Less Than a Week to Go Before “Delete, Delete, Delete” Proposals on Eliminating Unnecessary FCC Regulations Are Due – What Should Be Included?

A few weeks ago, FCC Chairman Carr announced the beginning of the “Delete, Delete, Delete” proceeding at the FCC – looking at “alleviating unnecessary regulatory burdens” on the companies that it regulates, across all industries, to unleash companies to innovate, invest, and expand.  Comments are due April 11 and replies April 28.  With less than a week to go before comments are filed in this latest attempt to lessen the regulatory burden on broadcasters, we thought that we would look at some of the issues that may come up in this proceeding, and some of the policies that stubbornly remain on the books but should be addressed.

Broadcasters are expected to advance many ideas.  But, before considering some of the issues likely to be addressed, it is important to put this proceeding in context.  This is not the first time broadcasters have been asked to engage in this kind of exercise.  In the 1980s, the FCC conducted multiple proceedings to address the “regulatory underbrush,” eliminating, among other things, rules that had required specific amounts of news and public affairs programming on every station, rules mandating a specific number of PSAs, rules requiring specific program and engineering logs as official records for every station, and policies restricting advertising for certain perceived vices like parimutuel betting and fortune tellers.  In the 1990s, as a result of the 1996 Telecommunications Act, other obligations were changed (including the adoption of the current local radio ownership rules, the abolition of the ability of any party to file a competing application contending that it should get the right to operate a broadcast station every time a license renewal was filed, and extending the license renewal term from three to eight years (see our article on some of those changes, here).  Just eight years ago, FCC Chairman Pai initiated the Modernization of Media Regulation Initiative (see our article here).  That proceeding resulted in the abolition or streamlining of many FCC rules, such as the main studio rule (see our articles  here and here), some children’s television rules (see our posts here and here), and rules prohibiting same-service radio program duplication by commonly owned stations, although the prohibition on FM/FM duplication by commonly owned stations serving the same area was reinstated by the last administration, though that action remains subject to a reconsideration petition (see our articles here, here, here, and here on some of the other changes brought about by Chairman Pai’s initiative).  However, there were many other obligations left unaddressed.  There are so many rules applicable to broadcasters, and so many competitive changes in the market have  impacted the relevance of many of those rules, that no proceeding ever seems to address every issue it should.  But we expect that many rules will be addressed in this “Delete” proceeding. 

Of course, high on the list of items that many broadcasters are hoping to see addressed are changes to the local broadcast ownership rules – last addressed in 2023 when the FCC refused to relax any of those rules (in fact tightening certain television rules – see our article here). Whether or not considered in this proceeding, changes to these rules will be considered to some extent this year, as the FCC needs to advance a Notice of Proposed Rulemaking to follow up on the December 2022 Notice of Inquiry in the 2022 Quadrennial Review (see our article here on the Notice of Inquiry).  The 2022 review is supposed to be completed this year as the next Quadrennial Review should begin in 2026.  But as no specific proposals have been advanced, and no full comments yet filed, there is still much to do in the 2022 review.  The ownership rules could be an even higher priority should the Eighth Circuit Court of Appeals complete its review of the Commission’s 2023 decision and find that the FCC’s decision was unreasonable.  That outcome was urged by broadcast interests in oral arguments held before the Court last month.  A decision in that case could be out in the next few months. If the appellant’s arguments are credited, the Commission could be ordered to take actions to relax the ownership rules.  The NAB, an appellant in the case challenging the local rules, also just asked that the FCC abolish the national television ownership rules, so ownership issues will be debated in some way or another this year.

We also expect comments to address public file obligations.  Personally, I would love to see the FCC’s analytics for broadcasters’ online public file to see if anyone but DC lawyers and competing broadcasters seeking business intelligence, ever visit those files.  We expect calls to eliminate or at least pare down the information required to be in the file. 

EEO paperwork obligations are always a bone of contention with broadcasters.  Chairman Pai started a proceeding to review those rules that brought forward a host of comments (see our articles here and here), but that proceeding has never been resolved.  We expect some of these proposals to be renewed and others to be raised to reduce or eliminate EEO paperwork obligations. 

I’ve heard some suggest that political broadcasting rules should be changed.  But most of the FCC-administered political broadcasting obligations are imposed by statute, not by FCC rule. The FCC cannot significantly change these obligations without the intervention of Congress. So lowest unit rates, equal opportunities, no censorship, and the political file rules for candidates and issue advertisers are likely here to stay absent Congressional intervention.

There will likely also be many proposals in the video industry, looking for changes in the relationships between stations and networks, and broadcasters and MVPDs, and even with programmers and all of these entities.  These areas are ones where consensus will be difficult – but there is no doubt that changes will be proposed. 

With recent headlines in the industry, issues like news distortion and the noncommercial underwriting rules, which might not have been thought of as high priorities 6 months ago, may find their way into comments in this proceeding.  Even broad issues like the interpretation of the FCC’s public interest standard may arise in comments filed in the next week. 

But there are many old (and in some cases odd) policies that are on the books, often not addressed by statute or rule, and often ignored when broadcasters consider their proposals in a proceeding like this. We thought that we would mention a couple in hopes that maybe some of these are addressed in comments that are filed. 

For one, the FCC has a policy against the sale of a “bare license,” meaning that a seller of a station needs to be able to convey some identifiable assets in addition to a license when selling a station (see our article here). In many ways, the FCC has seemed to have moved away from that policy (for instance, by allowing the sale for profit of an unbuilt construction permit), but it has never officially repealed the policy. This might be a time to do so.

Similarly, the FCC has a policy against taking a security interest in a broadcast license, the most important asset that any broadcast station has.  This policy can scare away certain lenders who might otherwise be interested in providing financing for broadcast transactions, and it makes lenders have to hop through many hoops to ensure that their loans are secure and to recover what they are owed when a broadcaster borrower falls on hard times (see our articles here and here).  Does this make any sense in today’s world?  From time to time in the past, attempts have been made to eliminate that policy. Perhaps this is the time to address this issue, too.

The FCC also reviews non-compete agreements in station sales, with some staff insisting on some very precise wording for such agreements to pass muster.  While so much attention was paid to the FTC proceeding on non-compete agreements last year, no one seems to remember that the FCC has this policy too.  Why is this an FCC concern when so many states have their own rules governing unreasonable noncompete agreements? 

The FCC’s rural radio policy is another policy that we have long suggested has outlived its usefulness.  The policy prevents stations from making technical changes that could improve station coverage and economics and bring more competition into markets where the most people live. But these benefits can’t be realized with a policy aimed at preserving program choice in rural markets even where that programming on a broadcast station may not be economically supportable – and where more and more program choices are now available by alternative technologies (like satellite). The policy also ignores that these rural areas are likely where there are more opportunities to drop in new broadcast channels, unlike the spectrum-congested urban markets where existing stations (including those in adjacent rural areas) preclude new services. 

No doubt, there are many other areas worthy of consideration.  But, before the FCC can make any changes, someone needs to alert the Commission of the need. The invitation to broadcasters to suggest rules that can be changed has been made, and the deadline for comments is April 11.  This is your opportunity to be heard. Think about regulatory issues that your station has faced, and where rules make little sense in today’s competitive media marketplace.  Make your suggestions by the upcoming deadline.