Media ownership shift opens up new perils

By Edward Wasserman
Week of December 24, 2007

Back in 2003, when the Bush administration was still cocky and determined, the Federal Communications Commission, led by Colin Powell’s son Michael, proposed a radical overhaul of longstanding restrictions on what broadcasters could own.

The changes would have spawned multi-media baronies in 170 markets. In the largest a single company could have three TV stations, a cable operator, eight radio stations and – with the ban on cross-ownership scrapped -- a daily newspaper.

Plus, the proposal raised the ceiling on how much of the national population a single station-owner could reach to 45 percent, which would bail out a few big media companies that were desperate to hang on to acquisitions that put them over the limit.

Powell’s plan was denounced by a hastily mobilized collection of strange bedfellows – from the gun lobby to anti-corporate activists – united only by rabid opposition to deepening concentration of media control. Congress got involved, the courts got involved, the plan was shelved.

Or, to be more accurate, since the 3-2 Republican majority on the FCC never gave up on deregulation, it was pulled back to the lab for refinement. Last week we saw the fruits of their tinkering in a revamped proposal passed by the commission. It is less audacious and less dangerous but, if anything, less coherent than the plan that was shouted down last time.

Gone is the national ownership ceiling and the sliding scale of ownership limits in any of 170 markets. The focus now is on the 1975 cross-ownership rule, which barred a company from owning both a TV or radio station and a newspaper in the same town. By a party-line 3-2 vote, the commission permitted cross-ownership in the country’s 20 biggest markets, as long as the TV station wasn’t one of the top four and the city still had at least eight unaffiliated major media outlets.

Kevin Martin, who succeeded Powell as FCC chair, described the plan as a “relatively minor loosening” of the ban, and defended it as a way to strengthen local news: “Allowing cross-ownership may help to forestall the erosion in local news coverage by enabling companies to share newsgathering costs across media platforms.''

That’s a curious assertion, one of several. In accompanying statements the commission suggested common ownership would both save money and increase the supply of news, and need not compromise the editorial independence of the combined entities.

Evidently, the way to improve the range, diversity and intelligence of news is to spend less on it.
Naturally, you might ask why, if the commission genuinely cared about the deterioration of TV news, it doesn’t use its ample statutory authority to attack the problem directly, such as by enforcing some semblance of public service requirement among broadcast license-holders.

But the real import of this policy lies elsewhere. First, it means a huge windfall for big market newspaper owners. Their potential buyers will now include not just faltering newspaper chains and bored billionaires, but the richest media companies in the country – network owners like General Electric and Viacom, and broadcast station chains like Sinclair, Lin TV and Clear Channel. More suitors will drive up the bidding.
But why would anybody buy a newspaper? For that matter, why care if two obsolescent technologies – print and over-the-air broadcast – are allowed to pool their miseries? So to a second point: What’s implicated here is the future of news on the Internet. There, the battle for news industry dominance is shaping up over local news and information, where the main combatants are the websites of metro newspapers and local broadcasters.

For all its blessings, the Internet is not likely to support an abundance of local news operations, and those that do not simply offer excellence online, but which benefit from offline operations – like newspapers and TV stations – that can drive traffic to them hold the upper hand.

The FCC says nothing about the independence of the Web-based news operations of the entities that it’s encouraging to merge. Ultimately, however, it may be there that the perils of this latest policy will be felt most severely, and the concentration of control over news and information will be most profound.

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