congressional reforms before moving forward. Then, the FCC should consider comprehensive ways to tackle these issues and benefit consumers, rather than just picking their favorite competitors and/or formats and giving them the most advantages.

Unfortunately, each time this sort of incremental change is accepted, real reform becomes less likely and more difficult to enact. Hopefully the FCC will listen and wait to enact real, meaningful and comprehensive reforms.

Steve Pociask is president of the American Consumer Institute and is a member of the FCC’s Consumer Advisory Committee (CAC). The Views here are solely his own and not that of the CAC. For more information, visit www.theamericanconsumer.org or follow me on Twitter @consumerpal.