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September 3, 2003 Hon.
George W. Bush, President of the United States of America
The White House
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500 Dear
Mr. President: The
National Grange, this nation's oldest general farm and rural public interest organization,
supports the decision by the Federal Communications Commission to increase the
national television ownership cap applied to the major networks from 35% to 45%
of national market share. This change will be benefit rural communities who rely
on free, over-the-air TV because they generally lack adequate access to pay TV
platforms. The FCC's action is a good first step toward leveling the playing field
between free, local, over the air television and pay TV services, which have no
comparable national cap. The change also furthers regulatory neutrality and benefits
rural America by allowing free TV to compete for capital and talent through acquisition
of additional local stations for an indispensable supplemental revenue stream
from local advertising. The
National Grange opposes efforts to reverse the FCC's decision on this issue through
the appropriations process. Reinstating the current ownership caps on the major
networks will inevitably result in reduced quality of service for rural communities
that depend on free TV. Therefore, we strongly urge you to veto any legislation
that would reinstate the current ownership caps on the major networks through
the appropriations process.
Founded in 1867, today the National Grange represents nearly 300,000 members affiliated
with 3000 local, county and state Grange chapters across rural America. The
National Grange recognizes the importance of free TV to the public welfare, especially
in rural communities. While only 15% of the nation's households do not subscribe
or have access to pay TV services, rural Americans rely disproportionately on
free TV, for vital information, including weather, emergency situations, local
and national news, as well as entertainment programming. The pay TV industry,
which has been growing rapidly in urban and suburban communities, currently covers
less than 30 percent of all local markets with fewer than 85,000 homes. The costs
of extending cable infrastructure to most rural communities is prohibitive. While
satellite broadcast systems are increasingly popular in rural communities, there
are still significant additional capital costs to purchase, install and maintain
these systems in addition to the monthly service fees for satellite TV systems.
In addition, line of sight limitations in many rural locations that arise from
mountains, trees or other obstructions often physically restrict access to satellite
broadcast signals. These factors, (costs, service and infrastructure) have restricted
the competitive growth of pay TV service in rural communities and require rural
Americans to rely on free TV for comparable service. The
national television ownership cap limits the ability of free TV broadcasters to
maintain the quality programming that rural Americans deserve and appreciate.
Without relaxation of the national cap, the future of free TV is uncertain as
more sports, public affairs, local event, emergency services and other programming
migrate towards the pay services that are not available in the majority of rural
communities. Unless free TV networks are able to defray their substantial programming
costs through ownership of more local stations, the networks will continue to
lose programming - such as this year's NBA All-Star Game -- and audience share
to the pay services. This will lead to least cost or inferior programming on free
TV. For rural viewers the issue is not just the extra costs of pay TV services
but the systematic lack of access to these services in their communities. Migration
of capital and talent to pay TV services will ultimately result in inferior TV
programming being the ONLY option in many rural communities. The
National Grange believes that the recent action of the FCC to increase the national
television cap benefits rural America. The change is a good first step toward
leveling the playing field between free TV and pay TV services, which have no
comparable national cap. (A single cable operator can claim 30 percent or more
of the nation's total cable and DBS subscribers as its customers. No television
station group can claim more than 5 percent of the nation's households as viewers
at any one time.) The change also furthers regulatory neutrality and benefits
rural America by allowing free TV to compete for capital and talent through acquisition
of additional local stations for an indispensable supplemental revenue stream
from local advertising. Relaxation
of the national television cap does not diminish the importance of localism. Network
owned stations have not reduced local service. The major networks have consistently
hired and retained quality local talent and made substantial technological upgrades
in their local stations because they want to have the most popular and profitable
station in each market. These stations also employ greater numbers of skilled
individuals represented by professional trade unions and provide greater job security
than independent media companies. The data in the FCC record demonstrated that
network stations actually air more local news (other factors being equal) than
other stations. Localism is the key competitive advantage that free TV has over
pay TV. Furthermore,
the FCC's decision to raise the network ownership caps enhances the ability
of the free, over-the-air broadcast industry to serve the interests of rural residents
without creating additional regulatory or commercial burdens on the pay TV industry.
Instead, it will allow the free TV industry greater flexibility to meet the requirements
of a competitive and rapidly evolving market by maintaining its ability to attract
the capital and the talent necessary to provide quality free TV that serve the
interests of rural Americans. Station
ownership by the television broadcast networks has served the public interest
since the beginning of television. It continues to serve the interests of millions
of rural television viewers who have no other practical access pay TV service.
The FCC took account of rural Americans, and their lack of competitive TV service
options, when it made its decisions on the national television cap. It is inappropriate
for Congress to second guess the judgment of the FCC on this issue through the
appropriations process. The FCC has taken a prudent step to ensure that television
broadcast networks have the necessary regulatory freedom to continue to serve
rural America with quality free TV broadcast programming by modifying the national
broadcast television station group ownership cap. Second guessing that decision
will only restrict the ability of the free television broadcast industry to serve
the interests of rural Americans. For these reasons, the National Grange strongly
urges you to veto any legislation that would reinstate the current ownership caps
on the major networks through the appropriations process. Sincerely,
Leroy Watson, Director of Legislative Affairs
The National Grange of the
Order of Patrons of Husbandry | 
