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FCC Media Deregulation: Done Deal

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Consensus has it today that the FCC is going to significantly loosen media ownership rules on June 2, based upon leaks from the FCC itself and media insiders. It would appear hearings and protestations from a variety of sources have changed Chairman Powell and the Republican 3/5 of FCC commissioner’s determination to deregulate not a whit: let the Clear Channel-ization of the media continue unabated!

The Washington Post reports:

    The Federal Communications Commission is poised to relax or eliminate a wide-ranging set of media ownership rules, allowing a newspaper to buy a television station in the same city for the first time in nearly 30 years and broadcast networks to acquire more stations.

    Media companies such as Rupert Murdoch’s News Corp. and the Walt Disney Co. have lobbied to lift the ownership limits, saying they need more newspapers and television and radio stations to remain viable and provide more and better local news to readers and viewers.

    Public interest and other advocacy groups that have fought to keep the ownership caps say that increased consolidation has led to tighter control of the media by a few companies and fewer voices on the airwaves.

    Two things are certain: On June 2, the five-member FCC will adopt most of the media-ownership recommendations delivered by staffers yesterday. Also, a wave of media deals — and probably lawsuits — will follow, as companies jockey to exploit the new rules or seek relief from them.

    ….Agency commissioners received a 261-page report from staff members yesterday covering the six major ownership rules up for reevaluation based on 18 months of record review and studies. According to sources, the report — which has not been made public — recommends:

    • Abolishing the cross-ownership ban in large and mid-size cities while retaining it in small cities.

    • Raising the number of television stations that a broadcast network, such as ABC or Fox, can own. Currently, a network cannot own a number of stations that combine to reach more than 35 percent of the national audience. That number is likely to be raised to near 45 percent.

    • Allowing one company to raise the number of television stations it can own in a large market, such as Washington, from two to three while keeping the limit at two in medium-size markets and one in small cities.

    Other rules, such as one that says one company can own a maximum of eight radio stations in the largest cities, will be retained. However, the definition of what constitutes a radio market will be redrawn to prevent one company from further dominating local airwaves. Another FCC rule, which forbids one of the four major television networks from buying another, will be retained, sources say.

The FCC’s two Democrats are very concerned, according to the NY Times:

    In interviews today before receiving the detailed plan, the two commissioners, Michael J. Copps and Jonathan S. Adelstein, said that they were troubled by reports that the commission’s staff, after extensive consultations with Mr. Powell, would recommend raising the ownership cap while retaining the formula that discounts the audience size of UHF stations.

    “I’m afraid we may be moving in a more dramatic fashion that could permanently alter the media for generations to come,” Mr. Adelstein said.

    Mr. Copps said that the changes, including the sharp increase in the television ownership cap, “would be a green light to considerable and significant consolidation in the future.”

    “It’s hard to imagine how the proposals foster the goals of the rules, which are diversity of voices, localism and competition,” he said.

The UHF discount is a bizarre anachronism, and if we are changing to keep up with the times, this provision should be the first to go:

    the UHF discount, came about in a different regulatory and technological era, when a vast majority of viewers received television signals free over the airwaves and had to use special equipment like antennas that resembled rabbit ears to pick up UHF stations. Today, about 85 percent of viewers use paid services from cable and satellite providers, rendering the distinction between VHF and UHF largely a relic.

    Officials close to Mr. Powell said today that the agency had decided to retain the discount because under the agency’s interpretation of the law, it was not clear it had the authority to alter it in the current proceedings. They said that there was nothing in the public record to justify changing the way the commission counted UHF viewers and that Mr. Powell had attributed the growth of new networks in recent years to the UHF discount, including UPN, Pax, WB and Fox.

Dan Ackman looks at the matter from a practical standpoint in Forbes:

    Both Viacom and the Fox unit of News Corp. already exceed existing caps on television-station ownership as a result of their past mergers. When their mergers took place, they were met by a hodgepodge of waivers and court rulings that effectively abrogated the existing rules.

    The newly proposed rule would allow a single company to own TV stations that reach 45% of U.S. households instead of the current 35% maximum. But stations like Fox and CNN, a unit of AOL Time Warner, are permitted to do that already. Existing “cross-ownership” rules, such as those limiting the ownership of a newspaper and a radio or television station in the same city, would be replaced by a single rule that would lift most of the existing restrictions, which are now often waived anyhow.

    ….Pundits have hailed the rule change as “the most significant in a generation.” Much more important is what has happened during that generation. Since the current regulations came into effect, the world has seen the rise of cable television, satellite television, new broadcast networks and the Internet. There are fewer daily newspapers than there once were, but many more television stations of various stripes. There are probably more magazines than ever, but arguably fewer serious journals of opinion. And anyone can put up a Web site or a Weblog and reach the world, assuming someone out there in the world wishes to be reached.

    ….those who are interested could use the Internet and dial up Le Monde or Al Jazeera. It’s not clear how many Americans exercise this option. By definition, most viewers tend towards middle-of-the-road opinions. Networks seeking a mass audience will try to meet them in the middle. The real problem may be that many Americans simply are not interested in knowing what’s going on. That’s unfortunate, but there’s probably nothing the FCC can do to change it.

    ….The paradoxical result of this wellspring of choice is a massive traffic jam in the center. But that doesn’t mean there aren’t other options on either the side of the road.

Paul Krugman, with whom I rarely agree, thinks the media explicitly curry political favor:

    The plan’s defects aside – it will further reduce the diversity of news available to most people – what struck me was the horse-trading involved. One media group wrote to Mr. Powell, dropping its opposition to part of his plan “in return for favorable commission action” on another matter. That was indiscreet, but you’d have to be very naïve not to imagine that there are a lot of implicit quid pro quos out there.

    And the implicit trading surely extends to news content. Imagine a TV news executive considering whether to run a major story that might damage the Bush administration – say, a follow-up on Senator Bob Graham’s charge that a Congressional report on Sept. 11 has been kept classified because it would raise embarrassing questions about the administration’s performance. Surely it would occur to that executive that the administration could punish any network running that story.

    Meanwhile, both the formal rules and the codes of ethics that formerly prevented blatant partisanship are gone or ignored. Neil Cavuto of Fox News is an anchor, not a commentator. Yet after Baghdad’s fall he told “those who opposed the liberation of Iraq” – a large minority – that “you were sickening then; you are sickening now.” Fair and balanced.

    We don’t have censorship in this country; it’s still possible to find different points of view. But we do have a system in which the major media companies have strong incentives to present the news in a way that pleases the party in power, and no incentive not to. [NY Times]

Whether the new rules merely reflect current reality or greatly enable the further consolidation of mass media into ever fewer hands is an open question – that media consolidation thus far, especially in radio, has reduced diversity and localism and homogenized what is supposed to be held in the public trust, is not.

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About Eric Olsen

Career media professional and serial entrepreneur Eric Olsen flung himself into the paranormal world in 2012, creating the America's Most Haunted brand and co-authoring the award-winning America's Most Haunted book, published by Berkley/Penguin in Sept, 2014. Olsen is co-host of the nationally syndicated broadcast and Internet radio talk show After Hours AM; his entertaining and informative America's Most Haunted website and social media outlets are must-reads: Twitter@amhaunted, Facebook.com/amhaunted, Pinterest America's Most Haunted. Olsen is also guitarist/singer for popular and wildly eclectic Cleveland cover band The Props.
  • There still is a chance that this could be stopped if it gets enough coverage.

    I listened to part of the Senate hearing this morning and a number of Senators spoke out against the new rules including Republican Olympia Snow. Trent Lott also said he favored keeping the current regulations.

    mediareform.net which was started by McChesney has lots of info.

  • Yaeh, I listened to pare tof that too – when Frank Blethen from the Seattle Times was on, and the Viacom chair and some guy from Capitol One recording.

    The Viacom guy in particualr sounded like a big baby. The rules, he was saying, should limit one company from owning 6 of 6 stations in one market but not 5 of 6.

    They also kept on trying to fudge the numbers, not using “how many people” reached when it suited them – when it sounded less. Like saying owning eight of 100 radio stations in a market only amounted to 8 percent of the number of stations. this ignores the fact that those eight may have 90 percent of the audience – and may have before Company WHRE decided to buy them up.

    If I could get to where I can upload to my Web site I’d post something more elaboratly presented there. But I can’t., so …

    Something about government-mandated less choice has always made me squirm. It’s the wrong direction.

  • Yeah, I heard Mel from Viacom (with a friend who had been laid off from MTV’s online news staff). Poor baby, he can only ruin 8 radio stations in NYC – he wants more, Infinity perhaps?

    It was interesting to hear the local owner of some stations including a CBS affiliate sound like McChesney (or even Chomsky at points) and totally contradicting Viacom.

    I lost access to the audio feed before Frank Blethen came on.

    CBS Marketwatch has a story on the hearing.

    There also is a wire story on the two Democrats requesting a delay and that the proposed rules be made public.

    That is one of the most amazing things about this. Powell doesn’t want the rules released before the vote, and Copps said that it wouldn’t even become public until two to six weeks after June 2nd if it is approved.

  • Eric Olsen

    I fear that mathematics – 5 commissioners, 3 Repub, 2 Dem – have long since sealed this vote. The administration is behind this move and none of the Repubs are going to buck that force.

  • I wonder why it has seemingly split up along such party lines? I have known many Republicans to quite enjoy more than one paper and/or TV station and/or more than one POV.

  • It probably will be a 3-2 vote, but Kevin Martin did buck Powell on a telco vote. It is reported that he is backing this, but there might be a chance he could be moved if there is more public outcry. Though for that to happen, there needs to be more coverage.

    As I mentioned, there are some Republicans who are against this. There is a slight chance it could be blocked in congress. It will also be challenged in the courts.


    Seek Additional Time to Examine Public Interest Implications

    Washington – Commissioners Jonathan S. Adelstein and Michael J. Copps have requested that the Commission postpone the announced June 2nd consideration of changes to the Commission’s media concentration protections. Under long-standing Commission practices, such requests from Commissioners are traditionally honored.

    In addition, Commissioners Adelstein and Copps reiterated a request for a public airing of the proposed rule changes. “We believe a full notice and comment period on the specific proposals is warranted. Sound policymaking, perhaps even the law, requires no less. At a minimum, we believe Commissioner Adelstein’s request for a public airing in an open forum would benefit the overall process. Such a public airing could be held in the very near future which would alleviate any concerns about the timely conclusion of the proceeding.”

    “As we have held our own field hearings and attended forums across this country, we have come to understand how important this issue is to our fellow citizens and to our democracy. When the Commission is considering significant changes that could unalterably remake our media landscape for years to come, we believe it is prudent to have a transparent process that ensures we understand the full implications of our decisions. Such an open forum is especially critical for issues of this magnitude when the Notice to the public asked broad, general questions, and did not set forth specific proposed rule changes.”

    “A public airing would make for better policies. It would make for better buy-in from the American people. And it would enhance the sustainability of any Commission decision in court. Revealing the outlines of the proposals to the public would allow us to obtain concrete input that would not only help avoid unintended consequences, but would also provide a sounder basis for defending the specific proposals against the inevitable court challenges.”


    Washington, D.C. ― Today, Commissioners Copps and Adelstein requested a delay of the June 2nd meeting on broadcast ownership. While appreciating their concerns, I must respectfully oppose their request. I conclude that for both legal and policy reasons we should move forward with the June 2nd meeting. The Commission has a statutory obligation to review our broadcast ownership rules every two years. We are already behind schedule, as June 2003 is past the date by which our 2002 biennial review should have been completed. Furthermore, we are fast approaching the time in which we need to begin our 2004 biennial review. If we don’t act, the courts may step in themselves.

    We have compiled a thorough and comprehensive record in this proceeding, which includes over 18,000 comments, 12 studies and testimony from a number of broadcast ownership hearings. We have provided notice of the rules we are reviewing, and the comments in the record reflect an understanding of these issues. I am satisfied that we have the information and the input we need to make a sound, judicially sustainable decision that will benefit the public interest. Although we are resolving very important and difficult issues, this task will not become any easier a week from now, a month from now, or even a year from now.

  • Thomas

    If we “let the Clear Channel-ization of the media continue unabated” what is the likelihood that political discourse in the United States will be increasingly dominated by one party? What is the historical record of nations dominated by one party?

    Saddam Hussein’s regime–which we were recently forced to depose–was propped up by a media machine filled with propagandists and cheerleaders. Does Michael Powell truly see the potential consequences of this decision, or is he only concerned with short-term personal gain?

  • political discourse already is dominated by one party.

    despite the republicans’ claim of liberal media bias, most left-leaning public statements are quickly shouted down with “LIBERAL!!

    …followed by said liberal skulking off into the fog.