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Media Ownership Rule Changes

NOW has been reporting on the issue of media consolidation for many months (see complete coverage). On June 2, 2003 the Federal Communications Commission voted to relax certain market ownership restrictions. Below is a summary of the changes and links to sites providing analysis from a variety of perspectives. But the story may not yet be finished. On June 4, 2003 the Senate begins hearings on the ownership changes.

New Rules

The FCC Web site presents the changes in greater detail at the end of their press release "FCC SETS LIMITS ON MEDIA CONCENTRATION Unprecedented Public Record Results in Enforceable and Balanced Broadcast Ownership Rules." These are the key changes, as reported in THE NEW YORK TIMES.

The commission revised the rule limiting cross-ownership of a newspaper and a broadcast station in a market, as well as the radio-television cross-ownership rule, which prohibited a company from owning more than eight radio and television stations in the same community. In markets with nine or more television stations, no cross-ownership restrictions will apply. In markets with three or fewer television stations, no cross-ownership will be permitted among television, radio and newspapers. In markets with four to eight television stations, some kinds of cross-ownership will be permitted.

The commission revised the rule on multiple ownership of television stations in the same market. In the largest markets, a company now will be allowed to own three stations. But a company owning a station in the top four in ratings cannot purchase another in the top four.

The comission ruled that a network may own television stations reaching up to 45 percent of the national viewership, an increase from 35 percent. However, by retaining, at least for the time being, a formula that discounts viewers of UHF stations, the change permits a network to reach as much as 90 percent of the nation's television audience over all. The commission said it would phase out the formula over a period that could last many years.

The commission retained the local radio ownership limit, which permits a company to own up to eight stations in the largest cities, but changed the way it defines markets in a way that proponents say tightens the rule and critics say loosens it.

The commission retained the dual-network ownership prohibition, which prevents a merger of any of the top four national networks.

Source: "Deregulating The Media: The Overview; Regulators Ease Rules Governing Media Ownership," Stephen Labaton, THE NEW YORK TIMES, June 3, 2003.

The Old Rules

What were the rules? Read NOW's summary of the rules as they stood before June 2, 2003. For more detail, take a look at NOW's extensive timeline of media regulation and deregulation.

FCC Statements

The FCC commissioners did not speak as one voice on the proposed changes. Below are links to the official statements of the FCC and each commissioner. The members of the commission are also testifying in the Senate about the changes and the process. You can check in on the hearings at the Congressional hearings transcript site.

Additional Analysis

What does it all mean to you? Check out these sites for more information:

Center for Digital Democracy
The Web site of the Center for Digital Democracy, a nonprofit organization dedicated to preserving media diversity, provides information regarding the issue of media concentration. The Center highlights the 1945 Supreme Court decision (Associated Press v. United States) which maintains that mergers that narrow the dissemination of information are unconstitutional. Other features include press headlines, articles, and resource links.

The Center for Public Integrity
The non-partisan watchdog group recently released a new study on the workings of the FCC called "Well Connected." The study contains several items of note:

  • A Travel report documenting FCC trips and expenses paid for by industry groups.
  • Databases enabling you to find out who owns what media outlets in your own neighborhood.
  • A survey of the media ownership in the hometowns of the five FCC commissioners.
  • Documentation on how the FCC gathers and disseminates its data on media ownership.

Colombia Journalism Review: Who Owns What?
"Who Owns What?" by the Colombia Journalism Review (CJR) features a list of media conglomerates and what they own. The page also provides a selected list of articles from the CJR archive on media concentration.

Consumer Federation of America
The Consumer Federation of America provides press releases, studies, brochures, and testimony to educate the American public about telecommunications issues and to advocate for pro-consumer policies.

Consumers Union: Nonprofit Publisher of Consumer Reports
The Consumers Union Web page, devoted to telephone-telecommunications regulation, provides a long list of articles, studies, and research describing how the deregulation of the telecommunications industry in 1996 has hurt consumers.

Economic and Political Consequences of the 1996 Telecommunications Act
Thomas Hazlett of the American Enterprise Institute argues that the 1996 Telecommunications Act resulted both in benefits to consumers and in "megamergers" that have benefited stockholders and market function. He contends that increased competition in the market had an effect on the political process, where the Telecommunications industry outspent all other industries in political contributions.

Federal Communications Commission (FCC)
The Federal Communication Commission is an independent government organization accountable to Congress. The FCC regulates "interstate and international communications by radio, television, wire, satellite and cable" within U.S. jurisdiction. The FCC Web site features a special section on media ownership which includes information on the Broadcast-Newspaper Cross-Ownership Rule and the Local Radio Ownership Rule in the form of announcements, press releases, and policy studies.

The Telecommunications Act of 1996
This Federal Communications Commission (FCC) Web page is devoted to the landmark Telecommunications Act of 1996, which promoted deregulation of the telecommunication industry (cable, long distance telephone service, local telephone service, and broadband) to create a competitive communications market and deliver better services and prices to consumers. The Web site features the complete text of the legislation and provides relevant FCC materials related to the implementation and guidelines of the Act.

FRONTLINE: The Merchants of Cool - Media Giants
On, the FRONTLINE Web site features a diagram of the seven largest media conglomerates and their numerous holdings. This information is provided within a larger context, asking how media mega-mergers and the products they sell affect children's psychological development.

Media Access Project
The Media Access Project (MAP) is a public interest telecommunications law firm dedicated to promoting what they call "the public's First Amendment right to hear and be heard on the electronic media of today and tomorrow." MAP covers a broad spectrum of issues concerning electronic media, including media consolidation, broadband access, Internet governance, promoting civic discourse, and protecting free speech. MAP's Media Consolidation Web page provides an overview of the telecommunications industry and its regulator, the FCC, and documents recent attacks on media-ownership limits and why the repeal of these limits harms citizens.

US Capitalism and the Public Interest: Restoring the Balance in Electricity and Telecommunications
Dr. Marc Cooper of the Consumer Federation of America argues that the deregulatory effort of the 1990s in the electricity and telecommunications industries has upset the delicate balance between private interest and public responsibilities. Dr. Cooper concludes that the Federal Energy Regulatory Commission (FERC) and the Federal Communications Commission (FCC) must reassert their regulatory responsibilities to salvage public interests.

What's Wrong With This Picture?
Crispin Miller of THE NATION magazine describes and analyzes the media cartel that has integrated all cultural industries into a few large corporations. Miller fears that American culture will become more homogenous with less dissent and fewer independent voices.

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