Catalyst Radio News Analysis

News Analysis for December 7th, 2007

According to an article in the Seattle Times, the Federal Communications Commission took important steps last week that could dramatically increase the number of low-power FM radio stations broadcasting nationwide. Low-power FMs are stations of about 10 or 100 watts that broadcast within a 1-to-3.5-mile radius. They are run by nonprofit organizations such as religious groups, schools, community groups and municipalities and provide programming not otherwise available. Often these stations provide either an eclectic and broad range of music or public-interest programming. Low Power FM stations also offer a local connection with a neighborhood or a part of the city or a cultural link with a group of people underserved by other commercial stations. There are roughly 800 low-power FM stations in the country today, although they are almost all found in less populated areas. In fact, there is only one such station in a top-50 market — Richmond, Va. The FCC last week recommended that Congress make technical changes to the rules so more low-power FMs can fit on the dial, a move long resisted by the larger commercial radio stations. Also, the commission agreed to study if it should award licenses to locally operated, low-power FMs over stations fed by a more distant source with no local content.

Said FCC Commissioner Michael Copps on last weeks decision, “Runaway consolidation since the 1996 Act has left us with homogenized content, national playlists, outsourced news, a dumbed-down civic dialogue, and shameful levels of minority and female ownership. That's why low power radio is such a breath of fresh air. It is a positive response to what ails us. These are truly local stations run by local organizations." The pressure now moves from the FCC to the U.S. House and Senate to buck the big broadcasters and approve rules that encourage more low power stations to pop up and occupy frequencies on the FM dial. Sen. Maria Cantwell, D-Wash., and Sen. John McCain, R-Ariz., are prime sponsors of legislation to make it possible to create more low-power FM stations. And their bill to create the spacing to fit more of these stations on the dial has unanimously cleared the Senate Commerce Committee.

In other FCC news, The Federal Communications Commission ended last week with several important decisions, including the $1.3 billion Clear Channel sale, planning to take a look at product integration, granting The ChicagoTribune its needed waivers and taking another shot at cable. Earlier last week, FCC chairman Kevin J. Martin presided over a long-delayed commission meeting that forced him to back away from plans to invoke new regulations on cable television. But late Thursday, Martin managed to secure supporting votes from Democratic commissioners Michael Copps and Jonathan Adelstein to impose a 30% cap on the number of subscribers a cable company can serve nationwide. No cable company currently serves 30% or more subscribers in the country, though Comcast is close with about 27%. The cable industry, which led a successful lobbying campaign against Martin's efforts to invoke new regulations, is expected to challenge the cap, which is not likely to be made official until the commission's next meeting on Dec. 18. Also tentatively scheduled for that meeting is an item the commission added late last week and that could lead to an FCC investigation into product integration, which has been a growing sore point between talent and producers. Product integration, or product placement as it is often called, is when companies pay to have their products included in a movie or tv show. Writers, actors and directors have been complaining that they or their material are increasingly used in movies and TV shows as vehicles for commercial products without adequate disclosure that the manufacturer has paid a fee for the service.

Also last week, the commission approved Clear Channel's planned sale of 35 TV stations to Newport Television. Regulators imposed conditions on the sale, which will put Newport in violation of FCC ownership rules in nine markets and thus require the divestiture of several stations. The companies asked the FCC for waivers to operate the stations for six months until it comes into compliance with the rules. The FCC granted waivers in eight of the nine markets, denying the request for Albany. The commission, as expected, granted temporary waivers for Tribune regarding its cross-ownership of newspapers and broadcast outlets in four markets (New York, Los Angeles, Miami and Hartford, Conn.). Tribune also has cross-ownership in Chicago, but since those properties were acquired prior to the cross-ownership ban in 1975, the FCC issued a permanent waiver for the Chicago market. The waivers will allow the planned Tribune sale to real estate magnate Sam Zell to go through before the end of the year.

The online journal Nieman Watchdog recently released a new article chronicling the lobbying activities of ALEC, the American Legislative Exchange Council. According to the Nieman Watchdog, ALEC is a corporate-sponsored, tax-exempt organization set up to help hundreds of big corporations and trade associations advance their legislative agendas in state capitals from coast to coast.” The article notes that ALEC lavishes spending on state legislators who choose to join — about 2,400 in all, by ALEC’s count. Perks for “legislator members” include taxpayer-financed junkets to prime tourist destinations in the United States, free or heavily subsidized vacations for their spouses and children, and other benefits that range from no-cost child care and medical tests to free Broadway theater tickets and dinners at expensive restaurants. Most legislator members can even pass along the nominal membership fee ($50 in 2007) to taxpayers in their states. In addition, legislators get enhanced campaign contributions and grants to pet projects they may have. The cost of membership for corporations ranges from $5,000 to $50,000 a year. In exchange, they get guaranteed face time with state legislators from around the country and a chance to introduce those lawmakers to so-called “model legislation” crafted by industry.
ALEC is heavily involved in crafting legislation concerning telecommunications and broadband policy. ALEC’s private sector members include AT&T, BellSouth, the National Cable and Telecommunications Association, SBC Communications (now merged with AT&T), Sprint, Verizon Communications and more. ALEC has proposed a number of telecommunication bills that have been showing up in states to block municipalities from offering broadband, to give AT&T and Verizon statewide cable franchises with no restrictions, as well as decrease public accountability and consumer protections. ALEC, in addition to being well-funded, is tied to other corporate-serving think tanks. The Summer 2007 meeting of ALEC was co-sponsored by the Heritage Foundation, which is itself funded in part by AT&T and Verizon. Despite its activities in creating and promoting legislation and its base of multi-billion dollar industries, ALEC is registered as a nonprofit 501(c)(3) organization. As such, not only does it reap the significant benefits of tax exemption, but its corporate sponsors get to write off their yearly membership fees as “charitable contributions.”

On piece of legislation written by ALEC that has impacted Michigan is the Cable and Video Competition Act that was passed by the Michigan legislature last year. The Port Huron Times Journal is reporting that after Jan. 14, Comcast no longer will offer government and school programming on basic cable in many Michigan markets due to a loophole in that legislation. PEG channels, which stands for Public access, educational, and governmental, will be moved to the cable company’s digital tier, with the public access channel being channel 900. Comcast spokeswoman Louise Beller said public access stations are being moved to the 900 channels in communities statewide to provide “a higher-quality format” and to make channel lineups more consistent everywhere. Beller said Comcast subscribers will need digital cable or a digital converter box for their basic cable. The converter boxes will be offered without a fee for one year. After that, the company will begin charging between $2 and $4 per month, Beller said.

While Comcast officials said there are benefits to the switch, local officials are not so convinced. Port Huron City Manager Karl Tomion contacted Comcast to express his concerns, stating “We don’t want people in January to all of a sudden plan on watching a City Council meeting and find it’s not available and wonder what the city has done. This was not a decision of the city’s, and we were not consulted.” Paul Dingeman, who oversees Channel 6 in southern St. Clair County, said he is concerned about senior citizens on fixed incomes and low-income families. “When the law was first made, it was so (public access) stations would be available in the lower tier so that low-income (people) and senior citizens could get a basic service, and still see their community meetings,(Comcast) is maintaining the channels, but they’re making it difficult for municipalities and viewers to see it.” Last years state legislation was the result of efforts to stream line the cable franchising system by taking it out of the hands of municipal governments and making a universal state-wide franchise contract. This move was applauded by the telecom industry, who claimed it would spur competition in the cable industry. City governments and consumer advocates opposed the bill, saying that the proposed statewide contract favored telecom companies at the expense of city governments and consumers.

This change will affect cable customers here in Grand Rapids who have been informed by Comcast that public access cable channel 25, GRTV, will be moved to the digital tier and no longer be part of the basic cable plan. GRTV is part of the Grand Rapids Community Media Center, as is WYCE and the Wealthy Theatre.

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