It goes like this: From the 1930s through the 90s, it made sense for government to limit how many broadcast stations a single firm could own because the number of broadcast frequencies was itself limited. In a big city, a hundred or so radio and television stations might be able cram into the available slots on the AM and FM radio and VHF and UHF TV bands, but no more. The ownership limits ensured that no individual or company could monopolize a city's airwaves.

But the Internet changed everything, according to this argument. Republican FCC appointee Deborah Taylor Tate made the case in her opening statement (pdf) at the Commission's September hearing in Chicago: Earlier in the day, she said, she'd spoken to students at Northwestern University's Law School, and asked them how they got their news:

While some of the students continue to rely on local radio and television, the most significant response might have been one that we didn't even ask about – blogs. From student responses it was clear that blogs represent a growing sector of America's news information sources. Today, the Internet enables individuals of any age to be writers, editors and publishers of news....

She could easily have added “broadcasters” to that last sentence, because of all it takes to set up an Internet radio or TV station is a decent home computer, a microphone for radio or camcorder for video, and a high-speed Internet connection. In other words, nowadays anyone can be a broadcaster; there's no longer a limit to the number of radio and TV stations that can be heard or seen in a given city. So there's less of a need to limit how many traditional radio and TV stations a single firm can own.

That's the argument. Reality is more complex.

Bloggers and online broadcasters are filling in gaps left by the traditional media – and covering topics rarely heard on radio or seen on TV. Sticking to Chicago, as we do on this week's show, and merely scratching the surface, one can find blogs on the city's real estate bubble, its blues music scene, a passionate devotee of knitting, even a blog on blogs. And some alternative news, too. The city's also home to Internet radio stations that feature music and information rarely heard on the air.

So the Internet has changed the media landscape. But traditional media still have the advantage: You can't listen to live internet radio as you drive home from work. You can't effectively read a blog as you ride a train or bus to work. And when it comes to journalism, online media lack the resources to compete with old-media giants like the Chicago Tribune, with its hundreds of reporters and editors – employees whose salaries are paid, in part, by advertising revenue generated by the newspaper's radio and TV stations.

Perhaps more importantly, radios and television sets are cheap and nearly ubiquitous; they pull signals out of thin air and turn them into sounds and pictures ... for free. Internet connections, on the other hand, aren't as ubiquitous, and they cost money. It takes a high-speed connection to receive a good web radio signal – and an even better one to broadcast online. But the phone and cable companies that provide those internet connections – again, keeping our focus on Chicago – have been slow to hook up minority neighborhoods. Even when good connections are available, they're too expensive for many residents. So the very people who say they've been shut out of the traditional media – in part as a result of consolidation, as we report on this week's show – have a hard time turning to the internet as an alternative.

One last note: The phone and cable companies that provide online service want the right to pick and choose – to decide which blogs you can easily read and which webcasters you can easily tune into. If those conglomerates get what they want, Big Media will have an even greater advantage over bloggers and webcasters. That's known as the “net neutrality” debate, and I update it in another post here.