Congress actually asked the gao to study a number of years ago and even the gao concluded they harm the Public Interest or contravene the ownership rules, time to do this topic to bed. For the people not so deeply steeped in sec lingo, we are talking two way consolidation might take place, two ways the consolidation grows scale. What is a horizontal point which is the combined company would own more stations across the country and therefore cover a large part of the country, the question is what percentage is okay for broadcasters to have as a horizontal matter across the country in a world where many distributors reach 100 of the country, in the old days only broadcasters could reach mass audience, now the internet is changing that. The second question is within each market, how many stations can you either own or have a significant relationship with such as socalled js as and when it comes to the individual market it is important to remember there are two screens any deal has to pass, one is a moment of justices screen where they look to see if the combination of stations within any given market are going to be too large and if it is they say you got to get rid of the state and then the sec overlay which involves its own test and potential for structuring, we have the senator here. We have a special guest and i was just perfect, i am so delighted senator blumenthal is able to join us and i will turn the mic over to him for a few remarks. I apologize, didnt mean to interrupt. If you havent finished, please do. I am sure my words can always come im delighted you could join us. I want to thank the Georgetown Institute for organizing today, very pleased we have this excellent turnout for a merger i think is profoundly important to the future of communications and media in america soon after sinclair announced its proposal to acquire tribune media. I call on the fiduciary, i sit on both going to have a hearing, to have full and complete consideration and i am profoundly disappointed and troubled there has been no hearing and no immediate contest appointment, not only disappointing and troubling but also a disservice to the american public. More than 70 of american households will be affected by an acquisition of the scope and scale and it is even more profoundly important ramifications going forward, no question congressional scrutiny and at least one congressional hearing is necessary and appropriate and probably more than one because both judiciary and commerce have a role here. This merger very simply threatens to create a concentration of unprecedented scope and scale in the Media Industry in america and will unquestionably affect the Public Interest whether you are for or against it, unquestionably it will affect the Public Interest. So i really welcome this conversation today because it provides what i hope will be a preview of coming attractions. At the very least a prelude to what should be close and searching congressional scrutiny and i hope deliberation today will raise issues my colleagues and i have an obligation to confront. I laid out the details why i oppose the sinclair proposed acquisition in a letter that i sent on september 27, 2017, to the chairman of the fcc. I oppose this merger because it violates longstanding media ownership rules and would demonstrably harm Media Diversity and competition, localism is deeply ingrained, competition is essential in this industry and diversity is part of our fiber in democracy and allowing this acquisition to move forward would reflect bluntly and simply a failure by the fcc to do its job. I again want to thank all of you for being here today particularly the wonderful panel that you have and hope there will be more opportunities to air the reasons this transaction would be a great disservice to the american public. Again my apologies for interrupting and go to it, thank you. [applause] the senator raised two interesting questions, number one, should congress hold a hearing but then i went to tag on a second question, he mentioned the Judiciary Committee and there has been no talk, the department of justice talked a lot about with regard to at t time warner merger but it hasnt been talked about at all with regard to this. I just raised it. My point exactly the question, i apologize. That is the point i made that gerri referred to earlier as well which is this is in the wild west come you cant just put a bunch of companies together in this country regardless of concentration and consolidation. There are some wellestablished rules the department of justice or guidelines, this merger is going to have to pass through the review, not talk about the nature of that review because it is confidential but doj is always vigilant about this, it is not the first one, they have been down this road many times so the fcc review is a Second Review and the addition of the concentration imposed by the disbarment of justice, what more should the sec do and the truth is even with the relaxed guidelines the sec will be doing more than the department of justice blues not the wild west that you can just put companies together willynilly, the question is how strict should the rules be and what we are trying to do is make the case that if you truly do love local broadcast, if you truly do believe in localism, if you truly do believe in that you should be in favor of this deal, not opposed to it because the resources necessary to do that in an environment that is much much more competitive, you can just look at the Balance Sheet these companies, the trendlines on their revenue, you will be drawn inescapably to that conclusion. The ad revenue, decades ago local broadcast is probably dominated 3 quarters of that chart but this is the declining local ad revenue situation we are facing. I would like to respond to the concern the senator has. Everyone needs to understand that every broadcaster knows that if you are not local you are not going to succeed in your market, localism is alive and well. Im not going to read it all but i have here a list of where we are number one or number 2 in our markets and you dont get there unless you are meeting the needs of everyone in the community. We have to close, i want people to address usually when it comes to broadcast mergers of this type doj tends to defer to the fcc, right . Should play a bigger role . It is more constrained than the fcc, doesnt look at the Public Interest generally but what role should the doj play and whatever else . I have a couple former students who are about to roll their eyes because in class we would talk about various ways in which different parts of the government look at a transaction like this, hearings on capitol hill, absolutely par for the course, get it out in the public and the debate in front of members of congress not because congress decides the state of the merger but has oversight responsibilities for the agencies that do. Different agencies with different jurisdiction may sound like a redundancy and that is because it is, different agencies with Different Missions look at the same transaction and it is no different here. We sort of run off the rails, we havent talked a lot about a change to a rule, interpretation of the statute with profound effects. There is a rule on the books that says no broadcaster can get above 39 of us households. Im pretty sure it is codified, not something the sec just investigated, it is instead you. With all the talk from supporters of this merger about how the world has changed and technology has changed, top addition has changed, internet, all this great stuff what is the one thing the chairman did to that rule . He went backwards in time to be for the digital transitions when television stations used uhf signals versus vhf signals and said that is how were going to count households, that is the practical effect of raising the number of households you could reach through broadcast today. What does that mean for the department of justice . The permit of justice look at that and say the export agency believes rules from 1975 about how to count households should apply today, we all about the future, but we are going to go back in time, the government of justice look at that and say they must know more than we do about how to count households or will the permit of justice say that seems backwards, why we talking about an analog uhf when everyone has gone digital and look at this with fresh eyes. I hope based on what we see, pretty aggressive enforcement when it comes to at t time warner merger that we see the same level of energy and enforcement when it comes to this merger and disregard this rather odd regression to the 70s the chairman has chosen. Alice in wonderland say that again. That is an unfair and underwood alice in wonderland discussion of what the german did. All the chairman did is say if you are going to reexamine the socalled uhf discount which is just a way of measuring the 39 you have to think about the 39 at the same time and what the Public Interest is, that is all he did and that is almost inarguably correct, 39 is highly antiquated in this day and age so if youre going to look at one you should look at the other end that is all he said. He said the Wheeler Commission which had only just changed the rule a few months before. This was not even a new rule, had made a mistake in deciding to undo the discount without looking at the it self because the Wheeler Commission said that would take too long and that is not a good way to make policy. He wants to look at it holistically, that is the right way to look at it and so he put the ball back on the field where it was before the initial mistake was made. Not so i followed what you said but you are smarter than me, maybe you understand and i dont. Can you just tell me, under the revision of the rule, with the merged company have to divest more or fewer television stations than under the wheeler version of the rule . Under the change wheeler made there are a whole bunch of companies that are overthecounter. Our transaction would be the best. Chairman wheeler did something, eddie understand it better than i do, this merged company would have to divest fewer tv stations, i dont understand why the change was necessary, and making a rule at the Expert Agency about how to count audience reach. He is making a rule, looking at the rule about what the ultimate definition of reach out to be. The question is not how you count uhf stations. The ultimate question is should broadcasters in an age where everybody else gets to reach 100 of the country only get to reach 39. That is the real policy question. He wants to answer that question. The part of justice will answer it. Abc, nbc, cbs all have 100 reach not because they own licenses or have licenses but they do that through contracts with Companies Like mine. Question from the audience, great questions. I wish we had time to answer all of them. David smith said st. Clair is, quote, forever standing like the universe and if you could wish for anything it would be complete instantaneous consolidation of the industry. Should thank be allowed to own every local station, should there be any limits . Broadcasters and not what the transaction. Is the argument that google has 100 reach so you should too . I answered that question when i described the rules that are in place. The antitrust division of the department of justice looks at these things, longestablished guidelines that dont allow anything remotely like that, they will be applied here. The rules of the fcc, the moment of justice, will also be applied here, that is a hypothetical. To keep some perspective here, the proposed rule change tomorrow is not to eliminate the ownership rules but just look at more closely on a casebycase basis. The top four. They are not looking at them, they are in this rating them. Im talking about the top four. There is this a rating from. What we are talking about with the National Ownership task is set in place by congress. Congress is 39 and congress has to change that, talking as if there is not a statute that precludes what they are talking about, looking at the discount in conjunction with the National Ownership is pointless because Congress Said 39 . And number 3, you are aligning national reach, talking about national reach, for the 4 hour youve been talking about the important of localism. You dont need 100 of the country to do a better job than these local communities. You want it because you want to extract more programming and if you want to reach that, start a network. I mentioned the ultrahigh frequency uhf discount early on and i think it is worth it for maybe you can say take two minutes to explain why was there a uhf discount but im old. When i was a kid if you wanted channels 1teen over Remote Control you clicked in. If you wanted 14 to 69 you would have to tune it like a radio. Those were uhf stations and they were at a severe disadvantage and nobody watched them. The programming was so awful it was unbelievable and that is why there were the uhf discounts to encourage folks to buy these less than optimal stations. That is why there was a discount but once we get to the digital tv transmission in 2009, that disadvantage went away and we got rid of her uhf discount when i was working for tom wheeler. It is hypocrisy for a deregulated to reinstate a rule that has absolutely no basis in reality, especially, a chairman who likes to say you have to take the facts as they are, not as you wish them to be. He wants to have that conversation. In reality what is the right number . Why is it 39 . He said he wants to open, to start that dialogue and create a record and get public input and look at todays advertising marketplace or consolidation marketplace and ask ourselves is this the right number . Im not afraid of having a dialogue, we welcome it and it is easier to have that dialogue in an agency that is set up to have input than congress. Thank you for explaining the uhf discount. Very passionate about it. What you said, there is no technological justification for it and everyone here agrees with that and youre making a procedural argument, the way we should consider it but even when you put sinclair and tribune together you would be 6. 5 over the 39 that currently exists. When you put them together and before the deal is complete they will have to come into compliance with under the current rule, the combination is over. They said in their filings they will come into compliance with the rule but this argument that because of rules, obsolete technologically and people take the other side from that but i will leave that aside, should be undone without looking at the fabric of the regulation it is a part of, it makes no sense which way you into the uhf discount you are immediately as an effect of massively constricting the ability for a group of companies to consolidate because consolidate has a bad name to it but that is what you do. You are not looking at the overarching rule of what number should be the right number, 39 , is that the right number 100, 80, 50 . The idea you should pool that one red without looking at the picture of the Market Structure, democratic chair of the fcc, when i got into the chief of staffs job he took me to dinner and had one piece of advice which is everything in the world is about Market Structure, you must think about Market Structure, if you dont about Market Structure, industries the count on the government to do the right thing are going to suffer terribly. We should look at this in an overarching Market Structure sense to understand where the broadcast business is in terms of appropriate level of consolidation. How that is objectionable i dont understand and that is apart from the concerns you expressed which are very real concerns, we do have a terrible problem with diversity ownership in media today. It is very widespread, not just limited media. How to solve that problem is something that the fcc deals with, i was there, i dont think you were at all successful in moving the ball and it is really hard but having taking, manipulating the consolidation rules for companies in an industry that is hurting as a way of forcing diversity to me is the wrong way to think about that problem. We have to solve it but we have to solve it in ways that are more with a scalpel than a sledgehammer like that. I will agree with one thing rebecca said because i have to agree with you on something. The minority tax credit was extremely successful. A claim what the minority you cant buy a tv station or anything expensive if you dont have credit. If there isnt a bank lender or investor, so how do you make an investment attractive . One way is give that investor a tax break that could be traded. You should what congress did was change the tax code such that somebody who did lend or sell to a minority owner got a tax benefit. That decision from the Supreme Court we are more limited in our ability to do rate specific incentives and that is a shame. Just look out the window to see we havent gotten there yet. That is the law of the land, nothing i would argue stops your country from voluntarily doing this and i hope when you are forced to that station and i hope you are forced there a lot, that will be sold to people who have not been in the business and that is one way to address diversity in the marketplace. An essential point we havent quite close the circle on, it is really essential here, if you talk about the value of the tax certificate policy and ability to spinoff stations, the success of the tax certificate policy was because the fcc ruled required limits that require divestitures to take place and if you lift the ownership also that sinclair can acquire the tribune stations without having the best stations there are no stations that are going to be spot off. As jim said at the beginning, if theres any value to the transaction it would be the spinoff of stations but if the fcc lifts the rules so no stations have to be spun off and the fcc lifts the rules so that large deeppocketed Companies Like nextstar and sinclair can buy up all the stations and skewer opportunities for new entrants many who are minorities and women to buy stationed at all, theres a delink a direct link between changing the ownership rules and opportunities for entry for new owners who are minorities and women. Finally i have to say for Eddie Lazarus to talk about the fcc manipulating the ownership rules for sinclair and tribune who have gained the system, having sinclair sidecar stations owned by the elderly mother of the ceo sinclair who was nominally a different independent company take a lot of chutzpah. I will let you respond but i will see if jim wanted to add anything there. I agree with everything and he just said. Even the closed book part . I wont respond on that. It is a problem when you look at what they are doing in terms of limiting these rules. In recent years because of Court Decisions and congressional action or inaction. The minority ownership policy has been largely ineffective and always been able to get some spinoffs in large mergers so to eliminate the rules with surprising spinoffs they make it virtually impossible to see any Significant Growth coming up and minority ownership. I will let eddie and rebecca have the last word on this and are two good questions i want to ask after that and we will close. We dont have any gsas at the tribune so on behalf of the company. The next question, what would the impact be on political campaigns and elections given sinclairs and call must run corporate directives and rightwing views . And also to others on the panel, just about the fact that sin purported to want to start a broadcast box . Is this about their political views . Answer the main question, for political campaigns. There is no impact whatsoever but i think when she is referring to is we have the National News or commentary. We launched a National News bureau we are very proud of, like many station groups we have a National Bureau where we cover National Stories and share them with our stations, these are completely objective news stories without any opinion. There will be no impact whatsoever on elections with respect to what we air with respect to our news. If you are referring to some short commentaries we run that is a tiny fraction of what we run at various times on our stations, the opinions of one person, they dont reflect the opinions of 9 people that work at sinclair and i dont have any impact on the concerns. Talking about much run these are segments sinclair stations are required to air, there is no editorial judgment to be exercised by whoever runs the station. Is a flaming the progressive democrat my opposition to this merger does not stem from the fact there are conservative views expressed any more than the opposition of all the conservatives against this merger stem from conservative views of the broadcaster. You wouldnt have newsmax and what america news and the blaze publicly opposing this merger if they were against conservative views being put on the airwaves. What we are against is the power. The power. Elections will be affected by that power. Who gets to buy ads, who doesnt. Why was it david smith and sinclair wrote their neck with affiliate relationship by not airing a story about iraq board eliciting a letter from senator john mccain saying that is unpatriotic . Because they didnt want that viewpoint getting out and that is the point, that is power. It is not about what views being a spouse, there are plenty of conservatives against this merger. It is how much power is being amassed under one roof. I dont care about the ability to deliver any brand 70 of the country. It he said tribune had jay as as as a Company Called dream catcher that has less as as. If you want me to explain there isnt any. There is a very big difference, we can leave that aside. The next panel. On a point the reason we have ssas in two small markets which are different. Doesnt make any difference. The reason we have them is the incredibly arcane rule that you cant own a newspaper and television station in the same market. Tainted the rules of contractual agreement which we have been talking about. The fcc passed on all this, the rule is about maker decided we didnt obey the rules. We are in compliance with the rules, and other rules you want but the rules that are in place. Here is the problem. You defended the newspaper crossownership rule, till newspapers were put out of business, it is the same process, newspapers were desperate for revenue, wanted relief from ridiculous old rules around owning a station and a newspaper in the same market you could share a news bureau and save money and serve the community better, but that is too dangers, too big an accumulation of power and as a result community after community after community, local newspapers are failing and that is an unfortunate battle. We dont have time for me to ask why you are wrong. One last question and we will wrap up, thanks for staying for so long and thank you, panelists, for having a conversation. Last question, sorry i cant get to them all. Antitrust laws are all we need to regulate broadcasters, shouldnt we also get rid of other regulations that distort the market . Coming back to where we started from. If we are going to say lets get rid of the fcc, broadcasters are not the only industry that want to get rid of the fcc, let antitrust rules rule, let the free market rule, why shouldnt broadcasters have benefits like retransmission . Which is codified in law . I would quickly say the reason transmission consent is important is as we have shown our declining revenue is not sufficient to support the very things everyone on this panel have said they want us to do and they want American Communities to have a. Advertising is an important, the most important revenue stream for us we cant do it without retrends. If you care about free and local broadcasts you are going to have to find a way to supplement our way of financing it without a dime from the government and this is the most fair way to do that. I would say if you are asking given the fact there hasnt been a major rewrite of the telecom laws since 1996, whether this is an area in general that is ripe for congress to take a look at and about what the rules ought to be, now that we have ubiquitous highspeed broadband and a bunch of other questions my answer would be yes but i dont think you should take a tiny corner of the media world and distort that particular piece by looking only at what might be outmoded outmoded laws and regulations in that one area. It is absolutely time for a rewrite of the telecom act, but the trouble is it is hard to to legislation as all of us in this room are painfully aware. A lot of it gets pushed to the regulatory agencies and we battle it out. A lot of battles are over many, some are over other things, but it is all very hard and that is what makes debates like today. As a footnote the ecosystem broadcasters exist in is very complicated and involves private property, intellectual property that has jurisdiction under copyright laws, broadcast laws and that integration, if you peel apart just one, retransmission consent, without addressing the overall issue of property and how broadcasters, Program Providers are compensated for their effort and for their intellectual property, that would be a disservice to the entire industry. You have to do it holistic we all at once and that is hard to do but you want to do it in a broad, white paper look at how we should regulate content and private property. Carmen, jim, andy and david and we will close it out. One quick point and i think i do agree with you that we should take a holistic approach but what i would like to see is having some study about the impact this will have on diversity, especially ownership for women and people of color. We need to understand the impact that change will have before we move forward with any changes at all. I would concur with carmen. Where we are is the fcc is allowing, if there. Rule changes they are proposing for tomorrow, wholesale consolidation of industry without any consideration what it means for diversity, looking at the fcc, perhaps a couple spinoffs when we have consolidation on this level that will be inadequate and the kind of decrease of minority ownership in broadcast is going to continue. I said enough, i rest my case. Last word. We started by talking about why broad just is different. Some of us believe it isnt, it is one of many sources of information along with internet and something that gets invested next year we never heard of which others believe it has some unique Properties Like the fact there is government, public taxpayer support or the fact local news is still the most popular way to get your information but make no mistake, what goes on at the fcc tomorrow, this is not an abstract economic question. Theres a real transaction with real implications waiting to be consummated and it will have an impact on all of our lives and we have to be ready for it. Thank you, this has been fantastic, thank you so much and to all of you. Have a great afternoon. [applause] [inaudible conversations] [inaudible conversations] the Senate Finance committee will continue debate of the tax reform plan them alive coverage on cspan3, online on cspan. Org or the free cspan radio apps. Tuesday night on cspan, former Vice President joe biden and Ohio Governor john kasich discuss the need for bipartisanship in the trump era. The discussion took place at the Biden Institute at the university of delaware. Here is mister biden talking about a conversation he had about donald trump. I was recently with one Prime Minister in europe, i went to speak at a conference and he wanted to see me so i thought it was a courtesy call. I thought it would last 10 minutes. It lasted 21 2 hours and at one point this Prime Minister said, did you see what he did . Sitting the same side of a conference table as close as you and i are, he stood up and said took the president of montagnais go and shoved him aside and stuck his chest out at his chin was all i could of was il duce. Not a joke. Not a joke. That is what people are thinking