FCC Plan to Alter Media Rules Spurs Growing Debate
By Frank Ahrens
The Washington Post
Wednesday 28 May 2003
Substantial grass-roots resistance to the Federal Communications Commission's plans to relax or eliminate several major media ownership rules has been building in recent weeks, turning a number-crunching bureaucratic process into a growing debate on free speech.
On June 2, the five-member commission is scheduled to vote on changes that would allow broadcast networks to buy more television stations and would lift the 28-year-old ban preventing newspapers from buying television stations in the same city.
Hundreds of thousands of e-mails and postcards are urging the FCC to put off a decision.
Those who favor relaxing and lifting the rules -- mainly, media corporations and the FCC's three Republican members -- say the regulations are no longer legally enforceable and have been made obsolete by the explosion of cable television channels and Web sites, which provide consumers with more sources of information than when the ownership rules were crafted years ago.
On the other side are the two Democratic commissioners, Michael J. Copps and Jonathan S. Adelstein, several public-interest groups and organizations that say what is at stake is nothing less than the health of the democracy. More consolidation, they say, will lead to fewer voices, making it difficult for minority viewpoints to be heard. Unexpected alliances have formed between liberal and conservative groups, opposing further deregulation.
In recent days, the FCC has been inundated with hundreds of thousands of e-mails and e-petitions. MoveOn.org, a public-interest organization founded by two Silicon Valley entrepreneurs, says it has collected 170,000 signatures on a petition to the FCC, urging the agency to keep the rules in place.
The group is joining forces with the public-interest group Common Cause, and this week it launched a $250,000 newspaper and television advertising campaign against the changes, including ads in the New York Times and The Washington Post.
Members of the National Rifle Association have sent 300,000 postcards demanding the same. The FCC's Web site has received more than 9,000 e-mail comments over recent months from individuals who claim no affiliation with corporations or associations. Of those, according to a musician's group that recently tallied the filings, only 11 comments support relaxing the media rules. Members of Congress are reporting that their offices are receiving substantial e-mail traffic as well.
"It seems to me that instead of serving the public interest, you are really serving the interests of a few corporate fiefdoms that want to control more of what we see and hear," one person wrote in an e-mail to FCC Chairman Michael K. Powell.
"The airwaves are open to the public and should not be controlled by a few very rich and powerful media moguls who are only interested in their own gain and/or political influence," wrote another.
Others have spoken out as well. USA Interactive chief executive Barry Diller, who controlled broad media holdings before focusing on Internet businesses, favored keeping ownership limits in a speech before the April convention of the National Association of Broadcasters. "The conventional wisdom is wrong," said Diller, a director of The Washington Post Co. "We need more regulation, not less."
The outcry is in part a response to the public comments of FCC chairman Powell and fellow Republican commissioners Kathleen Q. Abernathy and Kevin J. Martin, who have said they favor changing the ownership rules. Many of the regulations were crafted when there were three commercial television networks, no Internet and no cable. The GOP commissioners argue that by selectively culling agency rules they can preserve the viability of free, over-the-air television while protecting certain markets. FCC staff, for example, has recommended lifting the ban on newspaper-television cross-ownership in all but the smallest cities, where there tends to be little competition to begin with.
Even if media ownership rules are relaxed, proposed mergers would still have to meet the FCC's public-interest standard and pass the Justice Department's antitrust test.
"Nobody believes any more strongly than I do that unfettered consolidation is not a good thing," Powell said in an interview Friday. "When we're done, we're going to have significant and meaningful limits on concentration."
The FCC has spent the past 18 months collecting data, and the proposed changes to the media rules are based on detailed statistical analysis. For instance, currently a broadcast network cannot own a group of television stations that reaches more than 35 percent of the national audience. FCC staff has concluded that maximum coverage should be raised to 45 percent.
Prodding the agency has been the U.S. District Court in Washington, which has tossed out five of the FCC's ownership rules in recent years after saying they were based on faulty rationale.
Reconsideration of the rules has renewed questions about whether bigger is inherently better.
The questions played out Thursday at a hearing of the Senate Commerce, Science and Technology Committee, which is chaired by Sen. John McCain (R-Ariz.). News Corp. chief executive Rupert Murdoch was called to testify on his $6.6 billion attempt to buy controlling interest in the DirecTV home-satellite system, adding a distribution network to his Fox cable television and broadcast network.
Murdoch quickly became a proxy for all powerful media barons in the eyes of some committee members.
Sen. Byron L. Dorgan (D-N.D.) cited a radio study that examined the nation's 44 top-rated stations over a week and found that they broadcast 312 hours of conservative talk programming, compared with 11 hours of liberal shows.
Dorgan pointed out that these stations are owned by only five companies, a fact he said demonstrates that fewer owners means less diversity of opinion. He asked Murdoch what he thought.
"Apparently, conservative talk radio is more popular," Murdoch replied.
Fellow witness Kent W. Mikkelsen, an economist who has worked for the broadcast industry, testified that "there is no evidence that a variety of owners equals a variety of voices," a claim disputed by those who oppose relaxing the ownership rules.
The FCC grants lucrative television and radio broadcast licenses to transmit over the public airwaves. In return, the stations are expected to broadcast programming in the public interest. What that is exactly has always been a cause for debate. Networks argue that highly rated shows such as Fox's "American Idol" are in the public interest because they're popular. Educational and consumer groups argue otherwise, saying that broadcasters are sidestepping their legal obligation if they do not air worthy yet low-rated programming.
Although Powell said public-interest programming is necessary, he's uncomfortable with the five commissioners deciding what it should be. "If you're using the government will to impose 'castor oil' or 'eat your vegetables' programming, you'd better be a little bit concerned that you're going to allow three of five unelected officials to unduly impose what they prefer to see on TV," he said.
The Senate exchange between Dorgan and Murdoch highlighted the philosophical split between media owners and those who oppose them, said fellow witness Gene Kimmelman, the Washington director for Consumers Union, the advocacy group that publishes Consumer Reports magazine. "Owning broadcast stations carries public responsibilities, like providing a diversity of points of view for the community," Kimmelman said.
Powell, though, believes that the pending changes are in the public interest. In situations where a newspaper has received a waiver to own a television station in the same city, that station has produced more and better local news, Powell said. Network owned-and-operated television stations typically produce more local news than those not owned by networks, other data show, he said.
As for allowing networks to buy more stations, Powell points to the ascendancy of cable, which for the first time this year attracted a greater aggregate prime-time audience than the networks.
If cable continues to eat away at broadcast, Powell said, public-interest programming will be jeopardized because cable channels are under no FCC obligation to provide such programming. Allowing media companies to buy more stations, which typically return profits of 20 to 50 percent, would help ensure continued free, over-the-air public-interest broadcasting to the roughly 15 percent of viewers who do not have cable or satellite television, he said.
Some believe the FCC's economic arguments are flawed.
"The only justification for deregulation is that with the rise of the Internet and [cable and satellite] TV, you no longer have to worry about monopolies in the media marketplace," said Robert W. McChesney, a professor of communications at the University of Illinois at Urbana-Champaign and the author of "Rich Media, Poor Democracy." "If the Internet has created so much power, you would expect the value of [television and radio stations] to plummet, but it has increased well ahead of the rate of inflation."
If the FCC votes to ease and abolish the ownership rules next month, several media analysts have predicted a rush of media deals will follow. But some media barons have played down such a buying spree. Viacom Inc. President Mel Karmazin recently said that his company would not pursue newspapers in cities where it owns television stations, because papers "are not a growth industry." Murdoch said his company would not look to substantially add to its station group.
However, a report by Merrill Lynch & Co. predicted that companies such as Gannett Co., which has said that FCC ownership restrictions have pinched its growth, would acquire more television stations; likewise with Tribune Co. and Media General Inc. Merrill Lynch expects "targeted acquisitions" of television stations by the Walt Disney Co., Viacom and News Corp. in larger cities, as opposed to "wholesale, transforming" buys.
While Powell said he values public input on the rules, it ultimately will be of little help in crafting ownership laws that stand up in court.
"You don't govern just by polls and surveys," he said. "We have to exercise difficult judgments and abide by the law. If all of our rulemaking was just a case of put them out and take a referendum, things would be a lot easier."
Dean to FCC: Cease & Desist
By Governor Howard Dean, M.D.
Dean For America
Tuesday 27 May 2003
Howard Dean today wrote to FCC Chairman Michael Powell, urging the FCC to avoid further deregulation of the American media. The text of the letter:
Dear Chairman Powell,
Americans cherish the freedom of the press -- and the diversity of the press that ensures they can get access to the truth and to the information they need. The Bush Administration may not appreciate that freedom and diversity, but they should not tamper with it.
On June 2nd, the Federal Communications Commission should decide against allowing a single company to own multiple television stations, radio stations, and newspapers in a single town. The Bush Administration has urged the FCC to remove regulations that protect every Americans' right to a free press. This latest attempt by the Bush Administration to undermine the American ideals enshrined in our Constitution is wrong.
This deregulation, like so many actions pushed for by the Bush administration, would benefit a few at the expense of the rest of us. Modifying the ban in most cities on cross-ownership of television and radio stations and newspapers will have serious repercussions for every American. A similar deregulation of radio, through the 1996 Telecommunications Act, has resulted in a 30% decline of independently-owned radio stations in the United States. This decline has reduced Americans' access to local news via radio. According to a May 27 Bloomberg story, in at least one instance local authorities were delayed in broadcasting important emergency information to the local populace because the "local" radio station was broadcast from out-of-state. Accelerating the disappearance of independent local media by further deregulating television and newspaper ownership is the wrong direction for this country.
In my travels around the country, I have discovered that this proposed deregulation is one of the foremost issues on peoples' minds. I am asked about it everywhere--in small towns in New Hampshire, and in major cities across the nation. The American people are concerned about the future of their media, and the effect this decision will have on them. Thousands of Americans have written the FCC to oppose this rule, and members of Congress from both parties have voiced their protest and requested that you testify before them on the matter. Yet the FCC appears poised to ignore the interests of regular Americans by allowing a few massive conglomerates to gobble up our local news sources.
This proposed deregulation threatens the ideals of America--the ideals of openness, free speech, free expression and free discussion, which are the backbone of our Constitution and our democracy.
Therefore, I urge you to take the following actions:
- Delay the June 2nd vote by the FCC.
- Testify before Congress so that the Representatives of the American people can have the opportunity to question the representatives of the Bush Administration.
- Allow for, and consider, additional public input. The FCC must provide sufficient opportunity for public input on a decision that effects every American.
I appreciate your consideration.
Governor Howard Dean, M.D.