Let's be honest: Is media consolidation a good idea?

With the telecommunications industry still dazed in the wake of the FCC's recent line-sharing rulings, what else could that agency possibly have up its sleeve? Plenty, because later this Spring, it is expected to make some far-reaching determinations about ownership of the media. So I couldn't miss the FCC's public hearing on the consolidation of the media, on March 7th in Seattle. You ask, "What does this have to do with me, as a member of the telecommunications industry in good standing?" Again, plenty. But first, some background.

The Telecommunications Act of 1996 directed the FCC to conduct biennial reviews of its broadcast ownership rules. During the past two years, it has been reviewing these rules:

• The TV-Radio Cross-ownership Rule, prohibiting one party from owning a TV and radio station in the same market, although entities in the 50 largest media markets can obtain waivers

• The Dual-Network Rule, which prohibits one broadcast network from owning another

• The Local Television Ownership Rule, prohibiting one party from owning, operating or controlling two or more broadcast TV stations, unless one is ranked below the top four

• The National Television Ownership Rule, in which no single owner can reach more than 35% of television households, nationally

• The Broadcast-Newspaper Ownership Rule, prohibiting broadcasters from owning a daily newspaper and broadcast outlets in the same city

• The Local Radio Ownership Rule which allows one entity to own up to eight commercial radio stations

Although the FCC established a public commentary period, and the FCC still offers a resource on the Web, for the public to submit additional comments (see http://www.fcc.gov/ownership/), it is all but over. What's more, many expect that these rules will be modified; some may be dropped altogether. 

Perhaps guided by the premise that the public simply can't grasp the fundamental importance of the media ownership issue, or doesn't care, FCC Chairman Michael Powell magnanimously offered only one official public commentary meeting, in Richmond, Va.,--no doubt the nerve center of Big Media--in January 2003. Undaunted, the two "renegade" Democrat FCC commissioners took this as a signal that the fox (or perhaps Fox?) was guarding the hen house, and took their case on the road. Hence, the FCC hearing in Seattle.

Now, one would think that attending an FCC hearing is about as exciting as listening to paint drying, but then again, this is Seattle, an activist community to say the least, and the activists were there in droves. The agenda called for a series of formal presentations, followed by a period of public verbal commentary that would be entered into the public record (by the way, no telcos). Not only did hundreds of people attend, on a weekday; the public was passionate! At the end of the day, FCC Commissioners Jonathan Adelstein and Michael Copps were practically folk heroes. 

One could break the various speakers and participants down as being in one of two groups: those in favor of maintaining or even strengthening the current ownership limits, and those in favor of weakening or eliminating the limits.

Those in favor of reduced regulation were mostly business interests, including station managers and regional executives for the larger media companies, most of which argued that consolidation created new opportunities to streamline their business operations. One Seattle broadcaster, operating two TV stations, operates one newsroom that offers the same news programming in two different time slots, one per station. Others testified that they can survive only if they scale upward and share one set of resources across all of their local outlets. 

The others, those hoping for continued or increased regulation, included the creative community, musicians and craftspeople, media artists, independent media companies and civil liberties advocates. Seattle is one of the few large cities that still have an independent newspaper and interestingly, that paper was the only outlet in town that has worked to create awareness of the media consolidation issue. As an independent, it is unabashedly in favor of keeping ownership rules where they are. 

Several common themes quickly became evident as members of the public queued up to make comments to the FCC commissioners. The most frequent request was for the FCC to postpone its rule-making in order to allow for an additional period of public commentary; for these media consolidation issues to be aired in honest public forums nationwide, and not in a perceived cloak of near-secrecy. Another common complaint was the great difficulty that musicians have at a local level, in getting their music heard. One station owner exclaimed "But we have a two hour meeting each week to listen to new stuff, once or twice a month, we actually play them!" Small wonder that Seattle, the home of the vital grunge music scene ten years ago, hasn't produced a national act in years. Yet another is that there is precious little local independent broadcasting. Clearly, the people want a voice and don't feel that Big Media gives them one.

Some other tidbits picked from the course of the day included the fact that earlier this year, Comcast declined to broadcast anti-war ads. As distasteful as such sentiments may be to many, should the messenger shoot the message, even if the message is unpopular? Also, have you noticed the change in news programming over the past several years? These days, Fox leads, and MSNBC and CNN follow--even to the extent that the news staff are encouraged to take explicit political stances--in an effort to boost ratings.

Why isn't the general public hearing more about this issue? These are not trivial decisions; they have a direct effect on the ability for the voting public to be informed about all issues, large and small, and yet the public has been left virtually in the dark about it. One academician at the Seattle proceeding stated that 75% of those surveyed by the University of Oregon were not even aware of the media consolidation issue. Others blame the major media companies themselves for not creating awareness, whether by accident or by design. At the Seattle hearing, FCC Commissioner Michael Copps stated that when the commission announced the Seattle proceeding, only one network called the FCC for information, and then mentioned it on the air only once, at 4:45 a.m.!

All of this serves to remind us that because all of America's sources of news and entertainment are controlled by just a half-dozen companies, the nation is dangerously close to losing a foundation element of its democracy; namely, exposure to a broad diversity of fact and opinion. It may be good business, but something is wrong when large segments of the American population didn't know of February's Space Shuttle disaster because all the radio programming was pre-recorded by someone long ago and far, far away.

Comparatively speaking, media competition in Seattle is still pretty strong. There are two major newspapers (the aforementioned independent and one owned by Hearst) and several community papers, whereas other major cities have but one. All the major TV networks have a presence here, along with independents and community access stations. There's talk radio, but there are also some vital indie stations and two very different NPR outlets. In comparison, take a look at Los Angeles, the second largest media market in the US, and without a single major locally owned newspaper or radio station! 

Telecommunications carriers can play a very positive and important role to their local constituencies by providing local and regional competition, by carrying local programming. By providing a platform for Internet broadcasters, public and government access, local educational TV programming, local economic development and so much more.

Just as we'll soon look back at the FCC's recent UNE-P decision as a turning point, so shall we look back at their rulings regarding media ownership. If they are loosened, the media conglomerates may become so overwhelmingly powerful that even the RBOCs won't be able to compete with them. As long as telcos remain as risk-averse as they are today, the resulting lack of competition could even have an adverse effect on our American democracy.

FCC Chairman Powell himself recognizes the gravity of the situation, saying in a January 2003 interview in USA Today, "This broadcast-ownership review will not be easy, but it is one of the most important FCC proceedings in many years. At issue are bedrock principles of our republic: freedom of speech and the press, freedom to associate and to petition government... Our Founding Fathers understood that government should not have the power to restrict speech without deeply compelling justifications."  

Let's hope that the FCC doesn't turn these ideals on their head by opting to free the speech of media entities that already have an advantage, at the expense of the competing and independent voices.  As FCC Commissioner Michael Copps warned, in an article for The Nation in March 2003: "Suppose for a moment that the FCC votes to remove or significantly modify the concentration protections...How would we ever put the genie back in the bottle? The answer is that we could not."

Steve Hawley is principal consulting analyst of Advanced Media Strategies.  He may be reached via his Web site, http://www.tvstrategies.com.