FCC Getting Hip With The Present

Forbes.com ^ | May 13, 2003 | Dan Ackman

[madfly]

FCC Getting Hip With The Present
Dan Ackman, 05.13.03, 9:15 AM ET

More From Dan Ackman

The new cross-ownership rules being floated by the U.S. Federal Communications Commission have been in the works for at least two years now, but the reality in which they operate has been changing for a lot longer than that. The result: many more voices, even if the loudest voices all tend to say the same thing.

The new regulations, which have not been made public but which have been leaked to the media, would allow companies to own combinations of newspapers and television and radio stations in the same city and would permit any one company to control TV stations reaching 45% of U.S. homes.

Meanwhile, such companies already exist and are permitted to operate. Both Viacom (nyse: VIA.B - news - people ) and the Fox unit of News Corp. (nyse: NWS - news - people ) already exceed existing caps on television-station ownership as a result of their past mergers. When their mergers took place, they were met by a hodgepodge of waivers and court rulings that effectively abrogated the existing rules.

The newly proposed rule would allow a single company to own TV stations that reach 45% of U.S. households instead of the current 35% maximum. But stations like Fox and CNN, a unit of AOL Time Warner (nyse: AOL - news - people ), are permitted to do that already. Existing "cross-ownership" rules, such as those limiting the ownership of a newspaper and a radio or television station in the same city, would be replaced by a single rule that would lift most of the existing restrictions, which are now often waived anyhow.

The rule that bars mergers among the four major TV networks--NBC, CBS, ABC and Fox--would remain in place, according to press reports. But the FCC already eased that restriction in 2001 by allowing the major networks to combine with newer networks like WB or UPN. Of course, all the same companies that own networks already own cable networks. NBC, for instance, itself a mere unit of General Electric (nyse: GE - news - people ), owns all or part of CNBC, a joint venture with Dow Jones, and MSNBC, a joint venture with Microsoft (nasdaq: MSFT - news - people ), not to mention the History Channel and Arts & Entertainment, a joint venture with The Walt Disney Co. (nyse: DIS - news - people ) and Hearst.

Pundits have hailed the rule change as "the most significant in a generation." Much more important is what has happened during that generation. Since the current regulations came into effect, the world has seen the rise of cable television, satellite television, new broadcast networks and the Internet. There are fewer daily newspapers than there once were, but many more television stations of various stripes. There are probably more magazines than ever, but arguably fewer serious journals of opinion. And anyone can put up a Web site or a Weblog and reach the world, assuming someone out there in the world wishes to be reached.

A more difficult question is the result of this proliferation of media--much of it owned by massive conglomerates, but not all. In the recent Iraq War, for instance, a viewer could watch his or her local news or the network news or cable news. That seems like enough to assure diversity. But maybe it's not. Maybe it's as comedian Bill Maher put it: The choice was between watching American generals and retired American generals.

Still, those who are interested could use the Internet and dial up Le Monde or Al Jazeera. It's not clear how many Americans exercise this option. By definition, most viewers tend towards middle-of-the-road opinions. Networks seeking a mass audience will try to meet them in the middle. The real problem may be that many Americans simply are not interested in knowing what's going on. That's unfortunate, but there's probably nothing the FCC can do to change it.

The so-called glory days of network news featured just three networks, and giants like Edward R. Murrow, Walter Cronkite, Chet Huntley and David Brinkley ruled the earth. Their technology was much worse, but could offer more in-depth reports from Prague or Indochina, secure in the knowledge that their viewers would not switch to Seinfeld reruns or Jerry Springer, or, for that matter, the National Geographic Channel. Now viewers have more options so networks worry about showing anything too esoteric.

The paradoxical result of this wellspring of choice is a massive traffic jam in the center. But that doesn't mean there aren't other options on either the side of the road.

More From Forbes

Commander Of The Airwaves 04.29.02
FCC Chairman Michael Powell oversees industries with $1 trillion in annual sales, from cable to the Internet. Can he revive them by taming Washington's worst bureaucracy?

[madfly]

(Related items)

MENAFN.COM
Congress is also looking closely at the media landscape. On Tuesday, the Senate Commerce Committee will hold a hearing on media ownership rules. Witnesses will include Mel Karmazin, president of CBS parent Viacom Inc., who has denounced caps on the number of local TV stations one company can own, and a number of opponents of further consolidation.

FCC Chairman Michael Powell, a Republican, has argued that federal courts have ordered his agency to modernize its ownership rules.

But Democratic FCC commissioner Michael Copps has complained about the lack of public hearings and what he deems a rush into wide-ranging changes.

"Suppose we make a mistake? How do you put the genie back in the bottle?" he asked. "I hear that deals are already written. The t's are crossed, the i's are dotted. The only thing blank is the signature line. I think we'll see a number of deals. And yes, that disturbs me."

New media ownership rules proposed at FCC
Large companies could increase market holdings
San Francisco Chronicle Staff Report

Opposition to the proposal is being spearheaded by FCC Commissioner Michael Copps and Jonathan Adelstein. Copps was in the Bay Area on Monday holding a public hearing to garner comment on the issue.

Plan would relax rules on media ownership
Associated Press
May. 13, 2003 12:00 AM

The proposal by the Federal Communications Commission staff was delivered to the five commissioners. They have until June 2, when a vote is scheduled, to consider the recommendations.

The plan was not released to the public, but two government officials who saw it described the contents to the Associated Press.

http://www.freerepublic.com/focus/f-news/897559/posts
FCC changes tack on media merger rules Clear limits gain favor over case-by-case analysis

USA Today ^ | 4-21-03 | Paul Davidson
As federal regulators move closer to a sweeping overhaul of media ownership rules, they are backing away from a controversial proposal to rely on case-by-case analysis to judge mergers. Instead, the Federal Communications Commission is poised to craft clearly defined limits similar to, though more lenient than, today's blanket rules, say people familiar with the matter. The Federal Communications Commission is in the home stretch of an expected relaxation of decades-old rules limiting newspaper, TV and radio companies. A staff recommendation is to be given to the five commissioners in early May, with their vote slated for June 2. FCC...

[madfly]

fyi

[Sonny M]

By definition, most viewers tend towards middle-of-the-road opinions. Networks seeking a mass audience will try to meet them in the middle.

Total Bull. When the people who work in the media are all left wing or liberal, they don't see themselves as liberal, but as moderate. A majority of the people in the press voted for Mondale over Reagan when Reagan was cleaing house in 49 states. To this day, more then 85% of people in the media are still registered to the democratic party. Goldberg has discussed this at length, and written about it. The people in the media are simply liberal and elitist, they can't understand what america's views are, and when they see them, they feel the need to change them.

[madfly]

bump