The government can impact media businesses through communication policies and regulations. Regulators license broadcasters and impose obligations to promote goals like competition, pluralism, and localism. In the US, the FCC regulates under powers granted by Congress to effectively manage the broadcast spectrum in the public interest. The FCC pursues objectives like diversity, competition, and localism through rules governing media ownership and cross-ownership.

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

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

3. 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

4. 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

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

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

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

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

9. 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

10. 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

11. 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 . . .

12. Basic Powers of Regulators Licensing Supervisory Rule-making

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

14. 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

15. 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

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

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

18. 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

19. 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

20. Media Concentration Ownership Quotas

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

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

23. 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

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

25. Media Ownership Rules Always a debate

26. 2010 Quadrennial Review Congress requires FCC to review media ownership rules every 4 years To determine whether rules in are in the public interest Rules limit number of broadcast stations one entity may own and limits common ownership of broadcast stations and newspapers

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

28. 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 5, no more than 3 of a kind, no more than 50% of the market

29. National TV Ownership May own stations reaching up to 39% of national audience. When calculating station reach TV stations on UHF channels (14 and above) count less than TV stations on VHF channels (13 and below)

30. Dual Network Rule None of the following networks may merge: ABC, CBS, FOX and NBC

31. Media Cross-Ownership In top 20 markets owning a radio station and newspaper is presumed to be okay. San Francisco is a top 20 market, so that will be our focus. In top 20 markets owning a TV station and newspaper okay if TV station not in top 4 in market AND 8 major independent media voices remain

32. TV-Radio Cross-Ownership In markets with at least 20 independent media voices, one may own 2 TV stations and 6 radio stations In markets with at least 10 independent media voices, one may own 2 TV stations and 4 radio stations Smallest markets – 2 TV and 1 radio local market ownership rules apply

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

34. Advertising False and deceptive advertising prohibited Puffery (exaggerated sales talk) is okay Endorsements must reflect honest beliefs or experience of endorser Federal Trade Commission (FTC) takes action against deceptive advertising

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