Ownership Revolution Brewing

FCC review could change media universe, spark consolidation


It's the review that major media groups have been waiting for. At its September meeting, the FCC began the process that could trigger the greatest media consolidation spree since the ownership rules first went into place more than half a century ago. Nearly all the major ownership restrictions are on the chopping block as the commission follows orders from Congress and the courts to justify and revisit the rules.

Come springtime, rules on the concentration of media power local media cross-ownership and national reach and could greatly relax, allowing hungry media groups to gobble up television and radio stations, newspapers and Internet portals and providers.

"The Media Bureau item before you today begins a process of almost Copernican scope," said Media Bureau Chief Ken Ferree, referring to the astronomer once branded a heretic for suggesting that the Earth revolves around the sun. "It challenges an axiom upon which our media-ownership rules and policies have been founded for generations: that broadcast television and radio are at the center of the media universe.

"It is, in short, the most comprehensive regulatory review ever undertaken on commission broadcast-ownership rules," he said.

The 35 percent national broadcast television cap? It's already been sent back by a court for justification or refiguring, as has the rule restricting ownership of more than one station in a single market. A major network consuming another? Even that longstanding prohibition, which dates to 1946, is up for review.

"At stake is how radio and television are going to look in the next generation and beyond," said Commissioner Michael Copps, the lone Democrat on the panel. "At stake are old and honored values of localism, diversity, competition and the multiplicity of voices and choices that undergirds our American democracy."


Also under review are the newspaper-broadcast cross-ownership prohibition (little changed since its inception in 1975, it is widely seen as the most likely to fall); the local radio-ownership caps; and the radio-television cross-ownership restriction.

Ferree said the local cable-broadcast cross-ownership restriction, already overturned in court, is not up for revival. The 40-percent nationwide cable-ownership cap is the subject of separate proceeding.

Opponents of further media consolidation immediately voiced their fears of a future media regime.

Jeff Chester, executive director of the Center for Digital Democracy warned that media deregulation so far "has meant fewer foreign bureaus, investigative reporters and resources for journalists, while at the same time we have seen a greater focus on bottom-line tabloid programming.

"The country cannot afford another wave of consolidation designed to bolster the bottom line of a few at the expense of our democracy," Chester continued. Other watchdogs raised the specter of a single owner in a town controlling the local newspaper, a few television stations, a handful of radio stations, the cable operation and the Internet service provider and local portal.

But in response to reporters' questions, FCC Chairman Michael K. Powell played down his reputation as an anti-regulation crusader, insisting that he has not made up his mind on any of the issues.

And several observers warned against jumping to the conclusion that the action will result in a consolidation free-for-all. Although the courts have remanded some of the FCC's restrictions for review, they would be equally quick to reverse actions that completely junk the rules, said Harold Feld, associate director of the Media Access Project, which often warns of the dangers of consolidation.

"Setting aside the newspaper/ broadcast rule, I think the commission is not likely to make wholesale changes but will instead fine-tune the remanded rules," said attorney Anita Wallgren, former legal advisor to then-Commissioner Susan Ness and now with the Washington firm of Sidley, Austin, Brown and Wood, which represents broadcasters including Tribune and Albritton. "In any case, they will have to do a better job of justifying whatever rules they end up with."


In the upcoming weeks and months, the Media Bureau will release as many as 10 studies on the state of the media marketplace, how consumers and advertisers view media and how ownership affects the values of localism, diversity and competition.

The studies - as well as an expected avalanche of public comment - are intended to give the commission solid, defensible data with which to reach consistency in its rulemaking, ensuring that a "market" or a "voice" in one rule means the same thing in another rule, for example.

The studies will also explore the growth of cable, satellite and the Internet and how those contribute to the media landscape.

Those who favor relaxing the rules point to an explosion of media choice available - hundreds of channels, millions of Web sites.

"These rules are, frankly speaking, old," said Commissioner Kevin Martin. But Feld and others warn against mistaking a wide range of entertainment options (such as multiple music or sports channels operated by a single company) as media diversity. Even as choices increase, they note, the number of entities controlling most media has steadily lowered.

Ferree said the FCC may settle on final rules this spring.