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Broadcast Ownership Regulation in a Border Era: An Analysis of how the U.S. Federal Communications Commission is Shaping the Debate on Broadcast Ownership Limits
Unformatted Document Text:  1 Passage of the Telecommunications Act of 1996 marked the beginning of a border era for the television and radio broadcasting industries in the United States, which have undergone radical transition against a policy framework that has historically been characterized by incremental change. The 1996 Act was to provide a significant policy transition from an old media environment to a new media landscape of emerging technologies and heightened competition. Consequently, rules on broadcast ownership limits have faced an uncertain and contentious future within the U.S. Federal Communications Commission (FCC). Concerns among media critics regarding the negative implications of ownership consolidation and its long-term effects on media markets were heightened after passage of the Telecommunications Act of 1996. The new law relaxed restrictions on the number of television and radio stations that could be owned by a single entity, leaving only a 35% cap on the proportion of the national audience that can be reached. Fox Television later challenged the rationale for even a 35% cap in court after its purchase of Chris-Craft Industries, which allowed the company to reach over 40 percent of the national audience. On February 19, 2002 the U.S. Court of Appeals for the District of Columbia overturned the FCC’s 1998 decision to retain the national broadcast ownership cap rule, and ordered that the FCC reconsider if the rule should be retained, and determine what circumstances would merit its retention (Fox Television Stations, Inc. et al v. FCC). The decision appeared to be a huge victory for broadcasting companies that sought to get bigger, as FCC Chairman Michael Powell had previously “questioned the need for media concentration rules beyond the traditional restraints found in antitrust law” (Labaton, 2002a). The analysis presented here will examine why the FCC is revisiting the issue of broadcast ownership limits again and describe the political and economic contexts of the current debate.

Authors: Blevins, Jeffrey. and Brown, Duncan.
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Passage of the Telecommunications Act of 1996 marked the beginning of a border era for
the television and radio broadcasting industries in the United States, which have undergone
radical transition against a policy framework that has historically been characterized by
incremental change. The 1996 Act was to provide a significant policy transition from an old
media environment to a new media landscape of emerging technologies and heightened
competition. Consequently, rules on broadcast ownership limits have faced an uncertain and
contentious future within the U.S. Federal Communications Commission (FCC).
Concerns among media critics regarding the negative implications of ownership
consolidation and its long-term effects on media markets were heightened after passage of the
Telecommunications Act of 1996. The new law relaxed restrictions on the number of television
and radio stations that could be owned by a single entity, leaving only a 35% cap on the
proportion of the national audience that can be reached. Fox Television later challenged the
rationale for even a 35% cap in court after its purchase of Chris-Craft Industries, which allowed
the company to reach over 40 percent of the national audience. On February 19, 2002 the U.S.
Court of Appeals for the District of Columbia overturned the FCC’s 1998 decision to retain the
national broadcast ownership cap rule, and ordered that the FCC reconsider if the rule should be
retained, and determine what circumstances would merit its retention (Fox Television Stations,
Inc. et al v. FCC). The decision appeared to be a huge victory for broadcasting companies that
sought to get bigger, as FCC Chairman Michael Powell had previously “questioned the need for
media concentration rules beyond the traditional restraints found in antitrust law” (Labaton,
2002a).
The analysis presented here will examine why the FCC is revisiting the issue of broadcast
ownership limits again and describe the political and economic contexts of the current debate.


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