I was disturbed to read this article in Broadcast Engineering magazine:
FCC chairman Kevin Martin is promoting an ambitious plan that would dramatically relax the nation’s media ownership rules by year end.
Martin wants the FCC to repeal a rule that forbids a company to own both a newspaper and a television or radio station in the same city. He also wants to ease restrictions on the number of radio and TV stations a company could own in the same city.
That doesn’t sound like a good idea. Imagine hypothetically if Gatehouse Media owned not only all the newspapers in central Illinois, but a TV station in each market as well. That scenario is not so hypothetical in larger cities like Chicago. Sam Zell is buying the Tribune Company, which includes the Chicago Tribune and television station WGN. They have a waiver right now that allows them to own both, but that waiver doesn’t transfer to a new owner. Thus, Sam Zell would be among the big winners of the proposed rule changes, according to several news reports. Media mogul Rupert Murdoch would be another winner, as he would be able to own The New York Post and television station WNYW, reports Broadcast Engineering.
Illinois Senator Barack Obama doesn’t like the idea. But his complaint is not so much about media consolidation per se, but rather the harm it would do to minority media ownership:
Obama, in a letter sent Monday to FCC Chairman Kevin Martin criticized the agency’s record in promoting minority ownership in media companies and asked him to reconsider his proposed timeline.
We need more diversity in the media, but it goes beyond mere racial or gender diversity. We need more diversity of opinion. The last time the FCC tried to pass similar rules changes in 2003, Linda Foley, president of the Newspaper Guild, said, “The biggest impact [of media consolidation] is that we would have fewer and fewer people on the local level deciding what the news agenda is.” We’ve seen that here in Peoria already, as there are fewer reporters overall at area newspapers now that Gatehouse Media has bought and consolidated many of them. That means they can’t cover as much news, and more things go unreported and uninvestigated.
The non-profit advocacy group Common Cause has started a campaign against the new rules.
any rule that promotes monopoly is bad.
Too many media monopolies exist already. The new rules should seek to reverse that trend, not promote it.
C.J., some interesting points, but I disagree with you about ownership rules. I do some work with NAB, and I’ve seen many local and TV radio stations threatened (and even drowned) by the fragmentation of media.
In the 1950’s or 60’s, it wouldn’t have made sense for one company to own multiple papers in one market. But in 2007, there is just so much competition from the Internet, blogs, podcasts, etc… I think Martin’s reforms are valid for this day and age.
If you have a chance to respond, it’d be greatly appreciated.
ClarkAddison: So too much competition is a bad thing?
The way I see it, if there are six independent media outlets in a city, and one of them drowns due to competition, we still have five others. On the other hand, if two media conglomerates each buy up three of those six media outlets, we still have six media outlets, but only two voices. So more has been lost.
C.J., if one media company buys three stations, why would they have one voice for all three stations? The answer is they wouldn’t. They’d diversify.
But if three stations are owned by three companies, they’re going to play the most popular, homogenized content.
This actually happened in Minot, N.D., and Slate wrote a great article about it. Check it out if you get a chance — http://www.slate.com/id/2157395/
competition? preventing one company from purchasing another is our government attempting to regulate competition, i.e., artificially create it. in a total free market, one could buy whatever one could afford-tv stations, newspapers and so on. by preventing mergers, the government promotes inefficient and unsuccessful businesses. so the big guy gobbles up the little. with the fracturing of media via the web, people have zillions of choices (including this site, among others) for ‘news.’
I agree with aaron 100%. If a newspaper, radio station or TV station gives the people want they want to read, hear or see, they will succeed.
“in a total free market, one could buy whatever one could afford”
Except that the broadcast spectrum is a severely limited good. It’s not subject to the laws of free-market supply and demand because the supply is so short. That’s WHY the broadcast spectrum is regulated in ways we don’t typically allow other media to be regulated. And since the spectrum belongs to the American people, rules for its use have typically included diversified ownership and locally-based media.
As a libertarian, I supposed to appluad anything the lessens restrictions on the free markets. But we’re not talking a free market situation, are we? Try to start “Joe’s radio Station” in your garage, and the FCC will send guys in suits and ties to your door to confiscate your equipment.
If anything, this confirms the free market position that the public cannot rely on the government regulations to make things “fair” (a term that usually translates into “where’s mine?”) or to protect comsumers from the businesses they regulate. Eventually, the regulators become beholden to the entitities they regulate.
If the Bush Administration wants to get out of the way of the free market in the broadcast industry, he ought to tell his FCC chief to limit their activities to deciding that frequencies licence holders use, as well as start approving low-power FM licneses.
“If a newspaper, radio station or TV station gives the people want they want to read, hear or see, they will succeed.”
That’s not necessarily true, either — TV, radio, and newspapers have constant production cost issues. Most newspaper readers typically want foreign coverage, but fewer and fewer newspapers can afford to keep foreign correspondents on staff. Plenty of TV shows that tons of people watched and liked went off the air because production costs were too high. (And obviously in mass media there’s never a one-to-one relationship between the media and the consumer. You don’t CHOOSE goods, you are PROVIDED them.)
Mass media really market what advertisers will pay for and what production costs they can afford, not necessarily what consumers want to watch or read. For example, Disney’s tweeny-boppers have been dominating the top-40 Billboard charts despite the fact that not a single top-40 station will play the songs. The top-40 stations don’t care what consumers actually listen to; they’re catering to their vision of “cool” or “trendy” and there’s an awful lot of payola that goes into deciding what’s cool and trendy. 2006’s top album didn’t get a single spin on top-40 radio.
Media economics isn’t a simple case of “these apples are better than those apples.”
Thanks for the article link, Clark. I’m not sure where you live, but your theoretical and anecdotal evidence simply doesn’t square with what we’re actually seeing in Peoria.
Here, where Gatehouse Media has bought most of the local and weekly papers in the central Illinois area (with the notable exception of the Bloomington Pantagraph), we’re seeing more and more reporters go away through attrition and buyouts — thus, less local reporting.
Not only that, but having a virtual monopoly on print media makes it nearly impossible for a local competitor to enter the market. Gatehouse could decide to operate at a loss in Peoria by leveraging its other publications in order to snuff out any competition. Or they can simply buy out the competition, like they did with the Times Newspapers here.
You can’t seriously call blogs competition. We try to fill in what gaps we can, but we’re doing this as a hobby. We just don’t have the time or resources to be real “competition” for big media.
And just what is not working about the current arrangement from big media’s perspective? Are big media companies losing money? Is Sam Zell going to go into the poor house if he can’t own the Chicago Tribune and WGN? Big media appears to be doing very well. I don’t see any compelling reason to make the rules less restrictive. If anything, they should be more restrictive.
Have you read this report?
Aaron said, “competition? preventing one company from purchasing another is our government attempting to regulate competition.”
No, it’s an attempt to protect against monopolies and oligopolies because they are by definition anti-competitive and thus against the public interest. That’s what government is supposed to do.
alright, big bro, what sales/mergers should we stop? who gets to decide? right now, it’s the DOJ and the SEC. you gonna take over? prevent McDonald’s from buying Burger King so you can stuff your fat mouth with cheap burgers? There are specific criteria and market share numbers calculated into the equation. Still, anyone with a brain has to admit, it is a restraint on absolute free trade. hell, we still have tariffs on foreign steel and subsidize farmers out the wazzoo. politicians utter the phrase ‘free trade’ but really mean better prices for the crap we make here and lower prices for chinese shit. that chicken has come home to roost, and as a nation we owe boatloads of money to chinese banks that bought up our debt.
But, fair enuff eyebrows, there is only so much room on broadcast and while i don’t believe it ‘belongs to the american people’ (sorry, that sounds nice, like communism or some springsteen song, but it will never work), the airwaves are no longer an essential facility. In fact, most communication, including this, does not use the airwaves. (fine, maybe a satellite now and then). Radio and print is dead. except for pictures of britney, which are just as accessible online, there is no reason for either. And i will spend my dying days fighting against minority set-asides; only because i think there are good businessmen among the monorities who will rise to the top regardless. In this and in trade, I believe government only interferes and hinders.
i have a heart, more than anyone will know, but we’re turning into a government-state. most of us envisioned it as tanks rolling down pennsylvania ave, taking over, but now we are giving up everything, because we want mother government to take care of us. we want healthcare, we want cheap tv’s, we want video games, we want lilo on the cover of a magazine, we want, we want, we want. the more we rely upon and expect government to do for us, the more we give up.
oh, i forgot-
“Aaron said, “competition? preventing one company from purchasing another is our government attempting to regulate competition.”
No, it’s an attempt to protect against monopolies and oligopolies because they are by definition anti-competitive and thus against the public interest. That’s what government is supposed to do.”
drug patents are government enforced monopolies. too poor to afford this life-saving drug? too bad, we own it.
how many people in an oligopliy, bill?
so, if the ‘public interest’ is against anti-competitive tactics, then you’d vote against all the farmer subsidies, right? and we’d lose to south american farmers growing the same stuff for a penny on the dollar.
no more tariffs on foreign steel, an anti-competitive tactic? buh-bye pittsburgh.
the computer you type on? ’nuff said.
“But, fair enuff eyebrows, there is only so much room on broadcast and while i don’t believe it ‘belongs to the american people’ (sorry, that sounds nice, like communism or some springsteen song, but it will never work)”
That’s nice for you, but it’s belonged to the American people since the Communications Act of 1934 and has been repeatedly confirmed in subsequent litigation and legislation, including the Telecommunications Act of 1996.
“In fact, most communication, including this, does not use the airwaves.”
Welcome to the radio spectrum allocation of the United States of America: http://www.ntia.doc.gov/osmhome/allochrt.pdf
You are apparently unaware that the spectrum includes not just radio and television, but satellite transmission, cellular transmission, NASA’s space communications, radioastronomy, marine and aeronautical navigation, military spectrum, two-way radio (including emergency personnel), meterological data, the standard time signal, and, of course, amateur uses.
Part of the reason spectrum allocation is such a hot issue right now (and the reason that broadcast television is being forced digital by 2009 — digital signals take less spectrum) is that cellular uses have completely jammed up the spectrum, and that combined with growing commercial and military uses is becoming seriously problematic. Some spectrum space is worth nearly $200 million per megahertz.
The reason the government stepped in in the first place, incidentally, is that ships were foundering in the Atlantic and their emergency transmissions (as well as strategic military transmissions) were being buried under the nascent radio broadcasting industry, because everyone was just broadcasting on whatever bandwidth they felt like. The Titanic’s emergency broadcast was one of those swallowed by unregulated radio.
Spectrum regulation isn’t just about feeding corporate fat-cats or preventing open competition, you know. It’s a crucial safety issue and military security issue.
(And for future reference, you can’t just make facts up because they fit your prejudices. Find out what’s ON the radio spectrum before contending “most” communication doesn’t use it!)
(I think your blog ate my comment, CJ, and it was really long!)
Sorry, Eyebrows. I retrieved your comment.
Thankee!
Aaron, thanks for your input.