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Politics and Economy:
Transcript: Big Media
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FCC Chairman Michael Powell

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.

RICK KARR: Blethen's joined other critics of consolidation in asking the FCC to make a last stand and stop the growth of big media. On the other side of the debate: a who's who of media conglomerates — including AOL Time-Warner, Disney, Viacom, News Corporation, General Electric, Cox Enterprises, Gannett and the New York Times Company. They've asked the FCC to kill rules that prevent them from owning even more. Observers on both sides say it may be the FCC's most important decision ... ever.

The big media firms argue that the rules are outdated. FCC Chairman Powell is sympathetic to that argument: he says technology's changed so the rules should, too.

MICHAEL POWELL, CHAIRMAN FCC: Almost every rule that's being considered here pre-dates cable television-- pre-dates direct broadcast satellite television, pre-dates the Internet.

RICK KARR: Powell is one of three Republicans who are in the majority on the FCC. He says big doesn't necessarily mean bad.

MICHAEL POWELL, CHAIRMAN FCC: I do agree with people who say, "Oh, well-- well, but TV's different. This is key to our messages." I agree. But I think part of what gives us anxiety is not that there are only six, but that they're big.

RICK KARR: Do you think that size matters? I mean, do you think-- that some of the people who are concerned about size are right to be concerned about the size of these companies?

MICHAEL POWELL, CHAIRMAN FCC: I think they are. But the only thing that I sort of encourage citizens to do is-- you have a right to be concerned, but you should also be intellectually honest, and count the benefits.

Because we have strong evidence that a lot of times local independent run stations cannot afford to bring quality local news. Sometimes when a larger entity takes over, their resources are available to put that back on the air.

RICK KARR: There's no question that some stations owned by big media companies do quality TV news. But a recent study by Columbia University's Project for Excellence in Journalism found that TV stations owned by smaller media firms generally produce better newscasts: they're better at local reporting ... They produce longer stories ... And they do fewer softball celebrity features.

The study concludes that ... "Changes that encourage heavy concentration of ownership ... In local television ... By a few large corporations ... Will erode the quality of news Americans receive."

And sometimes, when consolidation comes to town, it just means fewer choices for viewers. Take Jacksonville, Florida, for example: two large media firms have bought up all four major network TV affiliates in town — radio giant Clear Channel owns the CBS and FOX stations while Gannett — the nation's biggest newspaper publisher — owns the ABC and NBC affiliates.

RICK KARR AT JACKSONVILLE HEARING: "Critics of media consolidation say Jacksonville may give us a glimpse into the future if the FCC further relaxes the rules that govern the ownership of television stations. Here's what they're talking about. Remember that the ABC and NBC affiliates here in town are owned by the same company. That company decided to combine the news operations of the two stations into one. That means that if you're watching the evening news on the local ABC affiliate, your neighbors seeing the exact same thing on the local NBC affiliate."

RICK KARR: That means viewers get fewer local voices on the air. Jim Goodmon represents the third generation of his family to run the Capital Broadcasting Company, which owns five TV stations in North Carolina.

JIM GOODMON, PRESIDENT AND CEO, CAPITOL BROADCASTING COMPANY: This is about the big companies, backed by the big investment bankers, wanting to own more television stations. And it goes against the notion that we want as many different voices as we can have here.

RICK KARR: Why though? Why is the idea of having more owners inherently better?

JIM GOODMON: If you have more owners, you have more points of views, more ideas, more opinions, different approaches to everything that's going on. That to me is a given.

RICK KARR: Goodmon notes that by law, the airwaves belong to the public. Because there's only so much space on the television dial, the government has to parcel out licenses to broadcasters. In exchange, Goodmon says, they have a responsibility to the public.

JIM GOODMON, CAPITAL BROADCASTING, RALEIGH, NC: "Nobody has a right-- nobody has a right to a TV station. You know, we make a deal, "Here's the license Jim, you serve the public interest. You're the only one's gonna run Channel Five in Raleigh."

RICK KARR: Goodmon worries that local broadcasting will die if the FCC lets big media firms buy more stations.

JIM GOODMON, CAPITAL BROADCASTING: The Commission seems to think that economy is the deal. "How can we create bigger companies that make more money?" Not, "How can we get these limited licenses to do what they're supposed to do?" Which is to serve the local community.

RICK KARR: But the networks say the stations they own are just as committed to local programming as the independents'. If they weren't, the networks say, they'd lose viewers to their competitors.

MARTIN FRANKS, EXECUTIVE VICE PRESIDENT, CBS TELEVISION: I think the public-- public votes every night with their remote control. And they're saying, "You know, we kind of like the programming the networks are giving us."

RICK KARR: Martin Franks is Executive Vice President of CBS. He says the networks need to own more stations.

MARTIN FRANKS, EXECUTIVE VICE PRESIDENT, CBS TELEVISION: It is a financial issue, but it's a financial issue that has to do with preserving free television, free delivery of that service. In terms of the money that we are investing in prime time, we have money that we're investing in sports, the money that we're investing in news, we are having difficulty getting any return, any positive return on those dollars at the level of stations that we own now.

We have to be able to grow that number if we're gonna be able to justify the enormous programming investments that we want to make, so that we know that we're gonna-- continue to bring the best in news, sports and entertainment to the entire country for free.

RICK KARR: But critics of consolidation say ... The media conglomerates' balance sheets show that they're very profitable.

JIM GOODMON: This is not about anybody say-- you know, we're gonna-- we're gonna help-- the communities. We're gonna improve-- civic discourse, we're gonna-- provide more viewpoints. This is money-- this is, "Do re me," for the big guys.

RICK KARR: Aren't you up against a lot of money, a lot of lobbying clout in Washington?

JIM GOODMON: Well, there's, you-know the networks, the major companies have huge lobbying groups that spend a whole lot of time in Congress and spend a whole of time at the FCC working on their best business interest, which is let us own more and more and more stations. That's what we want to do. It's a powerful, powerful lobby.

RICK KARR: That's true of just about everyone in this debate: the National Association of Broadcasters, which represents independents like Jim Goodmon, has a powerful Washington lobby, itself.

Media companies and their lobbyists made tens of millions of dollars in campaign contributions during the last election cycle. And they've been wining and dining the FCC, too, as Chuck Lewis of Washington watchdog group the Center for Public Integrity told a January forum at Columbia University.

CHUCK LEWIS, CENTER FOR PUBLIC INTEGRITY, COLUMBIA UNIVERSITY FORUM: We found that fourteen hundred trips -- all-expense-paid trips -- were paid for by broadcasters and other a companies for FCC personnel. How can the FCC judge and discuss media ownership if they're taking trips from these guys?

RICK KARR: FCC staffers say the commissioners' travel budgets are tight and trips paid for by corporations help them fulfill their mandate to educate the public. But Chuck Lewis told the panelists — including FCC Chairman Powell — that he disagrees.

CHUCK LEWIS, COLUMBIA UNIVERSITY FORUM I don't know how to put this delicately so I'll just spit it out: There is a general perception that the Federal Communications Commission and Congress have been a little too close and a little too accommodating to the broadcast industry.

RICK KARR: Meanwhile, critics say, the easiest way to see the effects of consolidation is by examining what the big media conglomerates aren't reporting.

FRANK BLETHEN, PUBLISHER AND CEO, THE SEATTLE TIMES: The most egregious problem in journalism has always been what's not covered.

RICK KARR: SEATTLE TIMES Publisher Frank Blethen says one thing the owners of America's largest news organizations aren't covering is themselves.

He may have a point: in 1998, for instance, Walt Disney company CEO Michael Eisner told the National Public Radio show FRESH AIR that he thought ABC News — which Disney owns — should not report on its parent company:

TERRY GROSS, FRESH AIR: So is that the policy that ABC can't cover Disney?

MICHAEL EISNER, CEO, THE WALT DISNEY COMPANY: We don't have a written policy about that. ABC News knows that I would prefer them not to cover it, they really know - know, I don't want any puff-pieces, I don't want any executive profiles, I don't want any positive pieces on our company.

RICK KARR: What Eisner didn't mention was what would happen if ABC produced a negative story on Disney. According to published reports, just days after Eisner's appearance on NPR ABC News pulled the plug on an investigative piece that contended its parent company, Disney had failed to thoroughly check the backgrounds of employees at its theme parks, which resulted in the hiring of alleged pedophiles.

And the continuing debate over consolidation is another story that critics say big media firms aren't covering. In 1995 when Congress was considering allowing more media mergers the evening network newscasts barely touched on the subject. This past February, when all five FCC commissioners travelled to Richmond, Virginia for their sole official public hearing on today's proposed changes, that pattern seemed to be unfolding all over again....

RICK KARR AT RICHMOND HEARING: "You might think that a major revision of the rules that determine who can own the media in the United States would garner some attention from the network news. You'd be wrong. None of these crews behind me here at the FCC hearing in Richmond is from one of the networks. In fact, a February survey by the Pew Research Center for the People and the Press and the Project for Excellence in Journalism at Columbia University found that 72 percent of Americans, nearly three quarters of us, had never even heard that the FCC was considering changing the rules."

JONATHAN ADELSTEIN, COMMISSIONER, FCC: It raises a real question as whether or not there is independence between ownership and the journalists. There's no better case study that I can think of than this issue in determining whether or not the journalists are able to cover the stories they want to.

RICK KARR: Jonathan Adelstein is one of two Democrats on the FCC.

JONATHAN ADELSTEIN, COMMISSIONER, FCC: We've heard from a lot of journalists who said they felt very intimidated about doing this story, sometimes explicitly, and sometimes it's implicit.

It's clear to them that it's not a career advancing move to write a story that challenges the policy that is being promoted by their boss.

RICK KARR: While most reporters have been ignoring the story ... Two NEW YORK TIMES columnists have spoken out against further consolidation: liberal Paul Krugman wrote that "politicians are busy doing favors" for media firms that support them. Conservative William Safire wrote that deregulation's led to "media giantism" and demanded a stop to consolidation "before merger mania afflicts TV".

On Capitol Hill, members of Congress are taking sides in the debate. In march, Republican Senators Olympia Snowe and Susan Collins of Maine and Wayne Allard of Colorado called for more public discussion: they sent a letter to their fellow Republican, FCC Chairman Michael Powell that says deregulation "could have a sweeping impact" so the commission should give any proposed changes "a complete public airing" first.

Just days ago, ten members of Congress — including Republican House Commerce Committee Chair Billy Tauzin and Democratic Senator John Breaux, both of Louisiana -- sent Powell a letter of their own. It says the rules are "outdated" ... and urges the commission to lift them "by June".

Because there's been so little media coverage and public input Jonathan Adelstein and the other Democrat on the FCC — Commissioner Michael Copps — have gone on the road to hear from the public. This week, the two consolidation skeptics were in North Carolina and Chicago; next week, Copps will be in Phoenix, Arizona.

JONATHAN ADELSTEIN: So I think we need to get a lot more public input on this. Because these are things that affect their daily lives: what they see on television, what they hear on the radio, and what they-- what they see in the newspaper.

RICK KARR: Powell has dismissed the road trips as "a nineteenth-century whistle-stop tour". He says the Commission will decide by June and that there's no need for more public input.

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