In a 2-1 decision last week, the Third U.S. Circuit Court of Appeals squashed recent efforts by the Federal Communications Commission (FCC) to deregulate media ownership rules, which would have allowed local news outlets across the country to adapt and thrive. Instead, a 40-year-old rule restricting cross-ownership of a newspaper and TV station in the same major market will remain in place to the detriment of local journalism and media content.
Upholding these outdated regulations is a complete rejection of the FCC’s 2017 rule changes that allowed news outlets to merge and combine their strengths with other companies. It also ignores the FCC’s critical role in the checks and balance process to act in the public interest and allow the market to change with the times.
In 1975, the commission enacted the “newspaper-broadcast cross-ownership rule” which made it illegal for one broadcast station to service the entire community. In theory, this would save small, independent news outlets from being bought out by large companies. But instead, the old FCC regulations would eventually hurt them, because these regulations couldn’t foresee how the industry would dramatically change in just a matter of decades to the advent of the Internet.
But now well into the Digital Age, there’s no excuse for a federal court to overlook the impact of internet on producing the news. And their obstinacy in maintaining obsolete rulings shows the court truly lives in another era.
With a variety of new outlets, anyone can write op-eds from their laptops or give political commentary from the convivence of their smartphones. Over the last two decades, social media overtook newspapers for how people get their news. For the younger generation, aged 18-29, only 2 percent referenced “print newspaper” as their news source.
Online advertising has boomed, taking away from print ads that would typically go to support local newspapers, radio broadcast and TV broadcasters. As society becomes more accustomed to instant information access, free websites have risen in popularity, leaving newspapers and broadcasters scraping by to retain readers and stay relevant.
Considering all the obstacles that modern news and programming industries face, the courts should be fast tracking FCC rule changes that help keep the doors open for more traditional media outlets that rely upon a paid subscription.
Even two decades ago, newspapers were already in sharp decline, decreasing the amount of paper published at a rate of 5 to 10 percent per year. In 2015, newspaper mergers made up $827 million, the highest since 2008, with big names like the Chicago Tribune and Denver Post buying smaller outlets just to stay in the game. As newspapers have seen their subscribers drop by half from the 1980s to 2018, news outlets need every advantage to even the playing field.
While the nature of how people get their news has changed, small communities across the nation need the ability to bulk up to represent their communities in the best way they know – by staying local. Most Americans want their news to be local and rooted in their communities, but unfortunately local news is threatened by enforcing decades-old regulations that were intended for a bygone era.
As of right now, the FCC is rightly looking to appeal the decision to the U.S. Supreme Court. But for now, the Third Circuit has shown that it doesn’t understand what news outlets need: more freedom to prosper, not less.
Janson Q. Prieb is an economic analyst with the American Consumer Institute, and Steve Pociask is president of the American Consumer Institute and chairman of the FCC’s Consumer Advisory Committee. Their views presented here are solely their own.