By Gene Kimmelman
Vice President for Federal and International Affairs, Consumers Union
Yesterday, the public interest took on powerful media conglomerates and a deregulatory-minded federal agency and surprise, surprise, didn't come away with a big victory: the Federal Communications Commission (FCC) eliminated the protection against newspapers being swallowed by TV stations in the same city (and vice versa). While we lost the battle here, we are still in a strong position to win the war as the fight now moves to Congress, the courts, and most importantly the court of public opinion where the majority of consumers who want more diversity and competition in their local media will push back against this excessive deregulation.
Process problems that weren't remedied by the FCC; permanent waivers for stations that were granted out of the blue, at the last minute, and which are not consistent with the Commission's new rule;, and junk science that plagued the studies used by the FCC to justify relaxation of this rule have all contributed to enormous angst about how the agency is conducting itself.
Now that FCC has said newspapers can be acquired by lower ranked TV stations (those below the top 4 stations) in the top 20 markets, and with a new waiver process in place for all other media mergers, we fear there will be less total news gathering in many markets. While the FCC claims the new waiver process is a "high hurdle" for smaller media markets and mergers among the biggest stations and newspapers in the top 20 markets, implementation depends on whether the agency is willing to carefully scrutinize waivers, rather than simply rubber stamp them. Unfortunately, the waiver process has been abused under both Republican and Democratic Chairmen, so getting this right depends on intense scrutiny by Congress and the public.
Thankfully, communities across the country have already gotten involved in the fight against further media consolidation. And we have the effective leadership of FCC Commissioners Michael Copps and Jonathan Adelstein, who led the fight for fair media ownership rules; plus Senators Dorgan and Snowe who passed a bill out of the Senate Commerce Committee to get the FCC back on track; and the House Commerce Chairman John Dingell and subcommittee Chairman Ed Markey who are willing to keep the heat on the FCC to block dangerous mergers.
It is these powerful forces for the public interest that helped convince FCC Chairman Martin to not even try to relax radio ownership, broadcast ownership, or more extensively relax newspaper-broadcast cross ownership limits.
And wouldn't many be surprised if we can all work together to make Chairman Martin's "high hurdle" test work to prevent anything but a few transactions among smaller broadcasters and newspapers in the top 20 markets? How could that happen? Well, let's look at how the standard Chairman Martin established would have to be implemented to protect against further consolidation, specifically the criteria to be used by the FCC to decide whether proposed mergers outside the top 20 markets should be given waivers.
According to the FCC, "applicants attempting to overcome a negative presumption about a newspaper/television combination will need to demonstrate by clear and convincing evidence that post merger, the merged entity will increase the diversity of independent news outlets (e.g., separate editorial and news coverage decisions) and increase competition among independent news sources in the relevant market."
All proposed mergers outside of the top 20 markets would be considered on a case-by-case basis using four specific criteria. Among them:
The financial health of the merging media outlets;
The level of media concentration in the market;
Whether the combined entity will bring more local news to the market;
Whether the broadcast and newspaper entities will maintain their own staffs, and retain independent editorial standards.
So how will a company proposing mergers of top broadcasters and newspapers in the larger markets be able to claim by CLEAR AND CONVINCING evidence that after the transaction there will be a greater diversity of independent news outlets AND greater competition among independent news sources? By definition such mergers will substantially increase market concentration and eliminate one important media voice from the market. And mergers like this in smaller, more concentrated markets are much more likely to decrease competition and diversity. Tough oversight of this standard has the potential to shut down most mergers.
But what about the four other "factors" the FCC said must be considered in this equation? Well, it looks to me like NONE of the four is enough to overcome the presumption against a merger, because ALL FOUR must be considered together. And, more importantly, it looks like these factors ONLY INFORM the analysis of the diversity/competition test; if the merging companies cannot show that their transaction will clearly increase diversity of independent news outlets and increase competition among independent news sources, their merger should be rejected.
Is it possible that the rule will work this way? Well, Chairman Martin seemed to want everyone to think so. So why don't we take him at his word and, with the help of Congress and a committed and aroused public make sure it happens!
From here, it's up to citizens to ensure that the waiver process is indeed a "high hurdle" as the agency claims and helps contribute to more newsgathering, not less.
