“Some broadcasters are doing end runs around our media ownership limits by way of so-called shared services agreements — a fancy term for covert consolidation that lets one company control another without actually formally owning it,” he said, according to a report on the website of Freepress, a nonprofit media reform organization that opposes consolidation.
“Just last week, our Media Bureau actually dismissed a complaint against such a shared service agreement, even while admitting that the arrangement was at odds with the purpose and intent of our rules on duopolies,” he said. (A duopoly is when a single company owns two or more stations in the same city.)
“It just seemed to me that this might be a case where we should have acted on behalf of the public interest instead of kicking the can down the road,” he said.
His views echoed what the Media Council of Hawaii said last month about the decision. The council called it “a black Friday gift to big broadcast owners while leaving the public with crumbs.”
“We’re very pleased with the FCC’s decision,” John Fink, general manager of KFVE-TV, told the newspaper. “The FCC has now held that HITV’s transaction with Raycom complies with all FCC rules and policies, as we have said all along.”
Actually, the commission wrote: “We agree with the Media Council insofar as it suggests that the net effect of the transactions in this case — an extensive exchange of critical programming and branding assets with an existing in-market, top-four, network affiliate — is clearly at odds with the purpose and intent of the duopoly rule.”
The commission also said: “We do believe that further action on our part is warranted with respect to this and analogous cases.” It said the time for such action would be when the stations’ licenses come up for renewal.
So what’s the public to make of all this?
The commission appears to agree with the Media Council, but in its ruling sides with the TV stations.
Maybe what the public should conclude is that our current regulatory structure is no longer up to the challenge of dealing with companies operating in much more complex and competitive times.
The central issue is that the companies involved are licensed broadcasters. They’re using public spectrum for their business, and as a result are subject to regulation that other news organizations, such as newspapers and magazines, don’t face.
One of the key principles the FCC is meant to uphold is the need for competition and diversity of news programming in any market.
But we’ve already seen in Honolulu that the city couldn’t support two daily newspapers. The Justice Department did nothing last year to stop the sale of the Advertiser to the owners of the Star-Bulletin.
And there’s no question that advertising dollars are drying up for TV, although more slowly than they have for print, as advertisers turn to digital sales. So is it reasonable to believe that current economic conditions can support the number of TV stations this city had before the Great Recession?
I don’t think so — unless one or more of the TV stations finds community funding, for example a station funded by the Office of Hawaiian Affairs or Kamehameha Schools. If that were to occur, it would add to the diversity of community voices.
The big financial boost for commercial TV comes every two years: election campaigns. But even with spending soaring, it’s hard to believe that would be enough to support more TV commercial news operations.
It seems like we’re in a war of attrition. Perhaps the TV stations think time is on their side, that their arrangement will be acceptable, a fait accompli, by the time their licenses come up for renewal. Who’s going to want to cause economic disruption when jobs are such a sensitive issue?
The Media Council wants quick action to rend asunder the arrangement and open the door to more diversity of news. But is it looking to a past that cannot be reconstructed?
No matter what, is it reasonable that one privately held company should have a government-sanctioned advantage over its competitors, the way the shared services agreement appears to do in Honolulu? And the way a recognized duopoly certainly would.
The Media Council is right. Even in the era of the Internet and the mobile device, where Facebook, a global company, has 637,000 users in Hawaii between the ages of 18-54, the question of TV station ownership matters.
And while the FCC didn’t act this time, my hope is that when licenses come up for renewal commissioners will come up with a constructive solution that squarely addresses the challenges of this transformative period in media history.
Stay Up To Date On The Coronavirus And Other Hawaii Issues