BEFORE the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C
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BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) 2006 Quadrennial Regulatory Review - Review ) MB Docket No. 06-121 ofthe Commission's Broadcast Ownership Rules ) and Other Rules Adopted Pursuant to Section 202 ) ofthe Telecolnmunications Act of 1996 ) To: Secretary, FCC For: The Commission COMMENTS OF HUBBARD BROADCASTING, INC. HUBBARD BROADCASTING, INC. Charles R. Naftalin Leighton T. Brown HOLLAND & KNIGHT LLP 2099 Pennsylvania Avenue, N.W. Suite 100 Washington, D.C. 20006 (202) 955-3000 December 11, 2007 Its Attorneys TABLE OF CONTENTS Page SUMMARY I. Introduction. ... ... ... ... ... ... ... ... ... ... ... ... .... ... .. ...... ... ... ... ... ... ... ... ... ... .. 1 II. The Principles Affinned in the Proposed Change. ................................... 3 III. The Virtual Duopolies. .................................................................... 5 IV. The Commission Should Act Now. ..................................................... 11 SUMMARY Hubbard Broadcasting, Inc. ("HBI") does not oppose the proposed revision to the newspaperlbroadcast cross-ownership rule. That proposed revision reaffirms the Commission's commitment to the public interest principles which support independent television station control and operation, along with independence in the provision oflocal news and programming generally. Since 2004, HBI has been urging the Commission to reverse decisions ofits Media Bureau which clearly are antithetical to those principles by authorizing combinations of television stations in small media markets in obvious contradiction ofthe terms ofthe Commission's television duopoly restrictions. Media Access Project filed comments in support ofHBI's efforts. By these Comments, HBI takes this opportunity to further focus the Commission on the need to address immediately these matters ofessential importance to the residents ofsmall and rural media markets, especially because in distributing the revised rule, the Chairman stated: With respect to the remaining broadcast ownership rules currently under review, the Chairman believes that any further relaxation in the radio or television broadcast markets should not be allowed. He therefore proposes to make no changes to the local television 'duopoly' rule..." As HBI, other broadcasters and MAP have made clear, the public interest requires that the Comlnission reverse the Bureau decisions which have authorized the formation of "virtual duopolies," an obvious relaxation in the duopoly rule. The requirements ofthe court in Prometheus Radio Project also require such action. BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) 2006 Quadrennial Regulatory Review - Review ) MB Docket No. 06-121 ofthe Commission's Broadcast Ownership Rules ) and Other Rules Adopted Pursuant to Section 202 ) ofthe Telecommunications Act of 1996 ) To: Secretary, FCC For: The Commission COMMENTS OF HUBBARD BROADCASTING, INC. Hubbard Broadcasting, Inc. ("HBI"), by its attorneys, hereby submits its Comments in the above-captioned proceeding responsive to the November 13,2007 Press Release issued by the Commission's Chairman which explained, and distributed, proposed revisions to the Commission's multiple ownership rule, §73.3555 ("Proposed Change"). 1 I Introduction HBI does not oppose the Proposed Change that would permit the common ownership of single broadcast stations and daily newspapers within the 20 largest DMAs in the country under enumerated circumstances. HBI sees the Proposed Change as an explicit affirmation of fundamental media ownership principles for television markets. For the past several years, HBI has urged the Commission to enforce those principles in small television markets. In support of the public interest in due process, broadcast localism, diversity in media, and the principles expressed by the court in Prometheus, 2 RBI offers these Comments in order to further focus the Comlnission on the need to immediately address these matters ofessential itnportance to those residing in small and rural media markets. 1 The Press Release, p.2, requests that comments on the Proposed Change be filed by December 11, 2007. rd 2 Prometheus Radio Project v. Federal Communications Commission, 373 F.3d 372 (3 Cir. 2004) ("Prometheus") RBI, a company with decades ofbroadcasting experience, is the parent company ofradio and television station licensees in six markets within the United States, including the small media markets ofDuluth, Minnesota-Superior, Wisconsin (DMA rank 137) (the "Duluth market") and Rochester, Minnesota-Mason City, Iowa-Austin, Minnesota (DMA rank 153)3 (the "Southern Minnesota market"). Starting in 2004, RBI, along with other broadcasters and Media Access Project ("MAP"), asked the Commission to review decisions ofits Media Bureau (the "Bureau") which have expressly authorized the formation of "virtual duopolies ,,4 and eliminated the material restrictions on the common ownership and operation oftelevision stations in small markets. To date, the Commission has not acted on the pending applications for review ofthese Bureau decisions nor has it acted on RBI's earlier comments on this subject which were filed in the instant rule making proceeding.5 In Part III ofthese Comments, RBI will address the pending applications for review of the Bureau decisions on the Duluth and Southern Minnesota markets which have been pending before the Commission for several years. In these proceedings, the Bureau granted assignment oflicense applications which, in all material respects, permitted network-affiliated television licensees in these markets to enter into a series of agreements which consolidated the stations into single economic units for advertising sales, consolidation ofnon-licensed assets, and operation as single elnployment units. The results ofthose consolidations have been the elimination ofcompetition, loss ofprogramming diversity, loss oflocal news, combinations of stations among the top four stations (the Duluth and Southern Minnesota markets each have only 3 These DMA rankings are taken from Television & Cable Factbook 2007, p. A-1214. 4 See Malara Broadcast Group ofDuluth Licensee LLC, 19 FCC Rcd 24070 (MB 2004) ("Malara Decision"). See also WDrO and KQDS Joint Petition to Deny (filed June 14, 2004)("Joint Petition"); Malara Opposition to Joint Petition to Deny (filed June 29, 2004); WDrO and KQDS Reply to Opposition to Joint Petition to Deny (filed July 12, 2004)("Reply"); and WDro and KQDS Motion for Leave to File Supplement and Supplement (filed Dec. 8, 2004). 5 Reply Comments of Hubbard Broadcasting, rnc., filed January 16, 2007 in: MB Docket No. 06-121; MB Docket No. 02-277; MB Docket No. 01-235; MB Docket No. 01-317; andMB Docket No. 00-244. 2 a total offour commercial television stations), fundamental reductions in media voices, and concentrations ofbroadcasting revenues in excess ofthat which the Department ofJustice normally permits under the Herfindahl-Hirschman Index ("HHI"). In short, the Bureau decisions at issue permitted clever legal agreements, which directly undermine the explicit terms ofthe television station duopoly provisions within the multiple ownership rules, to prevail. No version ofthe Commission's multiple ownership rule has ever permitted common ownership, or even attributable ownership interests, between television stations is the small markets at issue. 6 II The Principles Affirmed in the Proposed Change In his Press Release, the Chainnan describes the Proposed Change as applicable only in "...the largest markets where there existscompetition and numerous voices..." specifically "...the 20 largest Nielsen Designated Market Areas ("DMAs")... ,,7 The revised cross- ownership provisions are intended to govern in the 20 largest DMAs, but even in those markets combinations would be restricted to a single broadcast station (radio or television) and a single daily newspaper under limited circumstances. Under the Proposed Change, ifthe proposed combination consisted of a television station and a daily newspaper, the following restrictions would apply: (i) the television station is not ranked among the top four in the DMA, and (ii) at least 8 independently owned and operated major newspapers and full-power television stations remain in the DMA ifthe transaction is approved and consummated.8 Proposed combinations oftelevision stations and daily newspapers in compliance with these considerations would be presumed to be in the public interest, and ifnot compliant, presumptively contrary to the public interest (and not grantable).9 6 The only exceptions are not relevant, such as for satellite stations or due to failing station waivers. 7 Press Release, p. 1; see also Proposed Change,(d)(4). 8 Press Release, p. 2; see also Proposed Change,(d)(4)(i) and (ii). 9 Ibid. 3 Even a cursory examination ofthe small market television station combinations with which RBI has raised concerns results in seeing that these transactions are inconsistent with the ownership principles announced in the Proposed Change. Both Duluth and Southern Minnesota are ranked more than 100 DMA rankings below the top 20 DMA's. These virtual television station duopolies were approved by the Bureau although the stations ranked among the top four in their respective markets: for Duluth, the NBC and CBS affiliates, and for Southern Minnesota, the NBC and Fox affiliates. Neither ofthese markets has as many as 8 independently owned and operated television stations and daily newspapers, so it was impossible