**STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

**CONCUR IN PART, DISSENT IN PART**

*Re: Broadcast Localism, Report on Broadcast Localism and Notice of
Proposed Rulemaking.*

Today's decision would make George Orwell proud. We claim to be giving
the news industry a shot in the arm---but the real effect is to reduce
total newsgathering. We shed crocodile tears for the financial plight of
newspapers---yet the truth is that newspaper profits are about double
the S&P 500 average. We pat ourselves on the back for holding six field
hearings across the United States---yet today's decision turns a deaf
ear to the thousands of Americans who waited in long lines for an open
mike to testify before us. We say we have closed loopholes---yet we have
introduced new ones. We say we are guided by public comment---yet the
majority's decision is overwhelmingly opposed by the public as
demonstrated in our record and in public opinion surveys. We claim the
mantle of scientific research---even as the experts say we've asked the
wrong questions, used the wrong data, and reached the wrong conclusions.

I am not the only one disturbed by this illogical scenario. Congress and
the American people have done everything but march down to Southwest DC
and physically shake some sense into us. Everywhere we go, the questions
are the same: Why are we rushing to encourage more media merger frenzy
when we haven't addressed the demonstrated harms caused by previous
media merger frenzy? Women and minorities own low single-digit per
centages of America's broadcast outlets and big consolidated media
continues to slam the door in their faces. It's going to take some major
policy changes and a coordinated strategy to fix that. Don't look for
that from this Commission.

Instead we are told to be content with baby steps to help women and
minorities---but the fine print shows that the real beneficiaries will
be small businesses owned by white men. So even as it becomes abundantly
clear that the real cause of the disenfranchisement of women and
minorities is media consolidation, we give the green light to a new
round of---yes, you guessed it---media consolidation.

Local news, local music and local groups so often get shunted aside when
big media comes to town. Commissioner Adelstein and I have heard the
plaintive voices of thousands of citizens all across this land in dozens
of town meetings and public forums. From newscasters fired by chain
owners with corporate headquarters thousands of miles away to local
musicians and artists denied airtime because of big media's
homogenization of our music and our culture. From minorities reeling
from the way big media ignores their issues and caricatures them as
people to women saying the only way to redress their grievances is to
give them a shot to compete for use of the people's airwaves. From
public interest advocates fighting valiantly for a return of localism
and diversity to small, independent broadcasters who fight an uphill
battle to preserve their independence. It will require tough rules of
the road to redress our localism and diversity gaps. Do you see any such
rules being passed today? To the idea that license holders should give
the American people high quality programming in return for free use of
the public airwaves, the majority answers that we need more study of
problems that have been documented and studied to death for a decade and
more. Today's outcome is the same old same old: one more time, we're
running the fast-break for our big media friends and the four corner
stall for the public interest.

It is time for the American people to understand the game that's being
played here. Big media doesn't want to tell the full story, of course,
but I have heard first-hand from editorial page editors who have told me
they can cover any story, save one---media consolidation, and that they
have been instructed to stay away from that one. But that's another
story.

Today's story is a majority decision unconnected to good policy and not
even incidentally concerned with encouraging media to make our democracy
stronger. We are not concerned with gathering valid data, conducting
good research, or following the facts where they lead us.

Our motivations are less Olympian and our methodology far simpler---we
generously ask big media to sit on Santa's knee, tell us what it wants
for Christmas, and then push through whatever of these wishes are
politically and practically feasible. No test to see if anyone's been
naughty or nice. Just another big, shiny present for the favored few who
already hold an FCC license---and a lump of coal for the rest of us.
Happy holidays!

If you need convincing of just how non-expertly this expert agency has
been acting lately, you couldn't have a better example than the
formulation of the cross-ownership rule that the majority is adopting
today. I know it's a little detailed to see how the sausage is made, but
it's worth a listen.

On November 2, 2007---with just a week's notice---the FCC announced that
it would hold its final media ownership hearing in Seattle. Despite the
minimal warning, 1,100 citizens turned out to give intelligent and
impassioned testimony on how they believed the agency should write its
media ownership rules. Little did they know that the fix was already in,
and that the now infamous *New York Times* op-ed was in the works
announcing a highly-detailed cross-ownership proposal.

Put bluntly, those Commissioners and staff who flew out to Seattle with
staff, the sixteen witnesses, the Governor, the State Attorney General
and all the other public officials who came, plus the 1,100 Seattle
residents who had chosen to spend their Friday night waiting in line to
testify were, as Rep. Jay Inslee put it, treated like "chumps." Their
comments were not going to be part of the agency\'s formulation of a
draft rule---it was just for show, to claim that the public had been
given a chance to participate. The agency had treated the public like
children allowed to visit the cockpit of an airliner---not actually
allowed to fly the plane, of course, but permitted for a brief, false
moment to imagine that they were.

The *New York Times* op-ed appeared on November 13, the next business
day after the Seattle hearing. That same day, a unilateral public notice
was issued, providing just 28 days for people to comment on the specific
proposal, with no opportunity for replies. The agency received over 300
comments from scholars, concerned citizens, public interest advocates,
and industry associations---the overwhelming majority of which condemned
the Chairman's plan. But little did these commenters know that on
November 28, two weeks ***before*** their comments were even due, the
draft Order on newspaper-broadcast cross ownership had already been
circulated. Once again, public commenters were treated as unwitting and
unwilling participants in a Kabuki theater.

Then, last night at 9:44 pm---just a little more than twelve hours
before the vote was scheduled to be held and long after the Sunshine
period had begun---a significantly revised version of the Order was
circulated. Among other changes, the item now granted all sorts of
permanent new waivers and provided a significantly-altered new
justification for the 20-market limit. But the revised draft
mysteriously deleted the existing discussion of the "four factors" to be
considered by the FCC in examining whether a proposed combination was in
the public interest. In its place, the new draft simply contained the
cryptic words "\[Revised discussion to come\]." Although my colleagues
and I were not apprised of the revisions, *USA Today* fared better
because it apparently got an interview that enabled it to present the
Chairman's latest thinking. Maybe we really are the Federal Newspaper
Commission.

At 1:57 this morning, we received a new version of the proposed test for
allowing more newspaper-broadcast combinations. I can't say that I fully
appreciate the test's finer points given the lateness of the hour and
the fact that there was no time afforded to parse the finer points of
the new rule. But this much is clear: the new version keeps the old
loopholes and includes two new one pathways to cross ownership approval.
So please don't buy the line that the rule we adopt today involves fewer
loopholes---it adds new ones. Finally, this morning at 11:12 a.m. as I
was walking out my office door to come to this meeting, we received an
e-mail containing additional changes. The gist of one of these seems to
be that the Commission need not consider all of the "four factors" in
all circumstances.

This is not the way to do rational, fact-based, and public
interest-minded policy making. It's actually a great illustration of why
administrative agencies are required to operate under the constraints of
administrative process---and the problems that occur when they ignore
that duty. At the end of the day, process matters. Public comment
matters. Taking the time to do things right matters. A rule reached
through a slipshod process, and capped by a mad rush to the finish line,
will---purely on the merits---simply not pass the red face test. Not
with Congress. Not with the courts. Not with the American people.

It's worth stepping back for a moment from all the detail here to look
at the fundamental rationale behind today's terrible decision.
Newspapers need all the help they can get, we are told. A merger with a
broadcast station in the same city will give them access to a revenue
stream that will let them better fulfill their newsgathering mission. At
the same time, we are also assured, our rules will require "independent
news judgment" (at least among consolidators outside the top 20
markets). In other words, we can have our cake and eat it too---the
economic benefits of consolidation without the reduction of voices that
one would ordinarily expect when two news entities combine.

But how on earth can this be? To begin with, to the extent that the two
merged entities remain truly "independent," then there won't be the cost
savings that were supposed to justify the merger in the first place. On
the other hand, if independence merely means maintaining two
organizational charts for the same newsroom, then we won't have any more
reporters on the ground keeping an eye on government. Either way, we
can't have our cake and eat it, too.

Also, since when do unprofitable businesses support themselves by
merging with profitable ones---and then sink ***more*** resources into
the money-losing division simply as a public service? Think about it
this way. If any of us were employed by a struggling company, and we
suddenly learned that a Wall Street financier had obtained control,
would we (1) clap our hands with joy because we expect the new owner is
going to throw a bunch of cash our way and tell us to keep on doing what
we'd been doing, except more lavishly or (2) start to fear for our jobs
and brace for a steady diet of cost cutting?

Here's my prediction on how it will really work. Mergers will be
approved in both the top 20 and non-top-20 markets---towns big and
small---because the set of exceptions we announce today have all the
firmness of a bowl of Jell-O. Regardless of our supposed commitment to
"independent news judgment" the two entities' newsrooms will be almost
completely combined, with round after round of job cuts in order to cut
costs. It's interesting to hear the few proponents of this rule bemoan
the lost jobs that they say result from failing newspapers. Ask them
this: in this era of consolidation in so many industries, isn't cutting
jobs about the first thing a merged entity almost always does so it can
show Wall Street it is really serious about cutting costs and polishing
up the next quarterly report? These job losses are the ***result*** of
consolidation. And more consolidation will mean more lost jobs.
Newly-merged entities will attempt to increase their profit margins by
raising advertising rates and relentless cost-cutting. Herein is the
***real*** economic justification for media consolidation within a
single market.

The news isn't so good for other businesses in the consolidated market,
either. Think about the other broadcast stations there. It's just like
Wal-Mart coming to town---the existing news providers look around at the
new reality and figure out pretty fast that they ought to head for the
exit when it comes to producing news. Now, it may not be as stark as
actually cancelling the evening news---it could just mean doing more
sports or more weather or more ads during that half hour. But at the end
of the day, the combined entity is going to have a huge advantage in
producing news---and the other stations will make a reasonable
calculation to substantially reduce their investment in the business.
This is why, by the way, experts have been able to demonstrate---***in
the record before the FCC, using the FCC's own data**---*that cross
ownership leads to ***less*** total newsgathering in a local market. And
that has large and devastating effects on the diversity and vitality of
our civic dialogue.

Let's also be careful not get too carried away with the supposed premise
for all this contortionism, namely the poor state of local newspapers.
The death of the traditional news business is often greatly exaggerated.
The truth remains that the profit margins for the newspaper industry
last year averaged around 17.8%; the figure is even higher for broadcast
stations. As the head of the Newspaper Association of America put it in
a Letter to the Editor of the *Washington Post* on July 2 of this year:
"The reality is that newspaper companies remain solidly profitable and
significant generators of free cash flow." And as Member after Member
Congress has reminded us, our job is not to ensure that newspapers are
profitable---which they mostly are. Our job is to protect the principles
of localism, diversity and competition in our media.

Were newspapers momentarily discombobulated by the rise of the Internet?
Probably so. Are they moving now to turn threat into opportunity? Yes,
and with signs of success. Far from newspapers being gobbled up by the
Internet, we ought to be far more concerned with the threat of big media
joining forces with big broadband providers to take the wonderful
Internet we know down the same road of consolidation and control by the
few that has already inflicted such heavy damage on our traditional
media.

In the final analysis, the real winners today are businesses that are in
many cases quite healthy, and the real losers are going to be all of us
who depend on the news media to learn what's happening in our
communities and to keep an eye on local government. Despite all the talk
you may hear today about the threat to newspapers from the Internet and
new technologies, today's *Order* actually deals with something quite
old-fashioned. Powerful companies are using political muscle to sneak
through rule changes that let them profit at the expense of the public
interest. They are seeking to improve their economic prospects by
capturing a larger percentage of the news business in communities all
across the United States.

Let's get beyond the weeds of corporate jockeying and inking up our
rubber stamps for a new round of media consolidation to look for a
moment at what we are ***not*** doing today. That's the real story, I
think---that the important issues of minority and female ownership and
broadcast localism and how they are being short-changed by today's rush
to judgment.

[Minority and Female Ownership]{.underline}

Racial and ethnic minorities make up 33 percent of our population. They
own a scant 3 percent of all full-power commercial TV stations.  And
that number is plummeting.  Free Press recently released a study showing
that during just the past year the number of minority-owned full-power
commercial television stations declined by 8.5%, and the number of
African American-owned stations decreased ***by nearly 60%***.  It is
almost inconceivable that this shameful state of affairs could be
getting worse; yet here we are.

In most places there is something approaching unanimity that this has to
change. Broadcasters, citizens, Members of Congress, and every leading
civil rights organization agree that the status quo is not acceptable.
Each of my colleagues has recognized, I believe, that paltry levels of
minority and female ownership are a reality---which makes today's
decision all the more disappointing. There was a real opportunity to do
something meaningful today after years of neglect, and we blew it.

It didn't have to be this way. I proposed both a process and a solution.
We should have started by getting an accurate count of minority and
female ownership---the one that the Congressional Research Service and
the Government Accountability Office both just found that we didn't
have. The fact that we don't even know how many minority and female
owners there are is indicative of how low this issue is on the FCC's
list of priorities. We also should have convened an independent panel
proposed by Commissioner Adelstein, and endorsed by many, that would
have reviewed all of the proposals before us, prioritized them, and made
recommendations for implementation. We could have completed this process
in ninety days or less and then would have been ready to act.

Today's item ignores the pleas of the minority community to adopt a
definition of "Eligible Entity" that could actually help their plight.
Instead, the majority directs their policies at general "small
businesses"--- a decision that groups like Rainbow/Push and the National
Association of Black Owned Broadcasters assert will do little or nothing
for minority owners. Similarly, MMTC and the Diversity and Competition
Supporters conclude that they would rather have no package at all than
one that includes this definition. Lack of a viable definition poisons
the headwaters. Should we wonder why the fish are dying downstream?

So while I can certainly support the few positive changes in this item
that do not depend on the definitional issue---such as the adoption of a
clear non-discrimination rule---these are overshadowed by the truly
wasted opportunity to give potential minority and female owners a seat
at the table they have been waiting for and have deserved for far too
long. My fear now is that with cross ownership done, the attentions of
this Commission will turn elsewhere.

[Localism]{.underline}

At the same time that we have shamefully ignored the need to encourage
media ownership by women and minorities, we have also witnessed a
dramatic deterioration of the public interest performance of all our
licensees. We have witnessed the number of statehouse and city hall
reporters declining decade after decade, despite an explosion in state
and local lobbying. The number of channels have indeed multiplied, but
there is far less local programming and reporting being produced.

Are you interested in learning about local politics from the evening
news? About 8 percent of such broadcasts contain any local political
coverage at all, including races for the House of Representatives, and
that was during the 30 days before the last presidential election.
Interested in how TV reinforces stereotypes? Consider that the local
news is four times more likely to show a mug shot during a crime story
if the suspect is black rather than white.

The loss of localism impacts our music and entertainment, too. Just this
morning, I had an e-mail from a musician who took a trip of several
hundred miles and heard the same songs played on the car radio
everywhere he traveled. Local artists, independent creative artists and
small businesses are paying a frightful price in lost opportunity. Big
consolidated media dampens local and regional creativity, and that
begins to mess around pretty seriously with the genius of our nation.

All this is a travesty. We allow the nation\'s broadcasters to use half
a trillion dollars of spectrum---for free. In return, we require that
they serve the public interest: devoting at least some airtime for
worthy programs that inform viewers, support local arts and culture, and
educate our children---in other words, that aspire to something beyond
just minimizing costs and maximizing revenue.

Once upon a time, the FCC actually enforced this bargain by requiring a
thorough review of a licensee\'s performance every three years before
renewing the license. But during decades of market absolutism, we pared
that down to "postcard renewal," a rubber stamp every eight years with
no substantive review.

To begin with, the FCC needs to reinvigorate the license-renewal
process. We need to look at a station\'s record every three or four
years. I am disappointed that the majority so cavalierly dismisses this
idea. And we should be actually ***looking*** at this record. Did the
station show original programs on local civic affairs? Did it broadcast
political conventions? In an era where too many owners live thousands of
miles away from the communities they allegedly serve, do these owners
meet regularly with local leaders and the public to receive feedback?
Why don't we make sure that's done ***before*** we allow more
consolidation?

In 2004, the Commission opened up a Notice of Inquiry to consider ways
to improve localism by better enforcing the *quid pro quo* between the
nation's broadcasters and the public. The Notice addressed many of the
questions raised by earlier, dormant proceedings dating from years
before. Today's Localism Notice asks more questions and tees up
meritorious ideas---but again my question: why the rush to vote more
consolidation now, consolidation that has been the bane of localism, and
why put off systematic actions to redress the harms consolidation has
inflicted?

Our FCC cart is ahead of our horse. Before allowing Big Media to get
even bigger---and to start the predictable cycle of layoffs and
downsizing that is the inevitable result of, indeed the economic
rationale for, many types of mergers---we should be enforcing clear
obligations for each and every FCC licensee.

[Conclusion]{.underline}

Those who look for substantive action on these important issues
concerning localism and minorities will look in vain, I predict, once
the majority works its way on cross ownership. We are told that we
cannot deal with localism and minority ownership because that would
require ***delay***. But these questions have been before the Commission
for almost a decade---and they have been ignored year after year. These
issues could have been---should have been---teed up years ago. We begged
for that in 2003 when we sailed off on the calamitous rules proposed by
Chairman Powell and pushed through in another mad rush to judgment.
Don't tell me it can't be done. It should have been done years ago. And
we had the chance again this time around. Now, because of a situation
not of Commissioner Adelstein's or my making, we are accused of delaying
just because we want to make things better before the majority makes
them far worse. I see.

When I think about where the FCC has been and where it is today, two
conclusions:

First, the consolidation we have seen so far and the decision to treat
broadcasting as just another business has ***not*** produced a media
system that does a better job serving most Americans. Quite the
opposite. Rather than reviving the news business, it has led to
***less*** localism, ***less*** diversity of opinion and ownership,
***less*** serious political coverage, ***fewer*** jobs for journalists,
and the list goes on.

Second, I think we have learned that the purest form of commercialism
and high quality news make uneasy bedfellows. As my own hero, Franklin
Delano Roosevelt, put it in a letter to Joseph Pulitzer, "I have always
been firmly persuaded that our newspapers cannot be edited in the
interests of the general public from the counting room." So, too, for
broadcast journalism. This is not to say that good journalism is
incompatible with making a profit---I believe that both interests can
and must be balanced. But when TV and radio stations are no longer
required by law to serve their local communities, and are owned by huge
national corporations dedicated to cutting costs through economies of
scale, it should be no surprise that, in essence, viewers and listeners
have become the products that broadcasters sell to advertisers.

We could have been---should have been---here today lauding the best
efforts of government to reverse these trends and to promote a media
environment that actually strengthens American democracy rather than
weakens it. Instead, we are marking not just a lost opportunity but the
allowance of new rules that head media democracy in exactly the wrong
direction.

I take great comfort from the conclusion of another critic of the
current media system, Walter Cronkite, who said, \"America is a powerful
and prosperous nation. We certainly should insist upon, and can afford
to sustain, a media system of which we can be proud.\"

Now it's up to the rest of us. The situation isn't going to repair
itself. Big media is not going to repair it. This Commission is not
going to repair it. But the people, their elected representatives, and
attentive courts ***can*** repair it. Last time the Commission went down
this road, the majority heard and felt the outrage of millions of
citizens and Congress and then the court. Today's decision is just as
dismissive of good process as that earlier one, just as unconcerned with
what the people have said, just as heedless of the advice of our
oversight committees and many other Members of Congress, and just as
stubborn---perhaps even more stubborn---because this time it knows, or
should know, what's coming. Last time a lot of insiders were surprised
by the country's reaction. This time they should be forewarned. I hope,
I really hope, that today's majority decision will be consigned to the
fate it deserves and that one day in the not too distant future we can
look back upon it as an aberration from which we eventually recovered.
We have had a dangerous, decades-long flirtation with media
consolidation. I would welcome a little romance with the public interest
for a change.