U.S. Regulatory Patterns

In most of the world's nations, the government owns the spectrum. Traditionally, in the United States, however, the airwaves "belong to the people". This idea is central to all of broadcast regulation, including FCC (Federal Communication Commission) licensing of television stations. The FCC is concerned that there be diversity of ownership in local markets, implying that this will ensure a diversity of viewpoints. It is also wary of media properties being concentrated nationally in the hands of a few giant conglomerates. Whenever a television station is sold to a new owner, the FCC must approve the sale and the transfer of the license to operate.

The FCC also considers several criteria in order to identify the applicant for a television station license that is most likely to broadcast in the public's interest. These include, citizenship, character, local ownership, civic involvement, integration of ownership and management, diversification of management background, prior experience, and operating plans. If there is more than one applicant for a television station license, the FCC will normally favor a local applicant who promises to take an active role in managing the day-to-day operations of the station, assuming the applicants' other qualifications are fairly equal.

To prevent local market monopoly by a single company, the FCC has usually allowed only one television station per owner/company in a single market.

Historically, the FCC has also imposed national limits on television station ownership and has placed restrictions on the television station licensee owning other media outlets in the market, such as a cable company, a newspaper, or a telephone service. At one time, the number of stations owned by a single entity was limited to seven stations, five of which could be VHF channels 2 through 13. The limit was later raised to allow control of 12 stations by a single owner, provided the potential audience covered by the stations' signals collectively was not more than 25% of the national population. The impact of that rule change effectively limited the big networks from extensive expansion because their stations were all located in very large markets, bringing them close to the 25% audience cap already. There are advocates for eliminating all television station ownership restrictions now, but such a radical change is unlikely.

The FCC does change ownership limits and other restrictions as the need arises or as the interaction of technology and political pressure dictate. For example, at one time the FCC rule limited a single owner to no more than one AM, one FM, and one TV station in a single local market. Because of the growth of new technologies and the dominance of television, restrictions on the number of radio stations one person or company can own in larger markets have been relaxed. Additionally, cable companies are interested in offering telephone services, and telephone companies are interested in offering cable programming.

Recent actions by the United States Congress, primarily the passage of the Telecommunication Act of 1996 have altered many of the rules and requirements of ownership, enabling much more cross-media ownership and delivery systems. As a result of this new legislation the FCC is now in the process of rewriting its the rules governing ownership and distribution of media services once again. The future portends vastly increased competition between broadcasters, cable operators, telephone companies, direct broadcast satellite operators, and newspapers for ownership of television stations and the delivery of many other media related delivery systems.

The convergence of video, computer, satellite, and digital technologies, along with the globalization of media communication raises new questions about media ownership restrictions. Because of economies of scale, eventual consolidation of television ownership into giant multi-national conglomerates may be inevitable, making the FCC's citizenship and local integrated ownership criteria moot.

-Robert Finney



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See also Allocation; Federal Communications Commission; License; Station and Station Group; United States: Networks; U.S. Policy: Communication Act of 1934; U.S. Policy: Telecommunications Act of 1996