Did FCC Pressure Comcast to Incorporate 'Localism' Into NBC Deal?

February 4th, 2011 2:04 PM

Elections have consequences. In the realm of media regulation, the 2008 election meant increased influence for proponents of so-called media "localism." The increased influence of localism at the FCC bore itself out in the recently-approved Comcast/NBC merger.

As a hypothetical, "localism" is relatively innocent. But in practice, it essentially amounts to a back-door mechanism for media regulation, which is why the FCC's most left-wing member, Michael Copps, has been an outspoken advocate of localism as part of his proposed "public value test."

National Review's Matthew Shaffer wrote of Copps's localism proposals:

In the abstract, Copps’s ostensible goals aren’t purely objectionable (local news may well be more useful to the average citizen than more from the Washington circus, for example). But in practice, Copps’s recommendations — however well intended — necessarily entail expanding the power of bureaucrats to monitor media content, power which can then be used for objectionable and politicized goals.

Copps's contention is that only by removing market pressures can effective journalism thrive on the local level. Unfortunately, he apparently sees the solution as a federal mandate on the amount of local coverage that broadcast entities must carry. That both solidifies and increases federal control over the content of local broadcasters.

It also inevitably imposes arbitrary and subjective rules on broadcasters - what amounts to "local" coverage, what are the "local issues" that need to be covered, what amounts to "enough" local coverage, etc. Surely there are ways of deciding all of those questions, but none rely on the sum of individual consumer decisions represented by the free market. Or, put differently, all means of deciding those questions absent market pressures are by definition arbitrary, and skewed towards the preferences of those with the most political clout.

But that is essentially the point. Localism is catnip for the media Marxist crowd because it helps remove capitalism from the equation, and makes political pull - which the Michael Copps's of the country have far more of than they do entrepreneurial prowess - the sole determinant of standards for broadcasters as they pertain to "local" coverage.

But Copps's plan - and localism generally - cannot simply be imposed on NBC or any other broadcast entity without going through the usual bureaucratic processes. Like any politically contentious measure working its way through the federal red tape, that could take time. In Comcast's recent merger with NBC-Universal, however, Copps, Julius Genachowski, and Mignon Clyburn - the three Democrats on the five-member Commission - have managed to further the localism effort without conducting any of the normal rulemaking processes.

As a condition of the Comcast/NBC deal, Comcast will adopt localism standards by partnering various NBC affiliates with non-profit groups in order to increase coverage of local issues. But Comcast, not the FCC, incorporated that requirement into the deal. In a letter to the FCC dated December 23, Comcast wrote:

Local news, local public affairs, and other public interest programming have been a major focus of the Applicants from Day One. A primary virtue of the transaction is the preservation of the NBC Television Network as a free, over-the-air broadcast service, available through NBC’s owned-and-operated (“O&O”) broadcast stations and local broadcast affiliates across the nation (Commitment #1). Applicants have committed to preserve and enrich the output of local and public affairs programming on NBC O&O stations (Commitment #2). To this end, Applicants previously committed to increase the production of such programming by1000 hours per year across the O&O stations, by using On Demand and On Demand Online platforms, time slots on cable channels, and use of certain windows on the O&O schedules.

The letter goes on to offer a San Diego affiliate's partnership with a non-profit there as a model, and notes:

Cooperative arrangements such as this advance the Commission’s interest in ensuring that all Americans have access to vibrant, diverse sources of news and information as well as promoting the positive effects of the digital revolution on news-gathering, journalism, and information dissemination.

In other words, Comcast knew full well that the majority of Commissioners are localism advocates, and that concerns about local news could impede the NBC deal. The partnership between NBC affiliate KNSD-TV and VoiceofSanDiego.org - which Comcast cited as an example - itself illustrates why localism is so attractive to the left: the non-profit news organizations in the mold of those Comcast pledged to partner with are overwhelmingly liberal.

In fact, VoiceofSanDiego.org is a project of the Investigative News Network, an umbrella news organization funded by various left-wing groups, including George Soros's Open Society Institute.

Comcast clearly understood the political preferences of the people who would rule on the permissibility of a merger with NBC. So the company acted preemptively and offered to incorporate elements of localism voluntarily. Had Comcast not offered this concession, the deal would have been less likely to gain FCC approval.

For all its talk about the importance of local programming, Comcast was sure to give itself outs in the letter to the FCC.

Neither NBCU nor any of its NBC O&O stations will be obligated to broadcast, publish on a NBCU-controlled website, or otherwise exhibit or endorse any material produced by an Online News Partner, and the decision to broadcast, publish, or exhibit any such material will remain within the sole editorial discretion of NBCU and its NBC O&O stations. NBCU will maintain a minimum of five such arrangements to the extent that such local non-profit news organizations continue to exist in five NBC O&O markets, as described above. The minimum of five such cooperative arrangements will be maintained for at least three years following the date on which NBCU first has five such arrangements in place. In the event that NBCU terminates any such arrangement, it will use its best efforts to identify and establish a cooperative arrangement with another Online News Partner so that it will have ongoing relationships with Online News Partners in at least five of its O&O station markets.

Plenty of wiggle room for Comcast there. Clearly the company was not interested in localism for its own sake. If Comcast were fully committed to the cause, the pledge to incorporate local programming through nonprofit partnerships would have been stronger, larger, and would not contain the restrictions in the passage above.

Pro-localism writers on the left recognized the relative modesty of Comcast's commitment. Josh Stearns, who works for the far-left media reform outfit Free Press (they want a free press like North Korea is a "Democratic People's Republic"), also believes that Comcast included elements of localism to "placate policymaker's [sic] concerns." Stearns wrote last month:

Comcast has a long history of opposing and obstructing local journalism efforts at public access and community television stations. As part of the agreements that give cable companies local monopolies, companies like Comcast are supposed to provide channels and support for public, educational and government access stations. For example, in Philadelphia, Comcast’s home town, the cable giant blocked the establishment of local community TV stations for decades. Given this history, Comcast’s sudden commitment to nonprofit news seems suspect.

Indeed it does, and as Stearns acknowledges, all signs point to Comcast including localism provisions in order to satiate the left side of the FCC in the runup to the commission's decision with regard to the merger. Comcast included enough concessions to appease localists, while still leaving itself outs and keeping the decisions of local non-profits subject to the approval of the parent company. But though Comcast did not wholly embrace localism, it acceded to the FCC's demands that those concerns be addressed.

So in effect, the political views of the FCC's Democrat majority pushed Comcast to adopt an element of localism in its corporate structure. Through the FCC's authority over mergers between media companies, it was able to promote localism without ever issuing a rule mandating it. It never explicitly threatened to sink the Comcast/NBC deal if the issue of local news content were not addressed in some way, but Comcast clearly felt that the commission would at least be less likely to approve the deal if some element of localism did not find its way into the fine print.

Other localism critics, though, see the FCC's role in pushing Comcast to offer these provisions as a more overt exertion of federal regulatory power. Less Government President Seton Motley, an expert on media regulation issues and a former NewsBusters contributor, insisted in an email that Comcast's move was not a "concession."

These are totalitarian diktats forcing private companies to fund anti-capitalist entities who wish to see their newly conscripted benefactors ended, imposed by a rogue FCC that lords too much power over private agreements between private parties.

In any case, the moderate degree of localism that emerged - moderate compared to what, say, Free Press would impose if given the chance - demonstrates that Comcast was not particularly interested in localism except as a means to attain approval for the merger. It therefore subjected itself to the political preferences of the commission's majority.

While evidence that the incorporation of localism into the deal is mostly speculative, the three Democratic commissioners make no seccret of their support for the ideology. It seems entirely plausible that the incorporation of localism into the deal was an unspoken condition of FCC approval. One hopes that Comcast's concession will not set a precedent going forward that could lead to all sorts of left-wing regulations on broadcasters, and be used to target conservative talk radio hosts like Rush Limbaugh, Sean Hannity, Mark Levin, or Glenn Beck - all of whom sit at the top of localism proponents' collective (and figurative) hit list.