Transcript
Cross-Ownership
April 14, 2001
BROOKE GLADSTONE: The Bush administration has shown a de-regulatory bent in just about every area of governance, and that includes communications. Over the years the FCC has imposed limits on how many media outlets one company could own because it feared that too much media concentration would strangle competition and diversity of viewpoints. But now that the demonstrably liberal FCC chairman Bill Kennard [sp?] has been replaced by the decidedly conservative Michael Powell, big media sees chance to cast off some of those constraints. What are those constraints? Here are a few of the big ones. A TV network is not allowed to reach more than 35 percent of American households with stations it owns and operates, and no broadcaster may own more than one station in most markets, nor can the major networks own each other, and neither newspapers nor cable systems can own broadcast stations in the markets they serve. On Thursday at the next public meeting of the FCC, broadcasters will be clamoring for a change. Bill McConnell writes for Broadcasting and Cable Magazine. Mr. McConnell, which of those rules are going to be challenged and who's going to be doing the challenging?
BILL McCONNELL: Well all of these rules are being challenged right now. The one that's most likely to fall quickly is the dual-network rule that prevents the big networks from owning each other or owning the WB or UPN.
BROOKE GLADSTONE:So at the April 19th meeting, the question of UPN ownership comes up; currently the nation's biggest media company, Viacom, owns CBS and has been holding the ownership of UPN provisionally. It's supposed to sell it by May 4th. Viacom wants FCC to allow them to hold on to it and to some stations that go over the cap as well, right?
BILL McCONNELL: That's correct. The way it's going to be changed at the April 19th meeting-- would let these - the big 4 networks acquire UPN or the WB.
BROOKE GLADSTONE: What have been some of the consumer group challenges to that?
BILL McCONNELL:On this particular rule, the, there is not so much opposition because UPN is losing lots of money and if Viacom was forced to sell it, it would probably go out of business.
BROOKE GLADSTONE: And because UPN has a substantial black viewership this would seem to hurt diversity even more on network television.
BILL McCONNELL: That's correct.
BROOKE GLADSTONE:How about AOL/Time Warner? That's the fourth largest media company. Last month an appeals court struck down an FCC cable ownership rule that limited one company from reaching more than a third of the pay TV subscriber universe, and the court said the 30 percent cap violated the First Amendment. Where does that leave the rule?
BILL McCONNELL: Well, the FCC basically is under orders to, to re-write it. The court did say you can have a rule, you can have a limit, but it-- you need to justify it. Additionally this court decision in March, if you look at it deeply, says that any type of restriction on media ownership has to pass really strict scrutiny because it violates their First Amendment rights to some degree, and if you're going to do that, you really have to justify it.
BROOKE GLADSTONE: What is the net effect if these rules go away?
BILL McCONNELL:I think the net effect is you're going to see a lot of our most prominent broadcast and cable organizations controlled by 1, 2, 3 -maybe 4 companies.
BROOKE GLADSTONE: How is that different from the way it is now?
BILL McCONNELL:Well in each industry there might be that many number of, of big players; and also when it comes to broadcast radio and TV, there are still quite a few number of independent owners, even though there's only, you know, a handful of networks; each of the TV stations in your market are - might be owned by affiliates rather than the networks themselves.
BROOKE GLADSTONE: How would the average consumer be able to perceive this change? What would the net effect be on him or her?
BILL McCONNELL:Well it's hard to predict, because in the radio market there's been massive consolidation since 1996 when Congress lifted the ownership cap just on radio. You've seen that in, in radio markets across the country that the largest station groups now own 4 or 5 stations in, in every big town. The listener might not really notice any difference, because if you, you know if you're a station group and you own 4 or 5 stations in town. You're not going to run 2 or 3 classic rock stations. You're going to have country, classic rock, hip hop, whatever. You're going to try to diversify the holdings within your own group, so even though there's tighter control among the owners, there might be more di--diversity among the type of format. So the listeners might not really be able to, to tell right off, but I think what it does mean in other areas you see more of sort of the, the shock-jock type of stuff and sort of these big money-maker type of formats; less emphasis on news; that sort of thing.
BROOKE GLADSTONE: What is the likelihood that any of these rules or all of these rules will be changed?
BILL McCONNELL:Well I think there's a, a great likelihood that almost all of them will be changed in some way. The Powell Commission is going to be a lot more de-regulatory is, is the way Chairman Powell's leaning now, and the Republican appointees that will join the commission in the next months lean the say way he does.
BROOKE GLADSTONE:But has you laid out the situation in radio, in the rest of broadcasting, if these rules are lifted or, or tremendously relaxed, you're going to have 1, 2 or 3-voice towns for broadcasters.
BOB GARFIELD:That's a good point. I, I think the - the consumer advocates are I think very frustrated at this point because they see this - the idea that the diversity of ownership has value in itself; ti's just being something pushed aside. Chairman Powell himself argues that, that just cause you have diversity of ownership doesn't mean you have real diversity of viewpoints, because what's the difference between one rich person and another?
BROOKE GLADSTONE: He's saying that, but he doesn't seem to keep the rich from getting bigger and more dominant in the marketplace of ideas.
BILL McCONNELL: That's correct. It's a-- you might want to ask an advocate, I guess, what, sort of what the dangers of that, of that are.
BROOKE GLADSTONE: Bill McConnell, thank you very much.
BILL McCONNELL: Thank you! Glad to be here.
BROOKE GLADSTONE: Bill McConnell reporter for Broadcasting and Cable Magazine.