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Broadcast group pushes back on FCC plan to incentivize local content

Many TV and radio stations can't afford to produce local content, the National Association of Broadcasters says.

Many TV and radio stations can't afford to produce local content, the National Association of Broadcasters says.

A stock image of a broadcast tower.
(Stock image)

The broadcast television and radio industry’s main lobbying group is pushing against a proposal by some at the Federal Communications Commission (FCC) that would offer preferential treatment to stations that produce local content.

Last November, FCC Chairperson Jessica Rosenworcel said TV stations that produce local news and other community-oriented programming should be given priority when the agency weighs an application to renew that broadcast station’s license. The same would be true for radio stations that are seeking renewal of their broadcast license.

“There’s something special about when you hear a local voice on the airwaves or see a familiar face on your television set in the evening,” Rosenworcel said in a statement distributed by the FCC. “Over time we’ve come to trust those voices, and they provide an important service to these communities. We want to recognize that dedication when it comes time for license renewals and transactions, and this proposal does just that.”

The proposal received pushback during a closed-door meeting with representatives and attorneys at the National Association of Broadcasters (NAB), the main lobbying arm of the commercial radio and television industry.

During the meeting, representatives from the NAB said it was simply not feasible for some radio and television stations to produce local content in order to receive priority treatment of their license renewal, but they shouldn’t be discriminated against on this element because localism was inherent to the industry, even if some local content like news was produced somewhere else.

“Broadcasters offer an unrivaled local service, regardless of whether that service was produced within a given local market,” officials with the NAB wrote in a notice of ex-parte communications that was filed with the FCC last week.

The NAB went on to say that broadcasters are already providing local news and other community-oriented content when it is within their capacity to do so.

“Offering local content is a competitive advantage over the plethora of nationally-focused content throughout the marketplace,” the NAB representatives said. “Those radio and television stations able to provide locally-originated programming already do it. The barrier to initiating or expanding local content is that producing such content is generally very expensive. Without the ability to spread production costs over a large network, each local program is a heavy financial lift.”

Over the past several years, broadcasters have made it clear who they expect to help bankroll their local content: Cable and satellite subscribers. Several programming blackouts on cable and satellite systems like Verizon Fios, DirecTV and Charter’s Spectrum TV have been directly attributed to broadcasters demanding more money for their local channels (and, in many cases, co-owned national cable networks).

Those higher fees are passed along to cable and satellite customers in the form of higher bills, which has triggered a wave of “cord-cutting” by which former pay TV subscribers choose cheaper cable-like streaming services for their programmign needs. Last year, broadcasters banded together to form the “Coalition for Local News,” which is lobbying regulators to impose similar cable and satellite rules on streaming cable replacements like YouTube TV, Hulu with Live TV, Fubo and Sling TV.

Broadcasters say they need more money to continue investing in local news and other original programming. But, last week, their main lobbying group said many stations “simply cannot afford to produce a wide array of locally originated-programming,” and that dangling a so-called “carrot” in front of them in the form of a fast-tracked license renewal “will not address the fundamental challenges affecting broadcasters who would like to initiate or expand local program production.”

It wasn’t immediately clear if the discussion had any impact on officials at the FCC.

Last December, the FCC rejected a call from the NAB and other broadcast industry groups, who sought looser rules that would have allowed them to buy more individual TV stations. The current rules say a commercial television group cannot own a collection of TV stations that reach more than 39 percent of American TV households.

Broadcasters and the NAB say the ownership cap puts over-the-air TV station owners at a competitive disadvantage compared to streaming. On the other hand, allowing TV stations to grow bigger would open the door for more investments in local TV content, the groups claimed.

Officials at the FCC rejected that idea, saying the agency needed preserve the original intent of the regulations, which was to ensure one broadcaster did not exert too much control over the public airwaves.

“This approach is a product of the Communications Act and the values in the law that have always informed our approach to media policy — support for localism, competition, and diversity of ownership,” Rosenworcel said in a statement. “These values support jobs and journalism. They are important. Even as times change, these values remain. So does the law.”

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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