Sick Media: Diagnosis and Prescription

By Jerold M. Starr, CIPB Executive Director

On June 2nd, the FCC issued a major ruling on media ownership. Among other things, this ruling raised the limit on one corporation's TV station ownership from 35 to 45 percent of the nations households; lowered the barrier for two station combinations or duopolies in the same market from eight stations to five; for the first time permitted triopolies in the same market, as long as there were 18 other stations; and lifted the ban on cross ownership of broadcast stations and daily newspapers in markets with at least four stations.

Combinations do pay dividends to the owners if not the public. A larger market duopoly can generate a 50 to 60 percent earnings margin before interest, taxes, depreciation and amortization. In fact, the ratio of TV stations to TV owners declined over 1975-2000 from 1.8 stations per owner to 4.7 stations per owner.

According to JP Morgan analyst Spencer Wang, the June 2nd FCC ruling could quadruple multiple station ownership in communities to 473 duopolies and triopolies. To take an extreme case, say Los Angeles, New York or Chicago, this decision allows one corporation to control the cable operator, three television stations, eight radio stations and a daily newspaper in the same city.

Television Week columnist Alex Ben predicts this latest deregulation will result in more "blandness and sameness" because "business doesn't like controversy." As he explains, controversy costs time, money and resources and it can lead to boycotts, lost ad dollars, and unwanted political consequences.

Loss of Localism

A significant casualty of FCC deregulation has been the loss of local programming. Media scholar Susan Douglas has noted that satellite transmission and national syndication has led to more radio carriage of shows like Howard Stern and Rush Limbaugh. She predicts: "If this trend in radio continues," that "discussion of local issues will be driven out completely."

In justifying his June 2nd decision, FCC Chair Michael Powell claimed that mergers have and will create "synergies and efficiencies that will result in significant cost-savings." Why is a regulatory chief principally concerned with the corporate bottom line, especially when it typically means worker lay-offs? In fact, in the past 20 years, despite an increase in radio stations, the number of full-time station news staff has fallen almost 40 percent, from 19,600 to 12,000.

Here is what we have come to: Sinclair Broadcasting Group, based in Maryland, distributes to all 62 of its affiliates a program called "News Central." A one hour mix of local and national news, "News Central" leads with a locally produced segment of local news and then follows with national and international news, sports and weather pieced together from other Sinclair affiliates or CNN and produced and anchored in Maryland.

Concerned about the increasing global consolidation of local media, Cheryl Lianza of the Media Access Project states: "Citizens must have some recourse to coverage of local issues from different vantage points" because, in her view, the real questions are "who sits on the school board and who is elected mayor. It's about whether the garbage gets picked up, whether we can rely on our local hospitals and whether our local employees are secure."

One more little known consequence of increasing media consolidation has been a 26 percent drop in the already small number of black-owned stations. Some, like Jesse Jackson's Rainbow-Push Coalition have made this a major focus of their political work in Washington. In fact, the Minority Media and Telecommunications Council appealed to the FCC for help. Unfortunately, it didn't get it.

Why Network Ownership of Programs Makes for Cheaper Products

Here's the business plan behind increasing concentration and vertical integration: media executives now hold that it is most efficient for corporations to own as many outlets as possible to deliver movies, television, music and books that they themselves produce. This guarantees access to outlets, positioning and extensive merchandising and cross-promotion.

Until 1995, TV networks were not allowed to own any programs that they aired. Now, they are so inbred that one entertainment attorney recently suggested that in five years even the major independent producers--we are talking here about firms like Sony and Universal--will be out of the prime time producing business because the networks will shut out any studio with whom they are not affiliated. Barry Diller recently pointed out that ten years ago independent producers created 13 new series for network television; last year, just one.

Unfortunately for the public, programs internally produced for guaranteed distribution typically lack originality. They are further diluted by bureaucratic compromise. Networks also cut corners in the production itself. If the show is a flop, it's cheap enough that they can afford to leave it on longer than they otherwise would. This, of course, makes it harder for new shows to break in. The show, no matter how bad, is more likely to be "repurposed" into syndication on cable networks owned by the network. It's the Gresham's law of programming; bad shows drive out the good ones.

The Coalition for Program Diversity pushed the FCC to adopt a rule that would require the four major broadcast networks to purchase 25 percent of their prime time fare from independent producers. Powell and his Republican colleagues have not even agreed to review the request.

Think about it this way. When the major Hollywood studios owned the cinema outlets, moviegoers got what the moguls wanted them to get. When the government determined this to be a violation of anti-trust regulations, the studios had to give up their outlets. As a result, from the late 1950s on, the American public enjoyed the best of foreign and art film imports. Finally, there was real choice. Turning off the same old same old certainly is not equivalent to having real choice.

Why Global Marketing Further Cheapens Domestic Goods

Since 1990, Time Warner and Disney have more than doubled their revenue share from overseas sales from 15 to 35 percent. Both firms expect to do a majority of their business abroad sometime this decade.

The products that are cheapest to make and most translatable to foreign language markets are those that are light on plot, character development and clever language, and heavy on sex, violence and special effects. This is why the Parents Television Council joined the opposition to the FCC deregulation of media ownership limits.

Even when you get the same show you get ripped off. One promoter tells a story about how he had signed Bonnie Raitt for a $100,000 guarantee to perform a concert with tickets selling for $30 a piece. Clear Channel moved in and bid Raitt away with a guarantee for $250,000. She went with them and they cleared their profit by charging $45 a ticket.

Powell's Doubletalk on Deregulation

In the aftermath of the decision, it is revealing to note Chairman Powell's doubletalk on media regulation. Powell has claimed, "the market is his religion and that when it comes to media regulations, if you can't "validate" you must "eliminate".

Yet, the FCC does not seem to have any compunction about requiring TV makers to include digital turners in all sets even though the public has shown little interest in this technology and manufacturers claim they will have to raise prices to cover costs. Likewise, the FCC has had no compunction about calling for "family viewing hours," and imposing fines on a popular alternative radio station (KABOO) for "sexual descriptions" in a Sarah Jones rap tune. Apparently, none dare call that regulation.

Cable Business: More Consolidation, Bigger Profits

Here's the business plan: the cable system pays about $7 per month per customer for all the cable networks it carries (not counting premium) and charges customers about $29. That's a hefty profit margin.

Two cable companies dominate cable: Comcast and AOL/Time Warner. In March 2001, the Federal Appeals Court tossed out the rule restricting operators from controlling more than 30 percent of national markets. Both Comcast and AOL/TW already were in violation. The FCC declined to appeal. Powell is reported to be considering lifting the cap on one company's share of multi-channel subscribership to as much as 45 percent.

Public Distrust of News Media Grows

In 2001, 60 percent said they valued the press's watchdog role, down from 67 percent in 1985. However, only 37 percent thought the press got its facts straight, down from 55 percent. Those agreeing that the news media protect democracy barely exceeded those who disagreed by 45 to 38 percent.

Almost a third thought the major news organizations lacked professionalism, up from 11 percent. Only a fifth thought the news organizations cared about the people they cover, down from a third.

All of this seems a natural outcome of the Fifth Estate's neglect of real news and infatuation with celebrity gossip and police blotter scare stories. Moreover, despite the proliferation of new channels, the public senses that they are getting a censored product. In fact, a large majority of those in the media admit to self-censorship. It comes from government pressure, business pressure, internal editorial pressure or market pressure (feeling that story is too boring or complicated).

The Public Is Opposed to Big Media:

Perhaps, the above is why the public is opposed to media concentration. According to one poll, 70 percent thought the media companies were getting too big, 63 percent expected that broadcasters would be concerned only with maximizing profits and, by margins of almost 3-1, people thought that cross-mergers would create less diversity and were bad for the country.

TV's Toll on Democracy

Put the following observations under "coincidence, perhaps":

During the 2000 presidential campaign, news programs devoted an average of 45 seconds per show to the race.

A 2002 study in the top fifty markets found that just under half contained any local election coverage. Of these, only 20 percent contained any sound bites from the candidates. Ninety-two percent of the coverage focused on campaign strategy and only three percent on policy.

Between 1992-2000, national paid political advertising increased to $605 million a year and local paid political advertising to $825 million per year.

Coincidence? Perhaps.

The FCC and the Fairness Doctrine: What Were They Thinking?

The Fairness Doctrine called for equal time for response when a broadcaster criticized a group or individual. Broadcasters argued to the FCC that this requirement actually inhibited them from doing more public affairs programming. If freed from this obligation, they said, we would do more public affairs. The FCC said that sounded like it was in the public interest and rescinded the Fairness Doctrine in 1987.

According to a study by the Benton Foundation, over 1973-79 when the doctrine was in effect, local public affairs made up an average of 4.6 percent of all programming. Since dropping the Fairness Doctrine, only 0.3 percent of total programming qualifies as public affairs, 1.06 percent even if you include all local newscasts.

What could the FCC have been thinking?

Whose First Amendment?

In 1945, the FCC prohibited newspaper-TV station cross-ownership, ruling that the print media are not immune from antitrust rules and that government has an interest in media diversity. The commission justified its decision in terms of the First Amendment, stating that the First Amendment "rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public."

For the last 115 years or so, a series of Supreme Court rulings have served to grant corporations the rights of personhood under the Constitution, including protection of the First Amendment. In fact, these days, it seems that only the corporations have First Amendment rights. For example, here is FCC Commissioner Kathleen Abernathy's defense of the recent majority ruling: "It would be anathema to the First Amendment to regulate media ownership in an effort to steer consumers toward other programming." And here is AOL/TW opposing cable ownership and cable subscriber limits on the grounds that it "prescribes our First Amendment rights to present programming of our choosing."

To make matters worse, organizations critical of official policy have not been able to even buy airtime from the media. Recently, for example, Comcast, CNN, Fox and NBC all refused to sell airtime to the Peace Education Fund and Win Without War Coalition. Even though these groups confronted near monopolies, the FCC declined to investigate their complaints.

Public Outrage Moves Congress

Opposition to the June 2nd deregulation decision was extensive and bipartisan: 150 members of Congress expressed concern, perhaps responding to 750,000 members of the public who sent e-mails in opposition. The coalition opposed to "deregulation" included religious groups, labor groups, public interest groups, consumer groups, and political groups ranging from the Rainbow-Push Coalition to the National Rifle Association; and this, despite polling evidence that three out of four Americans were not even aware of the issue.

On June 20th, the Senate Commerce Committee approved legislation to restore the 35 percent cap on the number of TV stations a network can own and to restore most of the restrictions against print and broadcast cross-ownership. There also is a provision that would force big radio companies, like Clear Channel, to divest themselves of some stations. However, the Bush Administration already is on record as endorsing the deregulation and pundits claim the bill faces an uphill battle in the House.

Accordingly, there is talk of attaching a rider to a larger government appropriations bill, or about using a legislative veto to block implementation of the bill, or even about launching an anti-trust suit against the major media corporations.

Obviously, being shut out of the marketplace of ideas is a serious handicap for groups seeking to educate and mobilize the public. What are active citizens to do? Join the fight to overturn this latest FCC giveaway and stay on board for continuing reforms in the public interest.