August 5, 1999

SEPARATE STATEMENT OF

**COMMISSIONER MICHAEL K. POWELL**

**Re:** *Review of the Commission\'s Regulations Governing Television
Broadcasting (MM Docket No. 91-221); and Television Satellite Stations
Review of Policy and Rules (MM Docket No. 87-8)*

> *Review of the Commission\'s Regulations Governing Attribution of
> Broadcast and Cable/MDS Interests (MM Docket No. 94-150); Review of
> the Commission\'s Regulations and Policies Affecting Investment in the
> Broadcast Industry; (MM Docket No. 92-51); and Reexamination of the
> Commission\'s Cross-Interest Policy (MM Docket No. 87-154*).

Today I vote in favor of these orders revising the Commission's rules
governing local broadcast ownership. I write separately to give greater
context to my vote.

I believe that the actions we take today are both constitutional and
consistent with the explicit intent of Congress to promote diversity and
competition in the media marketplace. Section 257(b) of the 1996 Act
explicitly instructs the Commission to "promote the policies and
purposes of this Act favoring diversity of media voices."

47 U.S.C. [Section]{.underline} 257(b). Thus, as we review our ownership
rules, it is clearly the intent of Congress that we consider the
implications of our rules on diversity.

I agree that diversity is very hard to define, and is at some level a
visceral concept. Accordingly, we should be cautious in over-invoking it
as a justification for imposing or intruding on constitutionally
protected activities. Yet, not all worthy policy goals, not all
important government interests, and indeed, not all compelling
government interests, can be quantified or measured with precision. I do
not believe the Constitution boxes out all subjective judgment in
government actions. Yes, diversity is hard to define, but not more so
than obscenity, privacy, or interstate commerce, areas in which the law
allows government activity. What is important, is that such rules be
balanced and well-reasoned. Moreover, where rules involve some degree of
subjective balancing, they should be reviewed frequently to ensure they
remain on keel, given changing conditions in the market. This is what I
feel the Commission has failed to do over the years. But the Commission
takes an important step forward today, and it should continue to review
these rules at periodic intervals, as Congress instructed. 47 U.S.C.
[Section]{.underline} 202(h).

In all of the discussion about diversity and localism, I believe we lose
sight of something that is unique about broadcasting, something that I
believe is a substantial public benefit and something that is not so
easily entangled in the web of concern about content infringement. It is
the fact that broadcasting is free.

There are substantial public benefits that flow from the free
broadcasting business model. It provides access by all of our citizens
to news, entertainment, and information, regardless of their
socio-economic class. It provides valuable information to citizens in
natural disasters who cannot access their phones or cable systems
because of downed lines or loss of power. It lets people in a mobile
society stay connected to the outside world, as well as individuals in
remote areas.

But, this free business model is quite unique and, thus, some special
consideration of the challenges to it is warranted. For example, as a
medium it competes against other media that have access to subscription
revenue in addition to advertising dollars. Broadcasters cannot as
easily repackage programming or recoup costs of purchasing high quality
programming. And they have significantly less distribution capacity than
most of their competitors. Therefore, it is important to ensure our
rules do not unduly constrain broadcast business competitiveness and
viability.

Additionally, the public value of having a diverse free medium also
warrants some government attention to undue concentration. If a single
media group were to monopolize a market, advertising rates would likely
increase as would the desire for advertisers to place advertisements
with the concentrated media group. Because advertising dollars are not
infinite, it would mean other stations would suffer the effects of less
advertising revenue, which is the lifeblood of a station's viability.
Should such a station be crippled or fail, the public would have lost a
source of programming. This could happen irrespective of how highly the
public might value the station, since they cannot express their
preference by paying higher rates to sustain the station. For this
reason, we are justified in giving some consideration to the structure
of the market for free broadcasting.

Finally, I would be remiss if I did not briefly express a few of my
concerns. In the items adopted today the Commission does not grandfather
LMAs that were entered into after November 1996, the date of the Further
Notice of Proposed Rulemaking in these proceedings. I would have
preferred to grandfather LMAs entered into after November 1996. The
Commission's delay in bringing these proceedings to a close since 1996
has forced broadcasters to make business decisions regarding LMAs for
over three years without knowing what the rules would be. As a result, I
believe the equities lie in favor of grandfathering these arrangements.

I also would have preferred to count additional media in the voice
counts. For example, where cable is subject to effective competition as
a result of a cable overbuild, I would argue that there are two voices
for cable in that market. I would not have required *involuntary*
bankruptcy to access the failed station waiver. I do not believe that
there is any real threat of a broadcaster's entering into bankruptcy
voluntarily to gain the benefits of this waiver provision.

Rules, however, are by their very nature both under- and over-inclusive.
The rules we adopt today are not all right, and not all wrong. But they
reflect what good public policy often must be, a balanced compromise of
conflicting values and judgments. And I believe that with the Orders
adopted today, the Commission takes an extremely important step toward
aligning our rules with the current realities of the electronic media
market programming market.