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BROADCASTING OWNERSHIP IN THE 21ST 

CENTURY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND 

TECHNOLOGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 25 & DECEMBER 3, 2015 

Serial No. 114–77 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California7 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

GREG WALDEN, Oregon 

Chairman 

ROBERT E. LATTA, Ohio 

Vice Chairman 

JOHN SHIMKUS, Illinois 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

ANNA G. ESHOO, California 

Ranking Member 

MICHAEL F. DOYLE, Pennsylvania 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

BOBBY L. RUSH, Illinois 

DIANA DEGETTE, Colorado 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

JERRY MCNERNEY, California 

BEN RAY LUJA ́ N, New Mexico 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

SEPTEMBER 25, 2015 

Page 

Hon. Robert E. Latta, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 1 

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 2 

Hon. John Shimkus, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 2 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 3 

Prepared statement .......................................................................................... 3 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 57 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

prepared statement .............................................................................................. 57 

WITNESSES

Gerard J. Waldron, Partner, Covington & Burling LLP, on Behalf of the 

National Association of Broadcasters ................................................................. 5 

Prepared statement .......................................................................................... 7 

Answers to submitted questions ...................................................................... 72 

Paul Boyle, Senior Vice President of Public Policy, Newspaper Association 

of America ............................................................................................................. 15 

Prepared statement .......................................................................................... 17 

Answers to submitted questions ...................................................................... 77 

Kim M. Keenan, President and Chief Executive Officer, Multicultural Media, 

Telecom and Internet Council ............................................................................. 23 

Prepared statement .......................................................................................... 26 

Answers to submitted questions ...................................................................... 82 

Michael Scurato, Vice President, Policy, National Hispanic Media Coalition .... 33 

Prepared statement .......................................................................................... 35 

Additional information submitted for the record 1

Answers to submitted questions ...................................................................... 84 

Todd O’Boyle, Program Director, Media and Democracy Reform Initiative, 

Common Cause ..................................................................................................... 42 

Prepared statement .......................................................................................... 44 

Jason Kint, Chief Executive Officer, Digital Content Next ................................. 48 

Prepared statement .......................................................................................... 50 

Answers to submitted questions ...................................................................... 89 

DECEMBER 3, 2015 

SUBMITTED MATERIAL

Article of September 21, 2015, ‘‘Who’s behind those annoying political ads?,’’ 

by Newton Minow and Michael Copps, The Hill, submitted by Ms. Eshoo .... 66 

Letter of November 3, 2015, from American Civil Liberties Union, et al., 

to Mr. Walden, et al., submitted by Ms. Eshoo ................................................. 67 

1The information has been retained in committee files and also is available 

at http://docs.house.gov/meetings/IF/IF16/20151203/104240/HHRG– 

114–IF16–Wstate-ScuratoM–20151203.pdf. 

(1) 

BROADCASTING OWNERSHIP IN THE 21ST 

CENTURY—DAY 1 

FRIDAY, SEPTEMBER 25, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:07 a.m., in room 

2123, Rayburn House Office Building, Hon. Robert E. Latta (vice 

chairman of the subcommittee) presiding. 

Members present: Representatives Latta, Shimkus, Blackburn, 

Lance, Guthrie, Bilirakis, Johnson, Collins, Upton (ex officio), 

Eshoo, Welch, Yarmuth, Clarke, Loebsack, DeGette, Butterfield, 

Matsui, McNerney, Luja ́n, and Pallone (ex officio). 

Staff present: Ray Baum, Senior Policy Advisor, Communications 

and Technology; Rebecca Card, Staff Assistant; Grace Koh, Counsel, Communications and Technology; David Redl, Chief Counsel, 

Communications and Technology; Charlotte Savercool, Legislative 

Clerk; Gregory Watson, Staff Assistant; Christine Brennan, Democratic Press Secretary; Jeff Carroll, Democratic Staff Director; 

Jerry Leverich, Democratic Counsel; Lori Maarbjerg, Democratic 

FCC Detailee; Timothy Robinson, Democratic Chief Counsel; and 

Ryan Skukowski, Democratic Policy Analyst. 

OPENING STATEMENT OF HON. ROBERT E. LATTA, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. LATTA. Thank you very much, and I appreciate our witnesses 

for being here today and discussing a very important matter, 

broadcast ownership. The FCC has been entrusted to regulate 

media ownership, ensuring the broadcast industry remains competitive and meets the information needs of local communities. 

However, the FCC has failed to act in completing its mandatory review of current rules governing this dynamic marketplace. 

As a result, longtime industry participants that are subject to 

these rules and regulations are placed at competitive disadvantage 

as newer market entrants who are afforded greater flexibility to 

compete in an environment transformed by the Internet. Ignoring 

the need to make media ownership rules more relevant only hurts 

the industry and public interest. We need updated laws that better 

reflect the 21st century communications landscape. I look forward 

to today’s witnesses talking about the current regulatory framework governing broadcast ownership and the impact that it is having on businesses, consumers, and on the economy. 

2 

With that, I am going to yield my time, and I will now recognize 

the gentlelady from California, the ranking member of the subcommittee. 

OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. ESHOO. Thank you, Mr. Latta. I appreciate it. 

I just want to make a comment. Yesterday was a day filled with 

joy in the Congress. We welcomed the historic visit of Pope Francis. 

I think today is a sad day with the news of John Boehner announcing that he is stepping down as Speaker. He has my respect and 

my gratitude for what he has done over the years in the Congress. 

Mr. Chairman, a digital content revolution is underway. Thanks 

to the power of broadband, millions of Americans are using social 

media and over-the-top video services for original content, news, 

entertainment, and sports. A consumer can Hulu the last episode 

of ‘‘Glee,’’ Netflix ‘‘House of Cards,’’ or stream Major League Baseball games over Apple TV. There is no doubt that the media landscape is rapidly changing, but consumers continue to rely on traditional bastions of 20th century media, including broadcast television, radio, and newspaper for local news, public information, and 

weather. 

Consistent with the goals of the Communications Act, our subcommittee and the FCC should remain focused on promoting localism, advancing competition, and encouraging diversity across all 

content platforms. A lack of diversity in particular continues to 

plague the industry. Data reported by the FCC this year shows 

that just 3 percent of broadcast TV licenses are held by people of 

color. Similar challenges exist among the highest ranks of management, with just 4 percent of TV networks and studios led by minorities. 

A 21st century broadcast system should reflect the composition 

of our country. This is not only the right thing to do, it is good 

business as well. And this is clearly an area where little to nothing 

has changed. 

We know that nothing we deal with has easy answers, but one 

thing is certain: Relaxing the FCC’s media ownership rules will 

pave the way for increased industry consolidation, which does, in 

my view, nothing to promote localism, competition, or diversity, 

and I think it flies in the face of our democracy, where we believe 

there should be many voices to the many and not fewer. 

I had a much longer, magnificent statement, but given the beginning of this hearing later, I will yield back, Mr. Chairman. Thank 

you. 

Mr. LATTA. Thank you very much. 

Ms. ESHOO. And thank you to the witnesses for being here. 

Mr. LATTA. The gentlelady yields. 

The Chair recognizes the gentleman from Illinois, Mr. Shimkus. 

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

3 

Welcome to Washington and a subcommittee in Washington 

where once you think you have got it figured out, stuff changes. So 

I want to thank the ranking member of the subcommittee for her 

focusing on obviously a big issue that is going on here in the House 

and also the Republican Conference, and we will miss John. 

So we will do our best to wrap ourselves around your testimony 

and the issue at hand, but, please, especially for folks on this side 

and probably on both, there is a lot of other thoughts going through 

a lot of my colleagues’ minds right now, and we will try to drag 

them back to this hearing as soon as possible. 

So with that, I yield back my time. 

Mr. LATTA. The gentleman yields back. And the Chair now recognizes the gentleman from New Jersey, the ranking member of the 

full committee, Mr. Pallone, for 5 minutes. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you. I am going to try to limit it to 2, Mr. 

Chairman. 

It is easy to say the way we get news and information is changing. That is certainly true. But it is equally true that we continue 

to turn to broadcast TV and radio, and that means a diversity of 

voices over the air remains essential. Some say that we should 

overlook the need for diverse voices because the broadcast industry 

must consolidate if it is going to survive, but the fact is broadcasters are thriving, even without consolidation. 

The data speaks for itself. The radio industry last year raised ad- vertising revenue to the tune of nearly $15 billion. TV broadcasters 

earned $20 billion from on-air ads in 2014. Billions of dollars in political ad buying helped drive this total, and that number will likely skyrocket with the upcoming 2016 Presidential election cycle. 

The FCC must continue to serve as a sentinel, protecting the 

ideals of localism, diversity of ownership, and diversity of viewpoints. And given the impact of political ads, the Commission also 

has an obligation to make sure the public knows who is spending 

that money to control their airwaves. 

We do not need to look any further than my home State of New 

Jersey to see what can happen when consolidation goes too far. 

Nearly 9 million New Jerseyans are forced to rely on mostly outof-State stations for news and information. One of the few New 

Jersey stations we do have is part of a trio where one entity owns 

three TV stations in the New York market, and this station still 

does not serve adequate news about New Jersey for our local residents. 

So again, I am pleased we are having this hearing to discuss 

these issues, and I look forward to the testimony. 

I yield back, Mr. Chairman. 

[The prepared statement of Mr. Pallone follows:] 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

Thank you Chairman Walden and Ranking Member Eshoo for today’s hearing. 

Thanks also to our witnesses for being here today. 

4 

It is easy to say the ways we get news and information is changing. That is certainly true. But it is equally true that we continue to turn to broadcast TV and 

radio. For instance, when Pew researchers studied last year how Americans got 

their information, 91% of the people they called listened to over-the-air radio the 

very week they were surveyed. Similarly, local TV stations saw an increase in 

viewership last year. 

The fact remains that Americans still rely on broadcasters to bring them the 

news. A diversity of voices over the air remains essential. 

We will hear from some today that we should overlook the need for diverse voices 

because the broadcast industry must consolidate if it is going to survive. But the 

fact is broadcasters are thriving even without consolidation. 

The data speaks for itself. The radio industry last year raised advertising revenue 

to the tune of nearly $15 billion. TV broadcasters saw a 7% increase in advertising 

revenues-that means they earned $20 billion from on-air ads in 2014. Billions of dollars in political ad buying helped drive this total, which means that number will 

likely skyrocket with the upcoming 2016 Presidential election cycle. 

But while the broadcast industry is doing well without additional consolidation, 

a loss of voices over the air would cause irreparable harm to our democracy. That 

is why the Federal Communications Commission must continue to serve as a sentinel, protecting the ideals of localism, diversity of ownership, and diversity of viewpoint. And given the impact of the billions of dollars spent on political ads each 

cycle, the Commission also has an obligation to make sure the public knows who 

is spending that money to control their airwaves. 

We do not need to look any further than my home State of New Jersey to see 

what can happen when consolidation goes too far. New Jerseyans are forced to rely 

on out-of-State stations for news and information. Sometimes they serve us well, 

like during Hurricane Sandy. But the fact remains that while nearly 9 million people live in New Jersey, we have almost no commercial TV stations. And one of the 

stations we do have is part of a triumvirate where one entity owns three TV stations 

in the New York market. And this station still does not serve up adequate news 

about New Jersey for our local residents. 

Finally, minority and female ownership of stations remain at abysmal levels— 

even with recent spin-offs of stations to minority and female-owned entities. I don’t 

believe that we should cave into a simplistic call for deregulation to solve this complex problem. 

Again, I’m pleased we are having this hearing to discuss these issues. I look forward to the testimony. 

Mr. LATTA. Thank you very much. The gentleman yields back. 

And at this time, on behalf of the chairman, I want to thank all 

of our panelists for being here today. We really appreciate your 

being here and your testimony. 

And at this time, the Chair will recognize Mr. Gerald Waldron 

of the National Association of Broadcasters for 5 minutes. Thanks 

very much. 

And just turn that mic on and pull it closer to you, and we will 

get started. 

Thank you. 

5 

STATEMENTS OF GERARD J. WALDRON, PARTNER, COVINGTON & BURLING LLP, ON BEHALF OF THE NATIONAL ASSOCIATION OF BROADCASTERS; PAUL BOYLE, SENIOR VICE 

PRESIDENT OF PUBLIC POLICY, NEWSPAPER ASSOCIATION 

OF AMERICA; KIM M. KEENAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, MULTICULTURAL MEDIA, TELECOM AND 

INTERNET COUNCIL; MICHAEL SCURATO, VICE PRESIDENT, 

POLICY, NATIONAL HISPANIC MEDIA COALITION; TODD 

O’BOYLE, PROGRAM DIRECTOR, MEDIA AND DEMOCRACY 

REFORM INITIATIVE, COMMON CAUSE; AND JASON KINT, 

CHIEF EXECUTIVE OFFICER, DIGITAL CONTENT NEXT 

STATEMENT OF GERARD J. WALDRON 

Mr. WALDRON. Thank you. Good morning, Chairman Latta, 

Ranking Member Eshoo, and members of the subcommittee. My 

name is Gerry Waldron. I am a partner at the law firm of Covington & Burling. I am pleased to be here today on behalf of the 

National Association of Broadcasters. 

The FCC’s broadcast ownership rules were adopted with the stated purpose of fostering three longstanding policy goals: Competition, localism, and diversity of voices. But an honest assessment of 

the current video environment shows these rules failed to advance 

any of those objectives. 

I want to make three points for your consideration. First, the 

current ownership rules actually inhibit rather than promote 

broadcasters’ ability to compete in a vibrant video marketplace. 

Second, as a result, these rules undermine broadcasters’ uniquely 

local focus. And third, the rules actually fail to promote diversity. 

The broadcast ownership rules do not serve the public interest 

because they are simply out of touch with the reality of today’s 

media landscape. These days, watching TV frequently does not 

mean watching the big screen in your living room. Consumers are 

increasingly likely to turn instead to their laptops or tablets. 

Millennials do not necessarily watch channels. Rather, they consume programs whenever they want and wherever they may be. 

Consumers create their own content packages through services 

such as Amazon Instant Video, Hulu, and Netflix. 

The risk of a powerful broadcast owner, a Citizen Kane, if you 

will, that drove the creation of the broadcast ownership rules in the 

1970s, is not just unlikely, it is almost nonexistent. The media 

landscape is simply too diverse and evolving too quickly, both with 

regard to content creation and content distribution, to justify the 

current rules. 

Against that backdrop, the FCC’s rules pick winners and losers 

in this new media landscape. They limit broadcasters’ ability to 

compete with the cable, satellite, and online media outlets that face 

no comparable restrictions. As a result, these competitors have 

grown and have taken away both audience share and advertising 

revenue from traditional broadcasters. 

The reality is that today broadcasters’ main competition for advertising dollars comes from companies such as Google and 

Facebook, the newly merged AT&T/DirecTV, and cable companies 

like the soon-to-be merged Time Warner. I bring this information 

to the committee’s attention not to complain about competition, but 

6 

rather to underscore that the FCC’s rules pretend this competition 

does not exist. 

My second point is that, while the FCC’s rules should be promoting localism, they have had the opposite effect. A healthy, vibrant broadcast industry serves the public interest through locally 

focused news, sports, public affairs programming, and emergency 

services. No other industry has that responsibility, and most importantly, the ability or incentive to serve the needs of the public. Yet, 

the broadcast ownership rules act to inhibit broadcasters’ ability to 

serve this basic responsibility by limiting investment and synergies 

that could otherwise fuel locally focused programming. 

To maintain the ability to provide quality local service, the FCC’s 

ownership rules must permit reasonable combination of station 

ownership. Broadcasters are a critical source of information and 

entertainment in every community across the country, but it takes 

significant resources to provide up-to-the-minute news, local and 

national emergency information, and highly valued entertainment 

programs. To compete and serve their communities successfully, 

broadcasters should be governed by regulations that at least account for the new and varied competition that is all around us. 

Finally, the record is clear that the current rules have failed to 

promote minority ownership of broadcast properties, and yet support for these rules is sometimes justified on diversity grounds. 

NAB has long supported the goal of diversity among broadcast stations, and to that end supports the reinstatement of a tax certificate program. But our industry is not alone in having a great deal 

of room for improvement in this area. However, ownership rules 

that are out of step with today’s competitive reality only suffocate 

smaller broadcasters and limit new entrants. 

In conclusion, we are asking Congress for help to hold the FCC 

accountable for completing its review of the rules and making the 

necessary changes to the benefit of both communities and consumers across the country. 

I thank you for your attention to this important issue and look 

forward to your questions. 

[The prepared statement of Mr. Waldron follows:] 

7 

8 

9 

10 

11 

12 

13 

14 

15 

Mr. LATTA. Well, thank you very much. I appreciate your testimony. 

And the Chair now recognizes Mr. Boyle, who is vice president 

of public policy, Newspaper Association of America. 

And we appreciate your being here today, and thank you for your 

testimony. 

STATEMENT OF PAUL BOYLE 

Mr. BOYLE. Vice Chairman Latta, Ranking Member Eshoo, and 

members of the subcommittee, on behalf of my 2,000 member newspapers, thank you for this opportunity to testify. 

Congress and the administration have long been concerned about 

the future of newspaper journalism as our industry adjusts to new 

economic realities. The challenges that newspapers face today are 

well-documented. For the most part, these challenges are market 

driven. The one striking exception is the FCC’s ban on cross-ownership that prohibits investors from owning or investing in both a 

daily newspaper and a television or radio station in the same market. 

The rule may have been reasonable and appropriate in 1975, but 

with the surge of media across multiple platforms—cable, satellite 

TV, satellite radio, and the Internet—the cross-ownership ban no 

longer makes sense. Today, the American public has access to more 

information and more viewpoints than ever before, including 

through new digital platforms and social media Web sites. As the 

Pew Project for Excellence in Journalism summarized in its State 

of the News Media report: ‘‘The pace of technological evolution and 

the multiplicity of choices—from platforms to devices to pathways—show no sign of slowing down.’’ 

Newspapers are investing significant resources of their own on 

digital and mobile platforms and applications, providing consumers 

with news and information how, when, and where they want it. 

Most newspapers are also providing video to enhance news reports 

and provide viewers with in-depth features, videos that closely mirror the work of traditional broadcasters. 

For example, the New York Times received a 2013 Pulitzer Prize 

for a multimedia project about skiers killed in an avalanche and 

the science of such disasters. And the Detroit Free Press received 

an Emmy for documentaries that live exclusively online. 

The point is, media companies and consumers have embraced 

digital and mobile platforms, yet the FCC is desperately holding on 

to a media ownership rule that was constructed 40 years ago. 

The FCC’s cross-ownership ban is not only outdated, it is siphoning much needed investment in newspapers. Since 2008, print advertising in newspapers has decreased by 55 percent. Yes, digital 

advertising is a growing source of revenue, but it only produces a 

fraction of the resources that newspapers have historically relied 

upon to sustain their newsrooms. 

In 1996, Congress required the FCC to review its media ownership rules every 4 years and to repeal or modify any rule that is 

no longer in the public interest. The FCC has consistently ignored 

this directive. 

As this Commission continues to delay, this ban on cross-ownership is much further removed from the reality of today’s media 

16 

marketplace. In fact, the FCC inaction has contributed to the decision by some media companies to either sell their broadcast stations or to divide their publishing and broadcast properties. After 

20 years of waiting for regulatory relief, many media companies 

have moved on from cross-ownership as a strategy. 

These actions do not mean that the rule is irrelevant. Local 

newspapers will come on the market, and there will be situations 

where the most logical buyer is a broadcaster who shares a commitment to local journalism. And there will be a daily newspaper 

interested in buying a TV station so that it can diversify its revenue stream in support of journalism. 

But let’s be clear, the repeal of the cross-ownership ban will not 

lead to massive consolidation. More likely, mergers would occur in 

a few select markets where it makes economic sense and where 

there are synergies that would support local journalism. 

Finally, because the scope of this hearing includes diversity of 

ownership in the broadcast industry, I would like to point out that 

NAA has consistently supported many of the diversity proposals 

put forward by MMTC and others, such as the incubator program 

and a reinstatement of the minority tax certificate. 

In the past, some have argued that the FCC should not change 

the cross-ownership ban until the Commission takes certain steps 

to increase diversity in media. We believe the Commission is fully 

capable of doing both at the same time. 

Thank you. 

[The prepared statement of Mr. Boyle follows:] 

17 

18 

19 

20 

21 

22 

23 

Mr. LATTA. Thank you very much for your testimony. 

And the Chair now recognizes Kim Keenan, president and CEO 

of the Multicultural Media, Telecom and Internet Council. 

Thank you very much, and you are recognized for 5 minutes. 

STATEMENT OF KIM M. KEENAN 

Ms. KEENAN. Thank you, Vice Chairman Latta, Ranking Member 

Eshoo, distinguished members of the subcommittee, and esteemed 

colleagues on the panel. I am honored to appear today to address 

the Nation’s efforts to promote and preserve opportunities for diversity in the ownership of our Nation’s airwaves. 

My name is Kim Keenan, and I do serve as president and CEO 

of MMTC, or Multicultural Media, Telecom and Internet Council. 

This nonprofit was founded 29 years ago to promote equal opportunity and social justice in mass media, telecommunications, and 

the broadband industries. We proudly partner with dozens of national and local civil rights and advocacy organizations. 

In an effort to do our part to increase minority broadcast ownership, MMTC’s nonprofit Media and Telecom Brokerage division has 

participated in nearly one-third of all broadcast station sales to 

women and people of color since 1997. At MMTC, we believe that 

consistent with the mandate of Sections 151, 257, and 309 of the 

Communications Act, our Nation’s media must reflect the cultural 

and viewpoint diversity of our Nation. 

The late Dr. Everett C. Parker was one of our cofounders and a 

minister of the United Church of Christ. He passed away last week 

at the age of 102. And he fought very hard to desegregate both 

radio and television stations. Why? He said, ‘‘If we want the voiceless to have a voice that everyone can hear, we must have a robust 

minority broadcast ownership. It is essential to our democracy.’’ 

This message of advancing diverse media ownership still resonates as MMTC and other media advocates push for equity in representation and participation in the industry. So for the purpose of 

this hearing, I want to focus on three things. 

First, the FCC has not been proactive in advancing minority 

broadcast ownership. First, the FCC must swiftly act upon proposals and policies that address the market-entry barriers that 

limit diversity and inclusion in broadcasting. 

The FCC has four decades of minority ownership jurisprudence. 

In response to a 1973 court decision, the FCC first began to consider minority ownership as a factor in comparative broadcast 

hearings. It followed that decision in 1978 with the famous tax certificate policy, which, until its repeal in 1995, quintupled the number of bona fide minority-owned broadcast stations. Unfortunately, 

since 1978, the FCC’s activity regarding minority ownership has 

been marked by inconsistently applied policies and in some cases 

repeal of minority ownership initiatives without the implementation of new or alternative approaches. 

In the FCC’s most recent media ownership report issued in 2014 

and reporting on October 2013 data, people of color, including Hispanics, held a majority voting interest in only 6 percent of fullpower commercial television stations, 11.2 percent of commercial 

AM stations, and 6.2 percent of commercial FM stations. And because these stations are mostly small and underpowered, MMTC 

24 

estimates that they represent no more than 2 percent of broadcast 

industry assets as a whole. It is well settled that this is an indispensable element of broadcast ownership diversity. 

One of the other things that the FCC did under Michael Powell 

in 2004 was to create the Advisory Committee on Diversity for 

Communications in the Digital Age to advance media ownership 

opportunities for minorities and women. 

For our part, MMTC, joined by over 50 national civil rights, professional, and civic organizations, has placed before the FCC some 

44 race-neutral and almost entirely deregulatory proposals for rule 

changes and legislative recommendations that would advance minority ownership and participation in broadcasting. Despite clear 

interest in promoting ownership by women and minorities, the Advisory Committee on Diversity has not met since September 17, 

2013. 

The last Section 257 Market Entry Barriers report to Congress 

was due December 31, 2012. The FCC rejected 23 of MMTC’s 44 

pending proposals with no analysis or consideration in the 2014 

quadrennial report and order on the theory that they were beyond 

the scope of the 2014 rulemaking. 

In 2004, and again in 2011, the Third Circuit Court of Appeals 

had commanded the agency to consider pro-diversity proposals as 

a part of the quadrennial process. MMTC had to go to court to compel the FCC to simply rule on dozens of mostly unopposed proposals that have been pending for over a decade. 

To be fair, the FCC took a significant step by relaxing its foreign 

broadcast investment policy, an action that MMTC immediately 

lauded, yet the agency had rejected nearly all of the other diversity 

proposals presented to it and has been consistently tardy in issuing 

the congressionally mandated Section 257 reports regarding the 

status of minority ownership. 

My time is running short. I want to make sure I make both of 

my final points. 

Reform must continue on JSAs and SSAs to ensure that they 

promote meaningful ownership opportunities for minorities. We applaud their long-overdue crackdown on joint service agreements, 

JSAs, and shared service agreements, sometimes called sidecars. 

They allow one station to sell advertising for or operate another 

station in the same market. These arrangements have almost always been used to evade the TV duopoly rule. 

Although a handful of those selected to operate sidecars happen 

to be minorities, these arrangements do not help people of color advance in broadcasting. As a practical matter, most sidecar licensees 

own 100 percent of nothing. 

For decades, before sidecars were invented, women and people of 

color actually operated real television stations successfully. The 

owners hired the staff and chose to address and put on local programs to address those issues. 

We should note that there are rare instances where a JSA or an 

SSA can effect a legitimate purpose, and an example is Tougaloo 

College’s WLOO–TV, which was donated to the college by Raycom 

Media and is owned and operated by the college to train mass communication students. The student is a JSA with American Spirit’s 

WDBD–TV. 

25 

Finally, and I think this is the most important, the FCC has an 

immediate opportunity to foster minority media ownership through 

its broader efforts to revitalize AM radio. Pending before the FCC 

is the proposal to create an AM-only window to allow AM stations 

to apply for FM translators as a part of this proceeding. Last 

month, in an unprecedented mass letter—— 

Mr. LATTA. Pardon me, Ms. Keenan, if you could wrap up, because I know they are going to be calling votes here real quick. So 

if you can just wrap up in about another 10 seconds. 

Ms. KEENAN. Excellent. I will do that. 

Given this, 12 members of the Congressional Black Caucus have 

written to Chairman Wheeler urging the Commission to open the 

AM-only translator window. I respectfully urge other Members of 

Congress to follow suit and help guarantee that AM stations obtain 

the translators they need to remain competitive and provide our 

communities with the service that they need. 

We respectfully implore the subcommittee to exercise their oversight powers to ensure that the FCC makes up for lost ground and 

takes dramatic and timely steps to increase minority broadcast 

ownership. Thank you. 

[The prepared statement of Ms. Keenan follows:] 

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Mr. LATTA. Thank you. 

The Chair now recognizes Michael Scurato, who is the vice president of policy, National Hispanic Media Coalition. 

Thank you very much. You are recognized for 5 minutes. 

STATEMENT OF MICHAEL SCURATO 

Mr. SCURATO. Vice Chairman Latta, Ranking Member Eshoo, 

members of the subcommittee, thank you very much for inviting 

me to testify here today on this important issue of broadcast ownership in the 21st century. 

Broadcasting remains incredibly important in today’s media 

landscape, yet despite an increasingly diverse population and near 

universal recognition of the importance of broadcast ownership, 

people of color and women remain shut out. For many years, the 

National Hispanic Media Coalition has issued a number of recommendations that we think would help remedy this. 

First, the FCC should tighten and enforce its existing media 

ownership rules to create opportunities. Recent action to close the 

joint sales agreement loophole has already demonstrated how further and long-overdue action on this recommendation can create 

positive change. 

Second, the FCC should aggressively improve its collection of 

ownership data and perform analysis that is necessary to create 

proactive policies that promote diversity. 

And third, Congress should reinstate the minority tax certificate, 

which increased ownership diversity before being abandoned many 

years ago. 

Promoting ownership diversity in broadcasting should be 

prioritized given the role of the media in fostering public discourse 

on critical issues and providing important local news and information. The FCC also has a statutory obligation to promote diversity. 

Broadcasting remains the way that most people in this country 

access important local news and information. Broadcast television 

reaches 98 percent of Americans. Radio is similarly pervasive. In 

Los Angeles, over 95 percent of the population listens to radio on 

a given week, including 98 percent of Latinos and 99 percent of 

Spanish-speaking Latinos. 

However, excessive consolidation and lack of diversity has caused 

harm to diverse communities and prevented these communities 

from fully benefiting from the public resource that broadcasters use 

to serve them. Last year, before this subcommittee, NHMC compellingly recounted the harms that result from the prevalence of hate 

speech in the media. 

Examples from the past few weeks show this problem remains. 

For instance, one host on a conglomerate-owned station in Iowa recently suggested that all undocumented immigrants be enslaved. 

Additionally, the repeated broadcast of the hateful remarks of a 

high-profile public figure was recently revealed to be directly responsible for the violent and vicious beating and degradation of a 

Latino in Boston. 

While Internet access holds great promise, for two key reasons 

it is not yet able to match the power of broadcasting. First, as 

many as one in three Americans lack home broadband access. People living in rural areas, people of color, the poor, seniors, nonVerDate Mar 15 2010 12:24 Mar 01, 2016 Jkt 037690 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X77BRDCSTOWNPT1ANDPT2PDFMADE WAYNE
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English speakers, and people with disabilities are far less likely to 

access the Internet at home. Second, local news and information 

online still by and large originates from traditional media sources, 

such as local newspapers and broadcasters. 

The FCC’s latest diversity statistics are shameful. There are 

more than 1,300 full-power television stations in this country. In 

2013, African Americans held the majority interest in only nine; by 

early 2014, only four, many of those entangled in JSAs and other 

arrangements that limit control or wealth-generation potential. For 

Asians, the number of stations owned is five. Latinos held the majority interest in only 3 percent of full-power television stations in 

2013, despite accounting for 17 percent of the population. 

Female ownership continues to remain low or decrease. Women 

owned only 6.3 percent of full-power commercial television stations 

in 2013. And radio, once considered a key entry point for diverse 

broadcasters, presents a similarly bleak picture. There was a 20 

percent decrease in African American owners and a 10 percent decrease in Asian owners between 2011 and 2013. These numbers are 

persistently bad at a time when nearly 38 percent of the population 

is comprised of people of color, and they have remained bad for 

quite some time. There is a strong possibility that these numbers 

could decline further following the upcoming incentive auction. 

NHMC envisions a world in which broadcasters reflect the diversity of our population and adequately serve the needs of all communities. Congress should promote diversity in broadcasting by encouraging the FCC to strengthen its media ownership rules and 

perform the research and analysis necessary to create new diversity initiatives. Congress should also reinstate the minority tax certificate. These are important steps towards achieving NHMC’s vision. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. Scurato follows:] 

35 

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[Additional information submitted by Mr. Scurato has been retained in committee files and also is available at http:// 

docs.house.gov/meetings/IF/IF16/20151203/104240/HHRG–114– 

IF16–Wstate-ScuratoM–20151203.pdf.] 

42 

Mr. LATTA. Well, thank you very much. 

And the Chair now recognizes for 5 minutes Mr. Todd O’Boyle, 

who is the program director, Media and Democracy Reform Initiative, at Common Cause. 

Thank you very much. You are recognized for 5 minutes. 

STATEMENT OF TODD O’BOYLE 

Mr. O’BOYLE. Good morning, Mr. Vice Chairman, Ranking Member Eshoo, and members of the subcommittee. Thank you for inviting me to be a part of this discussion about the future of broadcast 

ownership. Former FCC Commissioner Michael Copps leads our 

media reform work at Common Cause, and he sends his warmest 

rewards. 

Mr. LATTA. Thank you. 

Mr. O’BOYLE. At Common Cause we advocate for inclusive, responsive governance and a diverse local media ecosystem that informs the electorate. Therefore, we oppose further relaxation of 

media ownership rules and support the unwinding of shell operations that undermine lively civic discourse. Waves of mergers and 

consolidation, too often with the blessing of the Federal Communications Commission, have eroded the vitality of local communications media to the detriment of our electorate. 

In recognition of the special compact at the heart of broadcasting, 

Congress wisely empowered the FCC to prevent local broadcast monopolies, and the diversity of voices enlivens the marketplace of 

ideas in which democracy depends. And competition for news-gathering resources means more newsroom jobs as rival news crews 

hustle to get the scoop. More local journalists, in turn, means more 

sunlight, the best disinfectant for corruption and graft. 

In other words, localism increases employment and enhances the 

quality and quantity of news—a win, win, win. But the inverse is 

also true. Consolidation wreaks havoc on journalism. The record is 

grim. The FCC has for many years sanctioned merger after merger, 

formally entrenching local information monopolies. And to be clear, 

this has been a bipartisan problem that has facilitated an arms 

race between big cable and big broadcast at the expense of audiences everywhere. 

Meanwhile, the agency has regularly looked the other way as 

media monopolists found and exploited loopholes to effect a covert 

consolidation through shared services and joint sales agreements. 

The consequences have been staggering. Diverse and female ownership took a nosedive. Is it any surprise that minorities and 

women still struggle with backwards portrayals in the media when 

they control so little of it? Clearly, ownership matters. 

There is scant evidence that these arrangements promote the 

public interest and reams of data that they harm it. Researchers 

at the University of Delaware found that SSAs resulted in duplicated content in every market they studied. They found stations 

sharing anchors, graphics, videos, and scripts. In some markets, 

such as Honolulu, broadcasters simply simulcast the exact same 

content on multiple channels. In short, more shells mean fewer 

journalists and less journalism. 

While we are disappointed the FCC has not yet reined in SSAs, 

thankfully, the agency has addressed JSAs. Last year Common 

43 

Cause applauded when the Commission took an important first 

step back to media diversity. It brought more parity between radio 

and television broadcasters by making joint sales agreements attributable in ownership calculations. Within months of the FCC’s 

action, the agency reported 10 new minority/female ownership arrangements, the first meaningful gains in years. 

This represented a great first step, but should be viewed as only 

the beginning of pro-diversity reforms. Indeed, the FCC’s own ownership data paint a dire picture. Female minority ownership still 

lags in the single digits. 

Broadcasters frequently defend these tricks of the trade as essential to keeping the lights on. They often claim that without these 

financial instruments, broadcasters would go dark. On the contrary, the bevy of recently announced mergers illustrates the 

broadcast business is booming thanks to record ad sales, the bulk 

of which come from political advertising. 

Presently, Congress is considering legislative vehicles to eliminate JSA reform. We call on you to halt them forthwith. A reversal 

would be a staggering step backwards and foreclose future prolocal, pro-diversity policies. Indeed, the rule in question includes a 

waiver process that broadcasters can make the case to keep the arrangements if they truly are serving the public interest. 

There are other areas where the FCC could improve. We have 

long urged the agency to do a better job of collecting ownership 

data with Form 323. The reporting tool itself is cumbersome and 

the agency has been known to grant extension after extension, rendering the underlying data of questionable quality. Notably, the 

courts twice previously rejected attempts to relax cross-ownership 

rules, citing insufficient record on ownership and how proposed 

changes would affect historically disadvantaged groups. Regardless 

of where each of us stands on ownership, any change would require 

more and better data. 

I close with this observation. The present moment is one of opportunity. Will the FCC, with your oversight, approve another slew 

of broadcast consolidations, or will it go down a different path, one 

of diverse voices and an informed electorate, the path of local and 

diverse ownership? Let’s hope it seizes the opportunities before it, 

first by putting the brakes on media consolidation, and then by 

building on its JSA reform to rein in SSA abuses. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. O’Boyle follows:] 

44 

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Mr. LATTA. Well, thank you very much, and I appreciate your 

testimony. 

Our next witness is Jason Kint, who is the chief executive officer, 

Digital Content Next. 

We appreciate your being here, and you are recognized for 5 minutes. 

STATEMENT OF JASON KINT 

Mr. KINT. Thank you. Vice Chairman Latta, Ranking Member 

Eshoo, and the members of the subcommittee, it is my honor to appear here before you today. 

I am the CEO of Digital Content Next, DCN, formerly known as 

the Online Publishers Association. We are the only trade group 

dedicated to serving high-quality digital content companies that 

manage trusted relationships with both consumers and advertisers. 

By way of background, I have spent over 20 years in digital 

media in a number of executive roles, operating both established 

and native digital companies and brands. Much of that work involved shifting these brands into multiplatform brands in a short 

period of time based on consumer demand. I am proud now to represent media companies from every segment of the market, from 

large to midsized companies, to newer upstarts that are carving 

niche market in the delivery of original content over the Internet. 

The members of DCN reached 230 million unique visitors, over 

100 percent of the U.S. online population, and they are leading the 

revolution of the marketplace. 

In the late 1990s, consumers turned to the disruptive power of 

the Internet because of the ease of access to content and the availability of this content on new platforms. As we have all witnessed 

over the course of nearly two decades since the beginning of this 

transformation, the current media landscape looks vastly different 

than it once did. When we examine where consumers turn for news 

and information, even more consumers are now turning online. 

In my full testimony, I provided some data on this transition, but 

I would like to highlight two important findings here. According to 

a 2015 Reuters Digital News Report, 74 percent of respondents got 

their news online, compared to 64 percent on television, 26 percent 

on radio, and just 23 percent from print media. If you look at the 

under-35 audience, less than 25 percent still get news from television. These statistics inform the debate. 

The underlying intent of the media ownership rules is to ensure 

diversity of independent voices is available to consumers. However, 

the rules have also served to limit investment in media companies, 

which for newspapers in particular has made their transition to a 

digital world much more difficult. 

At its core, the Internet is an innovative, and importantly, open 

platform that has produced a diverse ecosystem that allows businesses small and large to engage with consumers in a variety of 

ways, limited only by their creative capacity. It allowed a variety 

of consumer and professional voices to flourish. Recognition of what 

the Internet delivers and its potential is critical to analyzing the 

media ownership rules. 

I understand that developing the rules in this environment is difficult. On the one hand, consumers are increasingly moving online 

49 

for their news and entertainment, as demonstrated by the data I 

have previously shared. On the other hand, broadband adoption to 

access that consent is not ubiquitous yet, although that is changing. 

Moreover, there has been a decades-long decline in ad revenue 

for newspapers that digital ad revenue has not offset. That decline 

has resulted in job cuts and other reductions impacting their available news resources. However, there are new digital native news 

sites providing coverage from a variety of perspectives. Pew estimates that as many as 400 new native digital news sites now exist. 

Of course, others suggest that absent the ownership rules the 

growth in digital news sites may have been even greater. Balancing 

these competing data points and many others that speak to the levels of competition, localism, and diversity in media should provide 

an impetus for the FCC to decide what modifications to the media 

ownership rules should be made to reflect the new reality. 

In a digital age, consumers have even more access to a diverse 

amount of content than 20 years ago. DCN’s members have been 

at the forefront of this change. We have venerable institutions attempting to reform their business models and adapt their trusted 

brands to this digital ecosystem. We also have new digital native 

companies challenging the assumptions for how news should be 

covered and delivered. 

The Internet has been the great equalizer as content creators are 

able to access markets on a global scale while still having the ability to reach hyperlocal markets with original and compelling content. 

As any DCN member can tell you, there is no business model 

that can succeed long term without being built around the consumer demand. It should be no different in this case. It starts with 

the consumers. The key to any assessment of media ownership 

rules should be rooted in the answer to this question: Are consumers getting the news and content they want, and are those 

business models sustainable? My answer is that they are and that 

the offerings and offerors continue to proliferate. 

It is important to the marketplace, and ultimately consumers, 

that the Commission update and relax the ownership rules to reflect the media landscape as it exists today. I fear that expansion 

of outdated regulations to the online environment could stunt the 

growth of online content in a way that will prove detrimental to the 

consumer experience. 

DCN looks forward to working with this committee and engaging 

with policymakers and regulators on this issue, and I thank you for 

the opportunity to testify before you today. 

[The prepared statement of Mr. Kint follows:] 

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56 

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Mr. LATTA. Well, thank you very much for your testimony. We 

appreciate it. 

And in the interest of where we are right now, because we are 

almost at the end of this first vote, we are going to recess the subcommittee at this time, and committee staff will be back with you, 

because with all of the other events that have happened today, 

probably we won’t have members coming back in. So what we will 

do, we will recess the hearing and then be back in touch with you 

all as to furthering the committee hearing at that time. 

We appreciate your testimony and—sorry, the gentlelady from 

California. 

Ms. ESHOO. Thank you, Mr. Chairman. What I would like to suggest, given 11 votes coming up, and we are very late for the first 

one, and the importance of the testimony and the issues that are 

embedded in the testimony, I would request that this hearing be 

continued until a date certain is set rather than members just submitting questions to the witnesses. I really think we need to have 

an exchange, and it would be a healthy and worthy one. 

So that is the preference on this side, and I hope that that could 

be honored. Thank you. 

Mr. LATTA. So I think what we can do, both committee staffs will 

work to get that put together. 

I thank you. 

Ms. ESHOO. Good. Wonderful. 

Mr. LATTA. And again, we appreciate your time this morning. 

And we will recess the committee at this time. 

[Whereupon, at 10:50 a.m., the subcommittee was adjourned.] 

PREPARED STATEMENT OF HON. FRED UPTON

Our conversation today offers us a great opportunity to discuss ways we can modernize our laws to better reflect a media industry that serves consumers in the innovative and dynamic 21st century How people get their news has changed dramatically and continues to evolve on a near daily basis. But the media ownership rules 

in place today have failed to keep pace. Local broadcast stations and newspapers 

are now in direct competition with not only traditional national media outlets, but 

also a wide variety of nontraditional outlets as well as social media sites like 

Facebook and Twitter. Growing up in Southwest Michigan, you could count on one 

hand the source of news that was available—with the only options being local TV 

evening news, radio, or the morning hometown newspaper. Now, we have access to 

unlimited sources of real time information, 24 hours a day. But our laws are stuck 

in the 20th century, desperately needing an update that reflects the ever-changing 

market. 

Without relief, media companies have slowly sold off their newspaper and print 

operations, and it is unclear still what fate ultimately awaits many of our daily 

newspapers. Competition from the Internet has eroded traditional media companies’ 

market share and ad revenues—a point made even clearer as a result of the Great 

Recession. Modern laws might have allowed broadcasters and newspapers to better 

weather the rise of the Internet or the economic impact of the recession, but that 

relief has not been forthcoming. 

We are all committed to fostering competition, localism, and diversity of perspectives in a healthy and vibrant media industry. The parties here may not agree how 

best to achieve those goals, but we have the obligation to push forward and find 

agreement on something better because the status quo is unacceptable. 

PREPARED STATEMENT OF HON. GREG WALDEN

Good morning and welcome to today’s hearing on broadcasting ownership in the 

21st century. For the last century, broadcasting and newspapers have been the 

58 

media that connect communities. Whether it’s the local radio call-in show that amplifies the voices of average citizens, the local television news that’s ‘‘live, local, and 

late-breaking,’’ or the newspaper column that has everyone talking, broadcasters 

and newspapers are a part of our communities. These voices have served as the primary way Americans’ news needs were met for the majority of our republic’s history, but times have changed. 

The current broadcast ownership laws reflect a significantly different time in 

American history. Cable, satellite, and the Internet have become integral parts of 

our communications infrastructure and our daily lives, changing the way we consume news and giving national scope to their voices. But despite the massive 

changes to the communications marketplace and American consumption of news, 

our laws are stuck in a bygone era. 

Our laws were written for an era of limited voices. But this is an era of communications competition. Competition between broadcast news and cable news; competition between print journalism and online journalism; and competition between 

traditional media and new media. In an era of such intense competition, our laws 

should not unduly hamper the ability of any one segment to provide the high-quality 

content consumers have relied on for decades. 

But that’s exactly what our laws do. Our laws limit the number of households a 

broadcast station group can reach; our laws hold on to artificial distinctions between 

AM and FM radio stations; and our laws prevent broadcasters dedicated to serving 

their communities from saving local newspapers from extinction. These laws must 

change. 

While we work to change the laws to empower broadcasting and newspapers for 

a new era of American media, we must also look to empower our Nation’s minorities 

in the traditional media marketplace. Despite the wealth of voices and viewpoints 

in our society, ownership of traditional media by minorities remains low. Empowering broadcasting for the 21st century means embracing policies that diversify it 

to reflect the society it serves. I look forward to hearing from our witnesses on ways 

that we can encourage greater minority ownership in broadcasting. 

We all share the same goal of promoting localism in our communities. Broadcasters and newspapers play a critical role in ensuring Americans have reliable 

news sources and work to bring us all together whether you live in the largest city 

or on the most rural of ranches. As technology continues to change our society, it 

is important that we ensure our laws keep pace. Our priority should be to encourage 

innovation and diversity within communities without placing more restrictions on 

businesses. I thank our witnesses for being here today and offering your valuable 

input. 

59 

BROADCASTING OWNERSHIP IN THE 21ST 

CENTURY—DAY 2 

THURSDAY, DECEMBER 3, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:17 a.m., in room 

2123, Rayburn House Office Building, Hon. Greg Walden (chairman of the subcommittee) presiding. 

Members present: Representatives Walden, Latta, Lance, Johnson, Ellmers, Eshoo, and Pallone (ex officio). 

Staff present: Ray Baum, Senior Policy Advisor, Communications 

and Technology; Andy Duberstein, Deputy Press Secretary; Kelsey 

Guyselman, Counsel, Communications and Technology; Grace Koh, 

Counsel, Communications and Technology; Charlotte Savercool, 

Professional Staff, Communications and Technology; Gregory Watson, Legislative Clerk; Christine Brennan, Democratic Press Secretary; Jeff Carroll, Democratic Staff Director; Ashley Jones, Democratic Director of Communications, Member Services and Outreach; 

Jerry Leverich, Democratic Counsel; Lori Maarbjerg, Democratic 

FCC Detailee; and Ryan Skukowski, Democratic Policy Analyst. 

Mr. WALDEN. We will call the Subcommittee on Communications 

and Technology to order. 

And, by unanimous consent, Ms. Eshoo and I would like to ask 

our colleagues to waive opening statements so that we can actually 

resume this hearing or have the new hearing of the resumption of 

the hearing going forward. 

And I would suggest that if the panel members who had the opportunity to give your opening statements before, if you want to 

share a few comments, that would be fine, but if you want to kind 

of move through them rapidly, that would be fine. I tell you all that 

because they just called votes on the House floor. So, best-laid 

plans. There will be seven votes. 

And I understand you all have agreed to waive statements, so 

thank you. We could just pass bills and get everything done this 

morning at this rate. 

So, with that, thank you for returning. As you know, this is a resumption of the hearing on ownership. And so, with that, I guess 

we go right into Q&A then, right? 

So let me start with a question to Mr. Waldron. 

Tax incentives are generally considered a relatively efficient way 

for the Government to encourage certain policies. The minority tax 

certificate is a voluntary instrument that entities can take advantage of or not, depending on whether the situation is appropriate. 

Do you think the FCC would be able to structure a program 

around the minority tax certificate that would prevent arbitrage? 

And then I would like to get the views of the other panel members as well. 

So, Mr. Waldron, what do you think of that? 

60 

Mr. WALDRON. Thank you, Mr. Chairman. 

Yes, NAB has long supported tax certificates, and we think they 

can be structured in a fair and balanced way. I do want to emphasize that tax certificates did exist, and there were more than 50 tax 

certificates that were done. And so we think it can be structured. 

And, as you point out, it is a voluntary program, really a marketbased program, to incentivize minorities to get into the business. 

So we think it is an excellent idea and a step that the Commission 

and the Congress should take. 

Mr. WALDEN. Mr. Boyle? 

Mr. BOYLE. Mr. Chairman, NAA has supported the tax certificate 

and some other proposals that the MMTC has put forward to increase diversity of ownership. So we think it can be done, and we 

hope Congress would enact it. 

Mr. WALDEN. Ms. Keenan? 

Ms. KEENAN. Hello. 

Mr. WALDEN. Good morning. 

Ms. KEENAN. I am president and CEO of MMTC, Multicultural 

Media, Telecom and Internet Council. 

I absolutely concur with what has been said. MMTC has long 

been in the forefront of pushing for these tax certificates. They are 

the right way to handle this at the right time. 

If you were to do a bar graph of what it looks like when you have 

tax certificates and when you don’t, this is what it looks like when 

you don’t. Imagine the bottom. But when you have it, this is what 

it looked like. If you were to go back, you would see that the highest period of growth in ownership by women and people of color 

was under the tax certificate program. And those were bona fide 

people who entered at that level. But, once that program was taken 

away, we are back at those levels that were negative. 

So, absolutely, this is the right way, and it is the right time. 

Mr. WALDEN. Thank you. 

Mr. Scurato? 

Mr. SCURATO. Yes, the National Hispanic Media Coalition, we 

support the idea of reinstating the minority tax certificate. Moreover, we would hope that Congress could reinstate it in a way that 

is race-conscious, as the prior tax certificate was. We think that 

would have the most impact on ownership diversity. 

Mr. WALDEN. OK. 

Mr. O’Boyle? 

Mr. O’BOYLE. Common Cause also supports the reinstatement of 

the minority tax certificate program. I think this is a consensus position, not only because raising diverse ownership, increasing diverse ownership is an important public interest goal, but because 

we believe the evidence shows that female and diverse ownership 

drives more and better representative content of female and minority populations and that there is a problem with misogynistic and 

racist characterizations in the media because there is such a limited ownership of the media by females and minorities. 

Mr. WALDEN. Got it. 

Mr. Kint? 

Mr. KINT. My name is Jason Kint. As CEO of Digital Content 

Next and kind of representing the future of digital media, any 

issue around promoting the voice of minorities is of paramount imVerDate Mar 15 2010 12:24 Mar 01, 2016 Jkt 037690 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X77BRDCSTOWNPT1ANDPT2PDFMADE WAYNE
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portance to us. And the details on that, I would like to follow up 

with you, if that would be all right. 

Mr. WALDEN. All right. Thank you. 

I am going to yield back the balance of my time so we can get 

to Ms. Eshoo for her questions, as well, and to Mr. Latta. 

Ms. ESHOO. Thank you, Mr. Chairman. 

First, I would like to ask for unanimous consent to place two 

pieces in the record. 

Mr. WALDEN. Without objection. 

[The information appears at the conclusion of the hearing.] 

Ms. ESHOO. Thank you. Do I need to name them? 

Mr. WALDEN. No. 

Ms. ESHOO. No. OK. Save that time. All right. 

Thank you to all the witnesses. 

And I want to thank the chairman for agreeing to reschedule the 

rest of this hearing. I thought that it was important, and I thank 

him for agreeing and doing so. 

To Mr. O’Boyle, can you tell me how many shared services agreements, the SSAs, and joint sales agreements still remain in place 

today? And does the Commission require broadcasters to disclose 

the existence of such agreements? 

Mr. O’BOYLE. Thank you for the question. 

Determining the precise number of these arrangements is surprisingly difficult. Credit to Free Press for doing some good research to try and infer, by looking through SEC filings, the exact 

number. But it should not be this hard. 

The FCC’s Form 323 is a problematic reporting tool. It is complex 

and cumbersome. And noncompliance is also an issue. So there are 

issues with the reporting tool itself. 

But, more broadly, to take another issue, the 2014 JSA Reform 

Order, which Common Cause supported, did not actually require 

broadcasters to disclose SSAs. So we feel the most direct and easiest way for us to get a handle on a census, the number of arrangements out there, is to require they be disclosed. 

And I would offer that this bespeaks the bigger problem, that we 

need better data, and that regardless of where panelists—— 

Ms. ESHOO. Sounds like it is an area that really needs some 

work—— 

Mr. O’BOYLE. Yes, ma’am. 

Ms. ESHOO [continuing]. From what you have said. 

To Mr. Scurato, how do you respond to those that suggest that 

the JSAs and the SSAs actually increase broadcast ownership diversity? 

And I appreciate the comments, the responses to the chairman’s 

question a moment ago. That was terrific. 

Mr. SCURATO. So, looking at the available data, we don’t actually 

think that the advent and rise of these types of sharing arrangements do anything to help support greater ownership diversity. In 

fact, if you look at the data, you know, these agreements have really come to prominence over the last 10 years or so, going from 

about 37 agreements—— 

Ms. ESHOO. What do you think, shorthand, they actually 

produce? 

62 

Mr. SCURATO. Well, what they do is they allow current owners 

in the market to circumvent media ownership rules and own more. 

And that is at the expense of opportunities for people of color and 

women that may want to enter the market. 

Ms. ESHOO. To Mr. O’Boyle, I know that you know that there 

have been efforts from this side of the aisle, led by Mr. Yarmuth, 

earlier this year in introducing legislation to require the disclosure 

of the true sponsors of political ads on the public airwaves. We 

have a huge problem in our country, obviously, especially on the 

heels of Citizens United. 

Now, in the absence of any newly enacted law—which, obviously, 

is not going to take place, I mean, because there is opposition from 

our friends on the other side of the aisle—what do you think the 

FCC can do? What steps do you think they should take, in terms 

of disclosure relative to the airwaves? 

Mr. O’BOYLE. Well, section 317 of the Telecommunications Act 

empowers the FCC to write sponsorship identification rules—that 

is, to write rules requiring the disclosure of the, quote, ‘‘true identity’’ of that sponsor. And the FCC, in interpreting its own authority decades ago, said that the name of the sponsoring committee 

was—— 

Ms. ESHOO. How long ago was that? 

Mr. O’BOYLE. I can get the exact year, but I think it was in the 

seventies. At the time, that may have—— 

Ms. ESHOO. Almost a half-century ago. 

Mr. O’BOYLE. But times and circumstances have changed. 

Ms. ESHOO. I think so. 

Mr. O’BOYLE. And in the post-Citizens United world, we have unprecedented amounts of unaccountable spending. Voters don’t know 

who is trying to persuade them. 

Ms. ESHOO. Well, that is the problem. What would you recommend? 

Mr. O’BOYLE. I would recommend that the FCC undertake a notice of proposed rulemaking to begin to rewrite the sponsorship 

identification rules, updating them for—— 

Ms. ESHOO. So an update of that section. 

Mr. O’BOYLE. That is right. And we could do that in time for the 

2016 general election. 

Ms. ESHOO. I will yield back, Mr. Chairman. Thank you. 

Mr. WALDEN. The gentlelady yields back the time. 

And we now go to Mr. Latta. 

Mr. LATTA. Well, thank you, Mr. Chairman. 

And, Mr. Waldron, in your testimony, you noted that the FCC 

has not completed its statutorily mandated quadrennial review of 

ownership rules in a timely manner. 

Can you explain how the FCC’s failure to complete its quadrennial review affects the ability of broadcasters to effectively compete 

in the marketplace and why it is important to get this done? 

Mr. WALDRON. Thank you, Mr. Latta. 

It has been more than 12 years since the FCC actually has given 

a thorough look at ownership. Think about how the landscape has 

changed in that time. We have Facebook and Google that are a significant source of competing ad space for local broadcasters. We 

have cable companies that have formed interconnected pacts, so 

63 

they compete against broadcasters for advertising, for audience and 

eyeballs. 

And, in that environment, we still have an ownership rule which 

exists as if a broadcaster only competes with broadcasters. It does 

not acknowledge that your local car company can go place an ad 

on Facebook or they can place an ad with Google or they can place 

an ad with other broadcasters or they can place an ad with every 

cable company. 

And so we think if the FCC actually did the job that Congress 

gave it, to look at its ownership rules and look at the current environment today, we think that they would actually come out with 

a sensible rule that would allow reasonable combinations of TV stations. But looking at the prism through 2003 distorts what the 

rules should be. 

Mr. LATTA. Thank you. 

Mr. Chairman, I think I am going to yield so maybe the gentleman from New Jersey can get his questions in. Thank you. 

Mr. WALDEN. The Chair recognizes the gentleman from New Jersey. 

Mr. PALLONE. Thank you. 

Mr. Chairman, I just wanted to follow up to some extent on what 

Ms. Eshoo was asking, because the broadcasting industry, particularly TV stations, have benefited greatly from billions of dollars in 

revenue from political advertising every cycle. And although the 

FCC took a step forward by putting the public and political file online for TV stations, I am concerned that isn’t enough for consumers. 

Are consumers able to easily use these online political files to determine who is behind the issue ads that they see? And, you know, 

don’t Americans have the right to know who is behind these ads? 

If you can comment on, you know, the access to finding out the information about who is doing these ads. 

I was going to ask Mr. O’Boyle. 

Mr. O’BOYLE. Thank you, Mr. Pallone. 

We feel that there are important steps the FCC could take to improve the quality of the online public file by making it a searchable, queryable database that, as other Government agencies make 

their data machine-readable so that you can search—— 

Mr. PALLONE. Well, you agree that right now it is hard to find? 

Mr. O’BOYLE. It is not particularly useful. In many cases, we 

have public files that have been handwritten, scanned into a PDF, 

and uploaded so that they can’t actually be searched and you have 

to decipher sort of a scrawl. And that could be made much more 

usable. 

More broadly speaking, even if that were made as usable as we 

would like, it still would not disclose the true identity of an actual 

sponsor of an ad. 

And to your question about whether voters are able to determine 

who is trying to persuade them, no. To get that, we need to get the 

FCC to undertake a rulemaking updating its sponsorship identification rules for 2015. 

Mr. PALLONE. OK. 

I have one more question. Do we have time? 

64 

Mr. WALDEN. We have let the cloakroom know that we are trying 

to finish. 

Mr. PALLONE. All right. Then let me stop. Thanks. 

Ms. ESHOO. No, ask it. 

Mr. PALLONE. All right. All right. Well, this is a New Jersey 

question, though. 

Mr. WALDEN. Oh, forget that. 

Mr. PALLONE. I can wait till we come back. 

Mr. WALDEN. No, no, we are not coming back. 

Mr. PALLONE. Oh, all right. 

Well, I am just worried that in New Jersey—you know, this is 

from Hurricane Sandy and the local broadcasters—in New Jersey, 

we already have too few TV stations. And one of them is owned by 

an entity that already owns two other stations in the same market. 

So I was going to ask either Mr. O’Boyle or Mr. Scurato, can you 

elaborate on whether joint ownership as well as situations where 

there are sharing agreements between stations produces more local 

news and information for consumers? This is our concern in New 

Jersey. 

Mr. O’BOYLE. Briefly. And I will allow Mr. Scurato to respond, 

as well. 

University of Delaware Professor Danilo Yanich has studied extensively the nature of nested ownership structures and the impact 

they have on content. And in every market they have studied, they 

yield homogenization of content. 

So, rather than plowing the efficiencies into new investigative 

local reporting that holds local officials accountable and informs the 

local electorate, instead, they are padding the bottom line. 

Mr. PALLONE. OK. 

Mr. SCURATO. Further, I would just add that, you know, there is 

evidence that, as these agreements are entered into, these sharing 

agreements, that newsrooms shrink and there are fewer jobs at 

these stations. And so that has a pretty direct impact on the quality of local news and information. 

Mr. PALLONE. I think you are right. 

All right. Thank you very much. 

Mr. WALDEN. We want to thank our panelists. 

We have seven votes, so the intent would be to adjourn, unless 

there is an objection. 

I am getting mixed signals. 

Ms. ESHOO. Well, I wish we could stay all morning because there 

is so much that we can be discussing, but, you know, all the welllaid plans in the world. 

I don’t see any other members that showed up from our side for 

the hearing. So do you anticipate any? Because if you don’t, 

then—— 

Mr. WALDEN. I don’t believe so. So I think other questions can 

be submitted for the record. 

Ms. ESHOO. Yes. 

Mr. WALDEN. Otherwise, they are going to be here another hour 

before we get back. 

Ms. ESHOO. I have some more questions, so I am going to submit 

them to you. 

65 

Mr. WALDEN. Thank you for your participation. Sorry this hearing was abbreviated, as well. We appreciate your input, and maybe 

we can have a further discussion on these issues down the road. 

We are adjourned. 

[Whereupon, at 10:33 a.m., the subcommittee was adjourned.] 

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