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MEDIA OWNERSHIP RULES AND THE FCC |
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by Seeta Pena Gangadharan WHO CARES, WHAT'S WRONG, AND WHY IT MATTERS A guide for reporters covering the biggest media-regulation battle of 2003 To the reader The Federal Communications Commission (FCC), under the leadership of Chairman Michael Powell, has been contemplating the elimination of all remaining media ownership limits, clearing the way for even more media consolidation. However, congressional and public pressures have been mounting against Powell's deregulatory trend. Over the past few months the FCC took public comment on this issue and received an unprecedented number of letters and email messages from the public, media outlets and organizations. The majority of comments expressed opposition to scrapping remaining ownership limits. FCC Commissioner Michael Copps has urged his colleagues to provide more opportunities for public input. So far, the FCC has responded with one official forum, February 27, 2003, in Richmond, VA. Although Chairman Powell has resisted adding more hearings, stating that "in the digital age, you don't need a 19th century whistle stop tour to hear from America," independently organized public forums are sprouting up around the country. So-called unofficial hearings will take place and have taken place in New York, Seattle, Los Angeles and Durham, North Carolina, with various FCC commissioners in attendance. A decision- making process once held behind closed doors is becoming more transparent. A growing public awareness is clearly impacting the FCC and fiercely demonstrating that people oppose further consolidation in the media industry. This reporter's guide provides a synopsis of some of the most compelling evidence against relaxation of the media ownership. Read on to find out more about the issue. About this guide This guide was made with the financial support of Media Alliance, a 26 year-old media resource, and advocacy center working to foster media in the interests of peace, justice, and social responsibility. Developed in collaboration with many allies, this guide draws on the work of pioneering individuals and organizations dedicated to advancing democratic media and communications. It is co-produced by the Center for International Media Action, a new support organization for groups working to transform media systems and practices in the service of social justice. This Reporters' Guide will be updated and available online at: www.media-alliance.org. Please direct any questions to: info@media-alliance.org. About the author Seeta Pena Gangadharan is a freelance journalist, media activist and policy scholar based in San Francisco. She is co-founder of the new Center for International Media Action (CIMA), where she serves as policy specialist. She is pursuing a Ph.D in political communication at Stanford University. Graphic design and layout by Context Free Media: design@context.fm TABLE OF CONTENTS Who Is Demanding an Open Debate and Why Media Ownership Rules Matter How the Current Rules Affect Media Ownership: A Brief Synopsis Four Major Flaws of the FCC Review Process Context of the Media Ownership Debate Major Critiques of the FCC-Commissioned Studies on Media Ownership Rules Expert Resources Who Is Demanding an Open Debate?
Why Ownership Rules Matter* Corporate
accountability Diversity of
creativity, art, culture, vision The Fate of
Journalism Freedom of the
'Net Impact on
democracy Labor rights and
minority ownership Localism and
community *See www.mediatank.org for more information. How the Current Rules Affect Media Ownership: A Brief Synopsis* 1. Newspaper/Broadcast Cross-Ownership Prohibition (1975) The Rule: Prevents
broadcast TV companies from buying newspapers in the same communities in
which they have TV stations. 2. Local Radio Ownership (1941): Limits How Many Local Radio Stations One Broadcaster Can Own The Rule: Limits the
number of local radio stations that anyone broadcaster can own in a single
market, depending on how many stations exist in that single market. 3. National TV Ownership (1941):** A national limit on how many local TV stations one broadcaster can own The Rule: Limits the
number of local broadcast stations that anyone broadcaster can own to
systems serving 35% of the TV households in the United States. 4. Local TV Multiple Ownership, aka "Duopoly rule" (1964)** The Rule: Allows for
the combination of two television stations in the same market, provided
that at least one of the duopoly stations is ranked below the top four
stations and that at least eight independently owned- and-operating,
full-power commercial and noncommercial television stations remain in that
market after the combination. 5. Radio/TV Cross-Ownership Restriction (1970) The Rule: Prevents
one entity from owning both a radio station and a television station in
the same market. 6. Dual Television Network Rule (1946) The Rule: Prevents
one broadcast network from owning another broadcast network. *Excerpted from Intro to FCC Rules, written by the Writers Guild of America, East (see www.wgaeast.org/features/fcc/2003/02/13/fccintro/) . **remanded by D.C. Circuit Four Major Flaws of the FCC Review Process 1. Chairman Powell has made it clear in the past that he advocates for the abolition of ownership rules. Powell's statement in 2000 against the FCC's decision to keep intact the media ownership rules (the same ones that are now being reviewed and debated) lays out his tenacious disapproval of ownership rules. (See www.fcc.gov/Speeches/Powell/Statements/2000/stmkp013.html). Although the FCC and Powell have a process for public input and a mandate to regulate media in the public interest, it seems they have already reached a conclusion and are pressing forward with deregulation. 2. The FCC appears poised to fast-track a decision on media ownership. House Commerce Committee Chairman Tauzin (R-La.) is urging fast- tracking of the FCC decision. He wants FCC Chairman Powell to conclude media ownership proceedings by April. "If such a commitment cannot be made, I would similarly appreciate a detailed explanation of the circumstances and obstacles that are impeding the Commission's ability to meet that deadline," said a letter dated February 6. (See Ted Hearns, MultiChannel News, 2/6/2003). Meanwhile, Chairman Powell has said that more than 13,000 comments have been filed, demonstrating a vigorous public democracy (see www.fcc.gov/). If Powell were to make Tauzin's deadline, this implies that the FCC would be reviewing more than 300 filings daily. The fastest recorded review of FCC filings thus far concerned the legalization of low power FM, a decision that the FCC arrived at after nearly one year and nearly 3,000 comments. 3. The FCC does NOT want to confront public opposition to the abolition of media ownership rules. The withdrawal of official involvement in additional hearings called for by Commissioner Copps signals a clear rejection of the public's opinion. Meanwhile, Chairman Powell indicated his disdain for public hearings in a statement released February 5, 2003: "You don't need a 19th century whistle stop tour to hear from America." 4. Major media conglomerates have curried favor at the FCC. News Corp., Fox, NBC/Telemundo filed a statement that summarily dismissed any concern for the public interest. The conglomerates claim that "...there's no longer any public-interest need served by the Commission's ownership rules... " Eliminate them all, they say, while quoting Powell's 2000 statement. (See www.democraticmedia.org/ news/washingtonwatch/foxOwnership Filing.html) Rupert Murdoch (of News Corp.) also paid a special visit to FCC chairman Michael Powell and commissioners Kevin Martin, Michael Copps and Jonathan Adelstein, as well as some of their aides and Kenneth Ferree, chief of the FCC's Media Bureau, who will be making policy recommendations to the five commissioners. (See Ted Hearns, MultiChannel News, 2/6/2003). Context of the Media Ownership Debate Public opinion of media ownership is AGAINST concentration. A report released by Consumer Federation of America (CFA) said seventy percent of respondents to the survey believed media companies were becoming too large. The report, "Public Support for Media Diversity and Democracy in the Digital Age," was based in part on telephone surveys of 1,000 people after Labor Day. The report also included an earlier survey conducted over 2 years. CFA said that by a 3- to-1 margin, survey respondents felt that cross-media mergers-such as those between broadcast and newspaper-were bad for the country. Respondents felt those mergers would create less diversity in editorial viewpoints, CFA said. Future of Music, an advocacy organization for musicians, commissioned a telephone survey of 500 people on opinions towards the radio industry. Conducted by the Behavior Research Center, the study found that consolidation is not popular among audiences. Only one in ten radio listeners want their congressional representatives to support policies that would encourage more consolidation of radio stations by large corporations. Forty-two percent favor action by Congress to encourage preservation of locally owned, independent stations, and another 38 percent favor policies that would go a step further and stimulate an increase in the amount of locally owned radio stations. (See www.futureofmusic.org/research/radiosurvey.cfm) Despite the significance of the media ownership debate to the larger public, media do not and will not cover an issue that puts them in the middle of public scrutiny. In an opinion editorial by Harry A. Jessell, editor-in-chief of Broadcasting and Cable (1/20/2003), Jessell pointed out that the first (unofficial) FCC hearing on media ownership at Columbia University was meagerly covered by minor media players (Pacific and PBS) and via a webcast. New York Times' writer William Safire also criticized the lack of coverage, saying "Nor will you find many newspaper chains assigning reporters to reveal the effect of media giantism on local coverage or cover the way publishers induce coverage-hungry politicians to loosen antitrust restraints" (see www.nytimes.com/2003/01/20/opinion/20SAFI.html). Big media are clearly limiting the marketplace of ideas to a one-sided, pro- deregulation point of view. While ignoring and failing to inform public opinion on media concentration, the media industry pressures Capitol Hill to deregulate via massive political campaign contributions. As a major contributor, industry puts pressure on regulatory agencies tike the FCC to cater to industry wants, rather than public needs. The telecommunications industry contributed over $33 million, including $11.5 million from TV and radio stations and $4.7 million from cable TV, in campaign contributions to Democrats and Republicans in the 2002 election cycle (see Telecommunications industry contributions to political campaigns, The Center for Responsive Politics, www.opensecrets.org/industries/contrib.asp?ind=C2200). In addition to knowing very little of what the public thinks, the FCC and its researchers have shied away from determining how media professionals view the issue of media ownership. Lack of research on professionals' opinion of media ownership stems from their fear of reprisal. Journalists, freelancers and independent producers have been relatively silent on the topic of media ownership. Given the choice between blacklisting and continued work opportunities, media professionals would prefer to keep quiet. Commissioner Copps acknowledged media professionals' "fear of retribution" in a February 5, 2003 statement" (see hraunfoss.fcc.gov/edocs_public/ attachmatch/DOC- 230981A1.doc). Thus, far the FCC has not announced any procedure to collect anonymous testimony. It is important to note that high concentration in the industry correlates with the loss of jobs. Media companies are tightening their belts and, sadly, cutting jobs. Many cutbacks are attributed to the slowing economy and advertising market, disappointing results at online units, and restructurings in the aftermath of mergers. A tabulation of U.S. media layoffs, begun shortly after the start of the dot-com bust, has recorded some 70,000 lost jobs since June 2000 (see www.iwantmedia.com/layoffs.html). The media ownership debate is not a fight over deregulation, Major media players previously relied on heavy regulation in order to make a profit. Now that they have benefited from protectionism, they are calling for deregulation. The Fox network is a case in point. Launched in 1987, seven years prior to a deregulatory policy trend, Fox allied with independent, non-affiliated stations. These stations survived and thrived due to the Financial Interest and Syndication Rule (Fin/Syn), a regulatory measure designed to prevent major networks from controlling off-network rights to programs. As a result, Fin/Syn greatly expanded the number of independent stations (see the Caucus for Television Producers, Writers and Directors, www.caucus.org/news/news_fccresponse.html). Clear Channel-ization may befall the entire media industry. Many who are concerned with the prospects of further consolidation point to what has happened since national radio ownership caps were struck down by the Telecommunications Act of 1996. The most egregious case is the meteoric growth of Clear Channel Communications Inc., going from 40 stations to more than 1200. Major layoffs have resulted, while the quality of programming has been compromised (see www.mediaalliance.org/mediafile/21-4/clearchannel.html). Major Critiques of the FCC-Commissioned Studies on Media Ownership Rules Critics warn that the FCC's 12 commissioned studies on the impact of media-ownership rules cannot be the basis for such major decisions. According to the reports listed below, these studies reflect distorted analysis and vested interested and do not represent the broad range of issues at stake. Study #1 A Comparison of Media Outlets and Owners for Ten Selected Markets: 1960, 1980, 2000 By Scott Roberts, Jane Frenette and Dione Stearns, Media Bureau, FCC What's wrong and why The FCC Study #1 is skewed by a gross omission of rates of growth. Between 1960 and 1980, growth was at its strongest. Between 1980- 1985, the rate of growth of new media outlets measured at 18.5 percent. Between 1995-2000, the rate of growth dropped to 5.7 percent (see www.dpeaflcio.org/newsline/press/pr_2002_12_18.htm). Consumer Federation of America (CFA) demonstrates that between 1975 and 2000:
Study #2 Viewpoint Diversity in Cross-Owned Newspapers and Television Stations: A Study of News Coverage of the 2000 Presidential Campaign What's wrong and why FCC Study #2 presents a distorted view of the cross-ownership issue. His research:
A note on the author of FCC Study #2: David Pritchard arguably has a vested interest in debunking the newspaper-television cross-ownership restriction. Pritchard was originally commissioned to do research on viewpoint diversity to support the corporate media deregulatory efforts of Quebecor Media (see www.quebecor.com/crtc/en/masterfileENver5.pdf). *Nearly 80 stations were grandfathered at the time of the regulation. Four more stations were granted waivers to the restriction since then (Kortes Communication, Inc (2000), Columbia Monitor Broadcast, Co (1998), Fox TV Stations, Inc. (1993), Field Communication Corporation (1977)). **See, for example, The Effects of Newspaper Television Cross- Ownership on News Homogeneity, by William Gormley (Chapel Hill, N.C. Institute for Research in Social Science. 1976). Study #3 Consumer Substitution among Media By Joel Waldfoget, The Wharton School, University of Pennsylvania What's wrong and why Economist Dr. Dean Baker, of the Economic Policy Institute, states that Waldfogel's study suggests consumers use the Internet increasingly as a substitute for television news. Those findings, however, appeared to be contradicted by another FCC study (Study #8, using Nielsen Media Research) that says in a survey of 3,000, most consumers rely on broadcast TV, cable news and daily newspapers to stay informed. In this study, more than 83% said they relied on TV for national news compared with 21% who used the Internet (see www.dpeaflcio.org/pdf/FCC_Critique.pdf). According to the "Journalism Ethics and Integrity Project," conducted by the Radio and Television News Directors Foundation in 1999, Americans use local TV as their primary news sources (see www.rtnda.org/research/judg.shtml). The New York Times also contends that most Americans receive their news from a handful of outlets, and much of what appears on the Internet is repackaged from those outlets. The number of operations that gather original news is small and now may become smaller. (See www.nytimes.com/2003/01/07/opinion/o7KOVA.html). Study #4 Consolidation and Advertising Prices in Local Radio Markets By Keith Brown and George Williams, Media Bureau, FCC What's wrong and why Prior to passage of the legislation, the top radio ownership group in the country held 39 stations and produced revenues of $495 million annually. Today the largest radio ownership group boasts nearly 1,200 stations and generates revenues of almost $3.2 billion annually. There are 1,100 fewer station owners today than there were in 1996, a decrease of almost 30 percent. (See www.rollcall.com/pages/pb/00/2001/07/pb0723j.html). Study #5 Program Diversity and the Program Selection Process on Broadcast Network Television By Mara Einstein, Department o Media Studies, Queens College, City University of New York What's wrong and why The Writers Guild of
America-West notes that between 1992 and 2002, the percentages of
primetime series produced by the major networks increased from 25 to 69
percent. In 1992 there were 16 new series independently produced. Last
year there was only one (ABC's now-cancelled Dinotopia). (See
www.backstage.com/backstage/news/article_display.jsp?vnu_content Five conglomerates (AOL Time Warner, Viacom, NBC, Disney, and News Corp./Fox) both produce and distribute the programming seen by the vast majority of Americans on broadcast and cable. Of the 40 new series airing on the four major broadcast networks in the 2002 season, 77.5 percent are owned in whole or part by those networks, up from 56.3 percent the prior season -an increase of over 37 percent in just one year (see www.creativecommunity.us). Study #7 The Measurement of Local Television News and Public Affairs Programs By Thomas Spavins (Enforcement Bureau, FCC) and Loretta Dennison, Jane Frenette, and Scott Roberts (Media Bureau, FCC) What's wrong and why The FCC Study #7 misses the mark on localism and diversity in the news. According to the Project on Excellence in Journalism, quality can be graded by simple values: community relevance, focus on the significant, covering a broad range of topics, authoritative sourcing in stories, presenting more than one point of view, citing multiple sources, understandability of a story and level of sensationalism (see www.journalism.org). Program diversity means more than a jumble of quiz shows, dramas, comedies, etc. (see www.dpeaflcio.org/pdf/FCC_Critique.pdf). Moreover, increased amounts of local news programming may be repeat or re-purposed content. Viewpoint diversity does not mean bipartisan politics. Network owned-and-operated stations may be foregoing their public- interest obligations and getting rid of news programs and vital news staff.* Authors failed to investigate thoroughgoing forms of peer review such as the Investigative Reporters and Editors Awards. Authors also did not specify how many people are actually watching the programs that received awards (i.e., programs high in quality do not necessarily equate with spikes in ratings). Study #9 Radio Market Structure and Music Diversity By George Williams, Keith Brown and Peter Alexander, Media Bureau, FCC What's wrong and why Radio stations on a national basis have shown less diversity in the songs played in recent years, (Williams et al., 2002) while increased concentration of ownership has allowed stations to rapidly hike their advertising rates -68 percent in the five years following the Telecommunications Act of 1996. (Brown , and Williams, 2002). The Telecommunications Act ended national radio ownership limits, resulting in rapid consolidation of the radio industry (see www.dpeaflcio.org/newsline/press/pr_2002_12_18.htm). Study #11 Radio Industry Review 2002: Trends in Ownership, Format, and Finance By George Williams and Scott Roberts, Media Bureau, FCC In the fight for "eyeballs," the networks often mimic one another's successes, making it difficult to tell them apart. In radio, where consolidation has gone furthest, 66.6 percent of people who listen to news listen to stations that are owned by four companies, according to a study by the Future of Music (see www.futureofmusic.org/news/PRradiostudy.cfm). Furthermore, the increase in numbers of radio formats masks a decrease in attention to minority concerns. Programming under non-minority ownership is less community oriented, has less news and political coverage, and is more entertainment-driven. Minority-formatted radio stations that are also minority-owned continue to report relatively greater diversity of on-air talent than their non-minority-owned counterparts. So although the programming is minority-formatted, the viewpoints expressed continue to be those of the majority population (see www.digitalempowerment.org/library/detaits.cfm?id=4540). *Powers, A. (2101) Toward Monopolistic Competition in U.S. Television News. Journal of Media Economics, 14(2], 77-86. Expert Resources These experts and activists are able and willing to talk to the media about FCC ownership issues. Contact them! Department for
Professional Employees, AFL-CIO American
Federation of Television and Radio Artists (AFTRAI The Caucus of
Producers, Writers and Directors The Center for
the Creative Community, Inc, Center for
Democratic Communications, National Lawyers' Guild Center for
Digital Democracy Center for
International Media Action Center for Public
Integrity Children Now The Civil Rights
Forum on Communications Policy Communications
Workers of America The Consumers
Union Fairness and
Accuracy in Reporting (FAIR) The Future of
Music Coalition The Media Access
Project Media Alliance MediaChannel Media Tank National
Association of Black Owned Broadcasters National Writers
Union Prometheus Radio
Project Robert McChesney,
author Rich Media: Poor Democracy Writers Guild of
America, West Writers Guild of
America, East
Sponge Bob Square Pants pays a visit to FCC commissioner Michael Powell MEDIA ALLIANCE CENTER FOR
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