Why (Independent) Media Matters

I am a capitalist by religion and believe unnecessary government interference or regulation can burden businesses with often gratuitous costs and delay innovation. But when a business operates in a monopoly-like setting with a small set of large players stifling competition and making it impossible for independent, middle-market players to survive, then the government should step in. One of these examples was Major League Baseball, where a luxury tax has helped level the playing field so smaller budget teams like Cleveland, Colorado and Arizona can compete (OK, so it wasn’t the government, but you get the idea).

But one market that is indeed being squeezed by larger players is the media. In fact, thanks to some boneheaded FCC decisions (that were championed by both Bill Clinton and George W. Bush), the media in this country is now dominated by four players – GE, Disney, News Corp., and Viacom. Virtually every major TV broadcast, cable network, top Internet information site and radio show is owned by one of these four players. The result has been a homogenization of the airwaves from a disparate choice of independent choices and voices to an industry dominated by the four big companies of today. While there is an undercurrent of underground and alternative newspapers and web sites, they largely represent extreme political viewpoints that would not find a widespread audience or are constricted to local audiences.

The real trouble began with the Telecommunications Act of 1996 when the large media companies won an FCC ruling deregulating the industry. Media companies were now allowed to own any number of stations and outlets in a market provided their reach did not exceed 35% of the available audience. What followed was consolidation on an enormous pace. Radio companies like Clear Channel and Infinity Broadcasting gobbled up independent stations, who were then given set playlists (for music) and syndicated DJs who could not contribute on local issues (if you tune into an R&B or rock station in Boston, Atlanta and Los Angeles, all three will probably be playing the exact same songs). It also erased the line between the broadcast networks and their syndication partners, meaning the networks were not obligated to work with independent production studios. This finally set off alarm bells when Viacom – CBS’ syndication partner – bought CBS in 2000.

Besides the public, the losers have been independent, local outlets who are best equipped to provide their local communities with the information they need. Local media outlets are a disappearing breed. The four players will say there are plenty of choices for viewers on cable, satellite radio and the Internet. But the majority of large choices on these mediums are also owned by the big four. For example, News Corp. owns everything named Fox, FX Network, DirecTV, TV Guide, Dow Jones and scores of other newspapers, Harper Collins, myspace.com, and a slew of other highly-trafficked web sites. Disney, Viacom and GE’s lists of holdings are equally vast. In fact the top 20 Internet news sites are owned by one of these four companies. They don’t care if their broadcast networks are losing audiences when they’re only going to the cable or Internet sites they also own.

In 2003, with the blessing of former FCC Bonehead Michael Powell, the FCC raised the audience reach-cap to 45%. The backlash was huge. Lobbying (by everyone from the NRA to NOW) was almost unnecessary due to the bipartisan pushback, spurred by grassroots efforts to the FCC. Powell ended up with a compromise and raised the cap to 39%. Now new FCC head Kevin Martin, who appears just as bright as Powell, is now considering removing the longstanding cross-ownership rules. This would permit a media company to own a newspaper and a radio or TV station in the same market. Martin wanted to ram these rules through before the end of the year, but now a bipartisan group of senators (including Byron Dorgan and Trent Lott) are pushing for a 90-day delay to amass opposition.

When an issue unites people as diverse as Ted Turner and William Safire, let alone the senators we mentioned, it means it has widespread support and the FCC is in the minority. If you care about independent, minority and local freedom of expression in this country, please write your senators and congressmen and ask them to stop this new FCC proposal. It is bad for capitalism and worse for democracy.

More Info: A timeline of FCC mismanagement