FCC approves loosening media ownership rules in split vote

The Federal Communications Commission also makes other moves to strip away regulations -- actions that Democrats say will harm consumers.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
5 min read

The Republican-led FCC is making good on its promise to deregulate the communications industry, including a revamp of media ownership rules that will make it easier for big companies to own newspapers and more broadcast stations in a single market. But Democrats warn that those efforts will do more harm than good to consumers.


Chairman Ajit Pai has aggressively worked to roll back many of the marquee regulations adopted under the Obama administration. 

Nicholas Kamm/AFP/Getty Images

The Federal Communications Commission on Thursday voted on several controversial items that strip away regulation. Most notably it voted to loosen 40-year-old media ownership rules as well as rules that required phone companies to maintain their old copper infrastructure while they transition to new fiber networks. Additionally, the FCC also adopted reforms to the Lifeline program, which subsidizes phone and broadband service for low-income people. The votes were 3-2, along party lines.

Democrats and consumer advocates say those actions will result in less diversity in local news media, inferior phone and broadband services in some areas, and an ineffective social safety net for poor Americans.  

The divisive votes come as Chairman Ajit Pai, appointed by President Donald Trump in January, has aggressively worked to roll back many of the marquee regulations adopted under President Barack Obama's administration. Next month, the agency is expected to vote on a proposal that would dismantle Obama-era net neutrality rules adopted in 2015. These popular regulations bar internet service providers from blocking or slowing online content or allowing broadband companies to charge internet companies to deliver web content to their customers faster.

In a statement Wednesday previewing Thursday's meeting, Commissioner Mignon Clyburn accused the FCC of shirking its responsibility to protect consumer interests and said the commission is continuing "down its destructive path of adopting a series of actions that fail to put consumers first.

"During the first 10 months of 2017, the FCC majority has given the green light to more than a dozen actions that are a direct attack on consumers and small businesses," added Clyburn, who is a Democrat. "And most Americans are unaware that the agency established to protect the public interest has traded in that role for the chance to grant the wish lists of billion-dollar companies."

Media ownership

The most dramatic change was the agency's 3-2 vote to loosen media ownership rules in place since 1975. Under these changes, broadcasters could combine with a newspaper in the same market. They also could own two of the top four stations in any city.

The new rules will likely be challenged in court, but if they survive, they are a significant change in media ownership regulations and could lead to further consolidation.

Broadcasters have long argued they need greater scale to compete with cable and internet companies for advertising dollars. Pai echoed this sentiment in his remarks, pointing out how the media landscape has changed in the past 40 years with many Americans getting news from websites and social media.

"The media ownership regulations of 2017 should match the media marketplace of 2017," Pai said.

The changes come as the FCC considers whether to allow the $3.9 billion merger of Sinclair Media Group and Tribune Media, which would give the organization unparalleled control over local TV stations across the country. Democrats, such as FCC Commissioner Jessica Rosenworcel, have accused Pai of giving preferential treatment to Sinclair, which has offered favorable coverage to Trump. Pai denies these claims.

"Instead of engaging in thoughtful reform, which we should do, the agency sets its most basic values on fire. They are gone," Rosenworcel said in her dissent. "As a result of this decision, wherever you live, the FCC is giving the green light for a single company to own the newspaper and multiple television and radio stations in your community."

Clyburn said the change in regulations would open the "floodgates to more consolidation."

"Mark my words, today will go down in history as the day when the FCC abdicated its responsibility to uphold the core values of localism, competition and diversity in broadcasting," she said in a statement.

Pai called claims that looser rules would result in one company dominating the local media market "utter nonsense." Instead, he said it would lead to new opportunities for media companies.

"It will open the door to pro-competitive combinations that will strengthen local voices," he said, and "better serve local communities."

Relaxed requirements for retiring copper networks

In another 3-2 vote Thursday, the FCC moved to relax regulations requiring phone companies to maintain their old copper infrastructure. Pai has said getting rid of these regulations will remove barriers for phone companies to upgrade their networks to fiber infrastructure, which will allow for faster broadband service.

But the Democrats point out that the rule changes mean phone companies could leave consumers without service that's at least as good as their old copper networks, which provide traditional phone and DSL broadband service. As telephone companies like AT&T and Verizon replace their copper networks with fiber, some people, particularly in hard-to-reach areas, fear the companies will stop supporting their old services without spending the money to replace them with ones that are comparable.

That's why in 2014 the FCC under Democratic leadership created a "functional test" for carriers to get permission from the FCC before abandoning old copper networks.

The new rules roll back that test. Rosenworcel and Clyburn objected. In her statement, Rosenworcel acknowledged the need for networks to be updated. But she said the FCC's move "defies logic" since it would allow these changes to take place without carriers even notifying communities of the changes.

"To those who are affected by change -- consumers, businesses, state officials, tribal authorities and first responders -- the FCC says, 'Tough, figure it out, you're really on your own,'" she said.  "This is cold and cruel comfort for the millions who rely on these services today and are unlikely to see better broadband in the future."

Lifeline reform

In another bitterly divisive vote, the FCC voted 3-2 to take steps toward revamping the Lifeline program, which provides subsidies to low-income individuals. Pai has long argued that the program is rife with waste, fraud and abuse, with subsidies going to ineligible subscribers and "phantom" subscribers who don't exist.

Pai and his Republican colleagues have also criticized the program for escalating costs.

At the meeting Thursday, the FCC voted on a proposal that paves the way for the agency to institute a spending cap on the program. Once that cap is reached, Lifeline wouldn't be able to provide subsidies to additional people even if they are poor enough to qualify for the program.

The proposal would also eliminate a year-old nationwide approval process that makes it easier for phone and broadband companies to offer the subsidized service, and it would cut off subsidies to phone companies that resell service, such as wireless MVNOs. Critics of the measure point out this would limit the number of companies offering subsidized broadband service to the poor and would also require providers be approved in each state to get Lifeline subsidies.

"This is not real reform," Rosenworcel said. "This is cruelty.  It will do little more than consign too many communities to the wrong side of the digital divide."

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