The government can impact electronic media firms through communication policy and regulation. Regulators license broadcasters and impose obligations to promote goals like competition, pluralism and localism. The FCC regulates ownership levels and other aspects of broadcasting in the US to balance economic and public interest factors. Regulations are intended to prevent monopolies and promote diversity, and are established by Congress and enforced by the FCC and other regulatory authorities.

1. MEDIA POLICYAND ECONOMICS How the Government Can Impact the Business of an Electronic Media Firm

3. Communication Policy set of laws, rules and regulations that govern electronic media regulated electronic media: telecommunications, broadcasting, cable promote competition, pluralism, localism

4. Broadcast Regulation license broadcasters create legal obligations for broadcasters impose sanctions if fail to carry out those obligations organize and co-ordinate the broadcast landscape

5. Why chaos scarcity of the spectrum public trustees of the airwaves accessible to children pervasive nature of medium economics of media favors economies of scale and monopolies

6. Who Government (Communication Policy) Regulatory Authorities (Media Law/Regulations)

7. Objectives Pluralism (diversity) Avoid media concentration U.S. -- no monopolies Healthy industries Competition More choices & lower prices for consumers Localism Effectively manage broadcast spectrum

8. Communication Policy Players Legislative body Independent regulatory authority Many countries have two Courts President / Prime Minister

9. Regulatory Authority Supervise the implementation of broadcasting regulation In most European countries, separate authorities for broadcasting and telecommunications Some matters determined by the courts

10. Regulatory Authorities France: Conseil Supérieur de l’Audiovisuel Germany: Landesmedienanstalten Italy: Autorita per le garanzie nelle comunicazioni* Netherlands: Commissariaat voor de Media U.K.: Ofcom* U.S.: Federal Communications Commission* * = both broadcasting & telecommunications

11. How: Policy - U.S. Congress Senate & House of Representatives pass legislation, signed into law by President Act, Statutes, Code FCC develops rules to implement Federal Regulations Statutes or Rules may be challenged in court

12. The Communications Act of 1934 SEC. 303. [47 U.S.C. 303] GENERAL POWERS OF COMMISSION. Except as otherwise provided in this Act, the Commission from time to time, as public convenience, interest or necessity requires shall . . .

14. Basic Powers of Regulators Licensing Supervisory Rule-making

15. Regulatory Process Congress passes legislation FCC prepares rules that will implement the legislation Legislation or rules challenged in court

16. Congressional Process Introduction and referral to committee Considered by committee Public hearings Mark-up sessions Committee votes House floor consideration Resolving differences with Senate version Final passage and signature by President

17. Rationale for Regulation Clear need for regulation -- otherwise chaos Broadcast spectrum is a public resource Scarcity of the broadcast spectrum Fairness Doctrine Pervasiveness of medium Accessibility to children Little or no warning

18. Rulemaking Notice of Proposed Rulemaking Comments Promulgate Rule Requests for Reconsideration

19. Licensing in U.S. 8 year license period licensee must serve public interest, convenience and necessity availability of frequency no opposition

20. Basic Qualifications Technology comply with FCC technical standards--transmission facilities, interference avoidance and signal quality Financial adequate capital -- sufficient funds to operate station for three months without ad revenue

21. Character lack of serious legal violations (don’t lie to commission, engage in fraudulent programming or commit felonies) Citizenship/Ownership U.S. citizens ownership restrictions

23. Media Concentration Ownership Quotas

24. Spectrum Management spectrum allocation band allotment channel assignment (licensing) Berlin International Radio Convention of 1906

26. FCC Objectives Localism Local control Local programming Diversity Healthy Industries Competition

27. CASE STUDIES

28. Carroll Doctrine Financial Interest and Syndication Public Television Telecommunications Act of 1996

29. The Carroll Doctrine previously economic injury was not sufficient grounds to deny new license application Carroll established that it could deny if loss so significant would deprive the public of service (1958) FCC had to adopt a procedure for assessing economic harm from new licensing decisions

30. though no licenses were ever denied by a Carroll challenge, did delay licensing and drive up cost of competition after 30 years, FCC re-examined policy found changes in marketplace undermined whatever validity Carroll had had

31. FINANCIAL INTEREST AND SYNDICATION Finsyn adopted in 1970 to prevent three television networks from restricting market for television programming networks couldn’t have a financial interest in the subsequent broadcasts of programs aired on their stations networks couldn’t syndicate programming networks had to lease programs

32. over the years the television marketplace changed fourth national network emerged -- FOX cable had also developed 1991 rule was relaxed 1995 -- finsyn abolished

34. Public Television Founded in 1969 by Act of Congress receives funds (through the Corporation for Public Broadcasting) from Congress

35. Telecommunications Act of 1996 allowed competition for all telecommunications markets eliminated most cross-market entry barriers relaxed concentration and merger rules new implementation obligations on the FCC and state regulators restrictions on television violence and “indecent” online communications

36. Some results include . . . Increased consolidation Increased vertical integration

37. Clear Channel owns, programs or sells airtime for 1,200 radio stations 240 stations internationally 50 syndicated programs another merger: CBS and Viacom

38. Media Ownership Rules Always a debate

39. Telecommunications Act of 1996 requires FCC to review ownership rule biennially. Also two federal court decisions striking down some rules. 2010, the Commission will open a new phase of a rulemaking proceeding.

40. Analyze ownership rules To determine if “necessary in the public interest as the result of competition.”

41. Local Television Local television multiple ownership rule. 1964 -- one to a market. Rule relaxed late 90’s allow duopolies where 8 independent voices in market. only one can be in top 4 in market

42. Local Radio Ownership Rule Big market (45 or more stations) -- can own 8 stations, no more than 5 of a kind 30-44 commercial stations, can own 7, but no more than 4 of a kind 15-29 commercial stations, can own 6, no more than 4 of a kind 14 or less, can own 6, no more than 4 of a kind, no more than 50% of the market

43. National TV Ownership May own stations reaching up to 39% of national audience. Reviewing UHF reach discounted by 50%

44. Dual Network Rule Top four national broadcast networks may not merge.

45. Media Cross-Ownership Radio-television cross-ownership possible. Newspaper-television cross-ownership possible. See

47. Other Things that Are Good to Know

48. Other Powers of the FCC Warnings Fines (forfeitures) Revoke Licenses Refuse to Renew Licenses Position Papers Informal Negotiations

49. Specific Rules Ownership Concentration Foreign ownership Political Advertising Children’s Television Cable Satellite

50. More Rules Advanced television (digital; HDTV) Close-captioning Indecency

51. Advertising False and deceptive advertising prohibited Puffery (exaggerated sales talk) is okay Endorsements must reflect honest beliefs or experience of endorser

52. Federal Trade Commission (FTC) Enforcement Powers Against Deceptive Advertising Consent Decrees Cease and Desist Orders Corrective Advertising Industry Wide Actions

53. Federal Communications Commission (FCC) Regulates amount of advertising in children’s programming 12 minutes per hour weekdays 10.5 minutes per hour weekends No “program-length” commercials (host-selling) Program separators required

54. Indecency language or material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities prohibited between 6:00 a.m. and 10:00 p.m.

55. Miller Test Average person, applying contemporary community standards, would find that the work taken as a whole appeals to the prurient interest; Work depicts or describes in a patently offensive way sexual conduct specifically defined by the applicable state law; and Work, taken as a whole, lacks serious literary, artistic, political, or scientific value.

56. Libel Libel -- written Slander -- spoken Some states, broadcast defamation is libel California, broadcast defamation is slander Purpose -- redress for injury to one’s reputation

57. Privacy Commercial appropriation Intrusion Public disclosure of embarrassing private facts False light

58. Economic Impact cost of litigation libel insurance

59. Copyright ©

60. Exclusive Rights under © Reproduction Derivation (prepare derivative works) Distribution Performance Display

61. Fair Use Exception Purpose and character of use (commercial or nonprofit educational) Nature of copyrighted work Amount of copyrighted work used Effect of use upon potential market for or value of the copyrighted work

62. Antitrust Sherman Act Federal Trade Commission Act Clayton Act Hart-Scott-Rodino Act

63. Sherman Act every contract, combination . . . , or conspiracy, in restraint of trade “monopolize, or attempt to monopolize," trade or commerce

64. Federal Trade Commission Act unfair methods of competition

65. Clayton Act prohibits mergers and acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly."

66. Hart-Scott-Rodino Act requires the prior notification of large mergers to both the FTC and the Justice Department