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Policy & Economics (Law)

Policy & Economics (Law)






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    Policy & Economics (Law) Policy & Economics (Law) Presentation Transcript

      How the Government Can Impact the Business of an Electronic Media Firm
    • Communication Policy
      set of laws, rules and regulations that govern electronic media
      regulated electronic media: telecommunications, broadcasting, cable
      promote competition, pluralism, localism
    • Broadcast Regulation
      license broadcasters
      create legal obligations for broadcasters
      impose sanctions if fail to carry out those obligations
      organize and co-ordinate the broadcast landscape
    • Why
      scarcity of the spectrum
      public trustees of the airwaves
      accessible to children
      pervasive nature of medium
      economics of media favors economies of scale and monopolies
    • Who
      Government (Communication Policy)
      Regulatory Authorities (Media Law/Regulations)
    • Objectives
      Pluralism (diversity)
      Avoid media concentration
      U.S. -- no monopolies
      Healthy industries
      More choices & lower prices for consumers
      Effectively manage broadcast spectrum
    • Communication Policy Players
      Legislative body
      Independent regulatory authority
      Many countries have two
      President / Prime Minister
    • Regulatory Authority
      Supervise the implementation of broadcasting regulation
      In most European countries, separate authorities for broadcasting and telecommunications
      Some matters determined by the courts
    • Regulatory Authorities
      France: Conseil Supérieur de l’Audiovisuel
      Germany: Landesmedienanstalten
      Italy: Autorita per le garanzie nelle comunicazioni*
      Netherlands: Commissariaat voor de Media
      U.K.: Ofcom*
      U.S.: Federal Communications Commission*
      * = both broadcasting & telecommunications
    • How: Policy - U.S.
      Senate & House of Representatives pass legislation, signed into law by President
      Act, Statutes, Code
      FCC develops rules to implement
      Federal Regulations
      Statutes or Rules may be challenged in court
    • The Communications Act of 1934
      Except as otherwise provided in this Act, the Commission from time to
      time, as public convenience, interest or necessity requires shall . . .
    • Basic Powers of Regulators
    • Regulatory Process
      Congress passes legislation
      FCC prepares rules that will implement the legislation
      Legislation or rules challenged in court
    • Congressional Process
      Introduction and referral to committee
      Considered by committee
      Public hearings
      Mark-up sessions
      Committee votes
      House floor consideration
      Resolving differences with Senate version
      Final passage and signature by President
    • Rationale for Regulation
      Clear need for regulation -- otherwise chaos
      Broadcast spectrum is a public resource
      Scarcity of the broadcast spectrum
      Fairness Doctrine
      Pervasiveness of medium
      Accessibility to children
      Little or no warning
    • Rulemaking
      Notice of Proposed Rulemaking
      Promulgate Rule
      Requests for Reconsideration
    • Licensing in U.S.
      8 year license period
      licensee must serve public interest, convenience and necessity
      availability of frequency
      no opposition
    • Basic Qualifications
      comply with FCC technical standards--transmission facilities, interference avoidance and signal quality
      adequate capital -- sufficient funds to operate station for three months without ad revenue
    • Character
      lack of serious legal violations (don’t lie to commission, engage in fraudulent programming or commit felonies)
      U.S. citizens
      ownership restrictions
    • Media Concentration
    • Spectrum Management
      spectrum allocation
      band allotment
      channel assignment (licensing)
      Berlin International Radio Convention of 1906
    • FCC Objectives
      Local control
      Local programming
      Healthy Industries
    • Carroll Doctrine
      Financial Interest and Syndication
      Public Television
      Telecommunications Act of 1996
    • The Carroll Doctrine
      previously economic injury was not sufficient grounds to deny new license application
      Carroll established that it could deny if loss so significant would deprive the public of service (1958)
      FCC had to adopt a procedure for assessing economic harm from new licensing decisions
    • though no licenses were ever denied by a Carroll challenge, did delay licensing and drive up cost of competition
      after 30 years, FCC re-examined policy
      found changes in marketplace undermined whatever validity Carroll had had
      Finsyn adopted in 1970 to prevent three television networks from restricting market for television programming
      networks couldn’t have a financial interest in the subsequent broadcasts of programs aired on their stations
      networks couldn’t syndicate programming
      networks had to lease programs
    • over the years the television marketplace changed
      fourth national network emerged -- FOX
      cable had also developed
      1991 rule was relaxed
      1995 -- finsyn abolished
    • Public Television
      Founded in 1969 by Act of Congress
      receives funds (through the Corporation for Public Broadcasting) from Congress
    • Telecommunications Act of 1996
      allowed competition for all telecommunications markets
      eliminated most cross-market entry barriers
      relaxed concentration and merger rules
      new implementation obligations on the FCC and state regulators
      restrictions on television violence and “indecent” online communications
    • Some results include . . .
      Increased consolidation
      Increased vertical integration
    • Clear Channel
      owns, programs or sells airtime for 1,200 radio stations
      240 stations internationally
      50 syndicated programs
      another merger: CBS and Viacom
    • Media Ownership Rules
      Always a debate
    • Telecommunications Act of 1996 requires FCC to review ownership rule biennially.
      Also two federal court decisions striking down some rules.
      2010, the Commission will open a new phase of a rulemaking proceeding.
    • Analyze ownership rules
      To determine if
      “necessary in the public interest as the result of competition.”
    • Local Television
      Local television multiple ownership rule.
      1964 -- one to a market.
      Rule relaxed late 90’s allow duopolies where 8 independent voices in market.
      only one can be in top 4 in market
    • Local Radio Ownership Rule
      Big market (45 or more stations) -- can own 8 stations, no more than 5 of a kind
      30-44 commercial stations, can own 7, but no more than 4 of a kind
      15-29 commercial stations, can own 6, no more than 4 of a kind
      14 or less, can own 6, no more than 4 of a kind, no more than 50% of the market
    • National TV Ownership
      May own stations reaching up to 39% of national audience.
      UHF reach discounted by 50%
    • Dual Network Rule
      Top four national broadcast networks may not merge.
    • Media Cross-Ownership
      Radio-television cross-ownership possible.
      Newspaper-television cross-ownership possible.
    • Other Things that Are Good to Know
    • Other Powers of the FCC
      Fines (forfeitures)
      Revoke Licenses
      Refuse to Renew Licenses
      Position Papers
      Informal Negotiations
    • Specific Rules
      Foreign ownership
      Political Advertising
      Children’s Television
    • More Rules
      Advanced television (digital; HDTV)
    • Advertising
      False and deceptive advertising prohibited
      Puffery (exaggerated sales talk) is okay
      Endorsements must reflect honest beliefs or experience of endorser
    • Federal Trade Commission (FTC)
      Enforcement Powers Against Deceptive Advertising
      Consent Decrees
      Cease and Desist Orders
      Corrective Advertising
      Industry Wide Actions
    • Federal Communications Commission (FCC)
      Regulates amount of advertising in children’s programming
      12 minutes per hour weekdays
      10.5 minutes per hour weekends
      No “program-length” commercials (host-selling)
      Program separators required
    • Indecency
      language or material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities
      prohibited between 6:00 a.m. and 10:00 p.m.
    • Miller Test
      Average person, applying contemporary community standards, would find that the work taken as a whole appeals to the prurient interest;
      Work depicts or describes in a patently offensive way sexual conduct specifically defined by the applicable state law; and
      Work, taken as a whole, lacks serious literary, artistic, political, or scientific value.
    • Libel
      Libel -- written
      Slander -- spoken
      Some states, broadcast defamation is libel
      California, broadcast defamation is slander
      Purpose -- redress for injury to one’s reputation
    • Privacy
      Commercial appropriation
      Public disclosure of embarrassing private facts
      False light
    • Economic Impact
      cost of litigation
      libel insurance
    • Copyright
    • Exclusive Rights under ©
      Derivation (prepare derivative works)
    • Fair Use Exception
      Purpose and character of use (commercial or nonprofit educational)
      Nature of copyrighted work
      Amount of copyrighted work used
      Effect of use upon potential market for or value of the copyrighted work
    • Antitrust
      Sherman Act
      Federal Trade Commission Act
      Clayton Act
      Hart-Scott-Rodino Act
    • Sherman Act
      every contract, combination . . . , or conspiracy, in restraint of trade
      “monopolize, or attempt to monopolize," trade or commerce
    • Federal Trade Commission Act
      unfair methods of competition
    • Clayton Act
      prohibits mergers and acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly."
    • Hart-Scott-Rodino Act
      requires the prior notification of large mergers to both the FTC and the Justice Department