Statement from FCC Commissioner Michael Copps (6/21/06):
"[T]his innocuous-looking document initiates the single most important public policy debate that the FCC will tackle this year. Don’t let its slimness fool you. It means that this Commission has begun to decide on behalf of the American people the future of our media. It means deciding whether or not to accelerate media concentration, step up the loss of local news and change forever the critical role independent newspapers perform for our Country.
It’s tempting to see this debate as important only to giant media moguls. Some companies want the government to make the decision to rush into more media concentration behind closed doors in sequestered Washington bureaucracies. But I believe that Americans need to know what the FCC is doing and that we have a solemn obligation to encourage public participation in the decision. It’s important because if we make the wrong decision our communities and our country will suffer. This debate will have far reaching implications for the credibility of information Americans get from the media—for the vitality of the civic dialogue that determines the direction of our democracy—and for whether TV and radio offer entertainment that is creative, uplifting and local or degrading, banal and homogenized." Read the complete statement.
Statement from FCC Commissioner Jonathan Adelstein (6/21/06):
"I believe success or failure of this proceeding will depend to a large extent on the Commission’s willingness to listen to American people. Consequently, I am deeply troubled by the majority’s refusal to provide assurance that the public will have an opportunity to comment on specific proposals before new rules are finalized. The Court, common sense and simple fairness all demand that we allow public comment on the specific rules that are likely to change the media landscape for generations to come....
The task ahead requires transparency, leadership, bipartisanship, consensus building, thoughtful deliberation, and genuine participation by the American people. Fortunately, there is still time to get it right. I remain hopeful the Commission will change course and conduct a process that fulfills our legal responsibilities and reflects the best interests of the public. The American people deserve nothing less." Read the complete statement.
Latest Headlines:
As FCC Digs Into Ownership, Big Media No Longer Cares
The Washington Post (6/29/06) excerpt by Frank Ahrens
When the government's attempt to relax media ownership rules was defeated in court two years ago, some hailed it as a victory against putting too much power in the hands of too few media lords.
Now, the government is taking up the issue again, but the media landscape is radically different.
Since 2003, the media giants have greatly expanded their presence on the Internet, buying successful Web sites or redoubling their own efforts. The continued rollout of high-speed Internet, the improvement in online content and an explosion of handheld devices have combined to give Big Media much greater reach and potentially greater influence than it would have had, were companies allowed to buy a few more television stations each.
Last week, the Federal Communications Commission voted to re-tackle the sticky issue of media ownership. This time, the agency plans to loosen some rules, allowing big media companies to expand. For instance, a newspaper will -- for the first time since 1975 -- probably be allowed to buy the most popular television station in the same city.
But the times, technology and media marketplace have changed so much since the FCC began its ownership review last time, in 2002, that some of the same media giants that lobbied for changes before -- such as Tribune Co. -- may take little advantage of changes this time.
In 2002, the media giants had already been burned by the Internet. The newly merged AOL Time Warner Inc. took a $10 billion write-down, thanks to bad deals and falling revenue at America Online. Walt Disney Co. lost millions on its Go.com Internet portal.
IPods were still on the drawing board at Apple Computer Inc. Almost all Internet users had dial-up connections, which made online video about as watchable as the Zapruder film. Yahoo Inc. was not the multimedia powerhouse it is today. YouTube and its vault of 70 million videos did not exist. Neither did MySpace and its global community of users. And Google was merely the Internet's most popular search engine, not yet the revenue-generating monster whose advertising model is being emulated by everyone in traditional media.
In May 2003, Mel Karmazin told a Senate panel that his Viacom Inc. -- then the parent of CBS -- absolutely, positively had to be allowed to buy more television stations. It was essential to the company's future, he said.
Karmazin's pleas came to nothing. While the FCC relaxed ownership rules that year, the court struck those down in 2004, and Congress passed a law preventing CBS from buying any more stations.
As it turned out, CBS not only survived but became the top-rated network. The company sees its future not in owning more television stations but in expanding a revenue stream that was an afterthought in 2003: the Internet and its various iterations of digital downloading and streaming, channels that give CBS a far bigger footprint than local television stations.
"CBS's challenge is how to monetize its content, and since we are precluded from doing that through buying more stations, we're doing it in other ways," said Martin D. Franks, CBS Corp.'s executive vice president of government relations. "We have had to adapt to what the regulatory regime has dealt us."
To help spread out the enormous cost of the network's contract with the NCAA to carry the men's college basketball tournament each March ($6 billion over 11 years), CBS this year bought CSTV Networks Inc., which broadcasts live sports on the Internet and on cable television. The Web site averages more than 8 million monthly users, and the cable network is in more than 15 million households -- far more than any metropolitan television station reaches.
This month, CBS began selling episodes of its top-rated "CSI," "Survivor" and other shows via Apple's iTunes, following ABC's lead, for $1.99 each. Also, the network launched the ad-supported Web site ShowBuzz, with celebrity and entertainment news.
Circumstances have also changed for Tribune Co. In 2003, Tribune was a 13-newspaper, 26-television-station chain that wanted to buy more television stations in cities where it owned newspapers, in hopes of reaping big advertising rewards.
Now, the company is selling off television stations, is facing a shareholder revolt over its direction and is unable to figure out how to combine local television and newspaper advertising to its advantage.
FCC to Kick Off Review of Media Ownership
Reuters (6/22/06) excerpt by Jeremy Pelofsky
The U.S. Federal Communications Commission said yesterday it will again try to ease media ownership restrictions on television, radio and newspapers, a move that could spark a contentious battle involving politicians, media companies and consumer groups.
FCC chairman Kevin Martin said he wants to make it easier for a company to own a newspaper and a radio or television station that serve the same market and he repeated his desire to revamp the 1975 ban on cross-ownership...
Companies such as Tribune Co. and Media General Inc. have pressed the agency to lift the cross-ownership ban, citing cost efficiencies, among other reasons. They contend there is plenty of competition.
But consumer advocates are already forming alliances to oppose a change in the rules. They say more industry consolidation would squeeze out independent voices and cut local content.
“There is enormous public concern about bias in media, about lack of diversity in the media, and about unfair presentation of all kinds of information that communities care about,” said Gene Kimmelman, vice president for federal and international policy at Consumers Union.
FCC Opens Debate On Rules Limiting Media Ownership
Wall Street Journal (6/22/06) excerpt by Amy Schatz
A divided Federal Communications Commission kicked off a review of media-ownership caps, launching what is expected to be a long battle over the merits of such limits in the Internet age. …
The review is likely to stretch into next year, but advocacy groups, which helped to scuttle the FCC's last attempt in 2002 to establish new ownership rules, have mobilized for a fight. Those earlier rules were struck down by the courts...
Even a vote that simply set the rules for the coming debate drew harsh words from both sides, as the year-old bipartisan truce among the commissioners melted down. Yesterday's meeting marked the first time during FCC Chairman Kevin Martin's tenure in which Republicans held a majority.
The FCC's two Democrats complained Mr. Martin could be angling to fast-track a proposal on broadcast and newspaper cross-ownership limits. They noted that a long-stalled FCC study into how local coverage was affected by out-of-town owners hadn't been completed and was only a small part of the review. Commissioner Jonathan Adelstein, a Democrat, called the proposed effort "thin gruel to those hoping for a meaty discussion of media-ownership issues." Mr. Martin countered that Democrats were "rushing to judgment" on the FCC's plans.
The FCC will hold six public hearings throughout the country. Separate meetings organized by interest groups, however, begin next week in Mr. Martin's home state of North Carolina. The FCC's two Democrats are expected to attend; Mr. Martin isn't.
FCC Takes Up Media Ownership - Again
The Los Angeles Times (6/22/06) excerpt by James Granelli
The Federal Communications Commission on Wednesday restarted its controversial effort to draft new media-ownership rules — and critics assailed the complicated process as soon as it began.
High on the list of complaints is that the public can suggest revisions to current rules but won't be allowed to comment on any specific changes proposed by the regulatory agency.
Among other things, the new rules would determine how many television stations a company could own and would deal with a long-standing prohibition against owning newspapers and TV stations in the same market. Closely watched by media companies and consumer advocates, the rules have floundered for years as Congress and the courts found fault with previous FCC efforts and ordered the agency to try again.
Few expect the current process to be much smoother.
"This innocuous-looking document initiates the single most important public policy debate that the FCC will tackle this year," said Commissioner Michael J. Copps, one of two Democrats on the five-member commission. "It means deciding whether or not to accelerate media concentration, step up the loss of local news and change forever the critical role independent newspapers perform for our country."
Gene Kimmelman, a vice president at Consumers Union, publisher of Consumer Reports magazine, lamented the "widespread public concern about concentration and bias in the media. We need to remind the commission how important a variety of independent and locally owned sources of news and information are to our democracy."
The public-interest Benton Foundation, a member of the FCC's consumer advisory committee, lauded the commission's effort. But its president, Gloria Tristani, a former FCC member, said the agency should "heed the lesson" of its previous miscues and "adopt a more open, more inclusive process as it considers any changes to its rules."
FCC Chairman Kevin J. Martin attempted to alleviate concerns about how the rules would be drafted by promising to hold six hearings nationwide and commission studies over four months to plumb public opinion.
Editorials on Media Ownership:
Demand An Independent Press
The Seattle Times (6/23/06) column excerpt by Ryan Blethen
Newspapers will probably never be able to yield the monstrous profits that Wall Street demands but can comfortably provide the best newsgathering operation and advertising package in a community.
So what would happen if the Biggies owned everything in a community? Advertisers would be the first to see rates go up. The public conglomerates have to feed the beast, and the giant private companies are probably so leveraged every dollar needs to be squeezed.
The situation would not be any better on the news side. Take what William Dean Singleton, chief executive of MediaNews Group, said in Thursday’s Washington Post: " … you take the high cost of news gathering and spread it across multiple platforms and you get multiple revenue streams.”
What I hear in this comment is that if a company can own a television station, radio station and a newspaper in the same market, then the staff can be diluted among the three news organizations.
In 2003, the Republican commissioners had the majority — 3 to 2 — and do again. The FCC is taking public comment for 120 days. Be heard. Write your congressmen. Write your senators. Go to the public meetings the FCC plans to hold around the country. Tell the FCC to ensure that your press stays independent. If your newspaper or TV station is not covering this issue, ask the editor or producer why not.
It is time to panic. Our democracy will only suffer if the bland, monolithic media machine is allowed to suck up more press outlets.
Local Media Is Financially Sound. Read for Yourself:
A Push Toward Private Control of Newspapers
The Washington Post (6/17/06) excerpt by Frank Ahrens
"The recent breakup of the Knight Ridder Inc. newspaper chain has helped spark interest around the country in returning papers to local or private ownership after decades of expansion by corporate media conglomerates.
For example, the Philadelphia Inquirer left Knight Ridder for local ownership, and local groups in Los Angeles and Baltimore are mounting efforts to provoke sales of those cities' papers....
Some newspaper owners, such as MediaNews Group Inc. chief executive William Dean Singleton, never heeded the siren call of public money. Instead, he relied on revenue, acquisitions and private capital to grow his newspaper chain, headquartered in Denver. In April, Singleton used his own cash to buy four of the Knight Ridder castoffs, making him the industry's fourth-largest owner.
Singleton's reasoning -- one that is gaining traction in the industry -- is that privately owned newspaper companies have debt that can be paid down with the significant amounts of cash papers continue to generate. Wall Street cares far more about earnings than debt, and private companies don't have to talk about earnings to outsiders. With private ownership, shareholders are off your back. A helpful thing, as newspapers take risks to follow their readers to the Internet and beyond.
McClatchy found owners -- all of them privately held -- for all but one of the 12 newspapers it sold off.
Morton has become a convert to the return-to-private thinking, which he said has its journalistic benefits.
"The fact is, Wall Street is so short-nosed and is so dedicated to maximizing return on investment to the exclusion of almost everything else, you're going to have situations where, basically, you have a lot of public shareholders who have interests that are inimical to good journalism," he said. …
And even though big-city newspapers are losing circulation, many small and mid-size communities' newspapers are growing. It was those Knight Ridder papers that caught McClatchy's eye.
After buying Knight Ridder's 32 papers, McClatchy chose to hold onto only 20 of them -- and only four of them are large papers, including the Miami Herald and the Kansas City Star. The rest include the Olathe (Kan.) News, with a daily circulation of 4,986; the Idaho Statesman (circulation 62,000); and the 100,000-plus Lexington (Ky.) Herald-Leader.
The smaller papers are growing because, unlike in large media markets, they are either the only or the dominant advertising vehicle in town. It is an advantage that large papers, such as the Philadelphia Inquirer, cannot match, as advertisers have more ways to reach consumers there."
