Disappeared News

by Larry Geller

The Federal Communications Commission has opened a notice of inquiry (NOI) as part of its review of its rules and regulations on media ownership and consolidation.

This means that the public has 30 days to submit. These comments, which are often formal positions composed by attorneys but which may be informal as well,  could potentially influence FCC policy towards mergers such as Hawaii has experienced last year of KHNL, KGMB and KFVE.

The Media Council Hawaii filed a complaint through its Washington attorney that the merger was equivalent to a sale, since control of the operation passed to Alabama-based Raycom Media. The stations did not apply for a waiver of FCC rules before consummating their merger, holding that a waiver was not necessary.

Documents obtained under a FOIA request by the Honolulu Advertiser showed that Raycom reaps the lions share of profits from the merger and controls the operations:

Records obtained by The Advertiser under a Freedom of Information Act request with the FCC show that Raycom is receiving more than 90 percent of the cash flow generated by all three stations, which exceeds thresholds previously allowed by the FCC in mergers.

Alabama-based Raycom, one of the country's largest broadcasters, not only provides news programming for the three stations but also handles all sales functions, promotions and back-office support, the documents show.

Raycom also pays for the salaries for employees at all three stations, including K5's staffers, who technically are employees of K5's owner HITV License Subsidiary Inc. [Honolulu Advertier, New data cast doubt on news merger, 5/18/2010]

The FCC commissioners appear split on the issue of consolidation, according to this article on a broadcasting industry website:

Commissioners Michael Copps and Robert McDowell appended comments to the issuance of the NOI. Copps leans toward tightening the rules up to counteract the harmful effects of rampant ownership consolidation; McDowell leans toward loosening the rules to take into account the new competitive realities of the internet age. [rbr.com, FCC opens Notice of Inquiry into media ownership rules, 5/25/2010]

To date, the FCC has not ruled on the Media Council complaint. Perhaps they are awaiting completion of their review of the rules and regulations. If so, public and industry responses to the NOI may be influential also in the FCC’s ultimate disposition of the Media Council complaint.

The article linked above includes comments by both commissioners made at the issuance of the NOI.

Permalink posted by Larry @ 5/26/2010 07:43:00 AM