Friday, October 20, 2006

NBCU Version 2.0 and the FCC's Media Ownership Rules

The FCC is once again taking comments in its various media ownership dockets. (Note right at the outset that the open dockets reach back to include the multiple ownership of radio stations proceeding opened in 2000 and the cross-ownership of broadcast stations and newspapers opened in 2001). Just contemplating on a Friday afternoon the tortured history of efforts to relax or eliminate these outdated rules in the face of the new media realities is enough to dampen an upcoming weekend.

Take the lead in today's story in the Washington Post on the NBC Universal restructuring and job cuts: "NBC Universal announced sweeping cuts to its television operations yesterday demonstrating just how far a once-unrivaled network must now go to stay competitive with YouTube, social networks, video games, and other upstart media." NBC refers to the restructuring as the NBCU 2.0 plan. The Post's story is headlined: "NBC Takes a Big Step Back from Television." This in and of itself should be enough to get the pro-media ownership control crowd to acknowledge how much the world has already changed and continues to change as the various ownership dockets drone on at the Commission and bounce up and down between the agency and the courts. Every new day brings more fresh news about the woes of the old media as the new media garner more and more eyeballs and eardrums.

The past few weeks have brought a spate of stories about the financial pressures on most of the country's newspapers as they continue to lose readership --and ad dollars--to new media outlets. The newspaper/broadcast cross-ownership prohibition, one of the media ownership rules under review, was adopted in 1975 when most people still relied on their local newspaper or broadcast station for news and information. Regardless of whether it made sense then, and there is a lot of evidence that shows that commonly-owned media properties often publish and broadcast diverse views, the rule was adopted before the advent of hundreds of cable channels, before satellite TV and radio, before the Internet, before DVDs, before I-Pods and podcasts, and so on and so forth. Today, about 90% of Americans subscribe to multichannel cable and satellite television and the vast majority are online.

With print newspapers fighting for survival and local broadcast stations in a tough fight to retain viewers and listeners, who really thinks that the newspaper/broadcast ownership prohibition is necessary to promote "diversity" of opinion? To the contrary, in many communities, such a combination may be the only way to allow both types of outlets to remain financially viable through the realization of operating efficiencies.

I think NBC was trying to send a clear signal by calling its restructuring plan "NBCU 2.0". The signal has a lot to do with what the Internet is doing to disrupt the old media marketplace and the way people get news and information. The FCC needs to repeal or substantially relax its media ownership rules, and fast.