Rules and other rules adopted pursuant to section 202. Michelle carey, chief of the bureau will give the introduction. Good afternoon, chairman and commissioners. The media bureau is pleased to present an order on modernizestion that broadcast ownership rules to reflect the realities of a modern marketplace. And seeks comment on how to integrate a program to facilitate new entry in the broadcast industry. Joining at the table, Brendan Hollins and chad of the media bureau. You this order which reveals and modifies outdated restrictions and institutes and Incubator Program to facilitate entry of new and Diverse Voices into the broadcasting industry. The commission is required by statute to review broadcast ownership rules every four years to determine whether they remain necessary in the Public Interest as a result of competition. And to repeal or modify any regulation the commission determines to be no longer in the Public Interest. In august of last year, the commissioner found a second report, completing the 2010 and 2014 rules. Several parties sought reconsiderations of various aspects of the report. About threer is restrictions. Record,orted by the three must be repealed or modified. Specifically, todays order reveals the cross ownership rule finding that the rule is no longer necessary to promote Viewpoint Diversity given the multitude of voices in the modern marketplace. The rule unnecessarily prevents combinations that would enable both broadcasters and local newspapers to better serve consumers in their communities. The radiotelevision cross ownership rule is no longer necessary to promote diversity. They must be eliminated. With respect to local television, this eliminates a eight stationst must remain. Was unsupported by the record or any reason basis. The order also incorporates a casebycase review option and the prohibition against common ownership of two toprated stations in a market. This approach to the application will better reflect Current Conditions in the market. Todays order also reveals the attribution role for television joint sales which are agreements that allow noncommonly owned stations to sell advertising time. Commissionsds the decision to distribute these agreements was unsupported by the record and that these are beneficial and serve the Public Interest by allowing broadcasters to better serve their local communities. Rule,cal radio ownership presumptive waiver approach for transactions involving embedded markets which are smaller markets that are part of a larger Nielsen Audio market. In addition, this order on ssas. Deration involves the disclosure of Online Public inspection files was supported by the record. Todays order finds that the commission will adopt and Incubator Program to help promote new entry and ownership diversity in the broadcast industry. Help,cubator program can can provide benefits to an entity or a class of entities through the provision of Technical Expertise and financial assistance. In todays notice, the Commission Seeks comment on how to structure and implement such a program. Incubation activities, incentives for encouraging incubation, the review process for incubation proposals, compliance and cost and benefits of such a program. Adopting this and requesting editorial privileges to make technical edits. Regular thank you. Thank you. , luckily i did not take commissioner carr predicted 1 00. We are both wrong. I might have to take a seven inning start. I said 1 15 p. M. I dont drink but boy i am getting closer. Resetting the tone. The problems with this order on reconsideration are so glaring, on process and substance, it is truly hard to decide where to begin. Do i start by describing why the wholesale elimination of the media ownership rules will harm localism, diversity and competition . Do i focus on the number of loopholes this commission blesses through this order . Or do i highlight how the fcc majority has chosen to take some of the same acts used by this commission over a year ago to reach the exact opposite conclusions . Thesei address each of failures in greater detail, allow me to explain the alternative proposal ipo forward to my colleagues proposal i put forward to my colleagues. Despite what you have been told about the genesis of this order, it is not really about helping small, struggling broadcasters or newspapers. Out, rather itis could actually achieve that goal, this is about helping Large Media Companies grow even larger which is actually in stark contrast to what the president said last week in discussing the importance of outlets asny news you can go. Tothese were to provide hope the tiniest media markets, we would have adopted a narrowly terrible a narrowly tailored proposal focused on the stations. Instead, todays actions coupled with the recent fcc actions including reinstatement of the you hf discount and the elimination of the main studio rules, we have paved the way for a new crop of broadcast media empires. They will be lightyears removed from the very local communities they are supposed to serve. Titans will have degrees of power far beyond the imagination of our local communities. Us local outlets that inform of what is happening in our community. Those outlets that investigate allegations of impropriety within government, that tell us whether we need an umbrella or an overcoat or we might need both. Before, on the ground naturaland after major and manmade disasters. Local stations clearly play a unique role in our communities and unlike those 24 hour cable news networks, our local outlets deliver their broadcasts using the public airwaves, and with that comes the responsibility to serve the Public Interest. If you are to stop someone randomly on the street and ask them who owns their local television or Radio Station, after they look at you and they wouldnch you, not be able to answer. Top fourf the television stations have the same owner, a third station was affiliated with the stations through sharing agreement . Localthey know that the news anchor is reporting a story using the same script as dozens of other stations around the country or even another station and their very own market . While these may not be cap of mind questions for most americans, the answers matter. The risen listeners have a right to know those answers. They should also be aware these practices are already happening today. When this order is adopted, the floodgates to more consolidation will come without transparency or accountability. To be clear, the media landscape has changed a lot over the past 30 years. When it comes to coverage of national and international events, there is no question americans have more choice today than they did in 1975. If we are going to play that of making comparisons between legacy platforms and newer interests, including cable news and online sources, we need a neutral umpire to keep score. These platforms are not created equal. The reality is, they are not substitute when it comes to local news and event coverage. As one news publication aptly put it last week, consolidating ownership will not put more reporters on the ground, but it will certainly amplified the influence of a small number of companies. I could not have said it any better. The simple fairness, the chairmans fun of making comparisons between local broadcasters and Tech Companies like google and facebook. , none oftime i checked these companies are in the newsgathering business nor to my knowledge are they engaged in local news production. Googlet visit to underscore this point to me. Tab for thecal news district of columbia, nine out of the first 10 search results linked to stories by, guess what . Traditional local newspaper, broadcast, or television, or radio outlets. Facts thathe simple we should never ignore. When we are evaluating the Current Media landscape, while i am not here to vilify the site the financial success, i want it for myself as much as i want it for you. The Horror Stories depicted in the filings are cited in this the largest of broadcasters as reasons for eliminating the rules, do not match the realities of what is being presented on wall street. One major broadcast group in fact reported that their revenues are up 15 this year. A new record. Anothers revenues are up 17 and yet another broadcaster saw its stock price reached a record high earlier this year. As even further evidence, not matching filings, retransmission consent fees are up yearoveryear by as much as 162 . These are the Financial Realities on the ground, why are we in such a rush to eliminate protections that may prevent consolidation but have untold on Viewpoint Diversity . But maybe less obvious are the loopholes in our media ownership rules that this order blesses. Take the use of joint Sales Agreements. As i have shared, there have been cases in which these agreements have been shown to be in the Public Interest, albeit rare. Ive also described arrangements that amounted to the full scale ,ontrol of brokered stations including the same programming, the same talent, the same management, and the same studio. Coupled withment the dismantling of other key media ownership rules, substantially distorts the reality of how much control a broadcast asian owner has in a broadcast station owner has. It fails to a knowledge the past benefits of unwinding these. A december 2014 blog, chairman wheeler and i described that by enforcing the local ownership rules, 10 new minority and women owned stations were established. Similarly absent from the ,ommissions analysis eliminating ownership attributions of these arrangements. As in a recent joint filing, nonattribution of jsas coupled with the repeal of the test can enable a Single Company to completely dominate Television Sales and make new entry impossible. Once again the order fails to properly consider this very tangible reality. Turning now to process. Where we reverse course, not much more than one year after the commission completed its last review. Certainly something must have changed in those last 15 months to warrant such a drastic change in direction . The facts are the facts. While my colleagues in the majority may not have agreed with the policy adopted by the Previous Administration, it was based on the record that has not changed. If they disagree with policy and that is their right to hold such a believe, what they should have done was open a new preceding and build a case for that position. The courts have admonished this agency in the past for changing rules without a supporting record and todays order on reconsideration ignores the courts instructions. Continuing with the topic of process, take a look at how the order incorrectly invokes to suit its policy goals. Has toldes, the court us that if we want to make meaningful changes to our rules to promote minority and female ownership, we must get comprehensive, reliable data. For example, the court stated, at minimum, in adopting or modifying rules, the fcc must andine the relevant data articulate a satisfactory explanation for its action, including a rational connection between the fact found in the choice made. Has flippedmission those instructions on its head by concluding without the benefit of new data, that we cannot continue to subject broadcast television licensees to aspects of local Television Ownership rules that can no longer be justified based on the unsubstantiated hopes that these would restrictions would promote minority and female ownership. Some supporters of this order, point to the commissions newly established Advisory Committee on diversity in digital empowerment as evidence that we are on a path toward obtaining better data. The problem with that notion, is that we are adopting todays ,rder less than two months after the Committee Held its first meeting. What is the point of establishing a committee if the fcc majority has already reached the conclusion that a core media ownership rule is no longer necessary to support our goal of increasing diversity . Committeebers of this have agreed to step away from their busy schedules to do what the chairman describes as taking important steps toward increasing diversity throughout the Communications Industry and bringing Digital Opportunities to all americans. Andnot let them get to work make recommendations to the full datassion and rely on instead of reversing the action of the Previous Administration simply because you feel differently . There was a path forward that could have guarded garnered my support but my proposal was rejected. All petitions for reconsideration should be denied from the commission rules. Specifically, this section of our rules outlines a narrow set of criteria by which the commission will consider a petition that includes new facts or arguments which have not been previously resented. Presented. Needed the fact nor arguments have changed since the last review. This majority has routinely rejected petitions for reconsideration that failed to meet these requirements but here it ignored these rules to satisfy its own selfserving interest. Second, i proposed opening a new preceding to explore the adoption of an Incubator Program. Such a concept has been debated for many years, with bipartisan support. It is largely untested. The questions proposed in the accompanying notice of proposed rulemaking are the right ones to be asking but we are undertaking this process in the wrong order. I urged my college to initiate a proceeding that would build on a comprehensive set of data, examining the impact of ownership diversity on the broadcast marketplace. The proceedings should also examine how further media consolidation would impact localism and competition. I propose that this Data Collection the undertaken expeditiously and completed prior to the start of the 2018 review. Lastly, i propose any changes to the commission, media ownership rules be considered as part of the 2018 review once the appropriate data is collected and an assessment can be made of the impact that an established into beta program has had in creating opportunities for new entrants in small businesses. These were not unreasonable in my opinion. They are consistent with the commission rules, the instructions of the Third Circuit and our commitment as an agency to be data driven. My colleagues in the majority and other proponents of eliminating these rules, might suggest that my aim was to further delay the inevitable. This could not be further from the truth. The reality is, the rule changes made in this order are all interrelated. By looking independently at each change rather than assessing the collective impact of the changes on the media landscape, we are left with a deeply flawed order with no data to support its conclusions. , toome back my friends industry consolidation month at the fcc. Where it seems my colleagues in the majority are more intent on granting industry wishes than giving a gift to those in the general public. Mark my words, today will go down in history as one when the to abdicated responsibility uphold the core values of localism, competition, and diversity in broadcasting. I vociferously dissent and look forward to the day when the right issues a decision to this sad it wrong. Thank you. Commissioner riley. Thank you. Let me start with a quote. Today the modern media marketplace includes thousands of broadcasting stations, hundreds of national, regional and Broadcasting Networks delivering a vast range of content, and more significantly, the internet and a host of Digital Technology enabled interactive services. This statement is from, chief judge sirica of the Third Circuit in 2004. 202h of 1996 uses unmistakable language in describing the commission obligations. Despite what some of my colleagues would have you believe, our action today is not part of a larger master and to favorably set the landscape for future merger. Implying that is untrue. Instead, todays item, in 2017, includes the commissions 20102014 review. Commission river eliminates the cross ownership rule. The item explains, in todays environment, the rule makes no longer sense. This is not a new idea. In fact the commission in one form or another has been unable to justify this role for more than 18 years. The commission completed a 2002 review, that a complete ban of cross ownership was no longer in the Public Interest. Upon review, the Third Circuit agreed with this conclusion but found the fcc alternative proposal to be arbitrary and capricious. As a result, the 1935 rule remained. , 2006. E next review the sec no longer believed it could justify the van and modified the rules accordingly. Once again the Court Remanded the issue. The 1975 rule remained. 20102014 review, the Third Circuit admonished the fcc for its delay, stating that the even thoughains the fcc determined a decade ago it is no longer in the Public Interest. Perhaps determined to continue the process of the past, when the commission acted, it examines the full media landscape and did nothing to adjust our rules in response. Despite having the votes to eliminate the cross ownership rules, the commission ignored precedent and decided to maintain the rule. Again the 1975 rule remained. Today we fix the shoddy effort of the previous commission. We establish a thorough record and analysis to find where the rule is no longer necessary. I have no doubt this item will wind up back before the desk o