September 18, 2003
He Had To Do It
Last month, Fearless Leader Michael Powell introduced public service initiatives to ensure that broadcasters serve the communities in which they operate. That's right, Mr. Pro-Big Business, the same man who sided with broadcasters to raise ownership caps, is now siding with the public. It's Washington checks and balances courtesy of The Commish.
Last month, we also heard rumors that Powell would be stepping down, but that just isn't going to happen. People are none too happy with Powell, since raising ownership caps might promote more mergers (duh) and limit local programming (duh). Both sides of the aisle in D.C. are pissed, too, but Powell is just their tool.
The Public Vs. Politics: Localism
"We heard the voice of public concern about the media loud and clear," said Powell. "Localism is at the core of these concerns, and we are going to tackle it head on." Dandy. For those of you that need help reading between the lines, I'll translate:
Raising ownership caps has nothing to do with localism, but because the public and Congress are throwing a hissy fit, I'm going to make sure that we address this issue.
How? With an FCC task force that within one year will make recommendations to the commission on how to promote localism in TV and radio broadcasting. (The FCC will fast track low-power radio stations, since these are typically operated by schools, community groups, and religious organizations.) The FCC will also begin seeking comments on rules aimed at promoting localism.
Of course advocacy groups say this doesn't go far enough (there's no pleasing some people). Their beef is that raising ownership caps will lead to a handful of big companies controlling the majority of what people see, hear, and read. Sort of like what we have now.
No matter which side you're on, here's a sound bite from Powell I'm sure you'll love: He calls the FCC's localism initiative "an honest attempt to address the concerns raised by the public about localism during the media ownership proceeding. It is neither hollow nor political." Damn that's good. I wonder if I can hire his speechwriter.
Politics Vs. The Public: Political Advertising
As all of you know, certain members of Congress went ballistic with Powell and the FCC. But Congress is just using Powell and the FCC as a tool to get what they really want: a way to get even with greedy, unpatriotic broadcasters by pulling back ownership caps.
Here's the deal: Congress is pissed at broadcasters because they have to pay so much for political advertising.
As part of "serving in the public interest," broadcasters have to offer discounted ad rates to candidates. According to the 1971 federal "lowest unit charge" (LUC) provision law, stations are required to give candidates a discounted price based on the best deals the stations give their highest-paying advertisers (pay attention--this last part is really important).
OK, this sounds fair.
But candidates claim that they were fleeced by broadcasters, especially TV broadcasters.
According to the Alliance for Better Campaigns, broadcasters took advantage of loopholes in the LUC rules. In the 2000 election, candidates paid an average of 65% more for their ads than the lowest candidate rate published on stations' rate cards.
How did this happen? It's the difference between hard money (which is donated to the candidate and subject to LUC) and soft money (which is donated to the political party--not the candidate--and therefore not subject to LUC).
With all that money to buy unregulated ads, prices shot through the roof and ad time went to the highest bidder. Broadcasters made out like bandits, and not just with soft money -life isn't that simple. The outrageous prices affected the LUC hard-money discount rates candidates got, because soft money donors became the stations' largest and highest-paying advertisers -which in turn jacked up the rates for everybody. Because the regular rate went so high, there really was no LUC discount.
According to published reports, ad rates that should have fluctuated by 20 to 25% rose as much as 114%. To make matters worse, LUC ads can be bumped to less desirable timeslots if a regular advertiser offers to pay more for the original time. So broadcasters offered higher priced discount rates to prevent the LUC ads from being bumped.
Broadcasters were legally greedy, 800 people legally donated just too much money, broadcasters can't compete unless caps are raised, Congress wants free ad time, the public wants more localism, and that puts Powell and the FCC right in the middle of it.
Fearless Leader indeed.
Michael Silbergleid is the editor. He can be reached at email@example.com.