The FCC's main studio rule: achieving little for localism at a great cost to broadcasters.

• Author: Silverman, David M.

The old adage, "a moving target is harder to hit," should not apply to government regulation. Unluckily, Jones Eastern has learned the hard way that the vagaries of imprecision apply to many things in life, including in this case the main studio role.(1)

1. INTRODUCTION

   Localism, the communications law policy that requires spectrum licensees to serve the needs of local communities, represents a bedrock concept in the Communications Act of 1934(2) ("1934 Act") and the Federal Communications Commission's ("FCC" or "Commission") jurisprudence. Realizing vague, if noble, aims through concrete rules is fraught with peril, however, especially when technology and industry practices undergo radical changes over time. The Commission's sixty-year-old main studio rule(3) illustrates this point. Five years after Commissioner Quello's 1995 dissent in Jones Eastern, the main studio rule, which requires all television and radio stations to establish vaguely defined "main studios" that are adequately staffed and equipped, remains a regulatory moving target. Broadcasters often find that compliance with the main studio rule requires an absurd elevation of form over substance, raising legitimate questions about the continued need and rationale for the rule.

   Versions of the rule date back to at least 1939.(4) The rule appears to have been established to advance Congress's goal of preventing concentration of radio licenses in larger markets.(5) The Commission's later goals included encouragement of station interaction with, and reflection of, their communities of license, especially through the creation of local programming.(6) Changes in public interactions with stations, production of programming, and growing evidence of higher costs imposed upon stations, however, led to criticism of the rule by broadcasters and the Commission itself.(7) After granting an increasing number of waivers, in 1987 the Commission significantly revamped the rule by eliminating the program origination element and expanding the area in which the main studio could be located.(8)

   The 1987 Report and Order and the Clarification Order issued a year later,(9) however, failed to clarify staffing and equipment requirements under the rule.(10) The Commission subsequently attempted to clarify these issues in a series of enforcement orders, though many questions remained unanswered even after these decisions.(11) In light of continued criticism of the rule, the Commission examined the issue anew in a 1997 rulemaking.(12) The Commission ignored the urgings of many broadcasters to eliminate the rule.(13) Instead, the Commission merely relaxed the geographical limitations on location of the main studio.(14)

   The current FCC rule requires television and radio broadcasters to maintain main studio facilities within specified geographical areas.(15) The main studio must be capable of originating and transmitting local programming, and must be staffed with a full-time manager and at least one other full-time employee or the equivalents.(16) In the words of the Commission's Mass Media Bureau Chief, Roy Stewart, the main studio is "[e]ssentially ... the principal local point of contact between the licensee and the community or communities served by the station."(17) While superficially straightforward, the rule's precise requirements remain unclear in numerous respects.

   Confusion generated by the rule's lack of clarity has contributed to misunderstandings among broadcasters and Commission staff. The Commission has found at least ten broadcasters to be in violation of the rule since its latest reformulation, setting a base fine of $7,000 for willful or repeated violations of the rule.(18) At least one fine in recent years has been as high as $20,000.(19) In addition, compliance with other Commission rules and policies, such as the Suburban Community Policy(20) and the public inspection file rule,(21) are related to the main studio rule. Enforcement of the rule continues to demand considerable Commission attention, primarily because of the rule's lack of clarity.

   This Article examines the rule's evolution and its current problematic state, and analyzes whether its modification or elimination would conserve the resources of both broadcasters and the Commission, without any detrimental impact on the public interest. Specifically, Part II of this Article examines the history and purpose of the rule. Part III examines the changing content, interpretation, and enforcement of the rule, including the Commission's apparent failure to seriously consider widespread calls for the rule's elimination in the most recent rulemaking. Part IV examines whether the rule should be changed or eliminated, and concludes that the rule has become an anachronism that no longer furthers its original aims. The rule exists today primarily as a vague and burdensome bureaucratic technicality that serves as a trap to unwary broadcasters. This Article concludes that the main studio rule should be abolished or, alternatively, recast in a more limited and precise form. As a service to broadcasters attempting to comply with the rule, an Appendix briefly summarizes the current state of the rule(22) and what broadcasters must do to comply with it.

2. HISTORY AND PURPOSE OF THE MAIN STUDIO RULE

   1. Localism and the Communications Act

      Localism is a core value of the 1934 Act. The FCC has a duty under the 1934 Act to "make such distribution of licenses, frequencies, hours of operation, and of power among the several States and communities as to provide a fair, efficient, and equitable distribution of radio service to each of the same."(23) This language incorporates similar language from section 9 of the Radio Act of 1927,(24) which was passed in response to congressional concern regarding the concentration of many radio licensees within small geographic areas around major cities,(25) leaving the more remote and less populous communities without radio service.

      In order to achieve a more geographically diverse distribution of licenses, the Commission issued its "Table of Allotments," which established formulas for the allocation of local television and commercial FM radio broadcast frequencies throughout the United States.(26) The Commission's implementing rules essentially represented:

      an assumption by the FCC that the public interest standard could best be met by allocation of television frequencies in a way that provided every community with its own locally oriented and controlled television broadcast station. Early in its history of broadcast regulation, the Commission assumed that local broadcast stations would be the electronic version of the community newspaper. The perception was that[,] like the local newspaper, the local broadcast station would significantly contribute to local participatory democracy and would operate "as a kind of latter-day Mark Twain, who understands the needs and concerns of his community in an imaginative and sensitive way."(27) The Commission has more recently described the need for local stations to "serve their communities by providing programming (e.g., news, weather, and public affairs) to meet the needs and interests of those communities."(28)

      To achieve these goals, Congress and the Commission passed laws, rules, and policies in a number of areas to further broadcast localism. The rules included: 1) limiting the power of networks over local affiliates,(29) 2) limiting ownership of multiple radio or television stations, both within a market and nationwide,(30) 3) requiring nonduplication protection for locally received network and sports programming,(31) 4) requiring non-entertainment programming and barring excessive commercialization,(32) 5) requiring formal ascertainment procedures and the keeping of program logs,(33) and 6) requiring cable television carriage of local broadcast stations.(34)

      The Commission's policy of localism has engendered enormous criticism, including from a former Commissioner who claimed that "[l]ocalism is the most sacred cow of communications regulatory policy. More sacrifices have been laid at the alter (sic) of this beast than at that of any other in the history of communications regulation."(35) Asserted harms of the policy include "inefficient allocation of television channels and corresponding loss of viewing choices; constraints on competition in video delivery services; and wasted administrative energies."(36)

      The D.C. Circuit also has challenged the Commission's application of its localism policy. In its 1993 Bechtel v. FCC decision, the D.C. Circuit overturned a Commission policy that gave broadcast license applicants a significant comparative advantage through an "integration credit" if they proposed to have an owner-manager working locally at the station.(37) The decision was unusually interventionist for the D.C. Circuit, which found that even after granting the Commission substantial expert agency deference, the policy was arbitrary and capricious.(38) The D.C. Circuit found the credit unlawful, because the Commission had not imposed an obligation on successful applicants to adhere to integration proposals, had failed to support the claimed public interest advantage of integration, and had emphasized integration to the exclusion of other factors that could affect a station's performance--notably spectrum efficiency, broadcast experience, and local residence.(39) The court's ruling noted the difficulty of determining exactly what measures would achieve localism. It observed, for example, that although licensee awareness of and responsiveness to community needs was the stated goal of integration, "[a]n applicant whose proposed owner-manager knows nothing about ... the community but promises to work a 40-hour week" would prevail over a proposal to employ an experienced life-long resident of the community as station manager.(40)

      The impetus for reexamining the Commission's localism rules has increased as the assumption of...