Oil Wars

In all countries the government has regulalatory agencies that allocate and control the radio spectrum that broadcasters use. In Venezuela that agency is called Conatel and they recently created an uproar by not renewing the broadcast license of the RCTV television network.

In the United States the agency in charge of such matters is the FCC, or Federal Communications Commission. In today’s New York Times one of the commissioners of the FCC, Michael Copps, wrote an Op-Ed piece essentially wishing that the FCC would exercise more control and oversight over television broadcasters to push them to improve the quality of their programming – in other words, he wants the FCC to be more like Conatel. It is quite informative (and more than a little ironic) so even though it never mentions what recently happened in Venezuela lets have a look:

The Price of Free Airwaves

AS a member of the Federal Communications Commission, I often hear how fed up Americans are with the news media. Too much “if it bleeds it leads” on the evening news and not enough real coverage of local issues. Too little high-quality entertainment and too many people eating bugs.
It doesn’t have to be this way. America lets radio and TV broadcasters use public airwaves worth more than half a trillion dollars for free. In return, we require that broadcasters serve the public interest: devoting at least some airtime for worthy programs that inform voters, support local arts and culture and educate our children — in other words, that aspire to something beyond just minimizing costs and maximizing revenue.

Wow, talk about “handouts” – a half a trillion dollars worth of prime “real estate” just given away for free. And to very rich companies and individuals no less. How can this be? Why would something of so much value just be given away for free to private companies and people? What is the government getting in return? And can television broadcasters and the government really be said to be free of each other when one depends on the other for so much in giveaways? Its interesting how none of this ever seems to be questioned.

Using the public airwaves is a privilege — a lucrative one — not a right, and I fear the F.C.C. has not done enough to stand up for the public interest. Our policies should reward broadcasters that honor their pledge to serve that interest and penalize those that don’t.

“Using the public airwaves is a privilege… not a right” – try telling that to Marcel Granier. He and his supporters seems to think that it is his “right” to have his broadcast license automatically renewed and that unless he or the station is convicted of some crime he cannot lose it. Kudos to the F.C.C. which at least gets it that the license had to be earned through serving the public interest. And can any honest person say RCTV has worked in the public interest and is deserving of the privilege of having a lucrative broadcast license?

The F.C.C. already has powerful leverage to hold broadcasters to their end of the bargain. Every eight years, broadcasters must prove that they have served the public interest in order to get license renewal. If they can’t, the license goes to someone else who will. It’s a tough but fair system — if the commission does its job.

Hmm. So in the U.S. broadcasters only get their licenses for 8 years – not the 20 years Venezuelans got until recently. More on this in a minute.

The problem is that, under pressure from media conglomerates, previous commissions have eviscerated the renewal process. Now we have what big broadcasters lovingly call “postcard renewal” — the agency typically rubber-stamps an application without any substantive review. Denials on public interest grounds are extraordinarily rare.

Yup, that is what RCTV wanted too – “postcard renewal”. And when they didn’t get it Venezuela got their rock throwing hissy fit.

Just recently, the F.C.C. made news because it fined Univision, the Spanish-language broadcaster, a record-breaking $24 million. Univision claimed that its stations offered three hours of children’s educational programming per week — one of the few public interest rules still on the books — in part by showing a soap opera involving 11-year-old twins.

That was the right decision. But, viewed closely, it also illustrates just how slipshod our renewal process has become.

The fine was not levied at the ordinary time. In fact, the license term for one of the two stations initially at issue had expired 18 months earlier. This is typical — applications opposed by watchdog groups often languish for years while the broadcaster is permitted to continue business as usual. Then infractions are commonly disposed of with a small fine.

The commission paid attention to the Univision complaint because the station was part of a chain of 114 TV and radio stations being transferred from a public corporation to private equity firms. Without that, it is unclear when, if ever, the violations would have been acted upon. This even though scholars believe that one-fifth of what is billed as children’s programming has “little or no educational value” and only one-third can be called “highly educational.” Our children deserve better.

The FCC wants to promote better and more appropriate programming? Good luck. Just be careful. When Venezuela did the exact same thing a few years ago the screams of censorship came fast and furious. Sadly though, it does seem as if the broadcasters in the U.S. have the run of the place as they are sometimes allowed to keep broadcasting even with expired licenses. But don’t you try driving your car with an expired license!

It wasn’t always like this. Before the deregulatory mania in the 1980s — when an F.C.C. chairman described television as a “toaster with pictures” — the commission gave license renewals a hard look every three years, with specific criteria for making a public interest finding. Indeed, broadcasters’ respect for the renewal process encouraged them to pay for hard-hitting news operations. That was then.

Here things get interesting. Venezuela used to give its broadcast licenses for the absurdly long 20 years. They have now reduced the terms of the licenses to 5 years. Some opposition supporters see this as a sinister plot to exert political control over broadcasters.

Yet in the U.S. licenses are renewed every 8 years – that is sure a lot closer to 5 years than 20. Further, they used to review them every 3 years and as we’ll see in a few paragraphs this commissioner wants them to go back to that. Sounds good to me. And it shows that rather than having anything to do with politics Conatel reducing its licensing terms to 5 years is simply the government making sure it exercises appropriate oversight of its valuable broadcast spectrum.

Nowadays, a lot of people claim that because of the Internet, traditional broadcast outlets are an endangered species and there’s no point in worrying about them. That’s a mistake.

First, broadcast licenses continue to be very valuable. Univision’s assets — many in small markets — were sold for more than $12 billion. A single station in Sacramento, owned by Sinclair Broadcasting, went for $285 million in 2004. A station in a megamarket like New York or Los Angeles could easily fetch half a billion dollars or more.

Second, broadcast outlets are still primary, critical sources of information for the American public. Nearly 60 percent of adults watch local TV news each day — it remains the nation’s most popular information source. And so it’s imperative that broadcasters continue to provide high-quality coverage of local and national issues.
But ensuring they do so means putting teeth back into the renewal process. To begin with, shorten the license term. Eight years is too long to go without an accounting — we ought to return to the three-year model.

It sure is imperative that broadcasters “provide high-quality coverage of local and national issues”. No one ever accused RCTV of doing that. Too bad the Venezuelan government had to wait so long to be able to do anything about it. Fortunately, in the future they won’t.

Let’s also actually review a station’s record before renewing its license.

Whoa, you mean it shouldn’t just be automatic?!?! You mean the government should look at what is broadcast and possibly not renew a license if it doesn’t think it is appropriate? If so, they better watch themselves around Jose Vivanco of Human Rights Watch who seems to think it is a crime to “investigate” TV stations or to even to have standards for what types of things are appropriate to broadcast to little kids.

Here are just some of the criteria for renewal the F.C.C. considered in the 1990s but never put into place:

Did the station show programs on local civic affairs (apart from the nightly news), or set aside airtime for local community groups?

Did it broadcast political conventions, and local as well as national candidate debates? Did it devote at least five minutes each night to covering politics in the month before an election?

In an era when owners may live thousands of miles from their stations, have they met with local community leaders and the public to receive feedback?

Is the station’s so-called children’s programming actually, in the view of experts, educational?

All of this information ought to be available on the Web so people can see how their airwaves are being used.

These issues are even more pressing today: broadcasters are making the transition to digital technology that permits them to send several television and radio channels into our homes instead of the single channel they’ve had up to now. The F.C.C.’s next step after reforming the licensing process should be to address how this new digital capacity can increase local programs and also improve the generally shoddy coverage of minority and other underserved communities. New benefits for broadcasters should translate into public benefits, too.

If you need convincing that something needs to be done, consider that only about 8 percent of local TV newscasts in the month before the last presidential election contained any coverage whatsoever of local races, including those for the House of Representatives.

This low number is just one example of how poorly stations are serving their viewers. Do stations that make so much money using the public airwaves, but so plainly fail to educate viewers on the issues facing them, really deserve to have their renewals rubber-stamped?

Nope, no broadcaster should have their renewals rubber stamped. Venezuela has the good fortune to have a government that has already put a stop to that. If this editorial is any indication maybe there is hope for the U.S. on this issue too.

And though it is a little off topic it should be noted Chavez is a trend setter. He ramps up royalties and taxes on big oil and soon after even the U.S. did the same for oil pumped from federally owned lands. Chavez started putting in energy saving bulbs and now governments from Australia to California are falling over themselves to mandate them too. And now after the Chavez administration re-asserts government oversight the airwaves the FCC pines for the same. What can you say, Chavez is the ultimate trend-setter.
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