FCC Approves 2018 QR NPRM Over Rosenworcel Partial Dissent

Commissioners didn't agree whether the draft had any proposals, versus open-ended questions. Rosenworcel in her statements described aspects of the NPRM as making proposals, while agency staff and fellow commissioners said otherwise. She dissented in part because the NPRM didn’t focus enough on “competition, localism, and diversity." After Wednesday's meeting, Rosenworcel released a new version of her QR statement in which some references to proposals were changed to describe the FCC as suggesting or seeking comment on those matters. The NPRM's section on radio subcaps is largely based on an NAB proposal for rule change, an aide to Rosenworcel pointed out.

Pai’s criticism of Rosenworcel focused on what he and O’Rielly said were requests from her office for edits to delete from the draft questions about getting rid of the dual network rule. “Given that this notice doesn’t include any tentative conclusions, I’m disappointed that we were unable to secure a unanimous vote,” Pai said. The dual network rule is statutorily required to be reviewed in the QR, he said. “Whatever one’s opinion of it, refusing to include it in our quadrennial review would have violated the law.”

This QR's focus on the dual network rule differed from previous reviews, Rosenworcel told us during her news conference. “We asked questions about it, we asked for edits from our colleagues, that’s all that’s going on.” Carey said none of Rosenworcel’s requested edits were included in the final item. Broadcast officials don’t expect the FCC to act on the dual network rule in this QR.

Rosenworcel attacked the item for “proposals” that would let a company own all the radio stations in a market and eliminate the dual network rule. Pai and Media Bureau staff said repeatedly the final item doesn’t include proposals, only questions. The original draft repeatedly seeks comment on whether the dual network rule is necessary and on whether it should be changed or eliminated, but doesn’t explicitly propose doing so. Rosenworcel approved of portions of the NPRM dealing with diversity measure such as a procurement rule for broadcasters. She indicated support for removing limits on AM station ownership.

Commissioner Brendan Carr said the audio and video market has changed greatly from when the rules were enacted. “The gatekeepers of the past are no longer gatekeepers. Americans, using a broadband connection, can access any content, from any device, anywhere.” Rosenworcel said lack of focus on localism in the current market is creating "news deserts." It's "axiomatic that more owners in more markets can mean more ideas. It can mean more news,” she said. “The converse is also true. Too much consolidation can reduce the number of voices, jobs, and the newsgathering that results.”

O’Rielly said he pressed for removing language that “leaned away” from “more extensive relaxation of our rules,” though he wished the document went further. The final NPRM is now “a fairly benign document,” O’Rielly said, though he complained it still “gives credence to the belief that certain audio or video offerings can be siloed into discrete segments.” O’Rielly intends to “pay specific attention” to FCC action on radio ownership. “The debate has appropriately shifted to determining where to draw the line on the FM side, if at all, while permitting caps to be eliminated on the AM side,” he said. He called for bright-line guidance on top-four TV combinations. “Depending on multiple variables, I tend to view a combination of the top station in a market and the number four station differently than a combination of the two largest stations.”

"We trust the Commission will update these rules with an understanding" broadcasting "now competes head-to-head with powerful Internet, pay TV and audio companies,” NAB said. “We are not seeking wholesale elimination of these regulations, but rather a modernization that reflects today’s fiercely competitive marketplace that didn't exist when many broadcast ownership rules were first written." Pai “needs reminding that it isn’t the FCC's job to protect the broadcast industry’s profit margins,” said Free Press CEO Craig Aaron. “The agency must serve the public interest by creating and enforcing rules designed to promote competition, diversity and localism.”

Every previous QR order was remanded to the FCC by the 3rd U.S. Circuit Court of Appeals, and the 2014 QR and the agency’s subsequent reconsideration order are set to go before the same panel next year. Asked about the likely court challenge to a 2018 QR order, Pai said the agency has “done the blocking and tackling” to "make real progress," conceding the process hasn’t so far differed from previous, defeated QRs. O’Rielly told us the 2018 version will have a different fate because the market has changed substantially. “We can’t stay in the quagmire of the 3rd Circuit,” he said. He also noted at the meeting that this review surely, too, will face legal challenges.