**Statement of**

**Commissioner Jonathan S. Adelstein,**

**Dissenting**

*Re: Report and Order In the Matter of 2002 Biennial Regulatory Review
of the Commission's Broadcast Ownership Rules and Other Rules; Cross
Ownership of Broadcast Stations and Newspapers; Rules and Policies
Concerning Multiple Ownership of Radio Broadcast Stations in Local
Markets; and Definition of Radio Market.*

With the adoption of this Order, a dark storm cloud looms over the
future of the American media. The majority has sealed into federal
regulations the most sweeping and destructive rollback of consumer
protection rules in the history of American broadcasting.

The public stands little to gain and nearly everything to lose by
slashing the protections that have served them for decades. Allowing
fewer media companies to control what Americans see, hear and read will
not serve our democracy well. Today's relaxation of our media ownership
rules is likely to damage the media landscape for generations to come,
as all of our experience tells us that the relentless waves of
consolidation are virtually impossible to rollback once they advance.
Today's action will likely diminish the diversity of voices heard over
the public airwaves, which can only dilute the quality of our society's
intellectual, cultural and political life. It will also likely diminish
local control of our media, the core concept at the foundation of the
American system of broadcasting, as media giants buy more local stations
and homogenize the programs and stories they broadcast.

In the end, the new rules simply make it easier for existing media
companies to gobble up more outlets and fortify their market power.
Today's Order capitulates to many of the longstanding demands of the
media giants we oversee. It shatters many of the vestiges of the
consumer protections that weren't eliminated in the 1980s. It pulls the
teeth out of the remaining protections, leaving the Commission little
more than a toothless tiger.

As big media companies get bigger, they may chase the bottom dollar
ahead of serving the local needs of the community. They're likely to
broadcast even more homogenized programming that increasingly appeals to
the lowest common denominator. If, in the words of former Chairman Mark
Fowler, television is nothing more than a toaster with pictures, we are
paving the way for only Wonder Bread to pop out.

I dissent, finding the decisions embodied in today's Order are bad
policy, indefensible under the law, and inimical to the public interest
and the health of our democracy.

**I. Suffering the Consequences**

Now that this document, with its peculiar diversity index and other
proposals, will finally become public, I expect media experts,
academics, public interest groups, and most of all, the American people
and their representatives will find it riddled with contradictions,
false assumptions, and outcome-driven thinking.

It may take a while for the public to feel the full effects of today's
decision. Consolidation in the media markets could take place over a
number of years, just as it did in radio. But most people already expect
it to prove a disaster. They intuitively distrust more media control in
the hands of a few corporate giants. People will notice every time a new
merger goes through that eliminates a voice in a community. Anger will
flash when greater consolidation leads to more sensationalism,
commercialism, crassness, violence, homogenization, and noticeably less
serious coverage of news and local events.

It didn't have to turn out this way. Congress and the courts forced a
massive review. They did not force massive deregulation. We had a
choice. The courts required us to justify our rules, not to gut them or
replace them with pale substitutes. Certainly, the media markets have
changed and our rules must keep pace with those changes. But the
majority chose to go much further than Congress or the courts required.
They chose to pursue gratuitous deregulation. This is the most dramatic
weakening of our media ownership rules this country has ever seen.

I had hoped for a better outcome I could support. The Commission
undertook the most comprehensive review of its broadcast ownership rules
ever. It was supposed to produce a judicially-sustainable,
intellectually-coherent framework. But those good intentions and good
faith efforts are not reflected in the final product. The comprehensive
framework never materialized. An effort begun with serious intellectual
aspirations descended into an incoherent, outcome-driven document, the
likes of which the Commission has too often seen and sought to avoid.

A new regime for a new era fell short. Instead, we're left with a
muddled patchwork of skeletal protections based on market-driven
philosophies and deregulatory outcomes. The Order is rife with more than
a hundred references to market efficiencies for broadcasters, yet it is
upon consumers that the effects of our decision will be most palpable.
It is these listeners and viewers, not the media companies, whom we are
charged with protecting.

**II. Today's Decision in Context**

The majority touts the changed legal and technological environment since
these rules were adopted. Yet, for all the changes we have undeniably
experienced, some important foundational principles remain constant. For
all the striving to update our rules with modern empirical support, some
core concepts underpinning our broadcast media remain as elusive and as
imperative as ever.

**A. Our Statutory Public Interest Responsibility**

The majority implies that Congress and the courts forced this outcome. I
disagree. We had much wider latitude than this suggests. The biennial
review provides a simple directive -- to determine whether the rules
"are necessary in the public interest as the result of competition,"
repealing or modifying them [only]{.underline} if we determine they are
"no longer in the public interest."[^1]

The *Fox* and *Sinclair* courts sent the rules back to us for
justification, not for evisceration.[^2] It wasn't the prior
Commission's attempt to maintain the rules in their current form that
failed to satisfy the courts, it was the failure to examine the current
environment and justify retention of the rules based on that
environment.[^3] Congress's direction in the statute is to review the
rules, not to revise them. The Commission is only required to, as the
D.C. Circuit characterizes, "continue the process of deregulation" if it
finds after review that the current rules no longer serve the public
interest. The *Fox* court even stated, with respect to the 35-percent
national ownership cap, "we cannot say it is unlikely the Commission
will be able to justify a future decision to *retain* the Rule."[^4] And
the court made clear that the Commission could use "either analytical or
empirical" reasoning to justify its decisions.[^5]

The linchpin of Congress's statutory directive is two words -- public
interest. The Commission for decades has sought to serve the public
interest by promoting diversity, localism and competition through
diversification of mass media ownership.[^6] The courts have
consistently approved these priorities, agreeing that assuring the
public access to a multiplicity of information sources is a governmental
purpose of the highest order which promotes values central to the First
Amendment.[^7] Diversity is of exceptional importance, for achieving
"the widest possible dissemination of information from diverse and
antagonistic sources is essential to the welfare of the public."[^8]
Time and again, the Supreme Court has validated broadcast structural
regulations like those we erode today, recognizing that "their purpose
and effect is to promote free speech, not to restrict it."[^9] For, as
the Supreme Court stated with respect to the print media, "\[f\]reedom
to publish is guaranteed by the Constitution, but freedom to combine to
keep others from publishing is not."[^10] There can be no question that
the granting of exclusive rights to use the public airwaves affords the
Commission great latitude, and great responsibility, in the field of
broadcasting to protect the public's right to a multiplicity of sources
of information, news, and culture.

Since the earliest days of the FCC, no court decision or statute has
diminished the Commission's authority, or its responsibility, to ensure
the public's access to diverse and antagonistic sources by protecting
competition, localism and diversity over the public airwaves. No matter
what the majority believes the D.C. Circuit may have implied, the
Commission continues to have a special duty to protect what the Supreme
Court referred to as an "uninhibited marketplace of ideas."[^11] As the
Supreme Court stated in its seminal *Red Lion* decision, "It is the
right of the public to receive suitable access to social, political,
esthetic, moral, and other ideas and experiences which is crucial here.
That right may not constitutionally be abridged either by Congress or by
the FCC."[^12]

I am afraid that today's decision departs dramatically from our
statutory responsibility. Our mandate in the field of broadcast
regulation assures maximum flexibility for us to operate in the public's
interest. The Communications Act says, simply, we are to establish rules
in the "public interest, convenience, and necessity."[^13] Let me
explain why today I think we fail to meet even that flexible, broad
standard.

Judging from our record, public opposition is nearly unanimous, from
ultra-conservatives to ultra-liberals, and virtually everyone in
between. We have heard from nearly two million people in opposition to
relaxing our ownership rules, and only a handful in support. Comments
came in the form of letters, emails, postcards, and petitions. Some of
them were form postcards, but many were thoughtful, eloquently expressed
observations, entreaties, and personal experiences with media
concentration in local communities. Of the hundreds of citizens I heard
from directly at field hearings across the country, not one stood up to
call for relaxing the rules. Of the thousands of emails I personally
received, only one did not oppose allowing further media concentration.
The American people appear united in believing that media concentration
has gone too far already and should go no further.

I have heard it said we cannot make this decision by polls or by
weighing postcards. That is fair enough.

But the statute does not let us simply dismiss the public's views with a
passing reference in one paragraph. We are charged by law to serve the
[public]{.underline} interest. And the public apparently has no interest
in further media consolidation. Is the majority that confident that it
is serving the interests of the nearly two million citizens who are
motivated enough to contact the Commission or attend field hearings to
oppose further concentration? I would not assume that those people who
took the time to alert us to their concerns, more than 99.9 percent in
opposition, are wrong unless overwhelming evidence and reasoned analysis
proves it. Here, just the opposite is true. Plenty of evidence, and
plenty of common sense, shows the people are right.

The public is joined by expressions of concern from their elected
representatives, in resolutions passed in several state and local
legislatures, and in a bipartisan chorus of caution from Members of
Congress. Organizations from nearly every political stripe, from the
National Rifle Association to the National Organization for Women,
including the Catholic Conference of Bishops, the Leadership Conference
on Civil Rights, the Parents Television Council, Common Cause, the
National Association of Black-Owned Broadcasters, the National
Association of Hispanic Journalists and the Writers Guild, and many
others expressed grave doubt about the wisdom of relaxing these
protections. Hundreds of musicians and performing artists, and media
industry insiders also registered their concern.

It has been said that the public comments we received are too simple and
offer no substantive basis from which to make our decision. I beg to
differ. I have read many of these comments, and I've listened to
hundreds of people firsthand in city halls, schools, churches and
meeting rooms. The Americans I heard from know what they're talking
about. This is the media they watch, listen to, and read every day. We
have heard from people who have collectively spent billions of hours
watching television, listening to the radio, and reading newspapers.
There is no better control group than the American people. There is no
more objective jury than the American people. They take it very
personally, and they are very articulate.

But today's decision overrides the better judgment of the American
people. It instead relies on the reasoning of a handful of powerful
media companies who have a vested financial interest in massive
deregulation. Those who would benefit by buying and selling the public
airwaves won out over the public.

**B. Media's Place in Our Democracy**

It violates every tenet of a free democratic society to let a handful of
powerful companies control our media. A diverse, independent media is a
steward of democracy. The viewing and listening public have an
overriding right to be informed by a diversity of viewpoints concerning
matters in their local communities, across the nation, and in the global
community. Without a diverse, independent media, citizen access to
information crumbles, along with political and social participation.

Some argue that this concern is overblown, because the American
democracy is strong and resilient. While our democracy is indeed strong,
does that mean we can afford to weaken it? The fundamental issue before
the Commission is whether the media is serving American democracy well,
and what ownership structure, or other rules, would encourage the media
to serve American democracy better. The real question is whether our
media can make it stronger.

A study of television broadcast coverage of the 2000 election found that
only 74 seconds per night were dedicated to all campaigns, federal,
state and local.[^14] In that election, the public heard far more from
paid political ads, many of them negative. Could this lopsided coverage
have accounted for depressed voter turnout? Would allowing media
companies to swallow up each other, eliminate other voices, and grow
bigger lead to more or less time dedicated to serious coverage of
candidates and issues before the voting public? The majority makes no
attempt to answer even this question, possibly because we can
confidently predict that it will only make it worse. We had an
opportunity to at least consider whether to require merging entities to
commit to more coverage of the matters before our democracy. But the
majority dismissed such an approach out of hand, discarding an
opportunity to better democratize the media.

The airwaves belong to the American people. Access to them must be
preserved as widely as possible to encourage a broad range of voices and
editorial viewpoints. What transmits over the public's airwaves affects
people's preferences and opinions, their knowledge and level of civic
discourse, their political decisions, and much more.

The majority all but abandons the principle of public ownership of the
airwaves in a results-driven rush to bring new revenue opportunities to
broadcasters. The Order fails to emphasize that in return for the free
and exclusive use of valuable and scarce public spectrum, broadcasters
have a special obligation to serve the public interest.

That is, after all, the social compact broadcasters enter into with the
public. When people choose to become licensed broadcasters, they
understand that public service and a regulated environment come with
that privilege. As Newton Minow sought to remind stockholders, "an
investment in broadcasting is buying a share in public
responsibility."[^15] Broadcasters today know that they will have to
compete with other enterprises, but so far few, if any, have turned in
their license because of this, and they are not lining up to do so.
Similarly, broadcasters know that they must serve the public interest
and meet the local needs of the community, and I hear no complaints that
this is an unfair bargain. Indeed, many local broadcasters I know
embrace this public service commitment with gusto.

**C. The Soundness of Structural Regulations in an Era of New
Technologies**

By law, the Commission watches over broadcasting as a public trust. For
decades, the Commission has sought to protect the public's access to
multiple sources of information, news, and culture in the local or
larger community through structural ownership rules that were designed
to foster diversity, localism and competition.

We are indeed in an era of rapid technological advance, as the majority
proclaims. But the abundance of media platforms and channels, many
aligned with a handful of global media conglomerates, does not
invalidate the Commission's core concern with protecting diversity,
localism, and competition over the public airwaves in our communities.
It is no surprise to anyone that the number of outlets has increased in
the past 40 years. What is more relevant to the question of whether
structural ownership rules continue to serve the public is whether the
rules still serve important purposes and what has been the effect of
consolidation among owners, particularly since the loosening of some
restrictions in 1996.

Technological advances over the past 40 years have not overcome all
barriers in the field of broadcasting. Despite the Order's assumption
that technological advancements render broadcasters just another voice
in a crowd of ever-expanding and fungible media channels, a simple fact
remains. No technological advances have made it possible for every
person who wants to broadcast in a local community to do so.[^16] There
may be an ever-expanding number of printing presses available in the
market. Manufacturers are not precluded from producing as much coaxial
cable as the market will bear. Even Internet domain names and servers
are plentiful and expanding. But no one yet has figured out how to
replicate the electromagnetic spectrum for everyone who wants to
broadcast a message in a particular community. The exclusive right to
use the broadcasting spectrum denies it to all others.

The majority completely ignores the reality that neither cable nor the
Internet has changed the huge market power granted by federal license to
use scarce broadcast spectrum, particularly when that license comes with
the requirement to be carried on cable. Indeed, the majority excludes
cable as a significant local news voice in a community. If all media
outlets are indeed fungible, why then would someone spend hundreds of
millions of dollars to buy one television station when the same money
could be spent to create thousands of websites?

While the number of platforms for news and information, particularly on
the national level, is indeed expanding, ownership across these
platforms has become more concentrated. The exact figure is debated, yet
it remains the case that a large degree of programming is produced and
distributed by a handful of global media firms.[^17] Eighty percent of
the 91 major cable networks are owned by six media conglomerates.[^18]
The four major broadcast networks, alone, have part or whole ownership
in roughly 78 nationally distributed non-broadcast networks.[^19] A
recent survey of the Internet found that nearly all of the top twenty
Internet news sites are owned by large media conglomerates, with eight
affiliated with major newspaper organizations.[^20]

While a high proportion of the American public can now access numerous
channels, if the same few vertically-integrated global media firms are
behind the curtain, how will these wizards in our new Oz ensure
diversity, localism, and competition on the public's airwaves? Under a
principled approach to the public interest, the ultimate sources of
information, not just the number of different ways a message can be
delivered, must remain as widespread and diverse as possible. A person
can always add more electrical outlets in his house, but that does not
mean that he will get his electricity from new sources. The same goes
for media outlets -- making more media outlets available to the public
does not necessarily mean the public has access to distinct sources.

Even in this era of technological advance, not all media convey the same
local focus. Our record shows that people still get the vast bulk of
their local news and information from the same places they always have:
their local newspaper and television stations.[^21] As was the case in
the 1970s, television stations and daily newspapers continue to be the
main avenues where people turn for discussion of matters of local
concern. Yet, these are the very outlets we are granting the most new
flexibility to combine.

We cannot ignore the populace that does not have access to these
wonderful new technological marvels. Forty million Americans do not
subscribe to cable or satellite service. Not all Americans have access
to these enhanced technologies, so as an arbiter of the public interest,
we should recognize a fundamental need for this Commission to protect
the diversity available in those primary outlets that are accessible to
the underserved.

I do not support regulating content, and nothing here should be read
otherwise. Rather, our task should be to encourage the widest possible
dissemination of antagonistic expression through structural protections,
and not merely assure a four-voice or six-voice sliver of diversity. We
should encourage more competition and more localism.

This Order, to the contrary, concludes that there is plenty of diversity
already, so we can afford to sacrifice some and have enough left over.
It implies that the barest of competitive protections will promote
localism and assure all Americans an adequate slice of diversity. By
severely weakening our structural protections, I fear that little
remains in place to protect the American public from the media trends
they find so alarming already.

**D. The Rumored Demise of the Networks and Free Over-the-Air TV**

I have heard it said that we should unleash the media giants in order to
preserve free over-the-air broadcast television. That is a worthy goal.
But the evidence shows that the networks are far from financial
distress. The rumors of the demise of free over-the-air television,
widely spread, are greatly exaggerated.

In reality, the broadcast networks still deliver a sizable nationwide
audience which has kept the advertising market strong, and they receive
substantial syndication revenues.[^22] In 2001, the broadcast television
industry received \$38.9 billion in advertising revenue, compared to
\$15.5 billion for cable television.[^23] While cable certainly has
taken some viewership from the broadcast networks, which themselves have
significant interests in cable networks, from objective accounts, the
broadcast networks are not in the dire financial shape alleged by the
majority. Just last month, broadcast network advertisers spent a record
\$9.4 billion in upfront sales for 2003-2004 lineups, up from \$7.7
billion last year.[^24] The Wall Street Journal recently reported that
some networks make \$600-\$700 million in profits, while others are less
profitable.[^25]

It is quite telling that in the wake of record advertising numbers and
millions in profits, the best case that can be made for consolidation is
that the networks need to make still more. It requires pretzel logic to
claim the public interest demands buttressing the bottom line of some of
the nation's largest and most profitable media giants. It is not the
Commission's job to make sure every big television network makes money
-- that is the job of management. Our first priority is ensuring the
American people get a diversity of viewpoints and expression over their
public airwaves.

One sure sign that over-the-air TV is in real trouble will be when
broadcasters start lining up to turn back their licenses. Today, quite
the opposite is true. The value of television stations continues to grow
at a faster rate than inflation, signaling financial health.[^26] In
many cities, these licenses are so scarce their price continues to
skyrocket. One station sold for \$823 million, another for \$650
million.[^27] Why, for example, are the networks interested in
increasing the nationwide cap or acquiring triopolies in local markets
if this business is plummeting? It is quixotic that while the majority
so trusts the market when it comes to deregulation, they can so easily
ignore it when it says loudly that broadcast licenses are only
increasing in value, signaling that free over-the-air television is
alive and well.

Given this evidence of solid financial footing, has the majority
gathered the necessary financial data or conducted any analysis on which
to base its conclusion that we must act now -- and in such a radical
deregulatory manner -- to stop a landslide loss of quality programming
to cable? We do not even know how much the networks make, since they do
not report their earnings by category and we have not asked for such
information. We have not accounted for the less measurable benefits of
station ownership, such as retransmission consent, or the less tangible
benefits of network ownership, such as cross-promotion opportunities.
Such data is not in our record. Today's Order is devoid of the necessary
evidence and analysis on which to conclude that free over-the-air
television is seriously and imminently threatened.

**E. Radio: What is Past is Prologue**

Today's media environment contains a strong warning against hasty media
deregulation in the form of the rapid radio consolidation following the
1996 Act. The most constant refrain I heard from coast to coast was
complaints about the homogenization and loss of news coverage and local
artists on the radio dial since 1996. People begged us not to let happen
to television what happened to radio. But the majority did not heed this
concern, despite the fact that our record is replete with problems
consolidation caused in the radio market. By ignoring this history, we
may be destined to repeat it. Radio is a very sick canary in the coal
mine, and today's decision is likely to transmit the same disease to
television.

Since 1996, the number of radio owners dropped 34 percent.[^28] The
average number of owners in a local radio market declined from 13.5 in
1996 to 9.9 in 2002. Virtually all radio markets are now oligopolies.
The revenue share of the top owner in a local market now averages 47
percent, with the two largest firms averaging 74 percent.[^29]
Advertising time and rates increased.[^30] Consolidation enhanced market
power, which hurt the ability of smaller players to generate advertising
revenue, to invest in improvements to radio service, and even to stay in
business.[^31] Large group owners downsized local staff, including
popular local DJs, eliminated news coverage, began running stations
remotely with voice tracking technology, and standardized
programming.[^32] A Future of Music Coalition study found shorter,
homogenized playlists mean fewer opportunities for artists, particularly
local or regional artists, to be heard on the radio.[^33] Perhaps some
of these factors account for why radio listening has declined over the
same period and why the public expressed such profound outrage to
us.[^34]

**III. Misguided Goals**

Before turning to my concerns with the decision's bottom lines, I find
the majority's discussion of the policy goals that inform its choices
grossly inadequate for our overarching mission of promoting the
widespread dissemination of antagonistic voices over our broadcast
media. Many of today's rule changes are driven from a mindset that
efficiencies for the actual broadcaster are all that is necessary to
promote localism and competition, which will in turn ensure sufficient
diversity. But our fundamental public interest goals encompass more than
what is economic and efficient.

**A. There's More to Localism than Efficiency**

While it may very well be true that localism can be promoted by a local
broadcaster realizing efficiencies and cost savings from consolidation,
and I would welcome a case-by-case showing to that effect, I do not
believe that efficiency alone sufficiently upholds all the important
values that are embodied within localism.

The public interest means more than just efficiencies and cost savings.
Even the *Fox* court, which had much to say about the Commission's lax
rule justifications, nevertheless still sanctioned our ability to
promote public interest goals at the expense of efficiency. Rejecting
the networks' "paean to the undoubted virtues of a free market in
television stations" as not responsive to the ultimate question of
whether Congress could determine that a more diversified ownership
structure "would likely lead to the presentation of more diverse points
of view," the court went on to acknowledge that an industry with a
larger number of owners may well be less efficient.[^35] But the court
stressed that values other than efficiency may be pursued in the
regulation of broadcasting.[^36]

The majority makes the blanket assumption, without requiring any proof,
that putting more money in the hands of the broadcaster will always
promote localism. And it measures localism solely by selection of
programming and local news quantity and quality. It does not account,
for example, for the hiring of local employees, for the air time of
local creative artists, and for the length and depth of coverage of
local elections and local issues.

Every community has local needs, local elections, local news, local
talent, local advertisers, and local culture. While localism reflects a
commitment to local news and public affairs programming, it also means
much more. It means providing opportunities for local self-expression
and finding, developing, and promoting local talent. It means making
programming decisions that serve local needs. It means coverage of
weather reports, local economic conditions, local sporting events, local
education issues, city council meetings, and local culture expressed in
a variety of ways. It means allocating resources to promote the desires
and needs of the community. It is reflected in hiring decisions, as well
as in the way in which the broadcaster responds to feedback from the
community. Localism's many virtues are hard to capture, but may get
easier to ignore as companies consolidate.

From the outset of broadcasting, policymakers have always understood
that localism is inefficient, yet upheld its crucial role in American
broadcasting and made decisions to ensure that it would be protected.
Going back to 1927, the Federal Radio Commission reported to Congress
that it would assign station frequencies to serve as many communities as
possible. It specifically sought to prevent New York and Chicago
stations from dominating the airwaves. The Commission historically has
maintained numerous policies to promote localism. Station managers used
to interview local leaders to ascertain the needs of the community, and
then tell the Commission how they intended to and did respond to those
concerns. The Commission reviewed these and other programming
commitments in rigorous renewal proceedings. For many years the
Commission favored applications by local owners who knew their own
communities. Many of these policies are now largely abandoned, and local
stations have been absorbed by conglomerates with no direct connection
to the communities they serve and with little oversight by the
Commission. Today, the Commission veers even further off course.

Until now, American broadcasting has never been about maximizing
bottom-line efficiencies over all else.[^37] If efficiencies were all
that mattered, Congress could have directed the Commission to award
national or regional broadcast licenses. After all, it is hard to
contest that the most efficient structure is a concentrated media
empire. Think of all the efficiencies if one large company gathered the
news for everyone. Yet nothing in the 1996 Act jettisoned the core
community-based organizational principle of the Commission's dispersal
of valuable broadcast spectrum rights. As stated during Congressional
consideration, "Localism is an expensive value. We believe it is a
vitally important value, however, \[and\] should be preserved and
enhanced."[^38]

The Commission's sacrosanct responsibility to ensure diversity,
competition and localism may mean certain efficiencies must be held back
in the greater public interest. Nothing in the Commission's biennial
mandate suggests that we should facilitate the corporate interest or
other narrow economic interests at the expense of vital public interest
goals like local control of our media.

**B. Diversity in More than Just Viewpoints**

I am troubled that the majority, while validating viewpoint diversity in
concept if not in action, in many ways discounts other forms of
diversity. We should be preeminently concerned with diversity in news
and editorial opinion. But we should also ensure a profusion of diverse
sources, programs, outlets, and owners to serve the democratic needs of
the nation. Diverse outlets, for example, provide a redundancy in
infrastructure to alert the public to emergencies or other hazardous
conditions. Diverse sources, particularly in news, editorial opinion, or
educational programming, provide for a better informed public and a
better media watchdog. Diversity in programming, among other benefits,
offers the potential to greatly benefit the coverage and portrayal of
minorities and issues of concern to minority communities. Outsourced
content masquerading as local, or repurposing the same content on
multiple commonly-owned outlets may not always serve the public.

The majority also glosses over the role of diverse media outlets in
protecting the body politic. An abundance of independent owners serves
not only as a check on the exercise of government powers, but also as a
check on other outlet owners, to deter the personal biases or vendettas
of a particular owner from obfuscating facts. For example, none of the
Commission's studies adequately probed the effects of more concentrated
local media markets on one of the most sensitive areas of speech --
local political speech. Yet, it stands to reason that as the number of
independent diverse owners of media outlets in a particular market
dwindles, the ease with which the remaining owners can engage in abusive
practices increases. Will all the media outlets that today
antagonistically report on one another and chase leads still function
the same when commonly-owned?

It is the multiplicity of independent media voices informing our
citizens that helps keep our market economy functioning. Our loss of
diversity may be reflected in future stories not told, in programs not
produced, in would-be broadcasters not entering the field, or in
hazardous warnings never transmitted.

**C. Innovation is Unpredictable**

At times, the majority recognizes the important policy goal of fostering
innovation, even acknowledging that innovation more often springs from
small, new entrants than from incumbents. Other times, the majority
fails to consider the effects of its decisions on innovation. This
selective approach to innovation undermines the policy goals that inform
the majority's choices.

While competition, particularly in the form of new entrants, can spur
innovation, it is also undeniable that market structures which
significantly raise the cost of entry may harm innovation and the
greater public interest. Innovation should be encouraged not just in
program delivery but in program production. The majority fails to
account fully for innovation in programming, particularly given the
trend toward repurposing content among commonly-owned local outlets in a
market. What about innovation in news and public affairs reporting? The
majority implies that potential innovation in news production can only
come about through achieving efficiencies for incumbents, discounting
new entrants. And what about innovation in radio offerings? Is a large
media conglomerate more or less likely to try something innovative?

While generating efficiencies for larger media companies may improve
their ability to make investments that benefit the public, we should
also ensure that smaller owners can remain viable and that innovative
ideas in distribution and programming technologies can develop and
prosper.[^39]

**D. Commoditizing Ideas**

I am troubled by the assumption that with a baseline set of competitive
protections, the marketplace will preserve localism and diversity in our
broadcast media. Localism and diversity are not intended objectives of
commercial competition. It is far from clear that the media embodies or
operates as a free market, or that the media's role in civic discourse
can be reduced to mere economic principles. People use and value their
media for various reasons, from entertainment to instruction to
political expression to receipt of local news and information.
Dissemination of antagonistic ideas and opinions using broadcast media
is not readily susceptible to being captured through economic analysis
alone. This is especially true when the analysis is based not on an
actual local environment but upon a hypothetical market structure, as
the majority selects.

Unlike typical consumer products, the media produces significant
positive and negative externalities.[^40] For example, exposing
political or corporate corruption, or merely threatening to, produces a
significant benefit to the public that is not effectively captured by
the market. The media is where people receive information and guidance
for their democracy and their way of life. As Justice Frankfurter
explained, the business of the press is truth and understanding, and
these "are not wares like peanuts or potatoes."[^41] A broadcaster is
still in many senses a trustee -- deciding which issues are important to
a community, whether any particular speaker gains access to the
airwaves, and how various sides of an issue are presented.[^42]

Even when viewed strictly as a commercial enterprise, the media
marketplace has massive entry barriers, and the barriers will likely
rise even higher after today, with a detrimental effect on a widespread
dissemination of antagonistic viewpoints. By validating local television
clusters and cross-consolidation of broadcast stations with newspapers
and other sources of local news production and distribution, today's
action further escalates the entry barriers for small businesses.[^43]
Relevant economic considerations in evaluating a proposed combination
should include its effect on conditions of entry and the likelihood of
coordinated behavior, but the majority chooses to focus primarily on
efficiencies.[^44]

What assurances can the majority offer that the marketplace will drive
broadcasters to be responsive to the tastes and needs of a local
community or to unpopular points of view? In the case of radio, for
example, the market has resulted in pumped-in, homogenized, syndicated
programming, with programmers located hundreds or thousands of miles
from the community. Given real-world examples like the train derailment
in Minot, North Dakota, how can the market alone assure us that these
remote stewards of someone else's local airwaves would always know, for
example, that a dam has broken free and is flooding the town? Or that a
local artist has received a tremendous ovation at a neighborhood
festival?

**IV. Irresponsible Policies with Dangerous Outcomes**

Moving beyond the goals of the decision, I find that the bright lines
established by the majority whittle away most of the existing
protections designed to preserve diversity, localism, and competition in
broadcast media, and, in doing so, harm the public interest.

**A. Unleashing Massive Consolidation**

The bottom line of today's decision means massive new consolidation
opportunities on the local and national level, both within specific
platforms and across media platforms.

On the national level, a single entity can now own television stations
that reach up to 45 percent of the nation's television households -- 90
percent if those stations are UHF stations. This seems to take us closer
to a system of national, rather than local, broadcasting.

In local communities, mergers between a newspaper and a television
station are now permissible in nearly every media market. The majority
moves from prohibiting in absolute terms certain combinations across
media platforms, such as common ownership of a full-service broadcast
station and a daily newspaper, to allowing these combinations in as many
as 179 media markets across the country, where 97.7 percent of Americans
live. Television duopolies are now potentially viable in as many as 162
markets, where 95.4 percent of the U.S. population resides, depending on
the strength of noncommercial stations in that area. Television
triopolies are allowed for the first time in the top television markets.

This, to me, far exceeds our statutory mandate. Assuming that some
change to our current cross-media rules is needed, the extent to which
the majority has gutted the protections and expanded the opportunities
for media consolidation is not supported by our record and is not in the
public interest. The leap from protecting the entire population to less
than three percent is a dramatic and reckless jump. In some cases, these
mergers may bring some new heft to a struggling television or radio
station. But are we confident that this is true in virtually every case?

One company will now be in a position to greatly influence a region's
access to information. We have moved from an environment prohibiting
common ownership of a newspaper with a television or a radio station and
limiting multiple television, multiple radio, and television/radio
combinations, to a world where in larger markets one entity is permitted
to own three television stations, eight radio stations, and the
dominant, if not only, local daily newspaper, not to mention the cable
system, leading Internet provider, non-broadcast networks, magazines,
and programming studios which could produce the vast bulk of the
programming available to those outlets. In my view, it is no
exaggeration to say that the rules now permit the emergence of a 21^st^
Century Citizen Kane on the local level, with perhaps a handful of
Citizen Kanes on the national level.

In smaller markets, say the community of Bluefield, West Virginia with a
population of 11,451, our new rules permit one entity to own the leading
television station, the dominant newspaper, multiple radio stations, and
presumably the cable system. Even more consolidation is possible in
"small towns" like Burlington, Vermont, which, according to Bureau
figures, is in a DMA with 4 commercial and 6 noncommercial television
stations, placing it in a category for which cross-ownership
restrictions have now been entirely lifted. For that town with a
population of 39,824, the new rules permit one entity to own the
newspaper, one of the four commercial television stations, and seven
radio stations.

Lacking any assessment of actual market share, the new rules carry the
potential for one entity to saturate a community with a single editorial
voice. How would this confluence of media power into one owner's hands
affect local politicians? How would it affect local artists seeking to
get airtime? Will the newspaper still run reviews critical of the local
television station's programs? Will the commonly-owned outlets make it
harder for competitors to advertise on those platforms? These are
questions which I believe have not been fully examined and analyzed in
the majority's rush to judgment.

And there is no telling how many of the skeletal protections that remain
will be lifted in the future by waiver or other artifice to flaunt the
meager remaining ownership protections. For example, against all common
sense, the majority unwisely decides to retain a policy whereby even if
a broadcaster is restricted from acquiring a newspaper under our bright
line rules, the broadcaster can still buy the paper and hold it until
its next renewal period -- a period of eight years. This is outrageous
and untenable, and calls into question the Commission's willingness to
enforce compliance with even the minimal rules it has retained.

**B. Rejecting a Case-by-Case, Market-by-Market Approach**

This Order often equates the public interest with the economic interests
of media conglomerates. It assumes that efficiencies and cost savings
created by mergers will translate into benefits for the public. But it
makes no effort to ensure that the benefits will actually flow to the
public. Worst of all, it bases that dubious assumption on the claims of
the companies that seek to merge, and ignores substantial evidence,
experience, and common sense to the contrary.

We could have easily addressed these concerns. I could have supported
retaining stronger rules but allowing us flexibility to evaluate mergers
on a case-by-case, market-by-market analysis. This would determine if a
merger would actually benefit the public, as opposed to just the
companies themselves. I share the view that given changes in the
marketplace, some of the contemplated combinations and additional
flexibility may make sense. But the best way to determine the
consequences of a given merger is for the Commission to request
companies that seek to merge to demonstrate how, in the case of
particular entities in particular markets, any efficiencies gained by
the merger would be channeled into something positive for the viewing
public. This could entail a market-by-market determination of the level
of actual concentration in that market before allowing further
consolidation.

**C. The Bright Line as the Bottom Line**

The majority rejected such an approach in favor of bright line rules.
They refused even to ask parties that seek to merge to say anything
about how many news staff would be retained, the number of hours of
local programming planned, cross-programming plans for television
duopolies, or the overall impact on news and public affairs programming.
The majority's approach takes a huge leap of faith that if we let media
companies merge, they will channel the resulting efficiencies into
better programming for the public. But it is a leap into a chasm because
there is little evidence to support it. There is no mechanism to require
or even ask those companies to do anything for the public in exchange
for the ability to get bigger. There is no effort whatsoever to ensure
that they channel any of the economic benefits they generate into
serving the public.

The majority's stated goal is to achieve more market certainty for
entities that seek to merge. The Order proudly notes that establishing
bright line rules facilitates transactions, reduces costs for merging
companies, and makes deals more attractive to the capital markets.
Another stated goal is to avoid the administrative burden that a
case-by-case approach would impose upon the Commission.

While the concept of providing regulatory certainty is worthwhile, in
this context, it should have been balanced against the certain losses to
localism, competition, and diversity. The cross-media limits, for
example, are grounded on a "Diversity Index" that purports to tell us
how markets premised upon equal voices within media spread across
unequal media platforms ought to work. What the Commission might find in
any individual case, however, is of no bearing and facts to the contrary
are not welcome for our consideration.

The Order actually makes a special effort to state explicitly that the
Commission has no interest in the facts of particular cases since the
new rules are the be-all and end-all of what is in the public interest.
It says we do not want to be bothered with facts that might point in
another direction.

In its rigid insistence on fixed rules based on arbitrary methodologies,
the Order subordinates our statutory obligation to serve the public
interest, convenience, and necessity in favor of the convenience of
those who seek to maximize the money they can extract from private sale
of the exclusive right to use public airwaves. And it favors the
Commission's administrative "convenience" ahead of the public interest.
We are here to carry out the statute, not to subvert it with the excuse
that it is too much work to implement. This will not do when our very
democracy is at stake.

In the absence of some other compulsion, the media companies' fiduciary
responsibility to shareholders will require them to maximize profits.
The logic of the marketplace leaves them with little choice but to chase
the bottom line and pare down the debt occasioned by consolidation
sprees. That works fine in almost every industry, for consumers'
interests are largely confined to pricing and getting the best economic
value. But this analysis breaks down in the case of the media, where the
public interest is often non-economic and should be defined by getting
the most complete and accurate information to inform everything from
commercial to cultural to political decisions.

The majority's industry-focused view will, in the service of maximizing
economic efficiencies, likely foist upon the public even more
programming directed at the lowest common denominator. It is highly
suspect to assume that much, if any, of the savings will automatically
go toward meeting the responsibility of serving the public interest. If
the government required such a commitment up front to all merging
broadcasters across the board, broadcasters would operate on a level
playing field that would serve the public's needs. But if we leave it to
the tender mercies of the marketplace, the economic environment will
actually make it more unlikely the public will see any benefit.

People will question whether this decision slays the angel of the public
interest and deifies in its place the invisible hand of the market. The
results may well subvert the better angels of our nature, and make the
invisible hand very apparent in the ever more rampant commercialization
of America's media culture.

**V. Indefensible and Irrational Results**

Aside from the decision to slash the protections through rigid bright
line rules, the majority has made other decisions that are arbitrary,
unjustified, inconsistent, or contrary to the public interest. I turn
now to some of those questionable decisions.

**A. Erratic Application of an Outmoded UHF Discount**

Despite the proven subscribership of cable and other multichannel video
programming distribution systems (MVPDs), the majority decides to retain
a discount of 50 percent for UHF stations in the national television
cap, yet fails to justify the level or to apply it to other rules where
common sense dictates comparable treatment. For example, the local
television rule and cross-media limits are explicitly grounded upon the
presumption that by reason of cable carriage, all television stations
are deemed available throughout their Designated Market Area. To then
discount some stations for one rule without a sound rationale for
failing to do so in other rules is by all appearances arbitrary and
unjustifiable.[^45]

The task before us was to reassess our rules in light of technological
and market developments. Imposed in 1985, the UHF discount was designed
to reflect technical inferiority of the UHF signal in reaching the full
audience of a VHF station and to promote UHF.[^46] Today, however, 85
percent of the population receives broadcast television signals through
cable or other MVPD service, and 70 percent of television sets are
connected to these services. Must-carry and channel positioning
requirements, both on cable and DBS, ensure that UHF stations can reach
these viewers just as VHF stations.[^47] Even back in 1995, the
Commission found that various regulatory and statutory policies to ease
UHF reception had "substantially alleviated the technical disadvantages
faced by UHF television receivers."[^48] If constraints on the ability
to reach a full audience have eroded due to cable carriage and
improvements in receiver technology, so too should the UHF
discount.[^49] If the purpose of this exercise was to update our rules
in light of technological and market developments, we cannot ignore some
just because we don't like the outcome of more stringent limits.

So why does this Order settle on a discount of 50 percent? Even taking
the majority's assumption that geographic service area is the key, the
majority's own data show that UHF stations reach between 56 and 61
percent of the service area of VHF stations. Other data in the record
using a more refined measure of actual population coverage rather than
square miles show population reaches of 87.1, 92.7, 94.7, and 95.5
percent.[^50] After all, just as the majority finds in radio, television
stations "serve people, not land" or bodies of water. Scanning these
figures, along with 85 percent MVPD subscribers and 70 percent of
television sets hooked into MVPDs, I fail to find adequate justification
for a UHF discount of 50 percent.

The only mention of 50 percent is from outdated studies submitted by
Paxson. These studies show, first, that VHF affiliates of the top four
networks averaged 9.8 prime-time rating compared to 6.4 for their UHF
counterparts using 1997 Nielsen data, and, second, that UHF affiliates
generated less than 50 percent advertising revenues for the period from
1993-1996 than their VHF counterparts. It is hardly surprising that VHF
stations, with their head start, lead the ratings game, even though UHF
stations, both prior to and after 1997, have made tremendous strides in
proving themselves worthy adversaries.[^51] In fact, the recent growth
of alternative broadcast networks gives UHF stations much sought-after
national advertising opportunities and greater programming choices. But
the majority goes out of its way not to rely upon ratings and
advertising revenues in other contexts. After all, if ratings or
advertising revenues were our guides, then surely we would have
continued to impose a radio share cap and we would not equate a local
community station or home shopping channel with a NBC station for
diversity calculations. Moreover, what assurance do we have that
1993-1997 figures are an accurate reflection of today's media
environments, given the tremendous growth of alternative broadcast
networks since 1997?[^52]

So the majority strives to find other reasons for retaining the
discount, and settles upon promoting entry and competition among
broadcast networks. But this laudable goal is not endorsed in the other
rules under consideration today. Promoting new entrants is apparently
enough for measures which lead to greater consolidation, but is not
sufficient in the context of the local radio, local television, and
cross-media rules, where the focus is quite clearly on allowing large
incumbents to grow bigger, paying only lip service to promoting new
entry. I find the majority's retention of a 50 percent UHF discount
indefensible in light of today's media environment.

**B. Revised Radio Definition and the Removal of Market Power
Protections**

At first blush, the retention of the local radio ownership rules appears
an acknowledgment by the majority that they could not stomach the
fallout in communities across the country from the rapid consolidation
of radio over the past seven years. While that did not stop them from
introducing potentially similar problems in other media platforms, it at
least kept them from further lifting the cap on the number of stations a
single owner can control in a particular radio market.

In a long-overdue acknowledgement that our current system of contour
circles fails to provide a meaningful measure of a local radio market,
the majority rationally sought to impose a geographic market solution.
The current practice of drawing overlapping contour circles, after all,
often produced results about as alien as crop circles. It allowed
Yankton, South Dakota, to appear as one of the largest radio markets in
the country. It allowed Clear Channel to control all but one of the
commercial stations in Minot, North Dakota. Clearly, the contour circles
have benefited very few, with the exception of those companies that
mastered the art of clever contour linking.

Understanding that the Arbitron/BIA approach is not entirely sanitized
from abuse by market participants, I nevertheless agree with the use of
Arbitron/BIA as the relevant market where it is available. A meaningful
geographic market is far preferable to a contour-based methodology using
the outlets of only one party to define the market participants.
Unfortunately, for a sizable part of the country where Arbitron markets
are not defined, I question whether the majority has replaced one
haphazard system with another. I have had little time to study the new
approach being adopted on an interim basis in the non-Arbitron markets,
which was submitted by a commenter just 10 days before the vote. As the
jury remains out on the ultimate solution, which is the subject of a
further notice, I am hopeful that the attention the public has focused
on this problem may yet yield a rational solution for rural areas of the
country.

Yet, for all the talk about tightening the radio rules to respond to the
unintended consequences and unprecedented consolidation that occurred
after their relaxation in 1996, in several important respects the
majority actually further unleashes the industry, which compels me to
dissent.

The Order unwisely eliminates the current hard-look policy for
transactions resulting in significant market power concentration in a
local market. Currently the Commission "flags," or takes a closer look,
when one entity would control 50 percent or two entities would control
70 percent or more of the advertising revenues in the relevant Arbitron
radio market. I am puzzled why the majority would cast aside such a
fundamental and economically sound principle as accounting for the
measure of power of particular combined stations.[^53] The majority
acknowledges market share as the primary economic indicator of market
power, yet it finds that an inflexible market share limit in a bright
line rule would add little benefit. Many radio station owners are
already near the 50 percent threshold of today's flexible flagging
policy. Without any concentration assessment, what protections are there
against radio owners achieving market dominance through acquisitions, or
in achieving a sufficient level of market share to result in diminished
incentives to compete? The omission of an audience or advertising share
cap in radio is all the more glaring when trying to reconcile the radio
rule with the local television cap and dual network rules, which
recognize market power accumulation of the leading outlets.

With no measure of audience or advertising share, the revised rule now
clears the way for combinations that previously were denied or
designated for hearing due to the strong likelihood of negative
competitive effects. I am at a loss to explain how the majority can now
find that transactions that a year or two ago were determined to accrue
excessive market power in one owner are now appropriate.

The majority further decides to keep grandfathered clusters alive
indefinitely and allow them to shift hands to reach the nation's radio
giants, as I discuss below. The Order also adds noncommercial stations
to the count of radio stations in a market, noting that this will
reflect more accurately the competitive reality of radio broadcasters
despite the fact that noncommercial stations do not compete with
commercial stations for advertising dollars. In effect, this enlarges
the total number of stations in many markets. Despite the benefits of an
Arbitron/BIA market measurement, I also note that in areas with adjacent
Arbitron Metros, changing from a contour-based approach, with
significant contour overlap between the Metros, to an Arbitron/BIA
approach, where each Metro is considered a separate market, may very
well increase the number of stations that a major group owner could
acquire.

**C. Impact of Consolidation on Minorities and Women**

With ownership of a license to use the public airwaves comes the ability
to promote the ideas, news, culture, and language of the owner's
choosing. Unfortunately, females and minorities historically have been,
and continue to be, underrepresented in media ownership. As reported by
NTIA, in 2000, minority broadcasters owned a mere 4 percent of the
nation's commercial radio stations and 1.9 percent of the nation's
commercial television stations.[^54] This is the lowest level of
minority television ownership since the tracking of such data began in
1990. Minority ownership of broadcast stations has fallen by 14 percent
since 1997.[^55] Given that minority ownership tends to foster diverse
editorial viewpoints, this is a troubling trend. I welcome the
recommendations of the Advisory Committee on Diversity and hope that the
Commission will promptly explore ways to counteract this alarming trend,
which will only worsen after today's decision.

Minority broadcasters and others concerned about the low level of
minority ownership of the media overwhelmingly oppose further media
consolidation.[^56] They believe concentration has contributed to higher
station purchase prices which has prevented budding broadcasters from
entering the field. They claim that consolidation has made it more
difficult for minorities to raise capital to make investments in their
broadcast properties.

The majority's response? The Order devised a transferability exception
to grandfathered above-cap broadcast station clusters that, however
well-intentioned, pales in usefulness to the clear and present danger
presented by the overall thrust of the item to the ability of minorities
and women to gain access to and ownership of broadcast outlets. The
massive increase in consolidation in the new rules taken as a whole will
astronomically raise the already high entry barriers for smaller market
participants or new entrants. Small or single-station entrants will find
themselves increasingly competing with large, consolidated group owners.
While a systematic solution such as tax credits for station sales to
minority or female owners would offer a substantial offset to some of
these barriers, the transfer of entire grandfathered clusters to small
entities is likely to prove a rare occurrence. As such, it will do
little to offset the damage to new entrants created by today's Order as
a whole. A concern for small and new entrants would have been better
reflected by a decision not to grandfather any above-cap combinations,
or at least not to grandfather in egregious cases where anomalies have
produced unintended results, as the Commission has done before.[^57]

The marginal value of this exception is underscored by the difficulty
small businesses will encounter in raising capital needed to buy
expensive, large clusters, if they ever even come on the market at all.
This is especially true given that the seller could peel off one or two
stations and then sell both the remaining cluster and the spun-off
stations with no restrictions to an unlimited pool of potential buyers,
which will limit the exclusivity of the eligible entity buyer pool and
raise the market price. Such spin-offs before a sale are especially
likely considering most grandfathered clusters are only one or two
stations over the limit and are therefore easy to bring into compliance.
Those spin-offs may in fact be much more affordable to small businesses
than the entire cluster. So minorities and women potentially would have
benefited more if we had required clusters to be broken up rather than
allowing transfers as a group.

In my view, adding a well intentioned provision that potentially affects
only a handful of stations, if it ever gets used at all, does not come
close to offsetting the sad reality that small businesses, including
those owned by minorities and women, are going to find it even more
difficult in more concentrated and expensive media markets to raise
capital, own outlets, or have their unique voices heard.

Most alarming is that after only three years, the small business can
flip the grandfathered cluster to any large radio or media conglomerate.
For example, there is little protection to prevent a front company,
including an existing small business that forms close ties with larger
conglomerates, from buying a cluster and three years later selling it to
a large radio owner or media conglomerate. Making this approach so ripe
for abuse further diminishes the likelihood that it will serve much of a
useful purpose. Real disadvantaged businesses potentially will have to
bid against companies that plan to sell to well-capitalized radio
giants, raising the price of clusters. Nothing in the Order precludes
such an outcome. The ultimate beneficiaries of this approach could be
the largest group owners, like Clear Channel, that could add even more
grandfathered clusters than they currently control.

While the provision serves a laudable purpose, in my judgment it pales
in comparison to the harm more concentrated media markets pose for small
businesses, minorities and women, as industry pioneers like Ted Turner
and Barry Diller have made clear. I hope that I am proven wrong.
Nevertheless, nobody should find comfort that the availability of this
transferability exception will come anywhere close to counteracting the
damage done by the Order taken as a whole.

We should have made sure we understood the full impact of consolidation
on minority ownership, minority employment, issue coverage, and the
portrayal of minorities [before]{.underline} rushing ahead with massive
new consolidation opportunities.

**D. Gutting the Local TV Rule**

The majority today introduces a new concept into our media landscape: a
television triopoly. One entity can now own up to three stations in a
local community where there are at least 18 commercial and noncommercial
television stations in the market. Strictly on the basis of empirical
evidence of common ownership of two television stations, the majority
leaps ahead to triopolies. Based on Bureau figures, these triopolies are
available in a handful of the nation's 210 television markets, no more
than nine markets representing 25.2 percent of the population.

What is more troubling is the dramatic leap forward in terms of the
number of communities across our country in which television duopolies
are now permitted. Currently the Commission allows common ownership of
two television stations only when the stations' signals do not directly
overlap or where both stations are not among the top-four ranked
stations and eight independently owned stations remain after the merger.
The post-merger eight independent voices test essentially meant that no
station owner in markets 70-210 could acquire a duopoly, and those in
the top 70 markets still had to meet the other restrictive criteria.

Today, the majority expands this reach of duopolies to many more markets
and removes the protections that the signals not overlap or that a
minimum number of independent voices remain. The new rules essentially
make television duopolies potentially viable in as many as 162 of the
nation's 210 markets, representing 95.4 percent of the population,
depending on the ratings success of noncommercial stations in the
market. While common ownership may be appropriate in the larger markets
where diverse voices can be shown to flourish, and in the smallest of
markets where proven localism gains may outweigh the diversity harms, it
is the mid-sized markets that concern me most.

Reflecting the reasoning that is lacking in radio, the majority
restricts duopolies to only those where one station not is ranked among
the top-four stations based on audience share. This is a rational
realization that certain combinations will produce a single firm with
significant market power, even if the majority then backs off by
widening the scope of waivers.

As the sole duopoly protection that remains, the top-four restriction
effectively preserves only four independent voices in many markets, down
from eight. Curiously, however, in effect, at least six independent
voices are preserved for triopolies. So, pragmatically applying the new
rule, a market with 18 stations will protect at least six independent
owners, yet a market with one fewer station, a total of 17, will
preserve at least nine independent owners, a figure which is reduced to
four as markets get smaller. If the main point of this Biennial Review
was to meet the court's mandate to make our requirements consistent, the
Order clearly fails in permitting this glaring inconsistency.

Again, by allowing such extended consolidation in one fell swoop, the
majority puts efficiencies and cost savings ahead of other public
interest goals. Diversity, in nearly all its forms, is particularly
undervalued. Commonly-owned stations that no longer produce news
independently could have a detrimental effect on the diversity of news
sources as well as news slants. Sending only one reporter and one
photographer to a story instead of two, while certainly more efficient,
could mean a lost opportunity to interview a critical witness or snap
that award-winning photograph. Retaining multiple distinct television
outlets in a community also contributes to emergency preparedness
through redundant broadcasting infrastructure. To the extent that the
majority claims incentives to increase program diversity through
consolidation, this is contradicted by findings that consolidation may
lead to repurposing, resulting in less original program diversity, which
even the majority finds troubling in the context of children's
programming.

There is record evidence of the types of harm occasioned by same-market
combinations. One study found that the number of hours of children's
programming aired by broadcasters in LA decreased by more than 47
percent between 1998 and 2003, with the largest decreases occurring at
commonly-owned stations.[^58] Other evidence on the record shows
negative effects of same-market combinations on news production.[^59]
While there is certainly record evidence of how duopolies have benefited
the public, at best, the conflicting evidence in the record should
signal us to move more conservatively.

Even taking as a given that the benefits of efficiencies automatically
outweigh the harms in all the markets where the majority takes us, can
these benefits mechanically be presumed for a triopoly without further
analysis? Does there come a limiting point at which the efficiencies
trail off but the public interest harms intensify?

Another basis for a more measured approach is the digital television
transition. Our local television broadcasters are in transition, and
there is no question it is capital intensive. But there is also an
unknown frontier ahead of them. It may be that digital television
ultimately produces additional revenue opportunities for broadcasters.
While common ownership in a particular market may indeed stimulate the
transition, or serve the public in other tangible ways, broadcasters
could come before the Commission on a case-by-case basis and explain why
that is so.

So, taking the record as a whole, rather than lifting the limits in the
majority's breathtaking fashion, I would have preferred us to start with
more incremental steps and sufficiently monitor whether the benefits
flowed to the public. With a more conservative course, as we get further
into the transition, we could have had a more firm understanding of the
likely effects of further consolidation on the transition itself and on
the future digitized television environment.

In the television context, the majority also inexplicably removes a
longstanding requirement from the Commission's failing station waiver
standard -- that the station show that no bona fide out-of-market buyers
were interested in acquiring the station. While this requirement may not
seem like much, it was a way to maintain a maximum number of independent
voices in a market and provided a sensible check to avoid unscrupulous
accounting gimmicks. A similar requirement, for example, applies in the
context of satellite television stations. Given that satellite stations,
which can now originate an unrestricted amount of programming, are
exempt from our broadcast ownership rules, a station owner may have an
economic incentive to claim a particular station as a satellite. Yet,
before doing so, the station owner has to show that no other entity is
interested in operating the station as a full station. In an era of lax
corporate accountability, the Commission should go out of its way to
avoid the potential for questionable practices.

**E. Precarious Cross-Media Limits**

Cross-ownership restrictions remain a fundamental and necessary public
protection to prevent a single entity from gaining through acquisition
so powerful a voice across various media outlets that the entity can
control a community's most critical sources of local news and
information. Restrictions against cross ownership preserve a number of
diverse editorial voices in a community, which is necessary for
meaningful public debate, not to mention scrutiny of the media companies
themselves or criticism of the one platform's offerings by another.
These restrictions are especially important in smaller or mid-size
communities where citizens have fewer outlets for local news and
expression.

The record contains overwhelming support for continuing cross-ownership
restrictions. It also contains evidence of potential benefits of
newspaper/broadcast cross ownership in certain cases.[^60] But I fail to
find support for the majority's particular decision to drastically
eliminate citizen protections without any case-by-case analysis or any
effort to anticipate effects in a given community, and without requiring
commitments attesting to the benefits to the public of particular
mergers.

Under the new rules, mergers between a television station and a
newspaper are permissible in up to 179 local media markets, representing
more than 97.7 percent of the population. Combinations involving radio
and television are similarly permissible in those areas. And a newspaper
could acquire two or more television stations in markets representing
nearly 73 percent of the population. These are drastic reductions in
longstanding consumer protections.

The majority's justifications for this drastic of a change do not
measure up. For example, the majority strongly criticizes the current
rules for inadequately accounting for the competitive presence of cable.
Yet it then finds that cable has no significant presence as a source of
local news and information, omitting cable from the Diversity Index (DI)
and the rules that emanate from it. To justify a wholesale overhaul of
the rules in part on the basis of significant competition from cable,
and then not account for that influence in a measure of diversity of
media outlets in any given community is puzzling at best. Perhaps the
majority means to imply that cable's many channels contribute to news
and entertainment programming on a national level. But if the core of
the Commission's public interest responsibility is diversity, and
diversity is best demonstrated through local news and public affairs
programming, then I am at a loss for how the mere presence of cable can
be asserted as a justification for undercutting decades of media
ownership protections.

I am also puzzled as to why the majority fails to restrict combinations
among the most powerful voices in a community, as they do in the local
television rules. If consolidation among the top four-rated television
stations would create excessive market power in a community, why are
combinations involving these stations and the dominant daily newspaper
allowed? A newspaper, with in-depth analysis, opinion, and investigative
reporting, may very well bring a unique perspective to public debate
about issues of local concern.

Analyzing the effects of further cross ownership would logically start
with the realities of each market segment. Newspapers and broadcast
television are already highly concentrated markets, and radio is already
concentrated, with each market segment dominated by large,
vertically-integrated corporations.[^61] The market for program content
is similarly oligopolistic. Given this existing market structure, I do
not believe the majority has adequately accounted for the effects of
horizontal and vertical combinations that could result from the new
rules. Perhaps this is why the majority declines to base its local
rules, which are grounded on competition concerns, on traditional
economic measures such as the Department of Justice's
Herfindahl-Hirschman Index. And perhaps this accounts for the peculiar
way in which the Diversity Index treats the players within each market
segment.

For the reasons outlined below, I am not convinced that the Diversity
Index (DI) is an appropriate bellwether of diversity in local media
markets on which to base a set of bright-line rules. Although a noble
effort, the index tragically degenerated into a flawed philosophical
invention of little use.

Before turning to its inherent flaws, let me stop to point out the
utterly bizarre use of the DI within the new media ownership framework.
After detailing at length the new formula and its underpinnings, the
majority stresses that the DI is used only to conclude that the current
rules are not necessary and then to sort markets into tiers, from which
bright-line rules are applied based solely on the number of television
stations in a market. Despite the supposed virtues of the DI and its
lofty purpose, the order specifically denies any person the right to
apply this new magical formula to a particular market. In other words,
no one can use the Commission's new methodology to show that its
application in a particular market would reveal public interest harms.
This is peculiar, at best.

I agree with the majority that diversity is inherently subjective and
difficult to reduce to scientific formula. It is precisely because of
its elusiveness, combined with the difficulty of resurrecting it when it
is taken away, that the Commission must tread more carefully in this
arena than in any other.[^62] The majority appears not to care that the
DI change in a particular market may be more than it has bluntly
asserted, that people in a given market actually watch certain stations
more than others, or that some of the outlets they include do not even
carry local news programming. But I say that our cherished diversity
principles deserve more careful precision lest they be dulled to the
point of senselessness.

The majority concludes that viewpoint diversity is best measured through
news and public affairs programming. Curiously, it then makes arbitrary
assumptions about which outlets provide local news. I do not understand
why certain providers such as magazines and cable operators are removed
from the DI on the basis of their lack of local news coverage, while
television stations like home shopping stations, which carry little or
no local news programming, are fully included. By not basing the entire
index on local news voices, the results could very well overstate the
choice of local news and public affairs programming outlets available in
any given market. Not only is news content more easily measured than
other types of content, but, more importantly, it relates directly to
the Commission's core policy objective of facilitating robust civil
discourse.

The majority then fails to account for actual usage patterns in the DI.
This understates the market shares of relevant providers in each local
market, resulting in grossly understated measurements of the impact of
any particular combination when the understated shares are squared and
the change measured. For example, in New York, the majority treats Shop
At Home and the Dutchess Community College television stations the same
as the local NBC and CBS station. Similarly, with respect to newspapers,
the *New York Times* is treated the same as the *Polish Daily News* in
terms of assessing the relative share of the overall newspaper weight to
attribute to the owner. This arbitrary assigning of equal weights
undoubtedly understates the real market power of the relevant local
providers, which is compounded by squaring the artificially equalized
shares to measure the supposed effect of a transaction among providers
in that market. Presumably, under this analysis, a merger of the *Polish
Daily News* with the Shop At Home station would count the same as
combining the *New York Times* with the NBC station. As a result, the
calculations of the DI change from a particular transaction, which are
the very calculations that form the basis for the majority's cross-media
tiers, are not actual reflections of the real world effects of
cross-media combinations.

While this does not trouble the majority insofar as media outlets are
generally available and over time may change the amount of news and
current affairs that they offer, with a concern as paramount as
diversity, failing to capture the real world effects of any changes in
our rules seems to be slighting our responsibility and shortchanging the
public. In addition, I find it ironic that the majority in its
discussion of the local television rule finds that local news is
expensive, but then assumes for cross-media purposes that any available
outlet could at any time become a provider of local news.

I also fail to reconcile the majority's treatment of the Internet in its
cross-ownership analysis. Much of the Internet's news content is derived
from newspapers and other media companies, yet the majority does not
adequately account for the vertical integration.[^63] The DI assumes
that the provider of local news and information is the media outlet, say
the particular television station or newspaper, as the gatekeeper of the
content that is made available. It matters not whether a consumer
procured the *New York Times* through a vending machine, at her home, or
at a local convenience store. As it concerns the Internet, the DI deems
the relevant provider the cable modem provider or the dial-up, DSL or
other access provider, not accounting for the ultimate destination of
the consumer. This has the potential to understate the concentrated
market power of vertically-integrated media companies that have popular
Internet websites. Moreover, a reflection that the access provider is
the gatekeeper to news content available on the Internet surely carries
significant repercussions for our treatment of such providers in other
settings.

Despite the quest for solid empirical footing, the DI is premised on
admittedly incomplete and ineffectual data points. Recognizing that the
Nielsen study failed to ask specific questions on the source of local
news and public affairs programming, the majority marches ahead,
cobbling its own data points on local news sources from selective
answers to the admittedly-muddled questions. Again, I believe that
nothing in our statutory directive requires us to make the dramatic
deregulatory leaps that we make today, particularly when the size of the
jump rests on such a shaky foundation.

The DI's flaws have a very serious practical effect, for not only was
the DI used to conclude that a blanket ban on newspaper or radio
broadcast cross-ownership was not necessary, but the cross-media limits
are derived for the most part from DI calculations of the effects of
certain categories of transactions on the overall level of viewpoint
diversity in local media markets. If the index itself is flawed, on what
does the majority rely to justify its decision to allow cross ownership
in nearly every market in the country? Based on flawed foundational
principles that call into question the resulting cross-media tiers, the
entire exercise appears as a pretext for arriving at a pre-ordained
outcome: gutting the newspaper/broadcast cross-ownership rule and
leaving a pale substitute in its wake.

**F. Enlarging the National Television Cap**

I believe the record demonstrates sufficient concern with further
concentration of power in the hands of networks at the expense of
localism, innovation, and program diversity that retention of the
national network cap at the 35-percent level set by Congress is
justified. The record shows harm occurred in the leap from 25 to 35
percent, and common sense dictates that the harm will likely get
exponentially worse as the number increases.

A sufficient number of local stations should remain free to serve their
local communities and counteract the power of the networks. When a
network acquires a local station, there is some risk that the network
will seek to maximize revenue and national programming at the expense of
local interests and needs.

The network/affiliate relationship continues to involve a delicate
balance of network influence on stations, network influence on creators,
and advertiser influence on networks. Without analyzing all these
effects in concert, I am not convinced that the majority has adequately
justified the selection of a new 45-percent cap. Ample evidence
justifies retaining the cap in its current form.

> **i. Retention of the National Cap**

A cap on national television ownership reach promotes localism,
innovation, and program diversity by preserving the power of affiliates
to negotiate with the networks and make independent programming
decisions responsive to the tastes and needs of their communities. It
also facilitates competition in the program production market and in the
national advertising market.

It is axiomatic that the focus and incentives of the local affiliate are
on making programming decisions that closely align with the needs and
tastes of the local community, whereas broadcast networks earn income
from programming and syndication revenue as well as local station
ownership.

The record is replete with the instances of affiliates exercising
independence in programming to meet the needs of their local
communities. They range from NBC dropping a trial program of liquor
advertisements when affiliates refused to air them, to affiliates
seeking to shift the Victoria's Secret Fashion Show to a later time slot
or delaying the Olympics to reflect different time zones, to objecting
to the explicitness of promotional pieces.[^64] In other examples that
strike at the heart of localism, a network refused to permit affiliates
to blend in local news content during a two-hour morning news program,
and another station was denied permission to air a political debate that
would have preempted a season premiere.[^65] Even Jerry Lewis laments
the increased pressure the networks have put on affiliates who seek to
run charitable telethons.[^66]

The collective negotiating power of affiliates is immeasurably valuable
to the public. Successful affiliate pressure on the network could even
result in networks delivering programming that is more conscious of
local community needs. Preemption, which the record shows affiliates do
more of than network-owned stations, also fosters localism.[^67] The cap
also offers protections in the national advertising market, where
network-owned stations may have less incentive to compete directly with
an affiliated broadcast network. In my view, the record shows
overwhelmingly the need for a cap to protect the public interest in
fostering localism, innovation, and diversity.

ii. **Level of the Cap**

For a cap to be effective at promoting these values, it must be set at a
level to ensure, at minimum, that local programming reflects local
values and preferences and that a critical mass of affiliates remain to
bargain successfully with the networks. Increasing the cap risks
eliminating the unique choices local programming can provide. This
sizable risk, combined with the fact that the full extent to which this
harms the public may not occur overnight, calls for a measured approach.

In retaining the cap, the majority acknowledges that localism is served
both by an individual affiliate's ability to preempt programming as well
as by the collective influence of the affiliates in network programming
decisions. When it comes to determining whether to continue a 35-percent
cap or raise it higher, the majority relies on record materials relating
to affiliate preemptions, essentially ignoring the consequences a
45-percent cap may have on the collective bargaining power of the
affiliates. Yet even in looking at the preemption statistics, which
substantiate that on average affiliates preempted 48 hours per year
between 1991 and 1995 when the cap was at 25 percent and 36 hours per
year between 1996 and 2001 when the cap was 35 percent,[^68] the
majority dismisses this data. They say a more accurate measure would be
to compare the affiliate preemption rates with preemption rates of
network-owned stations over this period. I find this assertion to be a
bold one, knowing that the affiliates may not be able to access this
data but the Commission could, if it so desired.

To support the increase to 45 percent, the majority overlooks evidence
supporting 35 percent and relies primarily on evidence showing that
affiliates preempted the largest networks with a reach over 35 percent
as often as the smaller networks. This is a thin reed on which to
justify a ten-point increase. Without access to the data, the majority's
conclusion is less reliable and less convincing.

Differences between network-owned stations and affiliate stations in the
quantity of news did not prove statistically significant in larger
markets.[^69] Despite entry fees and other difficulties with using
awards as a measure of quality, I find these quality measures, ratings,
and awards, essentially inconclusive. To the extent that network-owned
stations do better in DuPont awards, the affiliates had higher quality
scores in the PEJ Study. Given this, the majority finds 35 percent not
necessary to maintain high quality local news.

But the PEJ Study also found that 48 percent of stations owned by
midsize and small group owners earned "A" grades for quality, compared
with only 22 percent for the 25 largest group owners.[^70] This
signifies a cutoff in quality as consolidation occurs and affects the
bottom line. While the majority deems this differential statistically
insignificant, even an equal level would call into question the
majority's assumption throughout this Order that greater efficiencies
from common ownership automatically lead to greater quality. Where might
that cutoff lie?

The majority picks 45 as a number that equates to roughly half of all
homes, represents the increment that Congress used in 1996, and leaves
room for additional growth. That Congress's wisdom can be useful in the
incremental increase of the cap, but not in the cap's overall number, is
curious. That 45 percent is not half is undeniably true, but it is much
closer to that brink than 35. Nothing in the record or the majority's
analysis assures me that 45 will not prove harmful to the localism goals
the majority so proudly claims it is protecting.

The majority's concern with network profitability and rising programming
costs is ironic, given the trend of networks supplying more of their own
programming. The majority not only fails to substantiate this charge
with any record evidence, but also ignores the fact that the
Commission's role is not to help broadcast networks financially. It is
to serve the public interest. The broadcast networks remain alive and
well. In fact, as I noted, they just announced a record upfront
advertising buy of \$9.4 billion, well over the upfront booked by cable.

I question whether the Commission should have acted based on
unsubstantiated claims that the networks' poor financial health will
result in the migration of expensive programming to cable. Did the
Commission gather and analyze relevant network financial information?
Did it measure other tangible and non-tangible benefits of network
ownership? Cox, for example, cites the leveraging of broadcast station
ownership during retransmission consent negotiations.[^71] Was this
calculated? In fact, the Commission made no effort to answer these
questions.

In the end, I believe we have yet another tradeoff favoring corporate
efficiencies over public interest goals such as localism. In my view,
the social benefit of locally originated and oriented programming and
ultimate program selection authority clearly outweighs any efficiencies
gained by allowing media companies to achieve further consolidation.

I am troubled that after admitting a recent trend of extensive backward
integration into program supply, the majority gives short shrift to the
program production market. The majority conducts no significant analysis
regarding whether networks are capable of exercising market power in
this area.

Lastly, I am troubled by the majority's failure to appreciate the role
of the cap in promoting diversity on a national scale and preventing
further homogenization of national programming. The majority narrowly
assumes that viewers do not travel, communicate with others, or
appreciate a diversity of views in communities other than their
own.[^72] Clearly, if all television or radio stations nationwide were
commonly-aligned, this would have a demonstrable effect on the public's
access to diverse airwaves. Surely there is some limiting principle for
the protection of diversity on a national basis.

**G. Dual Network Rule**

Finally, I cannot join the majority in voting for retention of the dual
network rule that prohibits ABC, CBS, Fox, or NBC from merging with one
another, as I would have also addressed other modern marketplace
realities in such a rule.

As an initial matter, I disagree with my colleagues that diversity no
longer underpins this rule. The question of multiple network ownership
is more than a question of market power and promotion of new entry. I
believe diversity, including source and program diversity, as well as
innovation, is also implicated in such network combinations. I note that
in analyzing competitive effects, the majority sidesteps the program
production market, looking only at the program acquisition market.

But more importantly, a more rigorous examination of this rule must be
conducted in light of the rising tide of Spanish broadcasting networks.
The rule is retained for the top-four English-language networks, which
comprise a "strategic group" within the national advertising market and
compete largely among themselves. Did the Commission consider whether
Spanish-language broadcasting is similarly separate for advertising
purposes? Spanish-language broadcasting should be examined separately,
in order to determine whether common ownership of the preeminent
Spanish-language networks should receive comparable treatment to the
top-four English-language networks.

The rapid growth of the Spanish-language media in the past several years
is having a significant effect on the landscape in which broadcast
networks operate. I believe that these developments require us to
consider whether to afford Spanish-speakers the same protections
available to English-speaking television audiences.

A horizontal merger between preeminent Spanish broadcast networks could
have demonstrable effects on market concentration within Spanish media,
as well as on price competition for Spanish media advertising. Such a
merger could also affect the program production and acquisition markets.
The competitive analysis should be informed by key distinctions in the
use of the media. For example, the need for a national footprint is
diminished in Spanish broadcasting, as the vast bulk of Spanish speakers
can be reached through a handful of key television markets. Evidence in
this record also suggests that far fewer Hispanic television households
subscribe to cable than the general U.S. population, meaning that
competitive effects inside the Spanish broadcasting networks take on
greater importance.[^73] The competitive effects also must be considered
against the backdrop of permanent waivers of the network representation
rule granted to Spanish-speaking broadcast networks.

Beyond the possible harmful competitive effects, a merger among leading
Spanish television networks would reduce the number of independent
Spanish-speaking voices and thereby diminish diversity, particularly
source and viewpoint diversity, for the Spanish-speaking population.
This diminution could also have a dramatic impact on localism and
innovation.

The contemporary broadcast network marketplace, with a growing role for
Spanish-speaking networks, raises questions that bear analyzing before
we understand the full impact of dual network ownership on our public
interest goals. These are serious questions, and, until the Commission
asks and answers them, I am not prepared to join my colleagues in
supporting this dual network rule.

**H. Independent Production**

I take seriously the concerns that the contemporary program production
market has deteriorated to the point that we should consider whether an
independent production requirement is needed to foster competition,
diversity, and innovation.[^74] The majority does not contest that far
fewer programs are produced independently now than in the past, but
apparently is not moved to address the consequences of the decline,
finding no sufficient explanation of its cause. As concentration limits
for the vertically-integrated broadcast networks are further relaxed
today, I would have preferred to see us examine in this proceeding, or
at minimum issue a further notice probing into, the basis for the
noticeable reduction in independent program production and its
implications for the broadcast viewing public.

A further inquiry would enable us to evaluate the effects of dominant
network ownership of programming on competition for content production,
on small businesses, on technicians and writers, and on innovation and
creative expression. It would allow us to analyze fully how the trends
over the past decade have affected the diversity of viewpoints from
different sources and impacted the public interest. Will market forces
alone enable independent producers to disseminate their expression and
preserve source and viewpoint diversity on our airwaves? These are
worthwhile issues to explore. A further notice would have been the
prudent course for the public interest.

**VI. The Public's Right to Comment**

I am dismayed that many of the inconsistencies and unintended
consequences which I point out today, and perhaps others, could have
been avoided by public scrutiny of the specific proposals put forth by
our rulemaking agency. Perhaps the majority's observation of the general
nature of the hundreds of thousands of citizen comments reflects the
lack of specificity given to the public about the pending changes, so
they had few concrete details on which to respond.

While some may say that selecting cross-media tiers based upon the
mixture of choices embodied in the Diversity Index that appeared for the
first time in this Order, or truncating certain radio contours in a
manner suggested in a late-filed comment, were logical outgrowths of the
questions presented in the notices to the public, I am not convinced
that mere logic would lead someone to the framework, let alone results,
reached in this decision. The lack of notice of the Diversity Index, for
example, is compounded by a bright-line regulatory framework that denies
people the ability to say that the hypothetical index does not represent
the diversity options available in their local community.[^75] Without
more specific notice of the interrelated proposals adopted today, at no
point was the public able to evaluate and comment upon how all these
rule changes might work in concert, particularly the increase in the
national cap and retention of the UHF discount overlaid with triopolies
and more expansive duopolies, or what the collective effect of the
changes would be on small businesses.[^76]

The Commission should strive for an open administrative process which
enables the public to participate meaningfully in the rulemaking
process, and which helps to assure that the Commission will have the
relevant facts and information before it. Publishing notices with
sufficient specificity for meaningful comment is not just the right
thing to do, it may very well be what the law requires.[^77]
Particularly in matters as sweeping as this, affording the public the
right to comment on mere general questions is not a substitute for a
hearty public debate on specific, interrelated proposals.

This is particularly true when the Commission went to great lengths to
employ an empirical evaluation of the elusive values underpinning our
protections. The Commission's sponsored studies, while voluminous, were
the subject of significant and precise criticism, even though the public
had little time to evaluate them (even less time to review the
underlying data) and was never given a clear understanding of their
anticipated use.[^78] Even the majority admits that the studies were not
complete and did not ask the right questions. And even now, have we, let
alone the public, evaluated the overall collective effects of our rule
changes?

We should have made every effort to ensure a transparent process in
which the public could fully participate. I requested and was denied a
public forum to reveal even the broad contours of our proposals. An open
process, a serious attempt to gather and analyze the necessary data, and
thoughtful deliberation on specific proposals would have helped in
convincing the public that the Commission is acting with the larger
interests of a democratic society in mind.

Instead, the public today sees the changes for the first time. I am not
persuaded by the refrain that this is the way we always do business. In
the majority's own assessment, this is the most rigorous and
comprehensive review of media ownership rules ever. It also sparked
unprecedented interest from the public at large. This is an
extraordinary proceeding that affects our very democracy, and we should
have taken extraordinary measures to ensure full and meaningful public
participation in the rulemaking process.

**VII. Moderating Extreme Proposals through a Conservative Approach**

I had truly hoped for a better outcome -- an approach that took into
account the current technological and market environment and protected
competition, localism, and diversity. The turning point when I realized
I could not likely support this item was when a majority settled on the
notion embodied in this Order that bright line rules, which as it turned
out allow consolidation in nearly every media market in America, were
preferable to making case-by-case determinations as to whether media
mergers served the public interest. With the stakes so high, the public
interest, in my opinion, calls for examining media consolidation on a
market specific basis.

Media consolidation undeniably means a loss of an independent voice in
the community, which is difficult to ever gain back. We should take a
slow, graduated approach to unleashing further media consolidation. And
where we do allow more consolidation, it is only through an explicit
showing that the public will know that they will benefit from
efficiencies to a sufficient degree to counteract the loss of localism,
competition and diversity in the affected communities. Broadcasters
seeking to consolidate should be required to demonstrate the extent to
which the efficiencies created thereby will accrue to the public
benefit.

What better programming, particularly locally originated and oriented
programming, will the buyer produce? Will the buyer hire additional
reporters to investigate local news stories? What better coverage will
result of local cultural events and local artists? Will each entity
retain separate editorial discretion, and will the overall editorial
budget be increased? How will the owner treat complaints of stories not
being covered? Will the broadcaster improve its emergency broadcasting
capabilities, or invest in better technology to alert the community to
dangerous conditions? Before allowing media companies to expand into
traditionally-protected areas, the public should know how they will
benefit.

And the broadcaster should remain accountable. A consolidated
broadcaster's performance should be matched against its promises through
an annual showing that it met its commitments. The public should know
whether its airwaves are being lavishly squandered for corporate
interests, or whether they are being used in a manner which both
compensates the broadcaster and serves the public. The Commission has
consistently required broadcasters seeking waivers of ownership rules to
make specific, tangible representations of the benefits of
consolidation. Given all the benefits claimed in this proceeding, this
should be an easy showing for consolidating parties, now that
consolidation can occur in nearly every market without a waiver. And it
would allow the Commission and the Congress to make more informed
decisions on future levels of concentration.

In addition, diversity concerns stemming from cross-ownership of a
broadcast station with other media outlets like newspapers or cable
should be addressed based upon a specific showing of the diverse voices
available in individual local markets and the power of the proposed
combination to undermine diverse viewpoints. To promote the widespread
dissemination of information from a multiplicity of sources, or at least
to know the effect of any given transaction upon the diversity of
viewpoints in an area, safeguarding diversity should not be subject to
abstract diversity scenarios that hypothetical markets of certain sizes
may engender. Given diversity's paramount position in our democracy, it
shouldn't be given short shrift by rules that neither reflect the
realities of available viewpoints nor the power of particular
combinations.

The Commission should also monitor what it unleashes. It should conduct
an extensive examination of positive and negative effects from the
likely consolidation that today's action will bring. Having just
completed reviewing the rules, the majority would undoubtedly agree that
there are areas calling out for more effective data collection to
understand the full effects of media consolidation. Now is the time to
institute such a framework for reporting and analyzing full and complete
data on the effects of media consolidation. I urge my fellow
Commissioners to step up and start rigorous information collection and
analysis.

Even assuming that some level of greater consolidation is warranted,
given the dramatically expanded consolidation opportunities created
today, I am not convinced that the modified rules have been reset at the
proper levels necessary to serve the public interest. I do not mean to
suggest that bigness is bad, or that free enterprise will always fail
the public. There is some truth to the arguments that my fellow
Commissioners make. There is nothing inherently wrong with earning
profits from the use of public property.

But when it comes to gaining even greater profits at the expense of the
cornerstones of our democracy, we must carefully question the rationale
and the effect on the public. Today's rules do not only let the big get
bigger, they effectively raise barriers to new entrants and prevent
smaller entities from breaking in while disserving the public interest
by increasing the likelihood of homogenization of the airwaves. Given
the potential harms in overhauling these longstanding rules in such a
dramatic fashion, I advocate an incremental approach that will show the
public at each step how it will benefit.[^79]

Proceeding with utmost caution and deliberation through a graduated
approach would provide the public more certainty as to the effects of
greater consolidation and would prevent unintended consequences. While
the majority expresses concern that some revised market definitions
might disrupt the markets, it overlooks the disruptive restructuring of
the entire media landscape brought about by today's interrelated
decisions. A graduated approach which modifies rules in a more
incremental fashion would not be a wait-and-see postponement of our
statutory duty -- it would still be a modification, just one that would
better serve the public interest. Congress, after all, directed us to
reexamine this landscape every two years, not every five or ten years,
which implies a certain level of comfort with an incremental approach.

**VIII. Conclusion**

We should always be wary of dismissing the American public's
strongly-held views about their media. This, in conjunction with an
exercise of gratuitous deregulation, is a recipe for disaster, and it
will have consequences we are already beginning to see. My prediction is
that the public will notice the effect of greater media concentration
and be outraged. One very possible backlash is that the public may
someday soon demand more intrusive content regulation or a return to the
prescriptive solutions of the past. As the majority today whittles away
the last vestiges of structural regulation, pressure for more intrusive
regulation may boil over.

Since my arrival here late last year, I have approached this proceeding
with a constructive frame of mind. I sought to understand the various
proposals and their underpinnings, and offer my views on their efficacy.
Even after others closed in on an approach with which I was not
comfortable, I made reasonable attempts to moderate the proposals, which
were refused. In the end, it was not the process that precluded me from
participating in drafting and supporting today's Order. It was the
substantive direction the item took and the results-driven imposition of
bottom line, bright line rules ahead of all else.

The majority claims these rules are responsive to the changes in the
world around us. Yet I question whether cobbling together a
results-driven regime allowing massive media consolidation serves the
public interest. I am disappointed that a majority of my colleagues
could not be persuaded to take a more reasoned, conservative,
case-by-case approach.

This is far from over. Congress may prove more responsive to the
citizens who passionately plea for the independence and diversity of
their media. The courts may yet tell the Commission to try once again
for a coherent comprehensive framework. To paraphrase Winston Churchill,
this is not the end, or even the beginning of the end, but just the end
of the beginning.

[^1]: Telecommunications Act of 1996, Pub.L. No. 104-104, § 202(h) (1996
    Act). *See also* 1996 Act § 257(b) (asserting the need to "promote
    the policies and purposes of this Act favoring diversity of media
    voices, vigorous economic competition, technological advancement,
    and promotion of the public interest, convenience, and necessity").

[^2]: *See* *Fox Television Stations v. FCC*, 280 F.3d 1027 (D.C. Cir.
    2002). *See also Sinclair Broadcast Group v. FCC*, 284 F.3d 148, 152
    (D.C. Cir. 2002) (noting that the *Fox* case remanded the national
    cap "for justification" by the FCC).

[^3]: *See Fox*, 280 F.3d at 1044 (criticizing the prior Commission for
    merely listing facts in a single paragraph, "without defining the
    relevant markets, let alone assessing the state of competition
    therein" and without linking the listed facts to the decision to
    retain the rule, "precisely what § 202(h) requires.").

[^4]: *Id.*, 280 F.3d at 1049 (emphasis added).

[^5]: *Id.*, 280 F.3d at 1048.

[^6]: *See FCC v.* *National Citizens Committee for Broadcasting*, 436
    U.S. 775, 780, 808 (1978) (*NCCB*). *See also* *United States v.
    Storer Broadcasting*, 351 U.S. 192 (1956).

[^7]: *Turner Broadcasting System v. FCC*, 512 U.S. 622, 663 (1994)

[^8]: *Id.*, 512 U.S. at 663-64 (*quoting Associated Press v. United
    States*, 326 U.S. 1, 20 (1945)).

[^9]: *NCCB*, 436 U.S. at 801.

[^10]: *Associated Press*, 326 U.S. at 20.

[^11]: *Red Lion Broadcasting Co. v. FCC*, 395 U.S. 367, 390 (1969).

[^12]: *Id.*, 395 U.S. at 390. *See also NCCB*, 436 U.S. at 794-95,
    799-802; *Sinclair*, 284 F.3d at 161-62, 168 (reiterating that there
    is no First Amendment right to hold a broadcast license where it
    would not satisfy the public interest).

[^13]: *See* 47 U.S.C. § 307(c)(1). *See also* 47 U.S.C §§ 303, 307(a),
    309(a).

[^14]: Martin Kaplan & Matthew Hale, "Local TV Coverage of the 2000
    General Election," the Norman Lear Center Campaign Monitoring
    Project, USC Annenberg School (Feb. 2001).

[^15]: Newton N. Minow, "Television and the Public Interest" Speech
    Before the National Association of Broadcasters (May 9, 1961).

[^16]: *See Sinclair*, 284 F.3d at 168-69 (dismissing the assertion that
    structural broadcast ownership regulation is undermined by cable,
    DBS, and the Internet; finding the rationale for structural
    regulation remains the necessity for the Commission to select among
    competing applicants for the same channel).

[^17]: *See* Coalition for Program Diversity Reply Comments; "Weekend
    Media Blast #22: Sucked Into the Dereg Process," Bernstein Research
    Call, Sanford C. Bernstein & Co., May 30, 2003 at 1 (noting that
    five media conglomerates -- Viacom, Disney, AOL Time Warner,
    NewsCorp and NBC/GE -- control a 70% share of homes watching prime
    time).

[^18]: *See* WGA/PGA Joint Comments.

[^19]: Annual Assessment of the Status of Competition in the Market for
    the Delivery of Video Programming, Ninth Annual Report, MB Docket
    No. 02-145 (Dec. 31, 2002).

[^20]: *See* Nielsen, Top Twenty Internet News Sites, Nov. 2002;
    "Newspapers Run 8 of Top 20 News Sites," Editor & Publisher (Feb.
    20, 2003).

[^21]: MOWG Study \# 8, Nielsen Media, "Consumer Survey on Media Usage,"
    Sept. 2002.

[^22]: *See* Jonathan Levy, Marcelino Ford-Livene, Anne Levine,
    "Broadcast Television: Survivor in a Sea of Competition," OPP
    Working Paper 37 (Sept. 2002).

[^23]: Universal McCann, U.S. Advertising Volume, March 2003; Kagan
    World Media, Broadband Cable Financial Databook 2002.

[^24]: David Bauder, "Network Estimate \$9.4B in 'Upfront' Sales,"
    Associated Press, May 23, 2003 (noting that advertisers are
    overlooking the declines in viewership among the broadcast
    networks).

[^25]: Emily Nelson, "CBS Narrows Profit Gap with NBC," Wall Street
    Journal, Apr. 15, 2003, at B3 (estimating net revenues of \$1.68
    billion for CBS and \$2.17 billion for NBC).

[^26]: *See* Testimony of Jim Goodmon, President and CEO, Capitol
    Broadcasting Company, before the Senate Committee on Commerce,
    Science & Transportation, Media Ownership Hearing (May 13, 2003)
    (stating that "\[f\]ree over-the-air and network television is a
    very profitable business with tremendous margins that other
    industries envy.").

[^27]: *See, e.g.,* Richard Morgan, "Viacom Pays \$650M for Another L.A.
    Station" The Daily Deal (Feb. 14, 2002).

[^28]: MOWG Study No. 11.

[^29]: *Id*.

[^30]: MOWG Study Nos. 4, 11.

[^31]: *See, e.g.,* Idaho Wireless Comments in MM Docket No. 01-317;
    North American Comments in MM Docket No. 01-317, UCC Comments and
    Reply Comments in MM Docket No. 01-317.

[^32]: *See, e.g.,* Statement of Jenny Toomey of the Future of Music
    Coalition, FCC Field Hearing, Richmond VA (Feb. 27, 2003); AFL/CIO
    AFTRA Comments.

[^33]: *See* Future of Music Comments "Radio Deregulation: Has It Served
    Citizens and Musicians?"

[^34]: MOWG Study No. 11.

[^35]: *Fox*, 280 F.3d at 1047.

[^36]: *Id*.

[^37]: *See Turner Broadcasting System v. FCC*, 512 U.S. at 663 ("The
    interest in maintaining the local broadcasting structure does not
    evaporate simply because cable has come upon the scene.").

[^38]: H. Rep. No. 104-204 (1995) at 221.

[^39]: *See* Ted Turner, "Monopoly or Democracy?", *The Washington
    Post*, A23 (May 30, 2003) (opining that it would have been virtually
    impossible to launch CNN without structural ownership rules, and
    that significant relaxation "will stifle debate, inhibit new ideas
    and shut out smaller businesses trying to compete" for smaller
    independents tend to be innovators and risk takers while large media
    companies are more profit-focused and risk averse).

[^40]: *See* Consumers Union Comments in MM Docket 01-235; Consumer
    Federation of America *et al.* Comments; C. Edwin Baker, "Giving Up
    on Democracy: The Legal Regulation of Media Ownership." For a more
    complete recitation of the externalities, see C. Edwin Baker,
    [Media, Markets, and Democracy]{.underline}, Cambridge University
    Press 2002.

[^41]: *Associated Press*, 326 U.S. at 17 (Justice Frankfurter,
    concurring).

[^42]: According to Theodore Peterson, "\[a\] press characterized by
    bigness, fewness, and costliness in effect holds the freedom of the
    press in trust for an entire population." Theodore Peterson, "The
    Social Responsibility Theory of the Press."

[^43]: *See* Ted Turner, "Monopoly or Democracy?", *The Washington
    Post*, A23 (May 30, 2003) (noting that to compete a new entrant
    would need not only a TV station license, but also good programming
    and good distribution, both owned by self-sufficient conglomerates
    with incentives to promote themselves, making it "hard to compete
    when your suppliers are owned by your competitors.").

[^44]: *See, e.g.,* *Great Empire Broadcasting*, 14 FCC Rcd 11145
    (1999).

[^45]: *See Fox*, 280 F.3d at 1052 (faulting the Commission for making
    no attempt to harmonize seemingly inconsistent decisions);
    *Sinclair*, 284 F.3d at 162-65 (stating that Commission must provide
    a reasoned explanation for its action in defining voices differently
    in the cross-ownership and local ownership rules).

[^46]: *See NPRM* at para. 130 (explaining that the discount was enacted
    because UHF stations were competitively disadvantaged by weaker
    signals and smaller household reach than VHF stations).

[^47]: *See 1998 Biennial Review*, 13 FCC Rcd 11276, 11284 (1998).

[^48]: *Review of the Commission's Rules Governing Television
    Broadcasting*, 10 FCCRcd 4538, 4542 (1995). *See also Review of the
    Prime Time Access Rule*, 11 FCCRcd 546, 583 (1995) (concluding that
    the UHF handicap has been reduced due to technological improvements
    and the growth of cable penetration); Letter from James F. Goodmon,
    Capitol Broadcasting Company, to Michael K. Powell, Chairman, FCC
    (May 29, 2003) (CBC Letter) (achieving almost equivalent coverage of
    the company's UHF and VHF signals utilizing maximum power levels).

[^49]: *See* *Capital Cities/ABC Incorporated*, 29 F.3d 309, 312 (7^th^
    Cir. 1994) (noting that, for independent stations, "their weak UHF
    signals \[were\] brought to parity with VHF by cable television").

[^50]: Letter from Alexander V. Netchvolodoff, Cox Enterprises to
    Marlene H. Dortch (May 29, 2003). *See also* CBC Letter (finding
    less than a 6 percent difference between the company's VHF and UHF
    signals based on actual interference-free population).

[^51]: *See* Letter from Andrew Jay Schwartzman, Media Access Project,
    to Michael Powell (May 29, 2003), Att. Economists Inc. Study "Prime
    Time Access Rule: A Supplementary Analysis (May 26, 1995)
    (concluding profitability data does not show UHF handicap)

[^52]: *See* CBC Letter (showing equivalent ratings for the Super Bowl,
    Sunday NFL Football, and Prime-Time Reality Hits for the company's
    UHF and VHF stations using data from 2001-2003).

[^53]: I am heartened that the majority attributed Joint Sales
    Agreements, which are, after all, a reflection of the power of
    advertising. Failure to attribute of these agreements until now may
    have skewed our full ownership picture.

[^54]: NTIA, "Changes, Challenges, and Charting New Courses: Minority
    Commercial Broadcast Ownership in the United States," US Dept. of
    Commerce, Dec. 2000, Part IV (187 minority broadcasters owned 449
    out of 11,865 total stations).

[^55]: NABOB/Rainbow/PUSH Comments.

[^56]: *See, e.g.,* NABOB/Rainbow/PUSH Comments, MMTC/Diversity and
    Competition Supporters Comments at 36-37, NOW Comments.

[^57]: While the Chairman claims to have fixed the "vaunted" case of
    Minot, North Dakota, by deciding to grandfather the current
    ownership situation in Minot that resulted from an anomalous and
    irrational market definition, in my view nothing for now has
    actually been "fixed" for the residents of Minot.

[^58]: *See* "Big Media, Little Kids: Media Consolidation and Children's
    Television Programming," A Report by Children Now (May 21, 2003) at
    2, 5-6, 9.

[^59]: *See* UCC *et al.* Comments at 40.

[^60]: *But see* PEJ Study (finding *inter alia* that cross-owned
    television/newspaper stations were twice as likely to have declining
    ratings and were less enterprising than other stations, particularly
    in the area of sending out reporters to cover stories).

[^61]: *See* Consumer Federation of America *et al.* Comments; CWA
    Comments (explaining that newspapers and television are already
    highly concentrated markets, with sample newspaper markets with HHI
    scores above 2200 and sample television markets with HHI scores
    above 1800); UCC Comments in MM Docket No. 01-135; Letter from Mark
    Cooper, Consumer Federation of America, to Marlene Dortch (May 21,
    2003), Att.

[^62]: *See, e.g., NCCB*, 436 U.S. at 797 (finding that diversity and
    its effects are elusive, that evidence of specific abuses by common
    owners is difficult to compile, and that "benefits of competition do
    not lend themselves to detailed forecast.") (*quoting FCC v. RCA
    Communications*, 346 U.S. 86, 96 (1953)).

[^63]: *See* Nielsen, Top Twenty Internet News Sites, Nov. 2002;
    "Newspapers Run 8 of Top 20 News Sites," Editor & Publisher (Feb.
    20, 2003).

[^64]: *See* NAB/NASA Comments at 29-30, Att. 2.

[^65]: NAB/NASA Comments at 25-26; NAB/NASA Reply Comments at 38.

[^66]: NAB/NASA Comments Att. 6, Letter from Jerry Lewis to Michael
    Powell (Jan. 29, 2001) (noting that few network-owned stations
    carried the Muscular Dystophy Association Telethon, and that
    affiliates were pressured by the networks to drop it).

[^67]: *See* Fox Economic Study G (affiliates preempted 9.5 hours per
    year of prime time programming versus 6.8 hours for network-owned
    stations).

[^68]: NAB/NASA Comments at 16.

[^69]: *See* Letter from Susan Fox, The Walt Disney Company, to Marlene
    Dortch, Secretary, (Feb. 13, 2003), at 8-9; NAB/NASA Early
    Submission, filed Dec. 9, 2002.

[^70]: Project for Excellence in Journalism, "Does Ownership Matter in
    Local Television News: A Five-Year Study of Ownership and Quality",
    Feb. 26, 2003, at 3 (PEJ Study).

[^71]: Cox Comments at 8, 42-47.

[^72]: *See* NAB/NASA Comments at 12, 69-70, Attachment 1, Marius
    Schwartz & Daniel R. Vincent, The Television National Ownership Cap
    and Localism, at 12-12.

[^73]: *See* Univision Reply Comments at 6 (52 percent of Hispanic
    television households in the top 30 markets subscribe to cable
    television, compared with 67.8 percent of overall U.S. households
    that subscribe to cable).

[^74]: *See* NPRM at para. 49 (inviting comment on whether to impose
    behavioral regulations and what, if any, should be imposed);
    Coalition for Program Diversity Comments, Reply Comments at 2
    (noting that in 1992, 66.4 percent of the networks' prime time
    schedule consisted of programs produced and owned by independent
    producers, compared with 24 percent of the top-four networks prime
    time schedule today).

[^75]: *See, e.g.,* Letter from Amy R. Wolverton, Georgetown University
    Law Center, to Marlene H. Dortch, Secretary, FCC (April 15, 2003)
    (underscoring the lack of information about the application of a
    diversity index); Letter from Chris Powell, Managing Editor,
    *Journal Inquirer*, to Michael K. Powell (May 19, 2003) (noting
    difficulty in responding to cross-ownership metrics without actual
    proposals that can be applied to specific situations).

[^76]: *See, e.g.,* Letter from Thomas M. Sullivan, Chief Counsel for
    Advocacy, Office of Advocacy, U.S. Small Business Administration to
    Michael K. Powell (Apr. 9, 2003); Center for Creative Community
    Comments Regarding the Commission's Initial Regulatory Flexibility
    Analysis (Jan. 2, 2003).

[^77]: *See, e.g., MCI Telecommunications Corp. v. FCC*, 57 F.3d 1136,
    1140-41 (D.C. Cir. 1995), *Appalachian Power Co. v. EPA*, 135 F.3d
    791, 802-04 (D.C. Cir. 1998).

[^78]: *See, e.g.*, "Democracy Unhinged: More Media Concentration Means
    Less Public Discourse: A Critique of the FCC Studies on Media
    Ownership," Dean Baker, Co-Director, Center for Economic and Policy
    Research, AFL-CIO (Dec. 2002); Letter from Amy Aidman *et al*., to
    Michael Powell (May 1, 2003) (submitted by nearly 300 academics,
    including Mara Einstein, author of FCC study on program diversity).

[^79]: *See Capital Cities/ABC Inc. v. FCC*, 29 F.3d 309, 316 (7^th^
    Cir. 1994) ("Phased deregulation is common, practical, and
    sensible.").