The Senate hearing comes as the FCC nears its scheduled June 2 vote whether to relax a number of rules limiting corporate ownership of media outlets.
At Thursday’s hearing, Democratic and Republican senators alike expressed concerns that easing ownership rules would stifle “localism, competition and diversity of views.”
In his opening remarks, Sen. Wayne Allard (R-Colo.) said the FCC’s vote does not give the public enough time to comment and debate, echoing earlier statements from committee members Sen. Olympia Snowe (R-Maine) and Sen. Frank Lautenberg (D-N.J.).
Allard also criticized the proposal to lift the “cross ownership rule,” which currently prohibits companies from owning combinations of newspapers and television and radio stations in the same media market.
“Increased cross ownership does not serve public interest,” Allard told the panel.
Rupert Murdoch, the 72-year-old chairman and chief executive of News Corp., defended proposals to relax such restrictions.
Murdoch — whose bid to acquire satellite television provider DirecTV still requires federal approval — asserted media deregulation would lead to better programming and offer consumers more channels.
News Corp.’s extensive media properties include the Fox Broadcasting Company, 20th Century Fox TV and film studios, international cable channels, and several British, Australian, and U.S.-based publications, including the London Times, New York Post, and Weekly Standard.
Gene Kimmelman, public policy director for Consumers Union, which publishes the Consumer Reports magazine, told the committee that easing ownership rules could “undermine media coverage of local issues and concerns.”
Murdoch refuted Kimmelman’s claims that large media corporations would not cover local issues.
“We have increased the amount of news on [Fox-owned] stations by 57 percent, on average, compared to the previous owners. Since 1994, Fox has assisted more than 100 affiliates in launching local newscasts,” Murdoch said.
“The only way a free broadcaster can really stay in business against a hundred cable channels is to identify with these local communities… It is simply good business,” Murdoch explained.
Murdoch also defended himself against charges that the DirecTV was the type of media conglomeration that impedes diversity and competition.
“This acquisition has the potential to profoundly change the multichannel video marketplace in the United States to the ultimate benefit of all pay-TV consumers,” Murdoch said.
Kimmelman said News Corp.’s interest in acquiring DirecTV was an attempt to monopolize the U.S. satellite television industry and raise subscriber prices.
Kimmelman warned that Murdoch’s proposed DirecTV deal, in addition to the proposed deregulation of media ownership rules, “threaten[s] to seriously harm meaningful competition between media companies.”
“Such a news and information giant is a frightening prospect for democracy,” Gene Kimmelman told the Senate panel, referring to News Corp.
Sen. John McCain (R-Ariz.), chairman of the Commerce Committee, asked the witnesses whether they thought relaxing ownership rules would lead to a “wave of media acquisitions,” to which nearly all present agreed.
McCain then asked Murdoch if his company would go on a buying spree if the restrictions were eased.
Murdoch said News Corp. had no plans to acquire new media properties, aside from DirecTV.
“I have no plans for anything other than the what I have before you today,” Murdoch said, which evoked laughter from some skeptical lawmakers and witnesses.
The Senate hearing Thursday is the second meeting for lawmakers, media executives, and consumer advocates to debate and examine the implications of the FCC’s upcoming decision whether to overhaul media regulations.
FCC Chairman Michael Powell and two fellow Republican commissioners, Kathleen Abernathy and Kevin Martin — a majority of the five-member commission — favor lifting ownership restrictions.
Such a move is backed by many large media companies, such as News Corp., which say the decades-old rules do not reflect the advances in new media technologies and today’s marketplace.
The agency’s two Democrat commissioners, Michael Copps and Jonathan Adelstein, last week called for the full disclosure of the proposed changes and asked Powell to postpone the vote to allow more public debate — a request Powell declined.