Policy & Economics (Law)

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    How the Government Can Impact the Business of an Electronic Media Firm
  • 2.
  • 3. Communication Policy
    set of laws, rules and regulations that govern electronic media
    regulated electronic media: telecommunications, broadcasting, cable
    promote competition, pluralism, localism
  • 4. 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
  • 5. 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
  • 6. Who
    Government (Communication Policy)
    Regulatory Authorities (Media Law/Regulations)
  • 7. Objectives
    Pluralism (diversity)
    Avoid media concentration
    U.S. -- no monopolies
    Healthy industries
    More choices & lower prices for consumers
    Effectively manage broadcast spectrum
  • 8. Communication Policy Players
    Legislative body
    Independent regulatory authority
    Many countries have two
    President / Prime Minister
  • 9. Regulatory Authority
    Supervise the implementation of broadcasting regulation
    In most European countries, separate authorities for broadcasting and telecommunications
    Some matters determined by the courts
  • 10. 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
  • 11. 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
  • 12. 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 . . .
  • 13.
  • 14. Basic Powers of Regulators
  • 15. Regulatory Process
    Congress passes legislation
    FCC prepares rules that will implement the legislation
    Legislation or rules challenged in court
  • 16. 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
  • 17. 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
  • 18. Rulemaking
    Notice of Proposed Rulemaking
    Promulgate Rule
    Requests for Reconsideration
  • 19. Licensing in U.S.
    8 year license period
    licensee must serve public interest, convenience and necessity
    availability of frequency
    no opposition
  • 20. 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
  • 21. Character
    lack of serious legal violations (don’t lie to commission, engage in fraudulent programming or commit felonies)
    U.S. citizens
    ownership restrictions
  • 22.
  • 23. Media Concentration
  • 24. Spectrum Management
    spectrum allocation
    band allotment
    channel assignment (licensing)
    Berlin International Radio Convention of 1906
  • 25.
  • 26. FCC Objectives
    Local control
    Local programming
    Healthy Industries
  • 28. Carroll Doctrine
    Financial Interest and Syndication
    Public Television
    Telecommunications Act of 1996
  • 29. 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
  • 30. 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
  • 32. over the years the television marketplace changed
    fourth national network emerged -- FOX
    cable had also developed
    1991 rule was relaxed
    1995 -- finsyn abolished
  • 33.
  • 34. Public Television
    Founded in 1969 by Act of Congress
    receives funds (through the Corporation for Public Broadcasting) from Congress
  • 35. 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
  • 36. Some results include . . .
    Increased consolidation
    Increased vertical integration
  • 37. Clear Channel
    owns, programs or sells airtime for 1,200 radio stations
    240 stations internationally
    50 syndicated programs
    another merger: CBS and Viacom
  • 38. Media Ownership Rules
    Always a debate
  • 39. 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.
  • 40. Analyze ownership rules
    To determine if
    “necessary in the public interest as the result of competition.”
  • 41. 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
  • 42. 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
  • 43. National TV Ownership
    May own stations reaching up to 39% of national audience.
    UHF reach discounted by 50%
  • 44. Dual Network Rule
    Top four national broadcast networks may not merge.
  • 45. Media Cross-Ownership
    Radio-television cross-ownership possible.
    Newspaper-television cross-ownership possible.
  • 46.
  • 47. Other Things that Are Good to Know
  • 48. Other Powers of the FCC
    Fines (forfeitures)
    Revoke Licenses
    Refuse to Renew Licenses
    Position Papers
    Informal Negotiations
  • 49. Specific Rules
    Foreign ownership
    Political Advertising
    Children’s Television
  • 50. More Rules
    Advanced television (digital; HDTV)
  • 51. Advertising
    False and deceptive advertising prohibited
    Puffery (exaggerated sales talk) is okay
    Endorsements must reflect honest beliefs or experience of endorser
  • 52. Federal Trade Commission (FTC)
    Enforcement Powers Against Deceptive Advertising
    Consent Decrees
    Cease and Desist Orders
    Corrective Advertising
    Industry Wide Actions
  • 53. 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
  • 54. 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.
  • 55. 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.
  • 56. Libel
    Libel -- written
    Slander -- spoken
    Some states, broadcast defamation is libel
    California, broadcast defamation is slander
    Purpose -- redress for injury to one’s reputation
  • 57. Privacy
    Commercial appropriation
    Public disclosure of embarrassing private facts
    False light
  • 58. Economic Impact
    cost of litigation
    libel insurance
  • 59. Copyright
  • 60. Exclusive Rights under ©
    Derivation (prepare derivative works)
  • 61. 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
  • 62. Antitrust
    Sherman Act
    Federal Trade Commission Act
    Clayton Act
    Hart-Scott-Rodino Act
  • 63. Sherman Act
    every contract, combination . . . , or conspiracy, in restraint of trade
    “monopolize, or attempt to monopolize," trade or commerce
  • 64. Federal Trade Commission Act
    unfair methods of competition
  • 65. Clayton Act
    prohibits mergers and acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly."
  • 66. Hart-Scott-Rodino Act
    requires the prior notification of large mergers to both the FTC and the Justice Department