Selected FCC Regulatory Policies:

Their Purpose and Consequences for Commercial Radio and TV

CED-79-62: Published: Jun 4, 1979. Publicly Released: Jun 4, 1979.

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Fundamental questions about regulatory policy have created a need to evaluate commercial broadcast regulation. The Communications Act established the Federal Communications Commission (FCC) in 1934 and directed it to regulate broadcast communications and to grant broadcast licenses to those who would serve the public interest, convenience, and necessity. Under this standard, the regulatory role of FCC includes policies and rules intended to promote diversity of ideas and viewpoints and assure balanced and responsive program service.

The essential requirements that enable the broadcast licensing process to serve the public interest are: (1) evaluation of the licensee performance; (2) public participation; and (3) retention of licenses by broadcasters complying with FCC regulations. Arguments as to how to achieve a balanced and responsive program service have centered around the standards of programing and service, competition, and public disclosure of financial reports. A revised financial reporting form, which, if adopted, would require disclosure of expenditures for programs, could be used to evaluate the utility of standards based on the expenditures. Arguments that financial disclosure would facilitate broadcaster evaluation or result in competitive harm have not been fully evaluated. Options for experimental deregulation of the programing of radio stations in selected markets are being developed, and special authority may be required for implementation.

Matter for Congressional Consideration

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should: (1) amend the Communications Act of 1934 to (a) authorize the grant of a broadcast license for an indefinite period, providing that a licensee can be placed on probation for a fixed period, (b) direct FCC to establish an evaluation system based on random selection and field audit of broadcast stations, (c) grant to the public the right to petition for revocation of a broadcast license, (d) place the burdens of evidence and proof in a revocation proceeding on the licensee, (e) eliminate the comparative licensing process; (2) provide legislative authorization to FCC to suspend programing regulations; (3) decide the importance of ownership diversity and industry stability in formulating ownership rules; (4) make clear the responsibilities of FCC to regulate equal employment opportunity in broadcasting; (5) clarify and determine the mode for achieving the balance between promoting political coverage and ensuring equal opportunities; (6) provide the legislative framework from which FCC can consider and test alternative methods to determine whether market forces exist to ensure full and fair broadcast coverage of controversial public issues; and (7) determine whether spectrum charges are needed.

Recommendations for Executive Action

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Chairman, FCC, should establish by public rule quantitative programing standards for commercial television and radio stations. In establishing standards, FCC should determine: (1) the general program categories and adopt periods for which standards should be adopted; (2) the levels at which such standards should be set; and (3) whether each standard should be set at a single level for all stations or at multiple levels based on factors such as frequency type, affiliation status, station size, and profitability. FCC should also consider that expenditures data by program would be useful for evaluating the utility of a standard of service based on the relationship between station program expenditures and revenues, profits, or investment in tangible property. FCC should also initiate a public inquiry to evaluate the arguments for and against routine financial disclosure of broadcaster financial reports and determine whether routine disclosure would cause competitive harm. FCC should ensure that stations in a representative number of markets of various sizes are exempted from programing regulation so that the effects of market competition can be isolated and observed. In addition, to ensure that exempt stations participate in the experiment, FCC should ensure that those stations are insulated during the experimental period from public challenges to their program service.

    Agency Affected: Federal Communications Commission

  2. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: To provide for a meaningful assessment of FCC formal ascertainment requirements, the Chairman, FCC, should ensure that the evaluation, to be conducted once the small market exemption expires in October 1979, goes beyond analysis of annual lists of ascertained problems and program responses and includes examination of the problem-identification and program-selection processes used by exempt and nonexempt stations. FCC should then exempt stations in large markets and evaluate the effects of the exemption on the ascertainment practices and program service of those stations.

    Agency Affected: Federal Communications Commission

  3. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: To permit monitoring of ownership trends, improved evaluation of multiple ownership policies and rules, and timely assessment of efforts to promote increased minority ownership of broadcast stations, FCC should: (1) establish an information system which provides current aggregate statistics on ownership of broadcast stations and related media; (2) implement procedures for collecting minority ownership statistics; and (3) publish periodically a statistical report showing changes in ownership concentration at the local, regional, and national levels, and the extent of broadcast station ownership by racial minorities.

    Agency Affected: Federal Communications Commission

  4. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: To strengthen current equal employment opportunity (EEO) reporting, enforcement, and information processing, FCC should: (1) examine ways to obtain more specific data on programing decisionmaking roles and responsibilities, including a requirement for each station to list employees by race, sex, and job title for each form 395 job category; (2) conduct each year onsite audits of a selected number of broadcast stations to verify the reported employee status of women and minorities, determine whether women and minorities are advancing to positions with programing authority and responsibility, and ensure overall station compliance with EEO rules; (3) establish criteria specifying the EEO deficiencies which will result in specific sanctions; (4) focus staff resources on reviewing all broadcaster EEO programs; and (5) expand current computer applications to include screening and analysis of station employment statistics.

    Agency Affected: Federal Communications Commission


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