Media Studies Chapter 11 The Communications Act Licensing And Structural Regulation Learning Objectives After Reading

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CHAPTER 11

The Communications Act, Licensing, and

Structural Regulation

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LEARNING OBJECTIVES

After reading this chapter students should be able to understand the following concepts:

Federal jurisdiction: Understand why Congress has power to regulate electronic media and that

authority is delegated to the Federal Communications Commission.

Broadcasting and the public interest: Comprehend the definition of “broadcasting,” and discuss “public

interest” definitions.

Federal Communications Commission (FCC): Delineate the FCC commissioners and staff roles and

understand FCC rule-making.

Licensing: Understand station ownership, mutually exclusive applications, how one finds a channel,

licensee qualifications, and services that require no license.

Station operations: Describe FCC monitoring of stations’ performance and how stations control

programs, develop employment practices, keep their public file, and keep abreast of changes in

regulations.

License renewal: Delineate how applicants and stations apply for licenses.

CHAPTER FOCUS

This chapter explores the constraints society places on electronic media, primarily on traditional

broadcasting, and reviews broadcast station licensing and cable system franchising. Most broadcasting

and cable regulations derive from this process of authorizing services. This chapter describes rules and

regulations of broadcasting and cable. Though not written in “legalese,” the chapter focuses on the

intricacies of significant regulations and, where necessary, supplies legal definitions and procedures. It

terms defined in the Communications Act include “broadcasting,” “radio communication,” and “public

interest.” The most notable Communication Act revisions came with passage of the Telecommunications

Act of 1996, but the public broadcasting provisions of 1967 and the cable television acts of 1984 and

1992 also modified this central piece of legislation.

Section 11.3 presents FCC organizational structure and composition. Designed as a “creature of

11.5.

Procedures for broadcast license renewal and transfer are explained in 11.6. Most renewal applications are

uncontested and granted almost automatically. With the 1996 Telecommunications Act, licensees were

given protection from a competing application. Only if the FCC determined a licensee should not be

renewed are other applications for the license considered.

Procedures for enforcing FCC rules and regulations and the Communications Act are explained in 11.7.

Fines and shorter-term license renewals are typically incurred by licensees who break FCC rules; the

threat of nonrenewal or revocation of a broadcast license remains a possibility for serious infractions.

Section 11.8 presents the cable acts of 1984 and 1992 in general and then reviews franchising. Cable

franchising follows a different pattern from broadcast licensing. Franchises are issued locally rather than

Issues relating to deregulation are the focus of the next to last section of this chapter (11.10). While

deregulation can be viewed as a way to discard outdated rules or simplify unnecessarily complex rules, on

a more controversial level, deregulation can be viewed from an ideological perspective: What is the

government’s proper role in national life? How much should government intervene in the regulation of

the marketplace? Or should the marketplace control its own economic behavior? Students need to

understand that ideology drives regulation and deregulation in Washington. One way to handle this issue

TERMS, CONCEPTS, AND EXERCISES

Federal Jurisdiction

Terms: commerce clause (Article I, Section 8), interstate and intrastate commerce, common carriers,

public utilities commissions (PUCs), hybrid services, independent regulatory agencies, “creature of

Congress,” “public interest, convenience, or necessity” or PICON

oDiscuss communication as “commerce.” Use Exhibit 11.a on the chain of authority to show how

all three branches of government play a role in electronic media regulations.

Communications Act

Terms: Communications Act of 1934; wired communications; wireless communications; broadcasting;

titles; sections; Title II (common carriers); Title III (broadcasting); Title VI (cable); Telecommunications

Act of 1996; radio communication; public interest, convenience, or necessity (PICON)

oDiscuss why radio is not considered a common carrier. How would broadcasting, as we know it

today, be different if radio, broadcast television, and cable were common carriers?

oReview each of the titles of the Communications Act. Note where each medium’s regulations fall

(e.g., common carriers under Title II, and so on). Compare these titles with regulatory changes

FCC Basics

Terms: FCC as a quasi-legislative agency, annual regulatory fees, Media Bureau and its divisions, Public

Safety and Homeland Security Bureau, Wireline Competition Bureau, International Bureau, Wireless

Telecommunications Bureau, Office of Communications Business Opportunities, Enforcement Bureau,

oDiscuss the relationship between the FCC commissioners and staff of the FCC. (See Exhibit

11.b.) Why do staff seem to have so much power?

oDiscuss the rule-making process of the FCC. (See Exhibit 11.c.) Is there a difference between a

rule and a regulation? (No.) Why does the FCC go through such elaborate steps when making

Broadcast Licensing

Terms: authorizing of service, channel allotments, construction permits (CPs), licensee qualifications

(U.S. citizenship, character, financial and technical resources), mutually exclusive applications, LPTV,

license auctions, non-licensed services

oWho “owns” radio and television channels? How does a would-be licensee find an available

channel?

oWhat is a CP? (Emphasize that awarding a CP is, for all practical purposes, equivalent to

awarding a license. The proof of performance testing is a necessary but now routine step in the

procedure.)

oWho may be granted broadcast licenses? How must individuals and corporations qualify in terms

Operations

Terms: equal employment opportunity (EEO), public file, Federal Communications Bar Association

(FCBA), trade organizations, The National Association of Broadcasters, National Cable &

Telecommunications Association

oDiscuss EEO requirements for broadcast stations. Note that these requirements apply only to

stations (and cable systems) that have five or more full-time employees. Why did deregulation

fail to change EEO?

oWhy are public files required of all stations? What must be included? How frequently are they

being used in your market? What do broadcasters think of them? Find out how often those public

files are requested. (Have students poll local stations. Remind them that stations are no longer

License Renewals and Transfers

Terms: uncontested licenses, petition to deny, comparative renewals, license transfers, petition to deny

transfer, media merger review

oWhy is license renewal rarely a traumatic experience for the station involved? How is the process

currently handled for most stations? Who may file a petition to deny? Under what circumstances?

How has paperwork been reduced over the last three decades?

oHow has the FCC dealt with contested renewals? What was the FCC’s dilemma in deciding

Enforcement

Terms: due process clause, administrative law judges (ALJs), standing, circuit courts of appeal, remand,

writ of certiorari, nonrenewal, revocation, willful misconduct, short-term renewal, conditional renewal,

forfeitures, fines

oDifferentiate among FCC sanctions for errant broadcasters. What types of infractions must a

station commit before the FCC would revoke or not renew its license? Are your students

surprised by the small number of licenses revoked or not renewed? Why does the FCC appear so

lenient about wrongdoing by licensees?

oWhat role do courts play in policymaking? Use the landmark WLBT case in Exhibit 11.d to

Cable

Terms: franchising, Cable Communications Policy Act of 1984, Cable Television Consumer Protection

and Competition Act of 1992, Title VI, retransmission consent, must-carry rule, ordinance, request for

proposals (RFPs), overbuilds, franchise renewals

oDiscuss the key provisions of the Cable Acts of 1984 and 1992 that apply to cable television.

What are PEG and leased access channels? Who regulates subscriber rates for basic cable service

today? Here emphasize public (and congressional) anger over sharp rises in cable costs to the

consumer and to broadcasters, concerns over retransmission and must-carry rules. What

modifications came with the 1996 Telecommunications Act?

oUse Exhibit 11.e to discuss changes in the direction of cable regulations in the last five decades.

What is the purpose of the must-carry rule? Why did the FCC drop such rules in the 1980s, and

Other Electronic Media

Terms: DBS, Satellite radio, SMATV, “wireless cable” or MMDS, telephone companies, “open video

systems” (OVSs)

oWhy are the services mentioned here regulated differently than either broadcast or cable? What

differences and similarities exist in the regulations of these media and broadcasting or cable?

oWhat cable/telco cross-ownership restrictions were changed with passage of the 1996

Media Ownership Regulations

Terms: diversification, antitrust law, Telecommunications Act of 1996, divest, attribution rules, multiple

ownership, duopoly, vertical integration, cross-ownership, grandfathering, media voices, telcos, minority

ownership, tax certificates, distress sales, lotteries, bidding preferences, foreign control

oWhat media monopoly dangers exist at national and local levels?

oOwnership regulations are considered structural as opposed to behavioral regulations. Why?

oWhat are the advantages of multiple station ownership? What limitations had been placed on the

number of stations an individual or corporation may own within a particular community (duopoly

rule), and how have they changed? What limitations apply to national ownership? How did the

FCC change the multiple station ownership rules from 1985 to today?

oWhat ownership rules have been applied to cable? Is the medium traveling the same path

Deregulation

Terms: deregulation, re-regulation, behavioral regulation, structural regulation, market failure,

marketplace, AM stereo standards, C-Quam, HDTV technical standards, Telecommunications Act of

1996

oConsider a class debate about deregulation’s pros and cons. Should government intervene, or

should the economic marketplace be the nongovernmental source of control over private

economic behavior? Has deregulation worked for the airline industry? The telephone industry?

(What other industries have been the subject of governmental deregulation?)

Other Regulations

Terms: National Telecommunications and Information Administration (NTIA), reporters’ privilege,

outtakes, Federal Trade Commission (FTC), stipulation, consent order, cease and desist order, ban on

cigarettes, children’s television commercialization levels, state laws, oversight hearings, consumer action,

boycott, “family values,” NAB code, press criticism

oWhy are international agreements important to electronic media? How do NTIA, the FCC, and

the State Department work together on international telecommunications policy?

oHow does “press law” apply to electronic media?

oHow does the FTC begin to attack deceptive advertising? Why doesn’t the FCC regulate

broadcast advertising? Which single product has been banned from the airwaves? Why?

oHow does Congress influence the FCC? Why are representatives and senators often sympathetic

to lobbying by communications firms? How can a president influence the FCC? When, and how,

does the president try to influence electronic media industries?

oWhat is a boycott? Who uses boycotts and for what reason? Note the vulnerability of advertisers

to boycotts and their inclination to avoid controversial subjects and programs. How does

PEARSON MYCOMMUNICATIONKIT RESOURCES

Each chapter of the MyCommKit for Head’s Broadcasting in America, 10th Edition includes chapter

learning objectives, practice quizzes, key terms flash card, and select media.

Media available for this chapter:

WATCH: Persuasive Speech: Interstate Commerce Clause

OUTSIDE AUDIO/VISUAL RESOURCES

Public Trust or Private Property (VHS, 56 min., 1988)

This program’s title proposes the key question underlying more than 60 years of U.S. communications

policy. The film examines this question through three in-depth case studies. First, it analyzes the merger

mania sweeping the television industry and resulting in the sale of all three networks. Second, the 1963

WLBT case in Jackson, Mississippi, is reviewed. Third, the Fairness Doctrine is explained through the