(Transcripts of video clips are at the end of the document.)

Backgrounder: Big and Bigger Media Media ownership rules are again a topic of debate on Capitol Hill, as the rules come up for a review and Republican Kevin Martin undergoes hearings to reconfirm him as chairman of the Federal Communications Commission. Senator Barbara Boxer grilled Martin about an FCC study on local media ownership, which found local reporting decreased markedly after the Telecommunications Act of 1996. In 1984, the number of companies owning controlling interests in America's media was 50 — today that number is six. Critics of media consolidation say it has led to fewer and fewer voices being heard — and a marked decrease in local news coverage. Some media watchers are worried that the much touted "free for all" of the Internet will go the same way. Proponents of "net neutrality" worry that the cable and telecom companies providing the bulk of Internet connectivity will use new fee structures, which may favor some content providers over others. Phone and cable companies have a near monopoly over Internet service. More precisely, it's a 'duopoly' - which means that in more than 90 percent of American homes in the U.S… [more]

Class Is in Session...
In 1941, the federal government regulated the ownership of media outlets to ensure a broad spectrum of opinion. The Local Radio Ownership Rule, National TV Ownership Rule stated that a broadcaster cannot own television stations that reach more than 35% of the nation's homes. Many other regulations followed as the American media landscape changed. In the 1980s the climate changed in the U.S. -- fewer federal regulations became the order of the day under President Reagan. (View a timeline of media regulation.)

Then came the Telecommunications Act of 1996, signed into law by President Clinton. It is generally regarded as the most important legislation regulating media ownership in over a decade. The radio industry experienced unprecedented consolidation after the 40-station ownership cap was lifted. Clear Channel Communications now owns 1200 stations, in all 50 states, reaching, according to their Web site, more than 110 million listeners every week. Viacom's Infinity radio network holds more than 180 radio stations in 41 markets. Its holdings are concentrated in the 50 largest radio markets in the United States. In 1999, Infinity owned and operated six of the nation's Top 10 radio stations.



Then in 2003 ownership limits came up for review again -- media companies wanted ownership rules relaxed further. Among the proposed changes: allowing greater cross-ownership in media markets (newspapers and broadcast stations, radio and television stations) and caps on television and radio stations ownership raised in large markets. In addition, the FCC proposed that a single entity could own television stations reaching up to 45 percent of the national viewership, an increase from 35 percent.



In 2003, Barry Diller, the man who created Fox Broadcasting and ran ABC Entertainment, Paramount, Vivendi Universal, spoke out against the rule changes to an industry group - and to Bill Moyers. (Diller is currently chairman and CEO of USA Interactive, itself an empire of informational services from the Home Shopping Network to Ticketmaster.)

What about the fairness doctrine?

Critics of consolidation fear that the fewer the owners the fewer the voices on the airwaves. Several recent cases -- among them Sinclair Broadcasting's decision not black out names and faces in an episode of NIGHTLINE which listed the names of U.S. soldiers killed in Iraq - have media watchers saying conglomerates have too much power over the message heard.

The Communications Act of 1934, as amended, called for stations to offer "equal opportunity" to all legally qualified political candidates running for office. In 1949, the FCC adopted the "fairness doctrine," a policy that viewed station licensees as "public trustees" and, as such, responsible for addressing controversial issues of public importance. The key requirement was that stations allowed opportunity for discussion of contrasting points of view on these issues.

By the 1980s, many stations saw the FCC rules as an unnecessary burden. Some journalists considered the fairness doctrine a violation of the First Amendment rights of free speech and free press; they felt reporters should be able to make their own decisions about balancing stories. In order to avoid the requirement of presenting contrasting viewpoints, some journalists chose not to cover certain controversial issues at all. In addition, the political climate of the Reagan administration favored deregulation. When the fairness doctrine came before the courts in 1987, they decided that since Congress did not mandate the doctrine, it did not have to be enforced.

(You can also see how the major news stations prioritize the news by visiting the Tyndall Report. Andrew Tyndall has watched the major broadcasts for six years.)

What happens to local media?

Another key worry surrounding media consolidation is that as ownership of newspapers, radio and television stations are concentrated in fewer hands - a vital connection to the local community is lost. NOW WITH BILL MOYERS and correspondent Rick Karr told a cautionary tale about the risks of media consolidation to local communities.

The story, broadcast in April 2003, starts in Minot, North Dakota where a train derailment spilled two hundred and ten thousand gallons of ammonia and a toxic cloud. Authorities wanted to get the word out to Minot residents: stay indoors and avoid the area near the derailment. So they tried to get in touch with six local commercial radio stations.

All six of those commercial stations — out of a total of seven in Minot — were owned by one huge radio and advertising conglomerate: Clear Channel Communications and had replaced live local programs with shows recorded in far-off studios that only sound local.

But what does this mean for the internet?

Lots of lobbying and advertising money is being spent on net neutrality and ownership rules in DC. In 2006, the FCC approved the sale of substantially all of the cable systems and assets of Adelphia Communications Corporation to Time Warner Inc. and Comcast Corporation. And, in July 21, 2006, BellSouth shareholders approved the $67 billion sale of the company to AT&T, which would further expand the latter company's reach in the telecommunications sector and place Cingular under a single owner.

In addition, the Supreme Court ruling on the Brand X case put cable modem service providers in the class of information provides, not telecommunication service providers - which come under fewer regulations - and are not bound by common carriage rules. At the bottom of the ruling? Cable broadband providers don't have to share their lines with competitors. A ruling which some say will further hamper the spread of high-speed service throughout the nation. (See more on the new digital divide.)

Discussion

• Do you think that media consolidation is a problem?
  
  
• Do you feel like you get enough local news coverage?
  
  
• Do you know who owns your local media outlets?

BILL MOYERS: Why now? Why did you choose this moment to speak out on media conglomeration?

BARRY DILLER: Well, I don't know. Maybe because, you know, all the forces are, so to speak, gathered. What's happened is, is that this oligopoly that was attempted to be prevented by regulation over the last 30 years. You know? 30 years ago, three companies controlled 90 percent of everything we heard or saw. And that was a bad idea. Now four companies, five companies control 90 percent of everything we see.

BILL MOYERS: Oligopoly. That's your word. I mean, that's a very strong word.

BARRY DILLER: Well, it certainly isn't an exaggeration.

BILL MOYERS: What do you mean by it?

BARRY DILLER: What I mean is, is that is that a very… a handful of companies are in charge of everything both vertically and horizontally that you get to see through a screen, a television screen not a computer screen. And I think… what I do think has to come along with that are rules and regulations that will make it so. That what we do not have in this country is a media and communications business that has no other voices in it. No air in it.

BILL MOYERS: Has that happened?

BARRY DILLER: Sure.

BILL MOYERS: I mean, you stated in your speech that ten years ago independent producers in Hollywood created 16 new television series. Last year, only one.

BARRY DILLER: Uh-huh.

BILL MOYERS: Is that the consequence of oligopoly?

BARRY DILLER: Sure it is.

BILL MOYERS: How so?

BARRY DILLER: Well, if you have… if, in fact, you have companies that produce, that finance, that air on their channel and then distribute worldwide everything that goes through their controlled distribution system. Then, in fact, what you get is fewer and fewer actual voices participating in the process. Used to have dozens and dozens of thriving independent production companies producing television programs.

Now you have but, you know, less than a handful. What has caused that? What's caused that is the forces of consolidation and consolidation. And I am not saying that those forces are bad and that the results are evil. What am I saying is that with that I think comes the necessity to say, "Well, you can't own all your programs." Well, you can't own every voice there is to own.

There should be some restraints. And more importantly, what's happened to broadcasting is that broadcasting really used to be… it used to have a very clear public service quotient. And it's more or less now. And it's been lost. Now, you know, I mean, other things have been lost too. But this perfect balance which was fear. Fear that your license would get taken away from you.

Plus a real sense of public service responsibility. That those airwaves actually belonged to the public. You used them. You profited from them. But you had to keep it in balance. That was a healthy environment. And in that environment, of course, mistakes get made, excesses happen. But they rebalance themselves. Today, after Mark Fowler says…

BILL MOYERS: The FCC… Chairman of FCC in the Reagan Era.

BARRY DILLER: In the '80s.

BILL MOYERS: Right.

BARRY DILLER: Who says, you know, a television is a toaster. It's just there for marketing. All that goes away. So…

BILL MOYERS: You sell a lot of toasters on television.

BARRY DILLER: Yeah, I do. I'm happy to continue to sell toasters. But, in fact, that's not what these mass engines of communication which are so vital. You know, they're so influential in everything. They have to have other aspects of responsibility and balance in order to do what they should be doing.

BILL MOYERS: Could a young Barry Diller make it today? A young Ted Turner? Could there be a new ESPN? A new CNN?

BARRY DILLER: Almost impossible.

BILL MOYERS: Why?

BARRY DILLER: Because, again, there is, you know, given the levels of concentration, if you're a new player, you have a new idea, you know? Ted Turner started with TBS which was a rundown Atlanta television station that he got to Superstation status. But he was still a tiny, little player when he said, "You know, I've got this idea for a 24 hour, you know, news network."

Of course everybody thought he was crazy. Everybody thought that it was hopeless. And, but what he did in individual sellings, he sold cable system after cable system on this idea. He got backing from a whole group of people to start what was then just a stand-alone. I mean, he didn't have very much than that.

That can't happen today. It can't happen today because if you knock on the door of these entities, they say well, first of all, you know, it's not independent by definition 'cause we'll own it. You know? There's no chance you can own it. That's gone now. So as the stakes rise, you know, that becomes virtually impossible.

BILL MOYERS: Where does a young, bright upstart go with an idea?

BARRY DILLER: Somewhere else. You know, you don't, you know, look. In media and in entertainment and in certainly in journalism, I mean, if you've got a great idea, an idea will out. It'll just be owned by one of the large and concentrated players. I mean, that is…

BILL MOYERS: Five of them now.

BARRY DILLER: That is, it's reality. Yeah. So, and it's not that that's just altogether horrible thing. But what I do think is these five players who believe they are living in a justifiably unregulated universe should have enough regulation, enough regulation — not that strangles them by any stretch — to stop these absolute forces of complete vertical and horizontal integration.

BILL MOYERS: Is this a change of heart for you? I mean, you've run huge companies. You run one now. If I remember correctly, when Disney bought ABC you said, "This is a great transaction."

BARRY DILLER: Yeah.

BILL MOYERS: What's different now?

BARRY DILLER: Well, I think what's different now are a couple of things. The first thing that is different now is that the… I had hoped when I… that the regulatory process would tightly follow consolidation and concentration. And that, in fact, what would not happen is that we would not be living in an area where it is considered, you know, antique and, you know, stupidly liberal to have, you know, regulations, you know?

Laissez-faire. Let it all mix. Well, the fact is that unless… my feeling is that if regulation had kept with this. If, in fact, we had not gone and raised the caps on broadcasting on what any one person could own in broadcasting, if, in fact, we had said in this Communications Act of '96 that we would actually impose real public service obligations on broadcasters and not toss them out. I mean, much of this would… consolidation would have happened. But it would have allowed other voices to come in. It would have allowed… again, it would have just simply stopped complete vertical and horizontal development.

BILL MOYERS: You mentioned the Telecommunications Act of 1996. The chairman of the FCC, the Federal Communications Commission, said at that time — and he was a Democrat… Here's what he said. "The new law is intended to begin the era of genuine competition."

BARRY DILLER: Yeah.

BILL MOYERS: And you say just the opposite has…

BARRY DILLER: Well, it was.... That what happened is, is that instead of the competition that was supposed to get more voices and all of those things, in fact, this, you know, I think dangerous oligopoly reconstituted itself in ways that nobody thought that thought would happen at the time.

And so what I think now is as the FCC is thinking about increased tossing more and more out. But instead they think about this issue for not only broadcast but the cable business which is now, you know, a cable business. One little…

BILL MOYERS: …dominating.

BARRY DILLER: …one little... You know? I don't know. Five, ten years ago there were thousands and thousands of cable operators, you know? Serving their local communities. Now, there are three big ones and three mid-size ones. And no one else essentially. So, and the…

BILL MOYERS: And the consequence is?

BARRY DILLER: Still, the consequences are in any completely concentrated area, the consequences have to be that when you get that kind of size that, in fact, it has to restrain the ability of any new player. It gives them such buying power. It gives them such overwhelming power in the marketplace that, in fact, everyone has to do essentially what they say.

END CLIP

RICK KARR, NPR CORRESPONDENT: In January of last year, a train derailed in Minot, North Dakota. Two hundred and ten thousand gallons of ammonia ...and a toxic cloud ... spilled out of it.

Authorities wanted to get the word out to Minot residents: stay indoors and avoid the area near the derailment. So they tried to get in touch with six local, commercial radio stations.

All six of those commercial stations — out of a total of seven in minot — are owned by one huge radio and advertising conglomerate: Clear Channel Communications. It's been buying up radio stations across the country and replacing their live, local programs with shows recorded in far-off studios that only sound local.

CLEAR CHANNEL DJ: "I'm Becky Wight -- have a great weekend!"

RICK KARR: Minot authorities say when they called with the warning about the toxic cloud, there was no one on the air who could've made the announcement. Clear Channel says someone was there who could have activated an emergency broadcast. But Minot police say nobody answered the phones.

Clear Channel owns more than twelve hundred radio stations nationwide; they have an audience of over one hundred ten million listeners a week. Critics of the company say that its way of doing business is symptomatic of what's wrong with the American media today — that it's grown too big for the public's good.

SEN. BYRON DORGAN (D-ND): "We're headed in exactly the wrong direction. In these areas you need to have your foot on the brake, not your hand on the throttle."

RICK KARR: At a recent hearing of the Senate Commerce Committee North Dakota Democrat Byron Dorgan used the Minot incident as a warning: that as large media companies — like Clear Channel — buy up the last remaining independent media outlets across the country, the public suffers.

SEN. BYRON DORGAN (D-ND): I think all of us ought to be concerned when we see this massive concentration occurring

RICK KARR: Dorgan grilled Federal Communications Commission Chairman Michael Powell over a phenomenon that's redrawn the landscape of the American media over the last decade.

SEN. BYRON DORGAN (D-ND) (FROM TAPE): "Do you not agree, for example, that if you had moved last month to Minot, North Dakota, and all of the commercial stations in that city are owned by one company, that there's been a diminution of competition? That it's diminished, that it's not beneficial to the consumer to have no competition among the radio stations, commercial stations, in Minot? Would you agree with that?

MR. POWELL (FROM TAPE): Yes, I would agree it's a problem.

RICK KARR: The problem's known as "media consolidation" ... multibillion-dollar media conglomerates growing larger and larger ... as they buy up their competitors ... and independent broadcasters ... and then centralize their operations. Critics of consolidation say it's happening at the expense of local communities ... and journalism.

RICK KARR: Consolidation started in earnest in 1996 after Congress passed a bill that set aside most limits on how much of America's broadcasting industry big media firms could own. Since then, almost a third of the country's radio station owners have been bought out by conglomerates.

Then there's television: more than three-quarters of Americans now watch channels that are owned by just six companies.

And those companies own dozens of the best-known names ... across the media. Just one example: Viacom ... Owns CBS... ...UPN ... MTV ... BET ... Nickelodeon ... Showtime ... Paramount Pictures ... thirty-nine local TV stations ... the nation's second-largest radio chain ... more than a hundred thousand billboards ... more than four thousand Blockbuster stores ... And the venerable publishing house Simon and Schuster.

And that's just a partial list.

FRANK BLETHEN, PUBLISHER AND CEO, THE SEATTLE TIMES: If we go out 20 years from now with the same pace of concentration of media ownership we've had for the last 20 we will not have a democracy. There's simply no way.

RICK KARR: Frank Blethen is a newspaper publisher and a critic of media consolidation. He represents the fourth generation of his family to run the independent daily THE SEATTLE TIMES.

He says consolidation hurts the public and its only benefit is to the bottom lines of a few media conglomerates.

FRANK BLETHEN: The CEO's get compensated not on their journalism, not on the Pulitzer prizes they win, not on some investigative piece that pisses off a major retailer. What they get compensated for is did you lay enough people off and reduce your news content enough and raise your prices enough so that the stock price went up. If you care about journalism, if you care about your local communities, and if you care about democracy you're not in it for the maximum dollar.

END CLIP