From: Park, James R S (jrspar_at_essex.ac.uk)
Date: 2003-05-30 09:57:34
I hope this is of some interest to you all.
James.
Media Diversity at Risk
By Marfuza Khan
The Corporate Research Project
May 29, 2003
On June 2, the Federal Communications Commission (FCC) will vote on
proposed changes to longstanding government rules on media ownership. It
is widely believed that FCC chairman Michael Powell, and the two other
Republican commissioners on the five-member Commission, will vote in
favor of loosening government rules which limit the size and reach of
the nation's largest broadcasting, newspaper and cable companies.
The rule changes that will be considered by the Commission are part of a
regular, congressionally mandated review initiated under the 1996
Telecommunications Act. However, this is the first time the review will
involve such drastic changes. Michael Powell has not made his full plan
public, but it reportedly calls for the most extensive rewriting of the
ownership rules in decades. As Jeff Chester of the Center for Digital
Democracy points out, "The rationale for these policies is that they
help provide for a diverse media marketplace of ideas, essential for a
democracy. They have not been perfect. But these rules have helped
constrain the power of the corporate media giants."
According to the Pew Research Center for the People and the Press, only
a third of all Americans realize that the public owns the airwaves, and
about a tenth are aware that the FCC gives stations licenses for free.
In 1997, broadcasters lobbied and received portions of the digital
broadcast spectrum - worth, according to some estimates, upwards of $70
billion - for free. The proposed rule changes would further increase
media concentration and have a deleterious impact on independent
production. At the same time, the changes are expected to result in the
loss of local content in favor of homogenized national programming. That
has been the experience in the radio market after the restrictions on
ownership were eased with the passage of the 1996 telecommunications
bill, which, for example, paved the way for Clear Channel Communications
to expand from 40 stations to 1,225 and in the process exert
unprecedented control over the industry.
Michael Powell has rejected a request from two commissioners to delay
the vote even though there is precedent for granting such a request.
Michael J. Kopps, one of the two Democrats on the Commission who
requested the extension, said that that the chairman was rushing to vote
on proposals that could change the media landscape in ways not fully
understood.
The Proposed Rules and Their Relevance in the Age of Multi-Media
The six key rules that are being considered for change are:
1) The newspaper/broadcast cross-ownership ban that prohibits the
combined ownership of a major newspaper and broadcast station in the
same urban market;
2) The national television station ownership cap that prohibits any one
entity from owning TV stations covering more than 35% of the national
audience;
3) The dual network ownership rule that prohibits mergers among the four
major television networks;
4) The television/radio cross-ownership rule, which limits the number of
stations that can be jointly owned in any one market;
5) The local television duopoly rule that limits common ownership of
television stations in the same market; and
6) The local radio ownership rule that limits the number of radio
stations any one entity can own in a single market.
Commission chairman Michael Powell has said that today's ownership rules
don't reflect the realities of the modern media marketplace. They are
irrelevant in a multi-media landscape where consumers have choices among
hundreds of cable channels, millions of websites and satellite radio.
Powell's spiritual father is Mark Fowler, Ronald Reagan's first FCC
chairman, who said that public interest rules for television were
unnecessary, since TV was just another appliance, "a toaster with
pictures." When asked in 2001 what he thought the term public interest
meant in the FCC's mission, the current FCC chairman responded, "I have
no idea...I try to make the best judgment that I can in ways that
benefit consumers. Beyond that I don't know."
A recent analysis by the Consumer Federation of America and Consumers
Union, two of the nation's largest consumer advocacy organizations,
debunks the notion favored by chairman Powell that a revolution has
taken place in the media and communications market that renders the
current rules irrelevant. The analysis uses FCC data that show that TV
is the American public's dominant source (56 percent of survey
respondents) of news and information, while newspapers are the second
(23 percent) most important source. Cable and the Internet play a small
role as a source of local news - 11 percent and six percent
respectively. Internet users, however, use the websites of newspapers
and TV stations as their primary source of information. Radio has almost
disappeared as an independent source of news.
Critics have also correctly pointed out that while there may be hundreds
of channels, there is a paucity of choices. Five major corporations are
the gatekeepers and decision makers for the programming choices of the
vast majority of the American people. Right wing powerhouses are also
expected to grow. The proposed takeover of DirecTV, the country's most
powerful satellite service, by Rupert Murdoch's News Corporation is the
obvious example. Companies such as the Sinclair Broadcast Group, which
reaches 24 percent of the national TV audience, has created repackaged
"faux" local news - local broadcasting combined with prepackaged news -
like Clear Channel in the radio market.
The Persuasive Power of Media Corporations
The major media companies have been engaged in the campaign to loosen
government regulations for a number of years. As noted in a study by the
Center for Public Integrity, media companies' strategies for winning
friends and influencing people have included time-honored techniques
such as lobbying, campaign contributions and taking politicians and
their staff on junkets. They have often gone either first to the FCC or
to Congress to achieve their agenda to end any federal limits on their
size and power. Failing legislative or regulatory intervention, they
have also launched a powerful attack of the rules in the courts, arguing
that the rules violate their right to free speech and are no longer
needed to ensure that consumers have access to competing sources of news
and entertainment programming. The U.S. Court of Appeals court for the
District of Columbia struck down FCC rules or demanded that they be
rewritten three times between February and April this year.
The media industry's political power is much greater compared to other
industries. In his memoir, "You Say You Want a Revolution," former FCC
chairman Reed Hundt comments, "The media industry does not mobilize
great numbers of voters and it actually is not comprised of America's
largest economically most important companies..." The media's
significant and political clout comes from its near ubiquitous,
pervasive power to completely alter the beliefs of Americans.
Politicians are afraid to take on the news media directly for fear that
they will simply disappear from the TV or radio airwaves and from news
columns.
Media Concentration & Democracy in the Marketplace of Ideas
Five companies - Viacom (owner of CBS), Disney (ABC), News Corporation
(Fox), General Electric (NBC) and AOL Time Warner - control about 75
percent share of production of prime-time viewing. Research conducted by
the Project for Excellence in Journalism finds that larger companies and
network owned TV stations produce lower quality news shows than do
smaller media companies. These five corporations are now on the verge of
controlling the same number of television households as the big three
broadcast networks did forty years ago. In the past, when three or four
broadcast networks controlled so many households, the Commission
protected the public's interest in competition and diversity of
viewpoints by requiring independent production of programming.
No such policy protects the American public today. Tom Wolzien, a Wall
Street analyst terms this "programming oligopoly" and shows that it
exists both in the distribution and production of programming. For
example, NBC owns outright or holds a significant financial interest in
one hundred percent of the new series on its schedule. The other
networks are not far behind. Rather than compete fairly in the
marketplace of ideas, the networks leveraged their control of the
publicly owned airwaves to take over television program production,
driving small businesses and creative entrepreneurs, many of whom were
women and minorities, out of business.
The biased coverage of the war against Iraq by the mainstream media,
particularly by Fox, demonstrates the pitfalls of media concentration.
Interestingly, Michael Powell makes the connection between the war and
his agenda. He says that bigger media companies are needed more than
ever because only they can cover the war the way the Iraq war was
covered.
The Big Five
* Viacom - 2002 revenues $24.6 billion. Owns 39 broadcast television
stations and 185 radio stations. Cable networks include MTV, Nickelodeon
and BET. Other businesses include CBS, UPN, Paramount Pictures, Simon &
Schuster and an 80.4 percent equity interest in Blockbuster Video.
* News Corporation - 2002 total revenues $17 billion. Owns (80.6
percent) the Fox Entertainment Group, which includes 20th Century Fox,
Fox Television Stations, and Fox Cable (includes sports and movie
channels, National Geographic Channel). Fox Television owns 60
television stations and has 188 affiliates. News Corporation is the
world's largest publisher of English-language newspapers, including the
New York Post. Also owns HarperCollins Publishers.
* AOL Time Warner - 2002 revenues $40.9 billion. Businesses owned
include America Online, CNN, Time Warner Cable, Warner Bros. Pictures,
Turner Networks (includes TBS Superstation) and HBO. The Warner Music
Group's major record labels include Elektra and Atlantic. The publishing
business conducted primarily through Time Inc. includes Time, People,
Sports Illustrated, Fortune and Money. The Securities and Exchange
Commission and the Department of Justice are conducting investigations
into accounting and disclosure practices of the company.
* General Electric - 2002 revenues $31.7 billion. NBC provides network
television services to more than 220 affiliated stations, produces
television programs, operates 28 television-broadcasting stations,
operates four cable/satellite networks around the world, and has
investment and programming activities in the Internet, multimedia and
cable television. Also owns Telemundo, one of the two largest hispanic
broadcasting networks.
* Walt Disney - 2002 total revenues $25.3 billion. Operates the ABC
Television Network, which has 226 primary affiliated stations. ABC Radio
Networks provide programming to more than 4,600 affiliated radio
stations. Radio Disney is carried on 51 stations, including 32 that are
owned by the company. ABC Radio Networks also produce the ESPN Radio
format, which is carried on more than 700 stations, including 215
full-time (four of which are owned by the company), making it the
largest radio sports network in the United States. Disney also owns 10
television stations, 44 standard AM radio stations, and 18 FM radio
stations.
Conclusion
As Virginia Riskin, President of the Writer's Guild of America, said in
her remarks at one of the FCC hearings on the proposed rule changes in
February, "The media are the modern-day American Town Square, the place
where people from different backgrounds and points of view share their
stories and the public learns about the world." Ensuring broadest
participation at this modern American town square is an essential
precondition for a pluralistic democracy to flourish. The First
Amendment rests on the assumption that the widest possible dissemination
of information from diverse and antagonistic sources is essential to the
welfare of the public. As the Supreme Court has reiterated, "Assuring
that the public has access to a multiplicity of information sources is a
governmental purpose of the highest order, for it promotes values
central to the First Amendment."