How Changes in the Economics of Broadcast Television Are Affecting News and Sports Programming and the Policy Goals of Localism, Diversity of Voices, and Competition

Charles B. Goldfarb
Specialist in Telecommunications Policy

Market and technological changes are creating challenges to the long-standing business models employed by broadcast television networks and local television stations, but at the same time generating potential opportunities. The changes also may be affecting the three pillars of U.S. government media policy—localism, diversity of voices, and competition—and damping the effectiveness of existing regulations intended to foster them. These changes generally are strengthening the position of parties that own or control popular content in their negotiations with distributors of video programming. Broadcast networks and stations, alike, both own content and distribute programming, so they have been strengthened and weakened by these changes.

The successful entry of hundreds of cable networks and the proliferation of social networking and video Internet websites have fragmented audiences and provided advertisers with alternative avenues for reaching consumers. This presents a significant challenge to broadcast networks and stations, which traditionally have relied on advertising for more than 90% of their revenues. As audiences have declined for both national and local news programming, networks and stations alike have reduced costs by sharing the fixed costs of newsgathering over multiple platforms and undertaking cooperative newsgathering with other outlets. Some broadcasters have sought to generate additional cost savings or revenue by combining with other newsgathering organizations, and urge modifications to the Federal Communications Commission’s broadcast media ownership rules that restrict such combinations. Policymakers will have to weigh whether allowing such consolidation will, on net, benefit the public by improving the financial viability of newsgathering firms or harm the public by reducing diversity of voices and competition.

At the same time, competition has developed among the companies that deliver multiple channels of video programming to subscribers—cable operators, satellite operators, and some telephone companies. If a multichannel video distributor fails to obtain the retransmission rights to popular national and local broadcast television programs, it risks losing subscribers to a competitor that does offer the programming. As a result, broadcast networks and stations are able to demand higher payments from these multichannel video distributors for the retransmission rights. This has created a second revenue stream for broadcasters that is projected to reach $2.6 billion in 2016. It also occasionally results in subscribers losing access to broadcast programming when their video provider and the broadcaster reach an impasse in retransmission negotiations. A coalition of video distributors and consumer organizations has petitioned the FCC to modify its retransmission consent rules by adding dispute resolution mechanisms and mandatory interim carriage.

The amount of local broadcast news programming has been increasing despite declining audiences and does not appear to be threatened by stations’ revenue declines. Many stations are broadcasting more news because local news programs can be cheaper to provide than purchased programming. In addition, local news provides a way for stations to develop strong brand identities as they compete for local advertising dollars.

The production and distribution of major sports programming is largely controlled by the sports entities that control the events. If it benefits them to distribute their programming through pay venues, such as cable networks that they own, rather than over the air broadcast, they will do so. This is likely to result in more events being televised, though many will only be available to subscribers to pay television services.


Date of Report: October 20, 2010
Number of Pages: 36
Order Number: R41458
Price: $29.95

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The Arecibo Ionospheric Observatory

Christine M. Matthews
Specialist in Science and Technology Policy

The Arecibo Ionospheric Observatory is a radio and radar telescope located in Barrio Esperanza, Arecibo, Puerto Rico. The Arecibo Observatory is part of the National Astronomy and Ionosphere Center, operated by Cornell University under a cooperative agreement with the National Science Foundation (NSF). In 2005-2006, NSF’s Division of Astronomical Sciences (AST) conducted a Senior Review of its portfolio of facilities. Among other things, the Senior Review was to identify potential reinvestment in the highest priority existing programs in AST and restructure the operational efficiency of the existing facilities. The Review reported that the scientific value of the Arecibo was modest when compared to other existing and proposed projects and recommended decreasing the telescope’s annual $12.0 million budget to $9.0 million in FY2009, and securing partnerships for the remaining necessary funding. If alternate funding sources or partnerships could not be obtained by 2011, the Review recommended dismantling the facility. An April 2010 program solicitation of the NSF provided funding for the Arecibo until 2016. At question is if the next Senior Review of the Arecibo will support its continued operation or again recommend its dismantling in the support of construction of new instruments and facilities. The issue before the 111th Congress is whether the Arecibo is more cost-effective than replacing it with newer, available technology. Congress may consider examining the balance between the demands of existing facilities and the investments in the next generation of large instruments and facilities.


Date of Report: October 13, 2010
Number of Pages: 12
Order Number: R40437
Price: $29.95

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United States Fire Administration: An Overview

Lennard G. Kruger
Specialist in Science and Technology Policy

The U.S. Fire Administration (USFA)—which includes the National Fire Academy (NFA)—is currently housed within the Federal Emergency Management Agency (FEMA) of the Department of Homeland Security (DHS). The objective of the USFA is to significantly reduce the nation’s loss of life from fire, while also achieving a reduction in property loss and non-fatal injury due to fire. The United States Fire Administration Reauthorization Act of 2008 (H.R. 4847/S. 2606) was signed into law on October 8, 2008 (P.L. 110-376).

P.L. 111-83, the FY2010 Department of Homeland Security appropriations bill, provided $45.588 million for USFA, the same level as the Administration’s proposal. The Administration’s FY2011 budget proposal requested $45.930 million for USFA, an increase of 0.7% from the FY2010 level. The House Appropriations Subcommittee and the Senate Appropriations Committee both matched the Administration request for the USFA.

In the 111th Congress, debate over the USFA budget focuses on whether the USFA is receiving sufficient funding to accomplish its mission, given that appropriations for USFA have consistently been well below the agency’s authorized level. An ongoing issue is the viability and status of the USFA and National Fire Academy within the Department of Homeland Security.


Date of Report: October 8, 2010
Number of Pages: 9
Order Number: RS20071
Price: $29.95

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Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service

Lennard G. Kruger
Specialist in Science and Technology Policy

Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a “digital divide” between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state of the art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment.

Citing the lagging deployment of broadband in many rural areas, Congress and the Administration acted in 2001 and 2002 to initiate pilot broadband loan and grant programs within the Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA). Subsequently, Section 6103 of the Farm Security and Rural Investment Act of 2002 (P.L. 107-171) amended the Rural Electrification Act of 1936 to authorize a loan and loan guarantee program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. The RUS/USDA houses two assistance programs exclusively dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program and the Community Connect Grant Program.

The 110th Congress considered reauthorization and modification of the loan and loan guarantee program as part of the farm bill. The Food, Conservation, and Energy Act of 2008 became law on June 18, 2008 (P.L. 110-246). Title VI (Rural Development) contains authorizing language for the broadband loan program.

Meanwhile, on May 11, 2007, RUS released a Proposed Rule seeking to revise the broadband loan program rules and regulations. Some key issues pertinent to a consideration of the RUS broadband programs include restrictions on applicant eligibility, how “rural” is defined with respect to eligible rural communities, how to address assistance to areas with preexisting broadband service, technological neutrality, funding levels and mechanisms, and the appropriateness of federal assistance. The final rule will reflect language in the enacted farm bill statute (P.L. 110-246). Ultimately, modification of rules, regulations, or criteria associated with the RUS broadband program will likely result in “winners and losers” in terms of which companies, communities, regions of the country, and technologies are eligible or more likely to receive broadband loans and grants.

On February 17, 2009, President Obama signed P.L. 111-5, the American Recovery and Reinvestment Act (ARRA). Broadband provisions of the ARRA provide a total of $7.2 billion, primarily for broadband grants. The total consists of $2.5 billion for RUS broadband loans, grants, and loan/grant combinations, and $4.7 billion to the National Telecommunications and Information Administration (NTIA) at the Department of Commerce (DOC) for a newly established Broadband Technology Opportunities Program.


Date of Report: October 7, 2010
Number of Pages: 24
Order Number: RL33816
Price: $29.95

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Federal Research and Development Funding: FY2011

John F. Sargent Jr., Coordinator
Specialist in Science and Technology Policy

President Obama has requested $147.696 billion for research and development (R&D) in FY2011, a $343 million (0.2%) increase from the estimated FY2010 R&D funding level of $147.353 billion. Congress will play a central role in defining the nation’s R&D priorities, especially with respect to two overarching issues: the extent to which the federal R&D investment can grow in the context of increased pressure on discretionary spending and how available funding will be prioritized and allocated. Low or negative growth in the overall R&D investment may require movement of resources across disciplines, programs, or agencies to address priorities. This report will be updated as Congress acts on appropriations bills that include funding for research, development and related funding.

Under the President’s request, six federal agencies would receive 94.8% of total federal R&D spending: the Department of Defense (DOD, 52.5%), Department of Health and Human Services (largely the National Institutes of Health) (21.8%), National Aeronautics and Space Administration (7.4%), Department of Energy (7.6%), National Science Foundation (3.8%), and Department of Agriculture (1.7%). NASA would receive the largest dollar increase for R&D of any agency, $1.700 billion (18.3%) above its FY2010 funding level. The DOD would receive the largest reduction in R&D funding, $3.542 billion (4.4%) below its FY2010 level.

President Obama has requested increases in the R&D budgets of the three agencies that were targeted for doubling in the America COMPETES Act (over seven years) and by President Bush under his American Competitiveness Initiative (over ten years) as measured using FY2006 R&D funding as the baseline. Under President Obama’s FY2011 budget, the Department of Energy’s Office of Science would receive an increase of $226 million (4.6%), the National Science Foundation’s budget would rise by $551 million (8.0%), and funding for the National Institute of Standards and Technology’s core research and facilities would grow by $48 million (7.3%).

As of September 30, 2010, no regular appropriations bill had been enacted by Congress. Two of the 12 regular appropriations bills had passed the House (the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2011, and the Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2011); none had passed the Senate. To provide for continuity of government operations into FY2011, on September 29, 2010, the Senate passed a continuing resolution (H.R. 3081, Continuing Appropriations Act, 2011, as amended) providing funding for federal agencies through December 3, 2010, including their R&D activities, “at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2010 and under the authority and conditions as provided in such acts.” On September 30, 2010, the House passed H.R. 3081 and President Obama signed it into law (P.L. 111-242).

For the past four years, federal R&D funding and execution has been affected by mechanisms used to complete the annual appropriations process—the year-long continuing resolution for FY2007 (P.L. 110-5) and the combining of multiple regular appropriations bills into the Consolidated Appropriations Act, 2008 for FY2008 (P.L. 110-161), the Omnibus Appropriations Act, 2009 (P.L. 111-8), and the Consolidated Appropriations Act, 2010 (P.L. 111-117). Completion of appropriations after the beginning of each fiscal year may cause agencies to delay or cancel some planned R&D and equipment acquisition. .


Date of Report: October 4, 2010
Number of Pages: 53
Order Number: R41098
Price: $29.95

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