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Spiked Study Leads to New FCC Query

By JOHN DUNBAR
The Associated Press
Thursday, January 25, 2007; 10:40 PM

WASHINGTON -- When the government decided to take a hard look at how well broadcasters were serving their communities, two economists at the Federal Communications Commission got a research idea: They would look at whether locally owned TV stations produced more local news than stations owned by companies based outside the area.

They found that local ownership resulted in more local news coverage. They also realized they had turned up what one of the researchers, economist Keith Brown, called "inconvenient facts." The findings were at odds with what their agency, under heavy lobbying from the broadcast industry, had endorsed.

The months-long study was spiked by the agency with "no plausible explanation," Brown says. He suspects it was because the conclusions were at odds with the shared position of the FCC and the broadcast industry: that media ownership rules were too restrictive and should be loosened.

Three years after Brown and the other economist, Peter Alexander, did their work, a copy of the study surfaced, sparking controversy. Its apparent suppression, and the alleged deep-sixing of a second research study, have prompted an investigation by the FCC's inspector general.

While that review is not yet complete, interviews with past and present employees of the FCC by The Associated Press reinforce Brown's account. Economic research reports were at times altered to reflect a more favorable view of lifting ownership caps, and at least in some cases they were spiked altogether, they said.

Moreover, there are new concerns that an FCC management directive, issued shortly after the first television news report made headlines last fall, has had a chilling effect on research.

The underlying issue _ how many newspapers, TV and radio stations a media conglomerate may own in a single market _ has yet to be decided. A federal court ordered the agency to take a fresh look at media ownership rules, a process that could stretch on for another year.

Brown and Alexander's research project, begun in late 2003, was meant to assist the agency's Localism Task Force, created by then-FCC Chairman Michael Powell. "Localism" is one of the three pillars of the commission's rules governing media ownership, along with "diversity" and "competition."

Powell created the task force after the FCC voted 3-2 in June 2003 to ease the ownership rules, bringing a backlash from Capitol Hill and elsewhere. The decision also drew a court challenge.

For the research project, the two Ph.D. economists holed up in their offices for two months and reviewed 10,500 clips from local news programs broadcast in 20 markets.

They categorized snippets of news shows as "local" and "non-local." They also determined whether the broadcasters that aired them were locally owned or not.

When the numbers were crunched, they revealed that "local ownership adds almost five and one-half minutes of local news" per half-hour program.

The finding, the report noted, "may have policy implications for both Congress and the Federal Communications Commission."

One implication was obvious: If large, out-of-state media conglomerates were allowed to buy up more stations, it could hinder the agency's goal of promoting "localism."

Big broadcasters had spent huge sums lobbying to convince the FCC that rules restricting the number of stations they could own were outdated, unrealistic and should be eliminated.

Brown said he is agnostic on the media ownership issue and wouldn't categorize the study as damning. But he did say it was interesting enough that it should have led to more research.

The two researchers submitted at least eight drafts of the report to other FCC economists and supervisors within the agency's Media Bureau. The bureau oversees policy and licensing of the broadcast television and radio industries. The level of review was unusual, said Brown, who is now an analyst with a federally funded research firm in Virginia.

Eventually, in a meeting with their supervisor, Brown said he and Alexander were told that "the front office wasn't going to let it out and the bureau chief wasn't going to let it out."

By then, a federal appeals court had ruled against the FCC's decision to liberalize ownership rules, sending the case back to the agency and forcing it to start the rulemaking process again.

W. Kenneth Ferree was the chief of the media bureau at the time. He is now a lawyer and lobbyist whose clients include The DirecTV Group. "I don't recall seeing or hearing about the localism report," he said in an interview.

Ferree said however, that he wouldn't have approved of the research project because the localism proceeding had nothing to do with ownership. He said the proceeding was really a process to find out what "stations should do to serve their local communities."

At around the same time the television study was being discussed, another report was being circulated. The agency regularly does economic research on the radio industry, but a study that appears to have been scheduled for release sometime in 2004 never saw the light of day.

A source knowledgeable about that report, who still works at the agency and requested anonymity for fear of retribution, said the reason the report was never circulated was because Ferree did not want it to be released.

At the time, the radio industry was being used as a poster child by critics for what can go wrong when ownership limits are lifted.

The unreleased radio study indicated that over seven years there had been a 35 percent decline in the number of radio station owners, and that 74 percent of advertising revenue in markets that were examined was controlled by two firms.

Ferree said he does "remember somebody mentioning" the radio report and would not be surprised if he had ordered work on it stopped. The agency had just issued its rules on media ownership, he said, and he didn't see the need for another report.

"I've got plenty of work here for people in this bureau to do," he recalls thinking at the time.

He said the report would have created "more heat and no light" and had the potential to "start another whole round of debates."

The spiked television and radio reports required hundreds of hours of work, costing tens of thousands of dollars. Their existence might not be known had copies not been provided to Sen. Barbara Boxer, D-Calif., a member of the Commerce Committee, which oversees the FCC.

During confirmation hearings for FCC Chairman Kevin Martin last fall, Boxer asked about the television study. Martin said he was not aware of its existence and that he was not chairman at the time it was prepared. A week later, Boxer released the radio report.

Boxer called for an inspector general's investigation, which Martin ordered the same day. Brown, the report's co-author, says no one from the IG's office has asked him about what happened. Ferree said he hasn't been contacted either.

While Martin has been quick to point out that the reports in question were not circulated on his watch, he has still come in for some criticism.

One agency employee said that after the television study hit the news, a directive came from the chairman's office requiring researchers to focus only on work specifically called for by the agency's management.

FCC spokeswoman Tamara Lipper said that she is "not aware of a directive, but I think we remind staff that people are expected to be working on the work assigned to them."

Meanwhile, the commission has ordered a new round of studies on media ownership. A description and a list of proposed authors was released the night before Thanksgiving.

The agency has also posted a number of draft studies and other records that were prepared before the last media ownership proceeding on its Web site. The available documents include all eight drafts of the local news study and a copy of the radio study.

While some are encouraged by Martin's apparent desire to be more transparent as the agency again reviews the rules, others are still wary.

Last August, the Institute for Public Representation at Georgetown University Law School filed a request under the Freedom of Information Act for "all studies and/or proposals for studies" related to the commission's media ownership and localism rules.

Much of what was provided, according to institute director Angela Campbell, was already publicly available. "It's not really as much as it looks like," she said. "I still have concerns because of the large quantity of material they withheld."

Citing FOIA exemptions, the agency opted not to turn over 1,400 pages of internal commission records.

© 2007 The Associated Press