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Transcript:

December 14, 2007

Massing of the Media

BILL MOYERS: Even as Keith Olbermann is emerging as a contrary voice, in the monolith of corporate broadcasting, journalism lost an island of independence this week. Rupert Murdoch officially took control of THE WALL STREET JOURNAL from the now defunct Bancroft family. With THE JOURNAL, Fox Broadcasting Company, Fox News channel, and his new Fox Business Network, Murdoch now controls four of the major outlets that compete every day for the space in our heads. And when it comes to using his power for his own agenda, he's no shrinking violet. Back when THE WALL STREET JOURNAL was still a free agent - the paper itself reminded us that Rupert Murdoch "has blurred a line that exists at many other U.S. media companies ... - a line intended to keep the business and political interests of owners from influencing the presentation of news."

So it matters who owns the paper you read. That's why our next story is important and timely. The number of media corporations that dominate our lives has shrunk over the past 25 years from 50 to just a handful. Eighty percent of the country's daily papers are now owned by conglomerates. There's a restriction in place that prevents newspapers from buying radio and television stations in the same market, but the moguls, tycoons, and barons of the business have been lobbying to get the FCC- the Federal Communications Commission- to lift that restriction. They're about to get their way. And once again the heist of the public interest turns out to be an inside job. Here's our update from producer Peter Meryash and correspondent Rick Karr.

RICK KARR: Publishing conglomerates are prohibited from buying radio and T-V stations in their home towns under what's known as the "cross-ownership ban." Next week, though, the three Republicans on the F-C-C are expected to scrap the rule. That means newspapers from Seattle and San Francisco ... to Boston and Miami ... and Atlanta and Houston will be able to buy up local radio and T-V stations. As could papers pretty much everywhere else, according to critics of the proposal.

CHAIRMAN KEVIN MARTIN, FCC: The decisions that we are going to make about media ownership rules are as difficult as they are critical....

RICK KARR: The F-C-C - under Republican Chairman Kevin Martin - hit the road for a series of six public hearings, from Pennsylvania to Washington State. We reported on a few of those meetings ... which attracted hundreds of people ... who stayed for hours ... and told the five Commissioners - overwhelmingly - that they didn't want any more media consolidation.

CHICAGO FCC HEARING PARTICIPANT: So if the F-C-C is here wanting to know if Chicago's residents are being well served? The answer is no. If local talent is being covered? The answer is no. If community issues are being treated sensitively? The answer is no. If minority groups are getting the coverage and the input they need? The answer is no, the answer is no.

SEATTLE FCC HEARING PARTICIPANT: We told you a year ago when you came to Seattle that media consolidation is a patently bad idea, no ifs ands or buts about it. So with all due respect, I ask you, what part of that didn't you understand?

RICK KARR: That last hearing was last month, in Seattle. Members of the public spoke until one in the morning ... but all of those comments didn't persuade the F-C-C's Republicans that consolidation is a bad idea. In fact, no sooner had the Commissioners returned from Seattle to their Washington, D.C. offices ... than Chairman Martin announced that his mind was made up: THE NEW YORK TIMES gave him space on its Op-Ed page to argue for .... MORE media consolidation. The short span between the last public hearing and Martin's article ... landed the Chairman in the hot seat last week at a House Subcommittee hearing. Seattle-area lawmaker Jay Inslee asked the F-C-C Chairman whether he'd been paying attention to anything the public had told him.

REP. JAY INSLEE: When you have 1,000 people staying till 1:00 at night on a Friday, on the next Tuesday morning in THE NEW YORK TIMES, we see an op-ed by the chairman saying that he's going to propose rules that would basically ignore the testimony of these hundreds of people in Seattle the Friday before. Now, that troubles me because apparently, this is an op-ed that I can't believe wasn't written before this testimony was even listened to, and my folks in Seattle believe that they were treated like a bunch of chumps out in there that they had the FCC come out, fake like you're listening to them, and the deal was already done. So my first question, Chairman Martin, is was your op-ed, at least rough draft, written before you listened to these thousand people out in Seattle?

CHAIRMAN KEVIN MARTIN, FCC: Sure, I was working on drafts of the op-ed. I'm sure I was working on it on the way out to Seattle.

REP. INSLEE: And when did you send the final draft to THE NEW YORK TIMES?

CHAIRMAN KEVIN MARTIN, FCC: I don't recall. It was some time over -- I'm sure it was some time over the weekend. I don't know. I don't know whether I submitted it on Friday or Saturday, I don't know.

REP. INSLEE: Well, knowing how THE NEW YORK TIMES works, I bet you submitted it before you heard the testimony in Seattle and I'm going to ask you to check that out and let us know.

RICK KARR: Inslee's staff says Martin hasn't responded to that request. THE NEW YORK TIMES didn't reply to our questions about when it received the F-C-C chairman's op-ed piece. Another House Democrat accused Martin of having made up his mind before he'd heard a single comment from the public: Pennsylvania's Michael Doyle said that in June of 2006 - almost eighteen months ago - Martin received this memo from F-C-C staff ... laying out how the Commission could justify allowing newspapers to buy into radio and T-V stations.

REP. MIKE DOYLE: Chairman Martin, a more cynical person than I might ask the question, did you know what you wanted to do on June 15th, 2006? I would hope that overturning cross-ownership rules wasn't a forgone conclusion, that you actually looked at studies, saw what they said, went to the field hearings, listened to the public and the stakeholders and then announced your rule.

CHAIRMAN KEVIN MARTIN, FCC: I think that it's fair that I did have an idea of what I thought the commission should end up doing in June,

RICK KARR: That's June of last year. Martin's answer seemed to confirm Democrats' suspicions that the F-C-C's hearings ... and academic studies ... were nothing more than a charade. They'd called for the subcommittee hearing because Congress may be the only body in Washington that can stop the proposal for more consolidation. House Republicans, on the other hand, were generally friendly to the idea of letting Big Media get even bigger.

REP. JOE BARTON: Well, I want you to know, Mr. Chairman -- Chairman Martin -- that some of us do support the relaxation of the cross-ownership rules so you have a few friends on that issue.

RICK KARR: But most of the Subcommittee's democrats slammed Martin's proposal - and so did Democratic F-C-C Commissioner Jonathan Adelstein:

COMM. JONATHAN ADELSTEIN, FCC: Americans from all walks of life, from all political perspectives, from the right to the left and virtually everyone in between don't want a handful of companies dominating their main sources of news and information. People are not clamoring for us to relax the media cross ownership ban. They're concerned about how responsive their local media is to local communities, what's happening in their own community.

RICK KARR: Adelstein's Democratic colleague, Michael Copps asked ... why the rush to give Big Media what it wants in defiance of what the Commission heard from the public?

COMM. MICHAEL COPPS, FCC: We are rushing in to encourage more consolidation without addressing the real damage consolidation has already caused. What we have here is an unseemly rush to judgment, a stubborn insistence to finish the proceeding by December 18th, public and Congressional opinion be damned. When overwhelming majorities of citizens oppose this, when members of Congress write to caution us every day, and when legislation to avoid a nine-car train wreck is being actively considered on Capitol Hill, I think the FCC has a responsibility to stop, look and listen. The stakes are enormous.

RICK KARR: Newspaper conglomerates argue that they have to get into broadcasting: Business is bad, an industry spokesman told the lawmakers, and profits are down, so publishers need the new revenues that radio and T-V can provide.

JOHN STURM, Newspapers Association of America: All of the vital signs of the newspaper industry now are negative. That is very difficult for me to say, but it is true.

RICK KARR: Republican F-C-C Chairman Kevin Martin echoed the industry's argument ... and even took it a step farther: Unless newspapers are allowed to expand into broadcasting, he said, they may just disappear.

CHAIRMAN MARTIN, FCC: According to almost every measure, newspapers are struggling. At least 300 daily newspapers have stopped publishing over the last 30 years. Their circulation is down, and their advertising revenue is shrinking.

RICK KARR: Except ... that's not the whole story. Newspaper profits are down, but on average, publicly-traded newspaper firms still generate profit margins that are greater than the average for the Fortune five-hundred. Pennsylvania Democrat Michael Doyle asked Martin whether he'd really done his homework.

REP. DOYLE: Are you aware that Dean Singleton, owner of the YORK DAILY RECORD and dozens of other papers of the Media Newsgroup, said that the newspaper industry is, quote, "very, very, very profitable and it will continue to be for a long time?"

CHAIRMAN MARTIN, FCC: I'm not aware that he said it, but I'm not --

REP. DOYLE: He did say that. Are you aware that Scarborough Research, a firm that works closely with the Newspaper Association of America, their report concluded that, and I quote, "They continue to find that when online readers are considered, the story of newspaper readership for many papers transforms from one of slow, steady decline to one of vibrancy and growth?"

CHAIRMAN MARTIN, FCC: I'm sorry, what was the -- was the question have I seen that report?

REP. DOYLE: Yes.

CHAIRMAN MARTIN, FCC: I haven't seen that report, no.

RICK KARR: This week on Thursday all five Commissioners were BACK on Capitol Hill ... testifying before a Senate committee. This time, Martin didn't hear any words of support: Even his fellow Republicans - including Alaska's Ted Stevens - called on him to slow down.

SEN. TED STEVENS: I do hope you'll listen to us. It's my feeling that the December 18th date ought to be postponed until we have a better understanding of where we're going on this.

RICK KARR: The Committee recently unanimously approved a bill that would delay the F-C-C vote by ninety days ... and require the Commission to do more research to justify any changes. But the full Senate isn't likely to vote on the bill before the F-C-C makes its decision on Tuesday. Florida Democrat Ben Nelson was one of several Senators who asked Martin point blank whether he'd yield to bipartisan criticism and postpone the F-C-C vote.

SEN. BILL NELSON: Mr. Chairman with all these questions raised by a committee of the United States Senate, do you intend to continue with this proceeding on December 18th?

CHAIRMAN MARTIN, FCC: Yes. At this point I think it is important for us to proceed.

RICK KARR: Massachusetts Democrat John Kerry blasted Martin for his defiance.

SEN. JOHN KERRY: It is really clear from the evidence that if the Commission intends to promote ownership diversity, you can't accomplish that goal while simultaneously increasing market concentration. It just doesn't -- it's just a complete contradiction. It just seems extraordinary to me that we're not able to have your agreement to wait a few days. Listen to American people. Listen to the Congress.

RICK KARR: So the F-C-C vote stays on the schedule for next Tuesday...

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