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PACE LAW REVIEW

Comment

THE PUBLIC INTEREST, CONVENIENCE, OR NECESSITY: A DEAD STANDARD IN THE ERA OF BROADCAST DEREGULATION?

Section IV


Pace University School of Law

Summer, 1990

Marc Sophos

Copyright 1990 by the Pace Law Review; Marc Sophos

You can also read this article in pdf format.


IV. A New Development: Twenty-Four-Hour Satellite Radio Programming Services

A development which has had a profound impact on the broadcasting industry is the emergence of satellite distribution of network programming. In 1979, the noncommercial network National Public Radio became the first radio network to deliver all of its programming to member stations via high fidelity communications satellite. [FN143] This was the first time that live, high fidelity stereo distribution of programming to hundreds of stations nationwide was possible on a regular basis. Commercial radio networks soon followed, and by 1983 most were distributing their programming via satellite. [FN144]

Traditionally, networks, both radio and television, served a station by bringing it national programming (entertainment, news, and public affairs) with which it could supplement its local programming. This national programming was often too expensive for a local station to produce on its own. Affiliation with a network thus allowed a local station to concentrate its resources on producing local programming.

During the 1980s, a period during which the Commission embarked upon the wholesale deregulation of broadcasting, [FN145] a new type of network developed. These new networks are designed to provide subscribing stations with twenty-four hour a day programming formats, delivered in high fidelity stereo via satellite. The only local material transmitted by the stations is typically a few minutes each hour of local commercials; all of the programming (which is exclusively, or nearly exclusively, entertainment and national commercials) is supplied by the networks. [FN146]

In communication theory, one who controls a communication channel is known as a gatekeeper. [FN147] Under traditional regulation, the Commission's policy of maximizing diversity of programming and viewpoints was served by its corollary policy of maximizing the number of gatekeepers. [FN148] Even disregarding the effects of the Commission's elimination or relaxation of the multiple ownership, [FN149] duopoly, [FN150] and one-to-a-market rules, [FN151] the development of satellite-delivered twenty-four-hour programming services has significantl reduced the number of gatekeepers in radio, despite the increase in the number of stations during the past thirty years. [FN152] These networks have virtually eliminated local programming on a significant number of stations. [FN153]


Footnotes

FN143. Lowenstein, Satellite Distribution: Lifeline for Public Radio in the United States, EBU REV., July 1987, at 24.

FN144. Telephone interview with Jeffrey Sudikoff, Chairman and Chief Executive Officer, IDB Communications Group, Inc., Los Angeles, Cal. (Apr. 10, 1990).

FN145. See supra note 95.

FN146. Stations are no longer explicitly required to air any news and public affairs at all. See supra notes 99-105 and 117-20 and accompanying text.

FN147. See, e.g., R. HIEBERT, D. UNGURAIT, & T. BOHN, MASS MEDIA 25, 114-25 (1979).

FN148. See supra notes 85-98 and accompanying text.

FN149. See supra note 79 and accompanying text.

FN150. See supra note 81 and accompanying text.

FN151. See supra note 83 and accompanying text.

FN152. Stations that air substantially all of their programming from these programming services have, in effect, delegated the gatekeeping function to the services, contrary to the prohibition against delegation of control to another. See FCC Report on Chain Broadcasting, quoted in National Broadcasting Co. v. United States, 319 U.S. 190, 205 (1943). See also Commission en banc Programming Inquiry, supra note 68, at 2311-12 ("The licensee, is, in effect, a 'trustee' in the sense that his license to operate his station imposes upon him a nondelegable duty to serve the public interest in the community he had chosen to represent as a broadcaster.").

FN153. It is estimated that between 2000 and 2500 radio stations air programming from the 12 largest satellite programming services for between 12 and 24 hours a day. Telephone interview with Robert Unmacht, Editor of THE M STREET JOURNAL, a broadcast industry newsletter based in Alexandria, Va. Apr. 11, 1990).

One of the largest satellite programming services, Satellite Music Network (SMN), was recently purchased by Capital Cities/ABC. Radio World, Sept. 6, 1989, at 2, col. 3. SMN provides programming to about 1000 radio stations. Id. In addition, Capital Cities/ABC also operates a number of other radio networks, including: ABC Talkradio, with 350 affiliates, Letter from Rich Wood, Director of Station Relations, Talk Programming, ABC Radio Networks (Mar. 19, 1990); ABC Contemporary, with 223 affiliates, BROADCASTING CABLE EARBOOK 1989 F-44 to F-45 (Broadcasting Publications 1989); ABC FM, with 139 affiliates, id. at F-45; ABC Rock, with 102 affiliates, id. at F-45 to F-46; ABC Information with 553 affiliates, id. at F-46 to F-47; ABC Entertainment, with 555 affiliates, id. at F-47 to F-48; ABC Direction, with 388 affiliates, id. at F-48 to F-49. ABC thus supplies programming to 2310 radio stations across the country, or about 25% of all the commercial radio stations in the United States. (This figure does not include the 1000 stations carrying programming from SMN). Additionally, the ABC Television Network has 223 affiliates. Id. at F-44.

One can gain additional perspective on Capital Cites/ABC's impact in the marketplace of ideas when one considers that the company owns eight major- market television stations reaching 24.4% of total ADI (Area of Dominant Influence) television homes. CAPITAL CITES/ABC, INC., 1989 ANNUAL REPORT 11 (1990). (The Commission prohibits common ownership of television stations which collectively reach 25% or more of ADI television homes. 47 C.F.R. s 73.3555(d) (1988).) Capital Cities/ABC owns 11 AM and 10 FM stations, including AM/FM/TV combinations in three cities, AM/FM combinations in seven cities, and an AM/TV combination in one city. Annual Report at 11-12. Its radio stations reach 25.7% of the United States. Id. at 12. It owns 10 daily and 77 weekly newspapers, id. at K-9, and 79 other consumer, special interest, and trade publications. Id. at K-10 to K-12. Additionally, it owns significant interests in three cable television networks: 33% of Lifetime, 38% of Arts & Entertainment (A&E), and 80% of Entertainment and Sports Programming Network (ESPN). Id. at 12-13.



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