Media Consolidation


September 13, 2002


BROOKE GLADSTONE: This week the FCC announced that it not revive the rule that had long barred cable and broadcast outlets in the same market from owning each other. Earlier this year a federal court ruled that the agency had failed to justify it. In fact, the courts have demanded that the FCC reconsider all its multiple ownership restrictions and to that end the commission has launched a massive review of its rule also this week. The results could determine the future of big media, as OTM's Paul Ingles reports.

PAUL INGLES: The rules limiting multiple ownership have always been intended to promote a diversity of voices on the public airwaves and to prevent single owners from controlling too much news and entertainment programming. In recent years some media companies have successfully appealed the restrictions, and the courts have demanded that the FCC prove the harm it says will come if restrictions were lifted.

BLAIR LEVIN: The FCC in some sense is being forced by the courts to prove a negative.

PAUL INGLES: Blair Levin is former chief of staff at the FCC and now a media analyst for Legg, Mason [sp?] Financial Services firm.

BLAIR LEVIN: The problem for the FCC is if you look at the totality of all these decisions, it creates shall we say an obstacle course, and I think it actually makes it rather difficult to sustain the FCC's traditional views that we should apply something of a common sense rule here to simply prohibit can-- transactions which we believe would result in less diversity in, in the media.

PAUL INGLES: If the FCC is to make any ownership restrictions hold up in court then, it must be able to point to convincing data showing that the consolidation touched off by the easing of limits in 1996 has meant less diversity, less localism and less competition. FCC chairman Michael Powell, on record as a skeptic of the limits, has a special task force trying to gather firm data on the effects of existing ownership limits on diversity and competition. Those studies will be publicized in a few weeks and their data will feed the public debate, and it won't be the only data in the mix.

JENNY TOOMEY: We've spent the last year doing an intense study of the impact of raising the ownership caps--

PAUL INGLES: Jenny Toomey calls herself a "rocker." She's an independent rock musician and the executive director of The Future of Music Coalition which has joined other artists, labor, recording and retail groups to oppose the easing of the ownership caps as well as other broadcast industry trends they say hurt artists and limit choices for listeners. They're about to release a report that includes a national random phone survey of 500 adults that shows some dissatisfaction with the state of deregulated radio.

JENNY TOOMEY: Okay, half of the respondents, over 52 percent, say that radio would be more appealing to them if it offered more new music, less repetition and more music of local bands and artists. Over 76 percent believe that deejays should be given more air time for songs they think will be of interest to their audiences rather than to be required to play mostly songs of artists backed by recording companies.

PAUL INGLES: Carolyn Gilbert oversees research for over 1200 radio stations now owned by Clear Channel Communications -- the company that took greatest advantage of the easing of ownership rules in 1996. She counters that her research shows that most listeners like the music they get from Clear Channel.

CAROLYN GILBERT: It's interesting also to hear people complain well consolidation is ruining radio! If you own too many-- you know you can't possibly serve your community! And I'm watching just the opposite effect.

PAUL INGLES: Gilbert maintains consolidation is bringing more format choices to communities compared to the days before the Telecom Act of '96 when she worked for a company that could own no more than 2 stations in a single market.

CAROLYN GILBERT: There was no chance we were ever going to own a nostalgia station-- a, a station targeted at older adults! Well in Cincinnati we own one that does really well. Because we have 8 here, and we can serve the niche formats, because they all can't be number one. You can't make the money you need to support one radio station in a niche format, but you can if you've got a group. So it allows you to serve disparate groups in your community.

PAUL INGLES: According to Andrew Schwartzman, president of the Media Access Project, a citizens rights policy group supporting more limits on ownership, Gilbert's Cincinnati example is a rarity. And he says Clear Channel's claim of greater format diversity leaves out an important statistic.

ANDREW SCHWARTZMAN: Data from the United Church of Christ office of communication filed in March of this year showed that the number of radio stations around the country has increased far more rapidly than the number of formats available. In other words, there are fewer formats per radio station; the data just suggests that Clear Channel is wrong.

PAUL INGLES: There are many other broadcast ownership rules due for review that many analysts feel the FCC will find they can no longer defend. Richard Wiley who chaired the FCC in the '70s now heads a law firm that represents many large media companies and he believes the rule restricting a newspaper from owning a TV station in the same city is the first that should be retired.

RICHARD WILEY: Because newspapers bring the journalistic tradition; they bring the whole concept of local news and public affairs to broadcasting, and yet I find some citizens groups oppose that change, and I think that's again a, a, a failure to really look at the industry and its problems and to try to find pragmatic solutions that will meet the mutual goals that perhaps we all favor -- that is, diversity and competition and strong over-the-air broadcasting.

PAUL INGLES: Observers may be split about the ultimate outcome, but most agree that the FCC and chairman Powell will find it difficult to justify to Congress dropping all the ownership caps. Public interest groups in favor of keeping the limits have garnered the support of several senators, notably Democrat Russ Feingold of Wisconsin who has introduced a measure that includes a halt to further relaxation of the radio ownership rules. Media analyst Blair Levin doesn't think that bill will fly, but he says:

BLAIR LEVIN: One thing that is very true about our members of Congress -- the senators and congressmen all understand the importance of media for communicating and for engaging in political debate. And I think that there is a intuitive understanding that too much concentration could hurt them in their own efforts to communicate with the public.

PAUL INGLES: So, says Levin, while there may be a consensus of concern among lawmakers, there isn't a consensus on how and where to draw the lines on broadcast ownership limits. After a public comment period through the fall and winter, the FCC will likely propose action on the rules in the spring of 2003. For On the Media I'm Paul Ingles. [MUSIC]