FCC Moves To Intensify Media Consolidation

The FCC (Federal Communications Commission) is moving to weaken or eliminate two of the few remaining broadcasting rules that protect some degree of media diversity.

On April 19, the FCC voted 3-1 in favor of eliminating the "dual network" rule, which had prevented one television network from buying another. This rule change will immediately benefit Viacom, which will be allowed to own CBS and part of the UPN network.

The other rule, expected to be lifted or amended in a matter of weeks, is the "cross ownership" rule, which prohibits a company that owns a local newspaper from owning a television station in the same market. Waivers have been granted in the past (Rupert Murdoch's News Corp. owns New York television station WNYW and the New York Post, for example), but watering down or eliminating the rule altogether has long been a goal of industry lobbyists.

This continues an intensely pro-business trend at the FCC, the government agency responsible for managing the broadcast spectrum and regulating the telecommunications industry. Under the impetus of the deregulatory Telecommunications Act of 1996, the FCC has overseen a period of intense corporate mergers. Since the Telecom Act, the number of television station owners in the U.S. has dropped by half (Los Angeles Times, 4/19/01), while more than half of the 11,000 commercial radio stations have been sold (Silicon Alley Reporter, 3/01).

The move to deregulate the media industry continued three years later, as the FCC in August 1999 changed its rules to allow networks to own two television stations in a given market. And last month, FCC chair Michael Powell approved a number of radio mergers that had been marked for public comment by previous Chairman William Kennard (Broadcasting & Cable, 3/19/01). The mergers given the green light by Powell would create local monopolies, where one company would control 50 percent of a given market's ad revenue, or two companies would control about 70 percent of total ad revenue.

Powell has indicated (New York Times, 4/16/01) that the cross ownership rule will fall as well: "I don't know why there's something inherent about a newspaper and something inherent about a broadcaster that means they can't be combined." Given that U.S. newspapers are overwhelmingly local monopolies, of course, mergers between the newspaper industry and the increasingly concentrated broadcast media would mean a dramatic reduction in media diversity at the local level.

Guarding and protecting the public interest is supposed to be central to the FCC's mission, but Powell has expressed some confusion about the very concept. When asked in February what he thought the term "public interest" meant (press conference, 2/6/01), he responsed: "I have no idea. The public interest at its core is the same thing as my oath of office: a commitment to making sure the American consumer is benefited.... I try to make the best judgment I can in ways I think will benefit consumers. Beyond that I don't know. I'm still trying to figure it out."

Powell is not always so confused about whose interests he represents: Appearing before the House subcommittee on telecommunications (Washington Post, 3/30/01), Powell referred to broadcast corporations as "our clients." Powell has also mocked the concept of unequal access to technology, often referred to as the digital divide: "I think there is a Mercedes divide," he said (New York Times, 2/7/01). "I'd like to have one; I can't afford one."

The FCC's actions under Powell are discouraging for those who advocate for media diversity. "Powell has been very clear about his intentions to turn over more and more of the publicly owned broadcast spectrum to already huge media corporations. These moves reaffirm those corporate-friendly principles," said Jim Naureckas of FAIR. "The FCC's total lack of interest in protecting Americans as citizens or consumers is shocking and disgraceful."

ACTION: Please contact Michael Powell and let him know that media diversity should be a top priority for the FCC, and that media concentration is not in the public interest. Urge the FCC to preserve-- and refrain from weakening-- the rule prohibiting cross ownership of newspapers and television stations in the same market.

Michael Powell, FCC Chair
Federal Communications Commission
445 12th St. S.W.
Washington, DC 20554

Phone: 888 225.5322
Fax: 202 418.0232


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