Supporters of diverse local media and champions of competition among news outlets are celebrating the recent U.S. Court of Appeals verdict in Prometheus Radio Project v. the FCC. The court rejected Federal Communications Commission rules that would have opened up ownership to further corporate consolidation. In the wake of the egregious overstepping by media mogul Rupert Murdoch’s uber British tabloid News of the World, the ruling has taken on an heroic cast. The court said that in making its rules the FCC had ignored the input of millions of American citizens.

“This is a major victory not just for our media but for our democracy,” Prometheus Policy Director Brandy Doyle told Democracy Now. “The court blocked the FCC’s attempt to end a 35 year old ban on newspaper and broadcast cross-ownership, when one company owns both in the same market… thousands of people spoke out at hearings held by the FCC and millions of people filed comments and raised their voice against this. The Third Circuit Court in Philadelphia agreed that what the FCC did was undemocratic and the process through which they did it was undemocratic.”

Prometheus Radio project is a non-profit group that builds community radio stations and advocates for media news and information that more directly reflects the concerns of local populations.

The Bush-era FCC twice tried to pass deregulating rules, in 2003 and 2007, and both times was blocked by the courts.

The recent court ruling came as the Obama-era FCC gears up to consider media ownership rules. Media watchdogs are pushing for the rules to be strengthened given that corporations have found ways to effectively chip away at them or skirt them altogether.

In Denver, for example, local TV news stations KDVR and KWGN work under a “shared services agreement” where essentially the same staff produces news programs at both stations. Watchdogs have flagged that kind of agreement as a violation of the spirit of the law if not the letter of the law and argue that the station owners are squatting on public air wave space through mutual agreement.

The argument for relaxing ownership laws made by corporate lawyers and rejected by the court was in part that cable television and the internet now ensure that a diversity of voices are heard on issues of public concern. Free network news, however, is still the main channel through which the public receives local news by a long shot and the FCC presented no evidence to counter the data in support of that fact. The court added that many local news websites are also owned by television stations and newspapers, which unsurprisingly use them to promote the work of their own staff.

Doyle said that 99 percent of the millions of Americans who officially commented on the FCC rules were against consolidation. The fact that the FCC moved ahead with deregulation anyway, she said, is another demonstration of the sway communications corporations have in the nation’s capital.

She added that Murdoch, for example, enjoys a permanent waiver of the rules banning cross ownership in New York. His News Corps owns the New York Post and TV station WNYW.

“The court not only ruled we have the right to media diversity,” Doyle said, “the court also ruled that we also have a right to impact the rules that shape our media system.”

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No one loved the internet rules written by the Federal Communications Commission last year that sought to safeguard the free-flowing egalitarian quality of the internet, where communication-industry giants don’t get to decide which information streams to users and at what speed. One side thought the rules were overreaching socialism and the other thought they were riven with the kind of loopholes corporate interests could wiggle through when it came time to assert control. In the spring, Republicans in the House opposed to the rules voted to strip the FCC of the cash it would need to enforce the rules. On Wednesday, a small band of senators, including Colorado’s Mark Udall, sent a letter to Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) and Ranking Member Thad Cochran (R-Miss.) objecting to the House action and asking the committee to strip out the budget amendment that would hold back the FCC funds.

“The… network neutrality rules are built on principles everyone should support – promoting transparency of broadband service operations; preventing blocking of legal content and websites; and prohibiting discrimination of individuals, applications, and other websites,” the senators wrote. “Some members of Congress have decided that they know better what is good for the Internet than the people who use, fund, and work on it. We side with the agency of expertise and supporters of the rule and urge you to reject any proposals that will prevent the FCC from implementing or enforcing its net neutrality rules.”

Joel Kelsey, a spokesman for Free Press, a media watchdog group that supports net neutrality, decried the “defunding” budget amendment strategy and applauded the group of senators who opposed it.

“This amendment is a poorly disguised play to hijack the budget process in order to prolong a political grudge against the FCC. We hope the Appropriations Committee heeds the advice of the senators on this letter and leaves this amendment where it belongs – on the cutting room floor.”

The letter:

June 29, 2011

Dear Chairman Inouye and Ranking Member Cochran:

The House Appropriations Financial Services and General Government Subcommittee has included language in its funding bill for 2012 barring the Federal Communications Commission (FCC) from using any funds to put into effect the Open Internet rules it approved last year. We write to you to renew our objection as a matter of both policy and process to any similar effort in the Senate.

Congress created the FCC in 1934 and reaffirmed in 1996 that the agency’s mandate is to provide all Americans with fair and equitable access to communications over wire and airwaves.

Consistent with those values and that mandate, the FCC approved an order to establish network neutrality ground rules for our nation’s broadband infrastructure. Those rules, which are in the public interest, establish guidelines for how telephone and cable companies can treat information that travels over their wires and connects Americans to the Internet and each other.

The final network neutrality rules are built on principles everyone should support – promoting transparency of broadband service operations; preventing blocking of legal content and websites; and prohibiting discrimination of individuals, applications, and other websites. In the wake of the order, a host of companies, venture capitalists, and hundreds of thousands of users of the Internet expressed their approval. Opponents of the rule predicted that we would see a decline in investment in broadband infrastructure because of the agency’s defense of the open Internet. In the intervening months, investment in infrastructure has continued to grow and innovative firms are developing and providing services over the Internet free from discrimination. The predictions of opponents have fallen flat.

Some members of Congress have decided that they know better what is good for the Internet than the people who use, fund, and work on it. We side with the agency of expertise and supporters of the rule and urge you to reject any proposals that will prevent the FCC from implementing or enforcing its net neutrality rules.

Sincerely,

John Kerry
Jay Rockefeller
Al Franken
Maria Cantwell
Tom Udall
Richard Blumenthal
Mark Udall
Ron Wyden
Bernard Sanders
Mark Begich

Although it seems to be at a crucial stage as more and more media moves to the web and as broadband access expands to the last corners of the country, the battle over net neutrality and how it will be enforced is sure to continue for years.

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The sprawling greater-Denver metro region is in news-media crisis. In the information age, when there seems to be more and more to know, there is less and less being reported by the diminishing number of local mainstream news outlets here. So it comes as little surprise that media watchdog organization FreePress this week is highlighting the Denver news market as a negative example for the nation. The organization reports that, on top of shrinking newspaper reporting, the local TV news market is host to a “severe” form of the kind of sly consolidation that media corporations have been effecting across the country for nearly a decade. FreePress says this “covert consolidation,” where direct ownership is never transferred, is gaining momentum and that it skirts federal ownership laws and erodes market variety and competition. 

Over the last two years, Denver news stations Fox 31 KDVR and CW 2 KWGN have entered a “shared services” agreement through which station operations are merged. The stations share broadcast scripts and reporting, for example, the same way they share staffers, equipment, management personnel and studio and office space.

“Just because the name on the letterhead hasn’t changed, doesn’t mean that the spirit of media ownership laws hasn’t been violated,” FreePress Program Director Josh Stearns told the Colorado Independent. He said the owners of the stations are squatting on public airwave space that could be taken up by another company or organization, which would hire its own writers, reporters and producers to deliver an original and rival product to KDVR and the other stations in the market. Stearns believes the KDVR-KWGN agreement effectively tramples regulations meant to guard against media “duopolies,” where a single company owns two or more stations that serve the same community.

‘We haven’t violated anything’

KDVR/KWGN President and General Manager Peter Maroney has heard these arguments before.

“Listen, that’s one side of the issue. We haven’t violated anything,” Maroney told the Colorado Independent last Thursday. He said he had yet to see the FreePress campaign but he signaled that he thought this debate had long ago been settled.

“The [shared services] agreement doesn’t violate or even challenge the ownership laws. There’s nothing new about local sales and marketing agreements. They have all passed the test with the [Federal Communications] Commission. We’re well within the regulations.”

KDVR is owned by Kentucky-based company LocalTV. KWGN is owned by the Chicago-based Tribune Co.

Maroney said the stations were not squatting on airwave space. He said he was running one organization that was producing two different products.

“Every program on each of the stations has its own decision-makers. There are different line producers, different presenters. What the stations do is produce the news of the day. That hasn’t changed.”

‘Photocopy news’

For the uninitiated, exploring Maroney’s products can be disorienting, at least at first blush.

Call the basic operating number at KDVR and KWGN– it’s the same number– and ask to talk to the management of each of the stations. You get a searching response.

“Well, you see, all of our operations have merged,” staffer Jim Yoshinaga told the Colorado Independent. “We have one news team. One news director. All of our operations are merged by agreement.” If you speak to the manager of one station, he said, then you’ve spoken to the manager of both stations.

It’s a similar experience surfing the station websites. They have been created and are powered by a partnership between the station owner-companies, by LocalTV and the Tribune Co through its digital division. The news personnel lists at the two websites (here and here) are nearly identical. Indeed, the KWGN website is oddly tasked with touting the work its people are doing for KDVR.

“Jeremy Hubbard has returned home to Colorado as anchor of FOX31 News Nightside,” reads the KWGN site. “Dave Fraser is the Associated Press award- winning chief meteorologist of KDVR.”

Of course the stations benefit by pooling resources, FreePress Program Coordinator Libby Reinish said, but the public pays the price. There’s less information and the information the public receives is the same kind of information and reported in this case by the same people with the same backgrounds and biases.

Reinish describes KDVR and KWGN as local news through a funhouse mirror: the same but different. These aren’t broadcasts, she said, as much as “simulcasts.” “They’re not rival products at all.”

“The Denver example is really striking,” she adds, pointing to a video FreePress is distributing on the Web as a part of the new public-awareness campaign. “You have two ostensibly different newscasts, two different stations, but the anchors are reading the same script.”

In the video, hosts from KDVR and KWGN introduce segments on an effort to deal with dog waste in city parks. They finish their introductions with verbatim phrasing. Then each of the hosts introduce the same reporter, Greg Nieto, who delivers the exact same report for viewers watching the different stations.

Reinish says viewers don’t really notice the similarities because they’re not watching two broadcasts simultaneously.

“People have affiliated loyalties. You watch your local news station. You don’t switch over.

“OK, so there’s a different presenter on one of the stations. That’s just a way to maintain some discreet cover. You keep a few different faces but the staff and the material increasingly overlap.”

Reinish said resource sharing starts out as a sensible business decision but that the sharing tends to creep.

“Of course it makes sense to send one crew instead of two to an event. They say they’ll be freeing up staff to do more in-depth reporting on other stories, but that almost never happens. They lay off people instead.”

In making these deals, Renish says TV executives are trading on the widespread impression that news-industry profits are tanking.

“They cry poor,” she said, “but that’s not how it is for TV news. It’s nothing like the newspaper industry.”

Local news bottom lines

FreePress cites a recent FCC report that chronicles the rise in profits at local TV news stations (scroll to Chapter 3 of the report on local TV). Fact is, local TV news remains the greatest source of news among the public. Nearly 80 percent of Americans get their news from local TV stations.

Although profits dipped for years as cable TV rose, 2010 saw profits rise at local news stations, even as newspapers folded around the country gushing red from the bottoms of their balance sheets.

For the first three quarters of the year, profits rose a whopping 27 percent at local TV stations, and the news sector brought in a lion’s share of those profits. After the Supreme Court’s 2010 Citizens United ruling lifted restrictions on political spending, local news ad buys have grown enormously and are growing still.

[T]he high percentage of income derived from news—44.7 percent in 2009—is “increasingly significant when considering the average television station that produces news airs an average of just 4 hours and 36 minutes of news per weekday.

Borrell Associates, a consulting firm that focuses on local media and advertising, estimates that the court ruling generated additional political advertising totaling $400 million in the 2010 elections. This created a windfall for local TV stations: in 2010, political advertisers spent an estimated $2 billion to $3 billion on local TV stations, which may be as much as 100 percent more than in 2008— despite the fact that 2008 was a presidential election year and 2010 was not.

Pew reports that the trend is alarming not least because it throws off balance for viewers. Political stories take up mere minutes of each news broadcast while political advertisers bombard viewers with their messages during breaks in the news shows and beyond.

Working off of data compiled by Pew and the FCC, FreePress reports that in states with competitive Senate races last year, four times as many hours were given to advertisements than to coverage of the races.

The 2010 Colorado U.S. Senate race between Michael Bennet and Ken Buck was the closest in the nation. Yet the organization reports that an estimated 88 percent of half-hour news shows in Denver contained no stories about the Senate race.

As the FCC notes, the windfall local TV news profits have also failed to save many journalism jobs. On the contrary, more local TV news is being produced by less reporters and editors. Nearly 65 percent of local TV news stations have cut staff and budgets over the last few years, although station directors are reportedly optimistic that they can add staff this year.

The drying Denver news landscape

Since 2009, when the Rocky Mountain News shuttered, the Denver Post has enjoyed a monopoly in the daily newspaper market here. The small Denver Daily News recently followed the Rocky into history and the weekly Westword survives mostly due to the herculean efforts of its skeleton staff and a wave of generous new medical marijuana advertisers.

For perspective: There are roughly 1.6 million households in the region and the entire front section of the Denver Post most days serves up a mere three or four news stories written by Post reporters about Colorado. Wire service stories make up at least 75 percent of the Denver Post front-section bylines. The Post places New York Times stories in the precious front-page space above the fold. There is no other general interest daily paper and the struggling Post recently cut an additional 4 percent of its budget.

The Rocky Mountain News was the longest-running newspaper serving the region, and its demise made national news. Yet just a few months before the Rocky closed, as FreePress points out, Denver also lost its longest-running locally produced newscast. When KDVR merged through the shared services agreement with KWGN, 30 staffers were sent packing.

Stearns said federal media ownership laws are shaped by local patchworks of regulations, which can be more and less strict depending on a lot of factors, like the size of the market. He said the FCC is presently reviewing its media ownership rules and so the FreePress campaign is designed to shed light on the ways TV news is both expanding and dwindling simultaneously, delivering more of less news.

Twenty percent of commercial TV stations broadcast no local news, Stearns points out in a release, and of those that do, according to the FCC, “nearly one-third say they are running news produced by another station.” In its own reporting FreePress claims to have identified nearly 80 markets where some version of a “shared service” deal is in place, involving more than 200 stations.

Yet, with newspapers struggling, local TV news bears an increased burden in informing the public. Now is the time to act, Stearns said.

The FreePress campaign urges citizens to contact the FCC.

“Call the FCC and tell it that you won’t stand for stations polluting your community with photocopy journalism and junk news.”

[ Top image Flickr, Steve Baron ]

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The letter was sent in advance of meetings the FCC plans to hold Thursday on national broadband policy.

Reps Polis and Perlmutter

Polis distanced himself from the letter, according to spokeswoman Lara Cottingham, once constituents and bloggers made it clear the letter advanced telecommunications industry interests against the interests of “network neutrality” supporters, who fear without regulation, the Internet will become a less free pay-to-play service that favors communications corporations.

“[Polis] would have never signed on to that letter had he believed it was anti-net neutrality,” Cottingham told The Colorado Independent.

“The letter (pdf) was pretty vague and when [Polis] read it, he agreed with the general push [it made] for increased competition and increased broadband access. The Congressman is not in the pocket of the telecom lobby. He has always been for open access. There was no flip flop. There was no change of heart. Which is why he decided to write his own letter and make his position crystal clear.”

On Monday, Polis drafted a letter (pdf) urging the FCC to take action to ensure that the Internet remains open and fair to all users even as it continues to develop. He also blogged his support for net neutrality at The Huffington Post, where he asked constituents to add their support by signing his letter.

Perlmutter spokeswoman Leslie Oliver said the congressman likewise fully supports net neutrality and that he does not believe the letter is in fact anti-net neutrality.

“It’s simply asking the FCC to use measured consideration in any rule making. It was not [Perlmutter's] intention to oppose net neutrality. His concerns are to increase speed and affordability for all.”

Qwest Communications is a top 20 contributor to Perlmutter’s campaign committee. Qwest gave $4,500 to Perlmutter, according to Open Secrets.

A representative for Meeks’ office confirmed he was the sole author of the letter, but would not discuss net neutrality in any detail.

“The letter was meant to ask the FCC when they put out new rules to consider the implications and do it based on the facts. The Congressman would ask [the FCC] to consider what those rules will mean for broadband expansion and investment — capital investment that the providers will have to put into the tech sector. We can’t have a slowdown now in capital investment because that means jobs.”

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So why then did Polis earlier this week join with a curious list of 71 other lawmakers in signing a letter likely authored by AT&T and Comcast (pdf) and meant to send a clear message to Federal Communications Commission Chairman Julius Genachowski that the major telecommunication companies were not going to let Congress pass net neutrality legislation without a fight. In other words, some executive somewhere was waving scalps at the FCC, and Jared Polis’s scalp — an identifiably wispy collection of short hairs — was one of them. Before he stole it back!

Why is the list of lawmaker names curious? Because a lot of them are from Texas and Pennsylvania, headquarter states for AT&T and Comcast, which suggests those are the companies behind Thursday’s anti-net neutrality letter to Genachowski at the FCC. Also, few if any of the lawmakers who signed the letter appear to be members of the influential committees set to wrestle with the net neutrality legislation– the commerce committee and its subcommittee on communications, technology and the internet. What would be their stake in the issue or their expertise? (Colorado Rep. Diana DeGette, incidentally, is a member of both committee and subcommittee and she did not sign the letter. Colorado delegation members Polis and Ed Perlmutter both signed it.) *

Were the signers pressured? Or were they confused by the euphemistic wording of the letter? Interview responses to come.

Below is a draft letter sent out informally Monday by the Media and Democracy Coalition in response to the letter to Genachowski signed by the Democrats Thursday. The final version is available here and includes the signatures of a long list of progressive media and rights organizations. The Coalition sent its letter to supporters who were also constituents in the districts represented by the lawmakers who signed the anti-net neutrality letter.

October 19, 2009

Dear Congresswoman/man XXX:

We are writing to express our disappointment in your October 15, 2009 letter to Federal Communications Commission Chairman Julius Genachowski raising concern over network neutrality rules, as well as urging restraint in the development of national broadband policy. We hope you will consider issuing a public statement in support of strong network non-discrimination rules, as well as federal policy that will improve the quality and availability of broadband in the U.S.

As we understand it, the underlying argument in your letter is that the do-nothing approach of the previous Administration and FCC is what has led to the growth in broadband adoption over the past decade. Please consider evidence to the contrary: the U.S. is far behind other nations when it comes to broadband adoption, ranking 15th in the world according to the Organization for Economic Cooperation & Development. Entire rural and Native American communities do not have access to any high-speed broadband providers at any price, and most other communities lack meaningful competition in the broadband market. In 2009, only 46% of African Americans had broadband at home, and only 35% of households with incomes $20,000 and under had access, compared to the national average of 63% of adult Americans.[1] If you believe this is unacceptable, as we do, we hope you will see a role for federal policy in speeding the deployment and adoption of high quality, affordable broadband.

Your letter goes on to imply that network neutrality rules may dissuade Internet Service Providers from upgrading or deploying high-speed networks. This argument is fundamentally backwards; rather than meeting consumer demand for more bandwidth by deploying high-capacity networks, cable and phone companies want to restrict usage and charge consumers more to access certain content. Put another way, ISPs want to “manage” Internet traffic in a way that forces U.S. consumers to live with networks that fail to meet our growing needs. We would rather see U.S. broadband providers upgrade their networks so there would be no need to throttle bandwidth users in a discriminatory fashion.

Furthermore, it should be of great concern to Congress and the FCC that cable and phone companies increasingly own both the infrastructure and content delivered over broadband. Without federal rules that keep the Internet an even playing field, there is no question ISPs will look for every opportunity to promote content they have a financial stake in above that of potential competitors. For comparison, it would be unfathomable to allow the U.S. Postal Service to deliver advertisements for FedEx slower than its own promotional mailings. We should not allow cable and phone companies to get in the way of free speech or commerce in the same way.

The Internet we know today treats all content equally, which is what has led to the creation of innovative applications and web-based businesses that have revolutionized the way consumers communicate, engage in commerce and participate in civic society. Allowing cable and phone companies to change the rules on U.S. Internet users could have a chilling effect on the information economy.

If it was not your intention to add your name to a letter that sends a message in opposition to pro-consumer network neutrality rules and public interest broadband policy, we hope you will clarify your position in another public statement.

Sincerely,

* TCI is continuing to compare the lists of lawmakers who signed the letter to the FCC with the members of the relevant Congressional committees and is looking out for any other relevant information.

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Cast your vote below the fold.

From the Save the Internet blog:

Wanted: a leader who understands that the “open” Internet doesn’t mean a burst pipe, thinks a diverse media is more than just a few minority network anchors, and isn’t afraid to battle chest-thumping corporate lobbyists to protect the public’s interest.

Alright, so we may not be doing the hiring, but President-elect Barack Obama is, and we the public need to hold the president-elect to his campaign promises as he picks the next head of the Federal Communications Commission.

Obama will soon announce his choice to lead the FCC, a decision that will influence every facet of our media system — from media consolidation to broadband access and cell phone innovation.

In recent years, the FCC has been at the center of immense controversy. In 2003, the agency was criticized for burying an internal report on the impact of deregulation in the radio industry that raised concerns about a spike in corporate media consolidation over locally-owned stations that are believed to be more responsive to public needs.

The following year, the FCC allegedly ordered staff to destroy records related to a draft television ownership study that found locally owned stations broadcast up to 5 1/2 minutes more news than corporate conglomerates. The study contradicted the agency’s arguments that local news would not suffer under concentrated ownership in a single market.

In 2006, the FCC refused to investigate whether AT&T, Verizon and BellSouth broke the law for engaging in a controversial White House-sanctioned warrantless wiretapping program arguing that it could jeopardize national security.

ArsTechnica reports that the Obama transition team is moving swiftly to name an FCC successor to replace current chairman Kevin Martin who is expected to resign in February. A formal Senate confirmation is likely by spring 2009.