Now, before we start i want to thank a couple of folks and a couple of institutions. I want to thank the institute for technology, law and policy. The institute for public representation, which is also part of Georgetown Law Center, the betten foundation and no civil la foundation for sponsoring this event. I also want to thank senator richard blumenthal, and i want to thank jamie who is a Research Fellow at georgetown and kind of my personal law clerk and doing a fabulous job. And alexander givens whos the head of the institute who some of you may have heard broke her leg when she and her son or daughter were shopping at h m in friendship heights, a shoplifter knocked them over and down a flight of stairs. I was in that h m, like, the day before. If people could send well wishes to alex, shes done a fabulous job running the institute. I also want to thank the other georgetown students gathered by Andy Schwartzman, one of our panelists, who are going to be helping today with various and sundry logistics. Let me set the stage what are we talking about today. So in may of this year, Sinclair Broadcast Group announced its intention to buy broadcast licenses of Tribune Media company. St seeking approval both from the federal Communications Commission and department of justice for the merger which, if consummated, will result in sinclair owning 233 stations covering 72 of american viewers. The next largest tv broadcaster would have 78 fewer stations. At the same time, the fcc will vote tomorrow to eliminate or loosen several of the media ownership rules including newspaper broadcast ownership rule, the tv radio crossownership rule and the local tv ownership rule. The pai fcc has already reinstated a rule that counts uhf stationings as half a station for purposes of the ownership rule. And lets just take a pause. How many of you know what a uhf station is . Okay, every is there anybody under the able of 40 the age of 40 concern. [laughter] oh, i saw three hands. Well have an opportunity to talk about that a little later and whether that was a rule that should have been reinstated or whether chairman pais has engaged in, actually, reregulation which really hasnt been his forte since hes been at the fcc. The other thing the fcc did in the last couple weeks, last month or so, was eliminated the main studio rule which requires a local broadcaster to maintain a studio in its community of license. And it sounds like a really kind of old and cricketty and unimportant rule, but i think actually when you combine consolidation with the getting rid of the need to have a presence in a local community, i think it actually is pretty meaningful. So maybe well get to that today. So these issues are, obviously, extremely timely with vote coming tomorrow. Were going to talk about whether this merger is in the Public Interest and whether media ownership rules make sense in this day and age when you have many multiple outlets, 500 cable channels, an internet thats chock a block of information, do they make sense. So let me talk about how today is going to go. Senator blumenthals not here yet, so as everybody knows, when he comes, we will let him speak regardless of what were doing. So i think what well do is well start off with a debate. And the debates going to focus largely on the ownership rules. Not so much on the merger. Then we will follow with the panel, and then we will have audience question and answer. And there are cards on your seats. I am not going to do the thing where i call on people. Thats bad. We are if you have a question, please write it down and, jamie, are you going to be the one collecting them . Okay, raise your hand and walk around and show people who you are. Raise your hand okay, thank you. Yeah. Dont be shy. Be like me. Okay, good. [laughter] show people. They will be collecting the cards, and jamie will go through them and select we wont have a whole lot of time for audience q a, but hopefully, folks will stay afterwards and answer more questions. So lets start with the debate. Now, were very, very lucky i think it was, what, it was 9 30 this morning i got an email from john hain who was supposed to argue in favor of loosening the ownership rules that he was too ill to come. I was, i think, still in my pajamas. I was not happy but, thankfully, he brought in his place a fantastic substitute who ive known for years, jerry fritz, whos the executive Vice President for strategic and Legal Affairs for one media which is a joint venture controlled by sinclair. So jerry, i mean, literally at the last minute has agreed to debate the very excellent David Goodfriend who some of you may know from some of his appearances on msnbc. He is the principal of the Goodfriend Group and also adjunct professor at Georgetown Law Center. So without further ado, each debater will have seven minutes to debate, and then whoever goes first which i believe is going to be david will have another two minutes to respond. So, david, the floors all yours. [inaudible conversations] thank you, gigi. I have to say again, gigis not the only one whos grateful here that jerry showed up. I am too. He literally got last minute notice of this and has stepped in, and i think thats, that deserves all our thanks. And now with that, i would like to take him on. [laughter] were going to hear a lot today and tomorrow at the fcc about how the world has changed. The world has changed. The world has changed since the ownership rules were first promulgated by the fcc back when jerry worked at the fcc, and that was a little bit ago. [laughter] the world has changed. Theres the internet. The world has changed, theres cable tv. The world has changed, look at all the Different Social Media platforms we have today. The world has changed and, therefore, these antiquated, oldfashioned broadcast rules have got to go. Because, the theory continues, thats the only way we can still have free over the air broadcast tv. Thats the only way to survive in the modern world. Now, if thats where the story ended, i would have to concede you win, jerry. Thank you. [laughter] fortunately for me and for the rest of us, though, thats not where the story ends because thats not where the story began. The story began when broadcasters in this country got a great, great deal. It was a trade. We are going to give you, we, the American People, the american taxpayers are going to give you free spectrum licenses, the best that there is in every single market. And not only that, these spectrum licenses that are worth with billions of dollars today under todays law, you can sell them if you want and get billions of dollars more. Free. From the United States taxpayer. But it doesnt stop there. The laws passed in this institution give broadcasters even more value. You, the broadcaster, are guaranteed distribution on cable and satellite tv. Show me a business person who would not love that deal. Guaranteed distribution of your product. In law. You, the broadcaster, are given a legal monopoly. Thats right, a monopoly under the copyright law to provide network programming. You are the only one in your market permitted to do so. If i want to buy a newspaper from another city, i can go to a bookstore and find a newspaper from another city. If i want to go on the internet, speaking of the internet, and find content from anywhere in the world, i can. But not when it comes to the contempt on broadcast content on broadcast tv. No, we the american taxpayer give broadcasters a monopoly for networkaffiliated content. And we also from time to time when were worried about the budget and taxes and where revenues going to come from like we are right now during tax reform, we ask is there any possible way to get some additional revenue from these licenses . What if we charged a fee for using this public property . No, say the broadcasters. No fees. We want it for free as weve always had it. Now we are supposed to get something in return. The American People are supposed to get something in return, and the bargain always went Something Like this. Number one, we get free over the air programming. Advertisesupported, available to 100 of house households in the United States. For free. Number two, we get local news, weather and, yes, sports because thats important. Localism. We get that as a Public Service from the broadcaster. And the other thing were supposed to get and this is where we get to our conversation today were supposed to get a wide variety of perspectives. Diversity of viewpoint, diversity of perspectives. We all know this countrys filled with different viewpoints. We also know that the owner is boss. And if the opener as boss says owner as boss says i want the viewpoint to be this, guess what . Thats what the viewpoint is going to be. And we, the American People, say to the broadcaster take it, take it all. Have it for free on us provided we get those things back. Its actually played out that way even in the midst of this vast market with all these different choices and all these different forms of technology according to the i Pew Charitable trust. 82 percent of americans across all age groups trust local broadcasts the most for local news. Local broadcast is trusted the most for local news. By the way, that survey also found that people trust their local broadcast news more than they trust their own family. [laughter] for whats going on locally. Now, in my view if you want all the freebies, its got to come with the favors in return that weve asked for. You have to provide local news, and you have to provide a variety of voices. And if you want to take away those restrictions, thats fine, just give back all the goodies youve gotten in return. Steve scalise over on the house side, Republican Leadership member, introduced a bill multiple congresses that says well get rid of all these regulations on broadcast, but youre not going to have mustcarry and the copyright exclusivity anymore, and guess what, broadcasters . Fight it. What we want is all that matters. Not what you want, the public. Now were going to talk about a specific transaction, a specific broadcaster. Its sinclair. And theyre represented here today. And were going to ask ourselves what happens when big broadcasters get bigger . Well, ill give you a little preview. Sinclair, when it buys a station, fires local reporters, local sportscasters, local staff and sends those functions to baltimore, its headquarters. And tribune, which it attempts to buy in this transaction, happens to have a better track record. In fact, we did a study of local news at both companies and found that at the top three stations that provide local news at both companies, tribune provides twice as much. Sinclair must prove to you today that by them getting bigger, the local news that tribune provides is either going to be just as good or even better after the transaction. Its past its prologue and you ask people in Oklahoma City or rochester, new york, or seattle where sinclair has bought stations, it passes prologue, it aint gonna get better. Its gonna get worse. Which begs the question, what are we the American People getting from this bargain . And why should these ownership limits be lifted so they can get even bigger . Because it passes prologue and the behavior of the nations largest bro broadcaster tells us anything, it doesnt work out well for the American People. Jerry . Thanks, david. And thanks, gigi, for the invitation. I thought about saving my head today to emulate my friend [laughter] but i dont think i could pull it off. [laughter] i apologize if i have not read all of the pleadings in this proceeding, but i have been a part of these rules since i first worked for chairman wiley and commissioner lee back in 1975 through my first, through my fcc staff time reviewing station sales in the mid 70s to my time with chairman fowler during the Reagan Administration in deregulating some of these rules in the 80s and trying to cope with them and advising station owners for the past 30 years. So i bring a little bit of perspective that might be enlightening. That might be enlightening. The question today, as david suggests, is whether we need fcc rules limiting broadcast ownership in the age of ubiquitous, High Resolution internet streaming, new over the top services and more competition than ever from nvpd distribution. We do not. In todays hypercompetitive media marketplace, antitrust principles are more than adequate to govern consolidation in Television Broadcasting. We dont need separate rules administered by an independent agency imposing artificial and arbitrary definitions of competition and diversity. All of which were chosen decades ago as political compromises rather than in response to rigorous thought about how Television Distribution works. Two basic premises guide my views. First, i believe free over the air broadcasting is a Vital National asset. A treasure even. I dont take it for granted. Whatever you say about programming markets or retransmission consent or advertising markets or the highest and best use of spectrum, i urge you to consider this if free over the air broadcasting did not exist and the fcc allocated spectrum for it today, would investors provide capital, and would the new broadcasters be able to outbid internet or multichannel pay platforms to acquire the very highest cost and most popular programming and produce hours and hours of live news in every market . And that is day in and day out and make it available for free . Access to people is no longer a barrier to entry, but nobody else does these things today. Second, i understand that theres no free lunch. Weve chosen to finance over the air Television Broadcasting by allowing broadcasters to compete for revenue in the marketplace. The decision to finance free over the air broadcasting with profits earned in the marketplace means that broadcasters cannot take anything for granted. They have to earn their supply of programming by paying for it. Nobody requires cbs stations to broadcast nfl games. Nobody requires the nfl to distribute its programming on a platform thats available for free or to sell games to nbc when espn and fox sports will pay more. When i hear the typical arguments against broadcast consolidation, the one fact that never gets acknowledged is the simple premise that broadcasters have to compete against unregulated competitors for every minute of programming and every dollar of revenue. But they will say broadcasters, as you heard david say, have special Public Interest obligations, and they got their spectrum for free, and that justifies limits on control. The problem is one does not follow the other. The canard that broadcasters got their spectrum for free and that justifies ownership regulations that thwart their competitiveness drives me crazy. [laughter] very few stations are in the hand of origin ally seven sees who got their stations for free. I was there when chairman fowler dissented to giving the original cellular licenses away to the incumbent phone companies for free with no Public Interest but responsibilities. The same was true for dbs licenses, most of all the licenses dbs, cellular and broadcast issued for free have changed hands to buyers when made market price. More to the point, how they got their stations and limits on ownership is an intellectual non sequitur. Ownership limits are not logically derivative from how a station was acquired. The fccs politically divide ownership rules have very harmful effects in the market. I was an aboutive witness in the absurd active witness in the absurd unintended consequence of making washington, d. C. A monopoly newspaper town when the fcc made joual briton separate the star from w [inaudible] and it died. Nationally, we do not need ownership caps. Because those particular rules prevent new competition to existing National Distribution platforms. As Preston Patton pointed out in his, just two days ago in his wall street journal oped, the rules have the effect of freezing National Television to abs, nbc, cbs and fox. They have 100 of american eyeballs. Why shouldnt others have that same option . Locally we dont need ownership restrictions east because we need either because we need to allow those who are willing to invest in local markets to organize in a way that allows them to be as profitable as competing platforms. In the system weve chosen to finance broadcasting, profits commensurate with the profits of competing platforms are not just good, theyre essential. Even if you belief that, oh believe that, oh, broadcast ownership should be regulated beyond antitrust, what ownership rules are right for 2018 and beyond . I reject as preposterous the argument that the ownership restrictions on the books, written at a time when people learned of pearl harbor bombings from three over the air networks before facebook, before google, amazon, netflix or even directv or davids former employers at dish existed. And when at t was still just a Long Distance provider, whether that is the best framework for the 2 isst century 21st century. I sometimes feel like rip van winkle. Well, heads up. The world has changed, rip. [laughter] get over it. The u. S. Shows the financed broadcasting through market profits. That was easy when broadcasters had no competition except for each other. Restrictive ownership limits have bad consequences, but they were not existential threats for free television. If you want the marketplace to find a way to bring you local news, nfl games, highcost scripted programming to everyone for free, you have to let the marketplace figure out how to do it. Because programmers are going to sell to the highest bidder every single time, and the government aint gonna subsidize them. Thank you. David. Well, when i said i was happy jerrys here, i take it all back. [laughter] jerry, you ended but saying the marketplace will figure it out, and im going to come back the a point i made earlier. If this were a real marketplace, the government would have no role in there whatsoever. But as long as the government has its thumb on the scale in providing guaranteed distribution and, yes, free licenses at a time when other competitors have to buy em, we the American People get something in return. Heres an analogy, okay . Its an analogy i use all the time. Did you know that 29 of the 32 nfl stadiums in this country were built in whole or in part with taxpayer money . Now, that taxpayer money is your money, and it went right into the pocket of a billionaire owner. And what do you get in return for that . 400 per family to attend a game, thats what you get. Or maybe the game gets blacked out altogether, or maybe youve got to subscribe to a really expensive network to get it. Thats not right. As long as the American Public is giving something to an industry, we have every right to ask for something in return even if that means its not perfectly efficient from an economic standpoint. And i think the way to handle this debate is to say, okay, we do want free over the air broadcast, and we to want localism, and we do want things available to the public for free. Those are all great things. But you only get to argue that the rules should go if you can show that somehow theres a disconnect between the value we get in a diversity of voices on one platform that matters most for local news, broadcast. And so far i see nothing, and i mean zero, in the filing submitted by sinclair at the fcc that would show that. In fact, every time one of us whos opposing this merger suggests a question that sinclair could answer like could you please show us how your local news hiring and content compare toss the rest of the industry or even just compares to tribune, the company you want to buy, crickets. No answer. Except maybe platitudes like were going to bring local basketball, local high school basketball. Thats great if i can compare it to how the rest of the industry or tribune does. So once again, we can talk about the free market all day long. But as long as uncle sam and us taxpayers are subsidizing this industry, we get a say, and we want local news and local diversity. Lets give our debaters a hand. [applause] [inaudible] and once senator blumenthal arrives, we will give him the podium. He can have my podium even. Okay, thank you. Andy told me its a lectern, not a podium. So thank you. Now ive been corrected. So let me briefly introduce our speakers, and i do believe their longer bios are on the Georgetown Law Center web site, if im not incorrect . But theyre also very easy to find in any search engine, and im not going to mention any particular search engine. [laughter] look them up, because theyre all terrific folks, and i feel very, very lucky to be able to bring together this panel. So directly to my right we have Rebecca Hanson whos senior Vice President for strategy and policy for Sinclair Broadcast Group. Eddie lazarus, executive Vice President and general counsel for tribune corporation. By the way, this is a big deal to have the two representatives of the memorying parties. So i merging parties. I called in a chip with both of them, so thank you, guys. Then we have carmen sing curato with the National Hispanic media coalition. And directly to her right is jim winston, the president of the National Association of blackowned broadcasters. To his right is my mentor and a longtime friend and sometimes pain in the whatever Andy Schwartzman whos senior counselor and attorney at the journaltown institute for public representation. Welcome, everybody. I think the first question i want to ask, we had two very stark visions there, right . One vision was of a industry that gets a lot of government and taxpayer benefits and, therefore, owes something to the public, the fiduciary. And one of the things they owe is a diversity of voices. On the other hand, we have a scrappy competitor and a very competitive marketplace. And where the free market, according to jerry fritz, ought to rule. Okay . Whatever needs to be done to make sure that broadcasters survive needs to be done kind of the way i read what jerry was talking about. So i thought i would ask anybody on the panel they wanted to respond. S which is it, or is it a little bit of both . Rebecca . Sure. Ill go first. Yeah, david payments a very rosy paints a very rosy picture, and a lot of the points he makes are not disputable except that we got our spectrum for free. If thats the case, im going to be expecting a 4. 4 billion check back from eddie at some point in addition to the 85 billion that weve paid over the years in acquisitions that weve made. There is an investment in spectrum regardless of, as jerry pointed out, the origin of how the original licenses were issued. But the other part of the picture that david painted is what you see before you, and its basically the environment in which we try to use these socalled government benefits to create a selfsustaining financially solid ability to deliver local news. That, this is a slide showing where broadcasters are in the middle in the media ecosystem in which we have to work. We have networks from whom we buy programming, 50, 60 times our size and mvpds where we distribute our programming. To summarize where we are in this landscape, the major challenges in which were supposed to provide all these Public Benefits include major declines in our primary Revenue Source which is local advertising. Major consolidation of satellite and Cable Companies with nationwide or near nationwide footprints. Consolidation of National Programming networks. Increased costs of programming including sports. Fragmentation of our viewership and entry of massive competitors such as apple, google, netflix and facebook. So i wanted to lay that out to set the scene that its not as black and white as david presented it. And ill just stop there for a second. Andy, you want to respond . Yeah. Lets talk about our spectrum. We own the spectrum. The public owns the spectrum. We are the landlords, they are the tenants. Sinclair doesnt own spectrum. When rebecca says our spectrum, thats not so. What sinclair bought was licenses. Their license is for eight years which expire, and they have a right to a renewal if they earn it. Unfortunately, the fcc rubber stamps that. But theyre supposed to earn it with Public Service. But make no mistake about it, we own the spectrum. And you need to i view it in that context when you realize that what we are saying is that because we, the public, own the spectrum, we can set appropriate conditions to make sure that that spectrum is used to benefit the public. And that includes insuring competition and diversity. So when jerry says, oh, well, antitrust can take care of it, antitrust laws about competition. The Communications Act is about diversity. And diversity is ultimately the most important thing that were trying to get here. So when i hear this its our spectrum, it just really, really, really turns me upside down. We own it, they dont. Okay. Eddie and then david, and then i want to move on to another topic. Well, theres an awful lot to be said on this one finish. Turn on your mic. Is it on now . Thank you. Im not sure its really that fruitful a discussion to talk about who owns the spectrum quite the way we are. I think all local broadcasters feel obligations to their communities. Thats what sets local broadcasters apart. But the trade that david described is just not accurate. Theres no requirement that local broadcasters provide local news. Many local broadcasters, some of the biggest, the religious broadcasters, ion, many local broadcasters dont provide local nudes, and the reason news, and the reason they dont is its hugely expensive. The people who provide local news, and tribune provides as much or more than most, is because its a differentiator. Its because they live in these commitments, they want to serve the communities, and if they can afford it, they invest deeply in local news, they invest deeply in local sports, they invest deeply in their anchors, in their relationships with the communities. But to do that, its not a government requirement. Thats something you do because you think it is the right way to run your business. And both sinclair and tribune have run their businesses that way. One other small point. David talks about that in its biggest market tribune puts on more local news than sinclair does in its local markets, but theres actually a very simple explanation for at least a good part of that which is our biggest markets new york, chicago and l. A we have either cw affiliates or independents. You run local news because youre not required by your Network Partner to have Good Morning America or the today show or what they put on and require you to put on when youre a Network Affiliate whereas sip claire, most sinclair, most of their biggest stations are Network Affiliates and, therefore, theyre required in many circumstances to run network programming. Both companies are deeply, deeply devoted to local news. Its and the reason for that is thats our way of delivering value to consumers. And david said one other thing which ill just point out which is we get automatic distribution. It is true that local broadcasters can choose whats called mustcarry to get local distribution. But thats not what sinclair and tribune and most of the major broadcasters do. They choose retransmission consent where the free market is involved where you negotiate with the cable and satellite providers for carriage. You dont get automatic cager. So the structure carriage. So the structure of the marketplace is very different i jump in very quickly. Very quickly, eddie makes a very important point because in some of our smaller markets we have awardwinning newscasts that do an excellent job year after year, but the ad revenue in those small markets is not enough. So those newscasts are not profitable. If it werent for retrans we couldnt be delivering let me just stop here. We have a national audience, not just the wonks in d. C right. So when you say retrans and retransmission consent, could one of the two of you, rebecca or eddie, just explain to people what that is . So as a broadcaster, there are two ways you can get distribution on the main distribution platforms. One you can send out your signal over the air, and people can get that for free. But if youre subscribing to cable or satellite, that happens in one of two ways. Either you choose something called mustcarry which mean that is the cable and satellite people dont pay you anything for your signal, but they do have to carry it, or you choose whats called retransmission consent which is youre going to pay me for the consent to retransmit my signal. And what happens then is you engage in a negotiation over what the price of that is going to be, and the cable or satellite operator this is oversimplified, but basically pays the local broadcaster for that signal in that market. And then the local broadcaster, and this is also very important, pays an increasing share of that money back to the network that its affiliated with. So if its a cbs affiliate, youre paying it to cbs. If its an abc affiliate, youre paying it to abc. Whats happened in the local marketplace for local broadcast is advertising dollars, which are the major driver of revenue at all local broadcasters, is flattened down and has been for years because of the increased competition from cable and the internet, you know, google and facebook and all the rest of that. Retransmission consent revenue is going up, but the share that the local broadcaster is paying back to the networks is going up faster. And so all local broadcasters feel themselves in a tremendous financial squeeze, and that is what [inaudible] thats what that slide is. And thats what drives a mature industry like broadcasting to consolidate, because that drives synergies which allow companies to save money and reinvest that money into the local communities. In the absence of that, there will be no growth in the broadcast industry until theres a technological change in the industry. And that is why you have rebecca and i sitting up here as members of two separate companies that their shareholders are interested in becoming one company. Daled, i want you to respond david, i want you to respond, but i also want you to respond to what eddie said that broadcasters dont have a legal or statutory obligation to seven their local communities i didnt say that. [inaudible conversations] we dont have a, we dont have a requirement to put on local news. That is one way to serve a local community. But there are other, the vast majority of broadcasters in every dma in this country do not put on local news. That doesnt mean theyre not serving their local communities. Yeah. Because my mentor, Andy Schwartzman, taught me about the thank you for clarifying it. Im good. David. Well, the first thing ill say is if sinclair and tribune are serious about maintaining the level of local coverage and staffing at tribune stations, i think that they coulding suggest be in writing in any order that the fcc puts out in approving this merger, but youre never going to hear them commit to that. Because as i said before, sinclair buys stations and fires local resources, local reporters david, you really want the government to dictate to broadcasters what kind of content to put over the air . I didnt say that. Just last month the entire Washington Community was up in arms because chairman pai didnt come out forcefully enough in favor of the First Amendment so that nbcs licenses wouldnt be in jeopardy. For you to suggest that the government in an order from the fcc should direct broadcasters to have any, any specific type of programming would be just the most constitutionally infirm decision well, you and i both know it would be a negotiated concept decree out of the department of justice or how about just a letter . How about a letter from the ceo of sinclair saying i will not cut local staff in chicago, l. A. , new york or any other tribune property . You will not hear it because it would be a false statement. As for retrans we know one thing for sure, this company intends to raise prices. Look at the transcript from their investor call where the ceo said were going to raise retrans fees. That means you, the american taxpayer. If you subscribe to cable or satellite, your prices will go up. I have worked in washington maybe not as long as jerry but for 27 years. Or andy. And never have i seen a merging company come to this town and say please approve our merger, we intend to raise prices x. Maybe thats why we have conservatives like chris ruddy who runs news max and progressives like Andy Schwartzman on the same page agreeing that this merger is bad news. Maybe thats why even under antitrust law youve got four attorneys general from different states, including sinclairs home state, saying this is a bad merger. I think the raising of prices and the failure to commit to localism is really spelling a bad deal. I want to shift gears just a little bit because we havent heard from either carmen or jim, and theyre got a lot to say theyre theyve got a lot to say. First, a response to what youve heard over the last ten minutes. Also i want to focus, were talking about retransmission concept fees and, you know, making a profit. But obviously diversity of voice, the concern about diversity of voices affects other things. It affects our electoral process, it affects whether marginalized communities will get to speak. So i was hoping jim and carmen maybe you could talk a little bit about some of your concerns not only with the change in the ownership rules, but also perhaps with the merger as well about its impact on voices of color. So, carmen, why dont you start and then jim follow. Absolutely. And what ive heard a lot of talk about localism, but i havent heard much talk about diversity and the impact this will have. And were talking about the marketplace. As it stands, women and people of color lag far behind white men in broadcast ownership. And the number for latinos is dismally low. Its about 4. 5 of broadcast television. And when youre talking about diversity, when you consolidate and make these mustrun segments that are centrally produced and distributed to the local stations across the country, you are pushing out and keeping diverse owners out of the market. Solely as a resource for news. And the numbers are even higher for Spanish Speaking households good it is 45. 7 percent. I thought this consolidation will not curve the diversity in that community. Jim . Yes, thank you. I feel like i need to give a little history here is the president of the National Association of black on broadcasters my guess is very few folks in the room may be familiar with this. I will go back a little bit. In 1978, the Communications Commission recognizing the lack of diversity of ownership of broadcasting particularly among minorities created a there we are okay. Created a minority ownership policy. Which was designed to increase the ownership of broadcast authorities by africanamericans and other minorities. The program worked very well in 1978. There were 36 africanamerican owned radio stations in america. No africanamerican owned television stations. At its peak, they represented 250 american owned radio stations and unfortunately the 200 for the 50 radio stations and 11,000 in america and the television stations were out of 1400 in america. Since that time, because of congressional and fcc policy changes, numbers have actually decreased. Now we are at 12 full Power Television stations and hundred and 80 radio stations. We talked about consolidation in the industry, it is already caused a great loss of africanamerican ownership and minority ownership throughout the industry. As carmen was saying, minority communities rely upon broadcast, radio and television for their news more than the general market. We talked about consolidation and industry, it is always a matter of great concern and historically we have always been a, a kneejerk response. Consolidation. The sinclair tribune merger comes at an interesting time because recently, we have been in conversations with the nab and they brought home a really key point for us. Is the National Association of broadcasting. China to talk in acronyms if you can help it. The association, what they brought to mind was this market chart that you see in back of you. If you look at the Largest Television companies, you see that there are a fraction of those companies that have to compete. See have comcast nbc up there with the huge market. You have at t directv up there. And so, if youre a pew broadcaster in 2017, youre competing against companies that are many more times your size. Not to mention facebook and google. All of whom are looking for the advertising dollars. So where we are now at a crossroads trying to figure out how do we navigate . If the broadcast industry as a whole is at a disadvantage, what does that mean for us as africanamerican broadcasters . When i look at the sinclair tribune transaction, i am hoping that it will be some because there is a discussion that some of the stations are being acquired by sinclair maybe spun off and in fact maybe to minority broadcasters. We look at this in a complex way more than we would have previously and i think it does require that the fcc have a very hard and close look. And we hope the kind of things that sinclair and tribune have been talking about in general terms with the merger have gains in minority ownership. Led to not only respond to a carmen and jim exhibit also to the general question. This is going to create a broadcast that no one is ever seen before. 232 stations, why is this in the Public Interest . To respond to what i heard in carmens remarks, that there is an underlying causal relationship between the broadcast ownership limits and minority ownership. That has never been proven to be the case. The only thing that has resulted, provably an increase minority ownership was congresses minority tax credit. And if congress were to bring that back i think you would see an increase in minority ownership. Because historically that is the only data that has ever proven what causes minority ownership. And jim yes, you do correctly point out that to the extent, we do plan that we are going to have to spin off some stations. Right now 20 percent of potential buyers of the stations are either minority or woman on. It was not clear but you should be aware that it is a very strong percentage and we are very proud of that. I guess going way back to what david said, i really have to take off the table his baseless allegations that when sinclair buys a station, we domain and fire everyone and run it from baltimore. That is simply not true. That is a caricature of a narrative that is being spun. It really clogs the policy debate that should be discussed which is, how do we fix this situation so that free over the air broadcasting continue. We have filings how many hours of news we have added to the broadcast, where we have added investigative report is done where we have added digital reporters. I do not want to waste precious time going through those but we are happy that our filings speak for itself to the people who really are making the decisions on this. Which is the fcc. Rebecca let me get back to this larger question. Is that your Public Interest case . Give me the affirmative case and eddie, you can chime in as well please. What do you say to craig erin in the second row about why your merger is in the Public Interest . Why should the American People support this merger . Is it just that . Because im not sure that particularly persuades us. We believe that free over the air broadcast should be just as compelling and have just as high Quality Content is content that is migrating behind pay walls. And you can only do not with scale. Weve talked about news. Were investing a lot of news. But there is other content invention for free over the air broadcasting. And sports is a great example. But look at shonda rhimes. Announcing that she is leaving abc. I mean most successful africanamerican woman producer who is going to netflix. And if you like greys anatomy or any of her other shows, you will not have to pay 10 a month. With scale, broadcasters can keep the Quality Programming on free over the air t. V. Because we believe it is part of the system and we do not want to see this become a secondclass service for people who cant afford cable who do not want to pay for cable. And you only get that in this day and age. You only get that with that. Did you want to chime in . Please [inaudible] with a particular role in over the air sports. I would have thought candidly that he would be one of the biggest cheerleaders for this merger. And the reason for that is, if you look at our portfolio, the only way to see the nets or yankees if you do not have the money to go to the ballpark and you are a cable or satellite subscriber, is on wpix in new york. If you are one of the hispanic in los angeles, and he wants to watch the dodgers, and you do not for you cannot afford the park or it is inconvenient or youre not a cable and satellite right evaluates the dodgers is to watch them on the local station in Los Angeles Chris him in chicago. We have our shows on wgn. These are hugely expensive contracts. It is exceedingly difficult for local broadcast to compete. It is difficult National Networks to compete with overthetop and with cable. But for local broadcast to compete is a possibility we have managed to do it. Without deep pockets, you cannot continue that and more games are going to go behind that p wall and the merger is a way that, of all the broadcasters, the one that i would say is most devoted to sports that spent a ton of money to buy the tennis channel is sinclair. They understand the value differentiation. And i dont understand why that is not a plus. And your suggestion that we would walk away from that. That we walk away from valuable properties that are very popular with our audience. It is just silly. Can it is explain what a pay wall is again. A payroll is basically t. V. For pay. He had to climb over the wall or pay whoever the gatekeeper is to get the programming. That would be the acronym and. Acronym freezone. Meals explain why he can look me in the way that he should say i have all people should care about this sports issue. I am the founder of a sports we petitioned the fcc to have the sports blackout rule. They unanimously voted to end it including both from chairman and the commissioners. I care about sports and it being available to the public and free over the air tv. My beef is not with tribune. You guys have done a great job of putting free over the air sports on tv. Im glad the image in the tennis channel though because let me preview for you sports fans, what will happen once sinclair takes over. Theyre going to take the sports rights that they will acquire and push them onto the paid tv, the pay will properties that they have like stadium, like tennis channel. So you will not be able to get them over the air. You will instead have to pay more to watch a local sports. Which is i think is a tragedy. I would be the first to say that sports on the air are important. But let me also remind you that the nfl, but we are fighting to end the sports blackout will, with the regulatory support, nfl games are going to come up broadcast t. V. And you have sports camp fans to blame for that. And then the fcc voluntarily and is on blackout practice peer why . Because broadcast is still the only medium in the United States when you can reach 100 percent of television households. So if your advertisers include budweiser and coke and pepsi and other brands that require penetration of 100 percent you will still get broadcast advertising. And as long as local broadcast is still, and it is. The most popular place to get your local news and guess what . You still going to have an extremely huge audience on broadcast. I do believe in keeping sports on the air. I do not believe this merger is a way to get it. Rebecca youre going to put all this was behind the socalled pay wall . The stadium is not behind the pay wall. Starting to roll out a broadcast component probably on the digital sub child. So that fact needs to be corrected. And eddie wanted to respond. I dont know what bases you have are saying they would move those for off broadcast. The reason they want it that when you do set negotiations, with the big one of the ways you get paid is by having the sports on your channel. If they move it behind a pay wall, theyre going to end up losing money and that makes no sense to requested that mean that you will commit to not taking on it programming . Or will subscribers get the benefit a Quick Response and then i want to move on. Which of another [multiple speakers] that is one of the major reasons broadcasters do get the money they get answer the idea in a disincentive for sinclair to move out of broadcast games on the pay wall is to me, makes no sense and i say that to someone who is not involved in sinclair is thinking about it but just as a broadcaster, im going to stop you there. I want to go to andy now and i want to talk about something, shorthand called sidecar agreements. For years, probably 25 or 30 years broadcasters have engaged in these agreements which essentially allow them to have local and National Ownership tabs through a variety of sharing agreements with other stations for staff advertising and sales. In other words, more powerful broadcaster will cut a deal with a weaker broadcaster to sell all of their advertising. Or to share facilities or management. And again, in my mind if i can offer opinion as a moderator its a way to scrub the ownership group. When indians talk a little bit about what they are and why he is troubled by them. Then i would like the broadcast boats to respond to, if were lifting the ownership rules anyway, it is going to happen tomorrow, why do we need these agreements anymore . I can understand although i did not like it, that when the rules are more restrictive youre trying to find ways to get around them. But now we are just saying were lifting a lot of the regulations, why should there be ways to get around that as well . Andy. Percival, i will adjust the privilege of responding to jerry on one point. I personally anything most people have no problem with the guidelines that the fcc had in place for many years that said a goal of having certain minimum amounts of news and Public Affairs programming for every station. Although a station can demonstrate that it fit the Public Interest in other ways. I certainly have no problem with the 1991 Childrens Television act which specifies there is a minimum amount of programming having to be carried to meet the informational needs of children. And i have not heard jerry or anybody else challenge the constitutionality or desirability of that statute and the fccs enforcement of it. Because as i said at the beginning, the airways belong to the public and we are entitled to extract Public Service. And that extends the socalled sidecar agreement. This was, a blatant evasion of the fccs ownership rules through contractual arrangements that give all but actual ownership to one company while having a nominal owner in place. In fact in the Securities Exchange Commission Accounting rules, the socalled sidecar stations are generally reported as being owned by the dominant company and not by the beard, the Front Company in operation. My guess is that as the fcc lists transport lifts the rules, my suspicion is that many of these instances they have option agreements that are going to allow them to buy up the companies anyway. A sidecar is a means of having somebody who does nothing other than hold a license and goes through the motions of pretending to own and operate the station for the benefit of another company. It is a disgrace to Public Policy and it makes a mockery of the law. I want before i turned to rebecca and eddie, i want carmen and jim to weigh in on these agreements as well. And just to let people know, if the sinclair tribune merger is consummated, they will be sidecar agreements and 63 different markets. So that is pretty significant. Exit tightly to 35. But whatever it is still in my opinion evasion. Go ahead jim and with respect to sidecar agreements, the position has been consistent with everything andy said about how they are just, they have been used historically to evade the fcc ownership rules. And if the fcc is about to change the ownership rule, many of these sidecar agreements to unmount you have a right for the dominant broadcaster to purchase the sidecar station and take absolute control. But i do worry that the fcc, because what they are proposing is so farreaching in terms of eliminating terms and ownership rules, you may see a station that buys out the sidecar. So that it now owns two stations outright in a market. Then in a sidecar with one third station. Because the rule does not prohibit another sidecar agreement after they own the two. So i think the relaxation the fcc is contemplating has the potential for totally destroying any local broadcast Television Ownership. I think it is a very bad step the fcc is taking. Carmen . I agree with andy and jim. These sidecar agreements are consolidation by another name. Theyve exported the loophole and invaded local Television Ownership rules. This time with this consolidation, it was devoted to local news and local journalism. And i agree, i think there is a real concern that this is going to undermine competition and the diversity of voices. First time i would direct your attention to the slide which shows the benefits resulting from j essays over the years. These are not ours. This are industrywide. That is joint sales agreement. Can you explain that . Joint sales agreements over two stations will combine advertising and consolidate their ad sales force so they can more efficiently sell their advertising and reinvest the cost into broadcast operations. But to respond to your point, this slide shows that in numerous markets, more local news or alocal news where there wasnt any local news on the smaller station before was introduced into that marketplace as a result of the jsa. Similarly there are 9 news benefits which are in jsa, partnerships, the smaller station can get these nonnews benefits. But i guess i would like to step back and ask the panel, by the characterization that these agreements sidestep the rules if the fcc has been providing broadcasters guidance on exactly how to craft these j essays . So that they are in compliance with the rules. Limited is very directly. The fcc stamp is been the pocket of broadcasting industry for 30 years. Thats why. [multiple speakers] nemesis 2008, the fcc has approved 30 5j essays. Every one of them should not have been approved. Their benefits. There have never been any demonstrable harms. One more point, Congress Actually asked the gao to study j essays a number of years ago. Even the concluded there was no data showing that j essays on the Public Interest or contravene ownership roles. It seems we have time to put this topic to bed. Unless [inaudible] we are talking of the two ways consolidation might take place. 2a the consolidation grows potentially. One is horizontal. Which is that there will be the combined company, they would own more stations across the country and therefore cover a larger part of the country. And the question there is, what percentage is okay for broadcasters to have as a horizontal matter across in a world where many distributors now reach 100 percent of the country. In the old days only broadcasters can reach a mass audience. Now obviously the internet has changed that. And then within each market how many stations can you either own or have a significant relationship with such as these socalled j essays. When it comes the individual market, it is important to remember that there are two screens that any deal has to pass. One of them is the department of justice 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 have to get rid of the station. And then there are the fcc overlay. Which involves its own test and potential for structuring. We have a special guest. That was just perfect. I am so delighted that senator blumenthal was able to join us. I will turn the mic over to him for a few remarks. I really apologize. I did not mean to interrupt. You are more than if youre not finished, please do. No, no, no i am sure my words can wait. Im delighted you can join us. I really want to thank the Georgetown Institute for organizing today and i am pleased that we have this really excellent turnout for a merger that i think is important in the future of communications and media in america. Soon after sinclair announced its proposal to acquire Tribune Media, i called on the chairman of the judiciary and the commerce because i sit on both to have a hearing to have full and complete consideration and i am profoundly disappointed and troubled that there has been no hearing and there is no immediate prospect of one. Not all disappointing and troubling, it is also i think, potentially a disservice to the American Public that would be affected. In fact, more than 70 percent of american households will be affected by an acquisition of this scope and scale. And it has even more profoundly important ramifications going forward. So theres no question that congressional scrutiny and at least one 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. Where the 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 attraction at the very least, a prelude to what should be close in searching congressional scrutiny and i hope that the deliberation today will really raise some of the issues that my colleagues and i have an obligation to confront. I played up the details about why i oppose the sinclair proposed acquisition of tribune in a letter that i sent on september 27 2017. To the chairman of the fcc. I oppose the merger because it violates longstanding media ownership rules and would demonstrably harm Media Diversity and is deeply ingrained in the rules, competition is essential in this industry and diversity as part of our fiber in democracy. And allowing this acquisition to move forward would reflect very bluntly and simply, a failure by the fcc to do its job. Again, i want to thank all of you for being here today. Particularly the wonderful panel that you have. And hope that there will be more opportunities to air the reasons that this transaction would be a grave disservice to the American Public. Again, my apologies for interrupting. And go to it thank you, sir. [applause] i think the senator raised i think two interesting questions. Number one, should congress hold a hearing . But then i want to tag on a second question. He mentioned the Judiciary Committee and the department of justice has been talking a lot about lately with regard to at t and time warner merger. But it hasnt been talked about at all with regard to this merger. I just raised it [multiple speakers] that is the point i made and i think gary referred to earlier as well. This is not the wild west. You cannot just willynilly put a bunch of companies together in this country regardless of concentration and consolidation. There are some very wellestablished rules at the department of justice or guidelines. This merger is going to have to pass through that review. Not going to talk about the nature of the review because it is all confidential. But doj has always been rigorous about its review of broadcast mergers. It is not the first, not the tent, they have been down this road many times. And so the fcc review is a second level of review. The question is, in addition to the concentration limits imposed by the department of justice, what more should the fcc do and the truth is that even with the relaxed guidelines, the fcc will be doing more than the department of justice does. So it is not the wild west they can just put companies together willynilly. And so the real question is just how strict should the rules be and i think were back and i trying to do is make the case that if you truly do love local broadcast and you truly do believe in localism, if you truly do believe in serving those communities, directly 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 go look at the Balance Sheets of the companies and trendlines on their revenue. You will be drawn inescapably to that conclusion. Rebecca, go ahead. Decades ago, local broadcasters probably dominated three quarters of that chart. But this is the declining local ad revenue situation we are facing. I would like to respond to some concern that the senator has. Everyone needs to understand that every broadcast nodes that if you are not local, youre not going to succeed in your market. Localism is alive and well with Sinclair Broadcast Group. I have here, i will not read this all but this is a list of where we are number one or number two in the market. And you do not get there unless you are meeting the needs of everyone in the community. We are going to have to close. I do want people to address, usually when it comes to broadcast mergers of this type, doj tends to defer to the fcc. I am asking, obviously this is more constrained than the fcc. It does not look at the Public Interest generally. But what role should the doj play here . And then, whatever else you want. I have a couple of former students in the room today and they are all about to roll their eyes. Our class, we talked 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 on the public. Have a debate in front of members of congress. Not because congress decides the state of her merger. But because congress has oversight responsibility over the agencies that do. Different agencies with different jurisdiction. It may sound like redundancy. Thats because it is good different agencies with Different Missions look at the same transaction. And it is no different here. This is where i think we sort of run off the rails a little bit though. We havent talked a lot about a change to a role or real interpretation of the statute. It had profound effects. There is a rule on the books that says no broadcaster can get above 39 percent of us households. This is not something they just invented. It is something in statute. With all the talked about how the world has changed in technologies change, competition is changed on the internet, although this great stuff what is the one thing that the chairman did to that rule . He went backwards in time to be for the digital transition. When television stations used uhf signals versus vhs signals and said thats how were going to count households. Of course, that had the practical effect of raising the number of households you can reach your broadcast today. What does that mean for the department of justice . The department of justice, while they look at that and say i guess the Expert Agency believes that pools from 1975 about how to count households should still apply today because i guess that is what the chairman thinks. We are all about the future and technology when it comes to getting rid of rules. But on this one were going to go back in time to 1975. Will that department of justice look at essay i guess they must know more than we do about how to count households . Or will the Department Just to say that seems pretty backwards why are we talking about an analog uhf way of counting when everyone has done digital . It will look at this with fresh eyes. I hope based on what we see in todays department of justice, which is pretty aggressive enforcement when it comes to the at t and time warner merger. I think we see the same enforcement when it comes to this merger and that they disregard this rather odd regression to the 70s that the chairman has chosen for accounting households. That is unfair. [inaudible] and say that again. I said that is an unfair and alice in wonderland description with the chairman did. All that the chairman did was say, if youre going to be examined the socalled uhf discount which is just a way of measuring the 39 percent, you have to think about the 39 percent at the same time and think about what the Public Interest is. That is all he did. And i think that is almost an arguably correct. The 39 percent is highly antiquated in this day and age. So if youre going to look at one, you should look at the other. And that is all he said. The commission, which had only just changed the rule a few months before, this is when it wasnt even a new rulemaking. They had made a mistake in deciding to undo the discount without looking at the itself. Because the Commission Said that would take too long. And that is really 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 down the field where it was before the initial mistake was made. Question i just asked. Im not sure about what you said but youre smarter than me. Maybe you understand something i dont. Can you tell me hundred chairman means revision of the rule, with the merged company have to divest more or fewer television stations than under the willow version of the rule . Under the change that we would make, there are a bunch of companies are already over the top. So. Our transition we will have to invest more. That is all i need to know the chairman did something that i guess eddie understand it better than i do. That means this merged company have to divest fewer t. V. Stations. That is only need to know. In fact, i dont really understand why the change was necessary in the first place if it was that reasoning was correct that but it seems to me as though if we are talking about making a rule that the Expert Agency about how to count audience reach. He is making a rule here he is looking at the rule about what the ultimate definition of reach ought to be. The question is not how you count the stations. The ultimate question is, should broadcasters in an age where everybody of skills to reach 100 percent of the country, only get to reach 39. That is exactly [multiple speakers] the chairman would like to answer a question he requested department of justice will answer. Look, abc, nbc, cbs all have 100 percent reach. Not because they have licenses. Rather because they do a contract with Companies Like mine. Heres a question from the audience good by the way you guys, i wish you had time to answer all of these questions. Sinclair chair has said sinclair is quote forever expanding the universe. If you wish for anything or be complete instantaneous consolidation of the industry. Should sinclair be large on every local station . Should there be any limits . Broadcasters and then i would like [multiple speakers] google has 100 percent reach so you should too . I think i really answer the question when i described the rules that are in place. The antitrust division at the department of justice looks at these things that are longestablished guidelines that do not allow for anything remotely like that. That will be applied here. The goals of the fcc that are more stringent than the department of justice. There will also be applied here. That is hypothetical that really doesnt to keep some perspective here, the proposed rule change tomorrow is not to eliminate the local ownership rule. It is to look at them more closely on a casebycase basis. I have three things. Number one theyre not looking at them. They are written in. I took my the top four prohibition. There eviscerating them. Number two, we are talking about with the National Ownership is something set in place by congress. It is congress that sets 39 percent into his congress that will have to change that. Eddie is talking as if it 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 percent. You and i are in court over that. [laughter] number three, you are aligning national reach. Now you talk about national reach. For the whole hour here you been talking about the importance of localism previews 9100 percent of the country to do a better job than the local communities. You want 100 percent of the country because you want to scratch more programming rents and if you want to reach out to places like nbc, start a network i mentioned the highfrequency uhf discount early on. And i think it is worth it for maybe carmen, you can take a few minutes to explain why was there the discount . Im old, right . So when i was a kid, if you want to channel 1 through 13, there was no remote control. You clicked in. If you wanted others you would have to tune it like a radio. Those were uhf stations. And they were at a severe disadvantage as nobody watch them. And some of the programming was so awful it was unbelievable. Right . That is why there was a discount to encourage folks to buy these less than optimal stations. That is why there was a discount. Once we went to the digital t. V. Transition in 2009, that disadvantage went away. And that is where we got rid of the uhf discount when i was working for tom wheeler. To me it is the height of hypocrisy for a d regulator to reinstate a rule that has absolutely no basis in reality. Especially a chairman who likes to say you to take the facts as they are. Not as you wish them to be. As i understand it, he wants to have that conversation of in reality, what is the right number . Why is it 39 percent . I think the proceeding he has said that he wants to open it to start that dialogue. Which, and credit record. And get public input. And look at todays advertising marketplace. While consolidation marketplace and ask ourselves after decades, is this the right number . I am not afraid of having that dialogue. We welcome it and it is easier to have the dialogue in an agency that is set up to have input then you can in congress. Thank you for explaining the uhf discount. Very passionate. What i want to make a point of is that exactly said, there is no technological justification for it. I think everyone here agrees with that. Youre making a procedural argument of the way we should consider it. But even when you put sinclair tribune together, you would be 6. 5 percent over the 39 percent cap that currently exists and is in congress. That is a congressional we put it together and im sure that before the deal is complete, it will have to come into compliance with the capital which as you say, is the current rule, the combination would be over. They have already said in the filing so come into compliance with the rule. But this argument that because a rule in your view is obsolete technologically and their people to think to get aside from that but i will leave it aside. Should be undone without looking at the fabric of the regulation it is part of. It makes no sense. When you undo the uhf discount, nor immediately as an effect, massively constricting the ability for a group of companies to consolidate. Consolidate i guess is a better name to but that is what you do. And, youre not then look at the overarching rule of what number should be the right number. 59 percent, however, you counted. Is that the right number . Should be 80, should be 60 . Whatever it is, the education just pull that one thread without looking at the picture of the Market Structure. Read hunt, democratic chair of the fcc is, when i got into the chief of staff, he took me to dinner and said one thing. I have one piece of advice. Everything in the world is about Market Structure. You must think about Market Structure or if you do not think about Market Structure, industries that count on the government to do the right thing are going to suffer terribly. All the chairman is simply saying is we should look at this in an overarching Market Structure sense to understand where the broadcast is today in terms of the appropriate level of consolidation. How that is objectionable, i dont understand. That was apart from the concerns you expressed carmen which are very real concerns and you too jim about we do have a terrible problem with diversity ownership in media today. It is very widespread. It is not just limited to media as you know. And how to solve that problem is one of the things of the fcc ever deals with i will say while i was there i do not think that we were at all successful in moving the ball. And because it is really hard but having, taking a manipulating the consolidation rules for companies that are in an industry that is hurting has a way of sort of forcing diversity to me is the wrong way to think about that problem. We have to solve it. All we have to solve it in ways i think are more with a scalpel and a sledgehammer like that. By the way, i have to try and agree with you on something. I think the minority tax credit was extremely successful. I think our friends can you explain that . You cannot buy a t. V. Station anything expensive really if we do not have credit. If there isnt a banker or a lender or an investor behind you. So how do you make an investment attractive . One way is you get the investor a tax break and what we call a transferable. When that can be traded. And you guys can stop me what congress did was change the tax code such that somebody who didnt lend to ourselves to a minority owner, got a tax benefit. Under the decision from the supreme court, the country, where former limited in our ability to do basic specific incentives. I think that is a shame. Because all you have to do is look at the window and see we have not quite gotten there yet. But that is the law of the land. Nothing i would argue rebecca, stops your company from voluntarily doing this. And i hope when you are forced to devastation, and i hope you are forced a lot. You announced the stations are going to be sold to people who have not been in the business before and maybe that is one way to address diversity. In the marketplace. Is it really essential point that we havent quite closed the circle on that i have to explain is really essential here. If you talk about the value of the tax certificate policy and the ability of spinoff stations. The success of the tax certificate policy was because the fcc and rules that required limits that required divestitures to take place. And if the chairman lifts the ownership also sink that can acquire the tribune, there are no stations that are going to be spun off. As jim said its beginning, if theres lots of any value to the transaction will be just spinoff a station. But if the fcc lifts the rules so that no stations have to be spun off and the fcc lists the rules so that large pocket companies can like nexstar in sinclair can buy up all of the stations, fewer opportunities for new, many who will be potentially minorities and women to buy stations at all. So theres a direct link between changing the ownership rules and the opportunities for increase or entry for new owners who are minorities and women. Finally i have to say, for Eddie Lazarus to talk about the fcc in a blade in the ownership rules, for sinclair and tribune who have come to the system with side cars having sinclair sidecar stations owned by the elderly weather of the ceo of sinclair who is not only a different independent company, hold on [laughter] i will let you respond eddie but i wanted to see if jim wanted to add anything. I certainly agree with everything he just said. [laughter] i will not respond. It is a problem when you look at what theyre doing in terms of eliminating rules as andy said in recent years, because of Court Decisions and congressional action. Or inaction. The minority ownership policy has been largely ineffective and all we have been able to do is get spinoffs from some of these large mergers. If you eliminate the rules which require these spinoffs to make it virtually impossible for us to see any Significant Growth coming up and minority ownership. I will let eddie and rebecca have the last word on this and then there are two really good questions i would like to ask after that and then we will close. I will pass responding. Just to say that we actually dont have any jaycees at tribune. So i take personal list go to the next question. What was the impact of the merger on political campaigns and elections given sinclair is what they call must run corporate directives and known rightwing views . I might also, i believe angela would also say, some of the others on the panel, is this really just about the fact that sinclair has been wanting to start a broadcast check or it is about the political views as a positive problem . Go ahead rebecca, answer the main question. What would it be given the must runs . There is no impact whatsoever. I think what gigi is referring to is, are you talking about we have the National News bureau of the commentary . Both. We lost a National News bureau that we are very proud of. Like many stations groups, we have a National Bureau where we cover National Stories and we share them with our stations. These are completely objective news stories without any opinion in them. Suggest your question, there will be no impact whatsoever on elections with respect to what we air, with respect to the news. If you are referring to some short commentaries that we run, that is a tiny fraction of what we run. At various different times on our station. They are the opinions of one person, they do not reflect the opinions of the 9000 people that work at sinclair. And i do not think it will have any impact on the concern. May i . Just explained, when we are talking about must runs, these are segments that sinclair stations are required to air. So theres no editorial judgment able to be exercised by whoever runs this station. Is a cardcarrying, progressive democrat, my opposition to this merger does not stem from the fact that their conservative views expressed. Any more than the opposition of all of the conservatives against this merger stem from the conservative views of the broadcast. I mean you would not have newsmax publicly opposing this merger if they were somehow against conservative views being put on the airways. What we are against is the power. The power and yes, elections will be affected by that power. Who gets to buy ads, who doesnt . Why was it that david smith at sinclair broke the Network Affiliate relationship, the contract by not airing a story about iraq listening a letter from john recanting is unpatriotic. Why . Because they did not want that viewpoint getting out and that is the point. It is not about what view is being spelled, there are plenty of conservatives against this merger. It is how much power is being amassed under one roof. Itd point of personal privilege. I agree with david. I do not care about their conservative politics. A candidate sinclair should have the ability to deliver any brand of politics progressive or conservative to 72 percent of the country. But eddie said the tribune doesnt have j essays. Technically i suppose that is correct it it has a sidecar Company Called dream catcher that has fsa. If you want to explain the difference, there isnt any. [laughter] actually is a very big difference. But we can leave that aside. We are out of time. Just on that point, the reason we have as essays into very small markets. That is a shared service agreement. But a different but it doesnt make any difference. Similar. Doesnt make any difference. We have the because of the incredibly arcane will you cannot own a newspaper and a television station in the same market. So you evaded the rules. The fcc passed on all of this. You say we baited the rules to the rule maker decided is that we are compliant with the rules but not the rules that you want but the rules that are actually in place. The rules that would benefit the public. Here is the problem. Who is to say, you defended the newspaper crossownership realtor newspapers put out of business. It is the same process that newspapers were desperate for revenue. They wanted relief from ridiculous old rules around owning both station and a newspaper in the same market reconnection share news bureau and save money and actually serve the community better. But wellmeaning people decided that is too dangerous, too big of a accumulation of power. In the community after community vocally said these are failing and this is an unfortunate fact. Was i was a moron would on time. Wellness question and we will wrap up. Thank you to everyone for staying for so long. And thank you panelists. The last question and im sorry can i get to them all this is really great. That laws are all we need to regulate broadcasters, should we also get rid of other regulations that distort the market . I think that is kind of coming back to kind of where we started. So again, we will say lets get rid of the fcc, broadcast is not the only industry that wants to get rid of the fcc. Antitrust rules rule at the free market will, why should broadcasters have benefits of must carry and frankly go ahead. Which by the way is codified in law. I will quickly say the reason we have transmission consent so important because we are shown our declining revenue is not sufficient to support the very things that everyone on the panel has said they want us to do. And they want American Communities to have. Read trans advertising is the most important revenue for us. We cannot do without retrans. If you care about free and local broadcast you have to find a way to supplement our way of financing it without a dime from the government i should add. And retrans has i think the most fair way to do that. If youre asking whether given the fact that there hasnt been a major rewrite of the telecom laws since 1996, whether this is an area in general that is right for congress to take a look at and think about what the rules ought to be, now that we have ubiquitous highspeed broadband and other questions. I think my answer would be yes. And i think by looking only at what might be outmoded laws and regulations in that one area. It is absolutely time for another rewrite of the telecom act. But the trouble is its really hard to do this with legislation as all of us in this room are painfully aware. So a lot of this gets pushed down to the regulatory agencies and we battle it out. All of the battles are over money. Some are over other things. But it is all very hard. That is what makes debates like today. As a footnote, the ecosystem that broadcasters exist in is very complicated. It involves private property, intellectual property that has jurisdiction in the copyright laws, broadcast laws and that integration, if you peel apart just one, just retransmission consent without adjusting the overall issue of property and help broadcasters, help 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 this sort of holistically, all at once and it is very hard to do as eddie points out. But you want to do this in a broad, white paper look at how we should regulate content and private property rights. Muscles have carmen, jim, andy and david and them will close it out. One quick point. I do agree with you maybe we should take a holistic approach. What i would like to see is having some studies about the impact that this will have on diversity. Especially ownership for women and people of color. I think we need to understand the impact that the change will have before we move forward with any changes at all. X i would concur with carmen. I think where we are is that the sec is allowing, if they adopt the changes for tomorrow, theyre going to allow wholesale consolidation of the industry without having any consideration of what it means for diversity. If we can look to from the fcc is perhaps a couple of spinoffs we have consolidation on this level, that will be inadequate and the kind of decrease of minority ownership we have seen in the industry will continue. I have said enough, i rest my case. [laughter] david, last word. We started off by talking about why broadcast is different. Some of us believe it is not and it is just one of many sources of information along with the internet and maybe something that gets inducted next year that weve not heard appeared out of us believe there is some unique properties. Like transfer local news is still the most popular way to get your information. But make no mistake your what goes on at the sec tomorrow and we talk about these rules, this is not an abstract academic question. There is a real transaction. And it will have an impact on our lives. And we need to be ready for it. Thank you panelists. And thank you to all of you. Have a great afternoon [applause] [inaudible conversations] you are watching booktv on cspan2. With top nonfiction books and authors every weekend. Booktv, television for serious readers. Next, booktv and primetime features biographies. 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