Americans rely on television and newspapers to learn about upcoming elections, understand local and national news and help make informed decisions. Through much of the 20th century, policymakers recognized the importance of limiting owners from dominating local and national media outlets in order to ensure people's access to the widest possible range of viewpoints and sources of information. However, the trend toward deregulating or lifting these limits began to take hold during the Reagan Administration.
FCC Adopts Media Ownership Limits
Early communications policy started out strongly in favor of preserving and ensuring diverse sources of information as a cornerstone of a functioning democratic society. In 1941, the Federal Communications Commission (FCC) began adopting strong rules to preserve diversity on the airwaves.
Through a series of actions that spanned from then until the 1970s, the FCC adopted rules that restricted the number of local radio stations one company could own, limited the national audience reach for one broadcaster, restricted companies from owning multiple TV stations in a local market and banned the ownership of both a newspaper and a television station in the same market.
Each of the FCC's early efforts to maintain some restrictions on media ownership was based on the widely-held belief that media concentrated in the hands of too few companies could threaten access, diverse viewpoints and local news and information.
Media Consolidation Begins
By the beginning of the 1980s, the Reagan Administration, the FCC and Congress embarked on a deregulatory approach toward communications policy and began chipping away at the protections in place for ensuring media diversity. For example, the number of television stations any single entity could own grew from seven in 1981 to 12 in 1985. And the 1996 Telecommunications Act eliminated the 40-station ownership cap on radio stations. Since then, the radio industry has experienced unprecedented consolidation.
Current Media Ownership Fight
In June 2003, the FCC voted 3-2 to overturn most of the few remaining restrictions still in place on big media corporations. These new rules would have lifted a ban on the cross-ownership of newspapers and broadcast stations in local markets and allowed for further concentration of broadcast ownership in local markets. Among other things, the new rules would have allowed one company to own three TV stations, eight radio stations, and the monopoly newspaper in a single market. The FCC also included a provision to allow one company to own stations reaching 45% of our nation's homes, but after much public outcry, Congress subsequently voted to reduce that cap to 39%.
Close to three million Americans have joined with public interest groups to fight back against the FCC's current deregulatory proposals. In late June 2004, a federal appeals court rejected the rule changes and ordered the FCC to rewrite them.
Media Ownership Timeline
The following is a timeline of major events in the history of media ownership. To learn more about the dangers of media consolidation, read What's at Stake.
1941 | Local Radio Ownership and National TV Ownership Rules limited media concentration. A 35% national cap prevented broadcasters from owning stations that would reach more than that number of the nation's homes. |
1946 | Network mergers prohibited. Dual Television Network Rule barred one major network from buying another. |
1964 | Broadcasters could only own one station per market. TV broadcasters prohibited from owning more then one station unless there are more then eight stations. |
1970 | Cross-ownership of Radio and TV banned. Broadcaster could not own a radio station and a television station in the same market. |
1975 | Newspaper and TV cross-ownership restricted. One company was prohibited from owning both a newspaper and a TV broadcast station in the same market. |
1981 | Deregulation by FCC and Congress. This first round of deregulation allowed a company to own up to 12 TV stations (up from seven), as long as those stations did not reach more than 25 percent of the population. |
1987 | DC Circuit Court eliminated fairness doctrine. Since the FCC's inception, the fairness doctrine had held that radio and TV license holders were public trustees charged with 1) taking reasonable steps to present multiple and opposing viewpoints and 2)performing public service reporting on key community issues. In 1987, the DC Circuit Court held in Meredith Corp. v. FCC that the FCC could not enforce the doctrine. |
1992 | The Cable Act of 1992 gave broadcasters the power to demand "bundled programming." Large broadcasters, claiming that cable companies were getting rich from "re-transmitting" their programming, prompted the Act's "must carry"/"Retransmission consent" option. Smaller stations elected "must-carry" in order to be sure that all broadcast programming was aired. Larger broadcasters, however, were able to negotiate favorable contracts in exchange for "retransmission consent," contracts that often required cable companies to show – and pay for – additional stations owned by the broadcasters (bundling). |
Feb. 1996 | Telecommunications Act of 1996 engended further deregulation of media policy. The Act envisioned robust cross-market competition among different types of telecommunications services, eliminating Congressional bans broadcast and cable provider cross-ownership and replacing it with a directive for the FCC to review and eliminate ownership limits as markets became more competitive. The FCC began relaxing these limits almost immediately, resulting in unprecedented levels of consolidation in virtually every communications and media sector. |
July 2001 | Senate Commerce Committee held hearing on media ownership in which participants expressed grave concerns over the effects of further concentrating media ownership. |
Sept. 2002 | FCC announced upcoming review on media ownership rules. |
Jan. 2003 | Due date for comments to FCC on media ownership. Viacom (which owns CBS/UPN), General Electric (NBC), and New Corporation (FOX) all requested that media ownership rules be eliminated. |
Jan. 2003 | Senate Commerce Committee hearing on media ownership. FCC Chairman Powell declared that there would not be a radical change in the media ownership rules, after Senators of both parties expressed concerns about the increasing levels of consolidation. |
June 2003 | FCC voted to overhaul limits on media ownership. Despite having held only one hearing on the complex issue of media consolidation over a 20-month review period, the FCC, in a party-line vote, voted 3-2 to overhaul limits on media concentration. The rule would (1) increase the aggregate television ownership cap to enable one company to own stations reaching 45% of our nation's homes (from 35%), (2) lift the ban on newspaper-television cross-ownership, and (3) allow a single company to own three television stations in large media markets and two in medium ones. In the largest markets, the rule would allow a single company to own up to three television stations, eight radio stations, the cable television system, cable television stations, and a daily newspaper. A wide range of public-interest groups filed an appeal with the Third Circuit, which stayed the effective date of the new rules. |
June 2003 | The Senate Commerce Committee approved, by voice vote, a piece of legislation entitled Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003 (S. 1046), which would have made the 35 percent cap permanent, unless Congress expressly decided otherwise. The Committee also approved an amendment that would have restored the "cross-ownership" media rules that the FCC overturned. |
July 2003 | A House panel voted to withhold funds from the FCC to enforce the 45% ownership cap as part of an appropriations bill (H.R. 2799). The committee amendment passed 40-25. The full House approved the bill, signaling support for the lower 35% cap. |
Sept. 2003 | The Senate passed a joint resolution (S.J. Res. 17) 55-40 disapproving the FCC rule changes. |
Dec. 2003 — Jan. 2004 | Congress changed the aggregate cap to 39 percent. After having voted to keep the ownership cap at 35 percent, both the House (242-176) and Senate (65 -28) raised the aggregate cap to 39 percent through a rider to an omnibus spending bill. The 39 percent cap allowed Viacom/CBS and News Corp/FOX to keep all of their stations. |
June 2004 | Third Circuit voted 2-1 to overturn the lax FCC rule. The court overturned the FCC's controversial media ownership rule passed a year earlier, emphasizing that the Commission's method for determining ownership limits was based on "irrational" assumptions. The Court sent the rules back to the FCC for revision. In the ruling, the Court underscored that the burden of proof was on the FCC to provide evidence to justify loosening the ownership rules. We now await the FCC's new rules. |
For more detailed information on the history of the FCC's media ownership rules, read this Congressional Research Service report (PDF).
