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Martin Supports Rule Changes For Localism
WASHINGTON -- October 31, 2007: During Wednesday's sixth and final FCC public hearing on its long-pending proceeding on localism requirements for broadcasters, FCC Chairman Kevin Martin outlined a variety of possible changes to the agency's rules that he believes will serve to enhance broadcast localism, including some changes to the low-power-FM rules.
Looking back at suggestions he made early in the year, Martin said he endorses elimination of the rule prohibiting LPFM transfers and assignments, subject to certain limitations, such as a three-year holding period for licensees. He also favors reinstatement of an original LPFM rule that required all permit holders to live in the local community and that limited ownership to one station per permittee.
Martin also suggested that LPFM stations be prohibited from airing any program more than twice, so local-origination requirements are met and endorsed expanding the definition of "local communities."
For traditional broadcast services, Martin endorsed allowing AM stations to operate on FM translators, a rule change that is currently under review at the FCC. He also recommended approval of a pending FCC proceeding that would require physical staff presence at a radio stations during all hours of operation.
"Requiring that all radio stations be attended would only increase the ability of the station to provide information of a local nature to the community of license," Martin said. "Particularly in the event of severe weather or a local emergency, the requirement that all operations be attended will increase the likelihood that each broadcaster will be capable of relaying critical, life-saving information to the public."
To encourage more minority ownership of broadcast properties -- one of the hearing's most popular topics -- Martin urged Congress to reinstate the tax-certificate system that gave tax breaks to minority investors.
He said, "That is why I proposed to the other commissioners, which they adopted earlier this year, the recommendation to Congress that it create a new tax incentive program designed to encourage small firms, including those owned by minorities and women, to acquire communications businesses, including
broadcast stations.
"We know that providing tax advantages has worked in the past to encourage greater diversity of ownership and to open the doors for entry by small businesses, including disadvantaged firms and entities owned by women and minorities. I support establishment of a new program that could permit deferral of the taxes on any capital gain involved in such a transaction, as long as the gain is reinvested in a qualifying communications business.
"The new program also could provide tax credits to sellers who offer financing to small firms. Other measures might include restrictions on the size of the purchaser, a minimum holding period for the purchased licenses, and a cap on the total value of eligible transactions."
However, Martin insisted that the FCC shouldn't rely solely on Congress to spur more minority ownership, and submitted some proposals that the commission itself could enact.
"The limited number of channels available in the broadcast television and radio spectrum bands and the high start-up cost of building a station are significant barriers to entry into broadcasting," Martin said. "It can be very difficult for anyone -- nonetheless a new voice -- to find an available channel and gather enough capital to build a new broadcast station.
"The commission should allow qualified designated entities -- small and independently owned businesses -- to lease some of an existing television station's excess digital broadcast spectrum to distribute their own
programming. The commission already has in place similar policies to create additional opportunities in radio and cable through the leased-access rules and the low-power FM service. However, I believe even these
rules need to be changed to be more useful.
"In response to concerns expressed by my colleagues, I plan to propose soon that the commission amend its leased-access rules, as well as the program-carriage rules, to be more effective. Neither of these regulatory regimes have successfully achieved their intended goal of facilitating the ability of diverse and local viewpoints to reach their local audience. Critics have argued that the leased-access regime has been dramatically under-utilized because of an artificially high rate. And I have heard from many potential and current programmers that the program-carriage rules are ineffective because of a distorted complaint process."
Martin added that other FCC proposals to encourage more minority ownership are still pending. "I have proposed that we allow small businesses to purchase expired construction permits and be allotted additional time to construct the broadcast facilities," he said. "I also proposed that we amend or waive the equity/debt plus attribution rule where doing so would assist these small businesses in acquiring a broadcast station, retaining an existing station, or building out a construction permit. All of these proposals were suggested by outside advocacy groups and have been pending for more than six months."
Martin wasn't supportive, however, of placing a hard requirement on broadcasters for carriage of local content.
"I have heard from a coalition of public interest groups that broadcasters should air a certain amount of different types of content to ensure local responsiveness," he said. "While I have concerns with mandatory minimums, such as free airtime for politicians, I did propose last March that the commission make comprehensive changes to the information broadcasters must report about what they air, and the manner in which they do it. If broadcasters mean it when they tell us how much local programming and news they are airing, then they shouldn't object to telling the commission in detail what they are doing.
"Specifically, I proposed that broadcasters complete every quarter an enhanced, standardized form on which they describe the local civic affairs programming, local electoral affairs programming, public service
announcements -- whether sponsored or aired for free -- and independently produced programming that the station airs to meet the needs and interests of its local audience. Broadcasters would need to post the enhanced
disclosure forms on their websites, if they have them, or on their state broadcasters association's website if they do not."
Martin added, "The FCC is committed to ensuring broadcasters adequately serve their local communities and to expanding opportunities for entry into media ownership and media programming. And, to that end, I believe we can and should move forward on the proposals currently pending before the commission.
"I know that localism is important to broadcasters who recognize that their own success depends on responding to the needs and interests of their local communities. Most broadcasters do a good job, both by airing programming of unique interest to their local communities and more generally by contributing to the sense of community in their local towns.
"It has become apparent, however, that some broadcasters may not be doing all they can or should to serve their local communities. I believe the commission needs to make a number of policy and rule changes to ensure that all broadcasters better serve their local communities."
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