Ken Auletta

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• TERENCE SMITH:

  Ken, when you look at the changes to these rules, what effect do you see them having on the media landscape?

• KEN AULETTA:

  It causes more concentration of ownership. And it causes less local ownership – and it invests an enormous power in the few individuals who are very powerful, who then will come back and make the argument we need to be more powerful because it's very expensive to do television. It's very expensive to have news on –and therefore we have to own multiple sources of communication.

• TERENCE SMITH:

  What does it do to news organizations and the delivery of news?

• KEN AULETTA:

  Well, what it does is that it pushes news further down on the totem pole with an organization. It used to be that news was a primary focus of many of these companies; it was certainly a large focus. At CBS or NBC or ABC or News Corp. … news is not necessarily the primary focus. You could argue that many of the newspapers don't produce news, which is another question, but in any case what happens is that the profit-driven parts of the company are cable, software and syndication, and not news.

  And news then is expected to compete in terms of profit margins and contribute comparable profit margins to some of these other visions – and it can't as to news – and so the public pays a price for that because ultimately the news will be cheapened and homogenized.

  Local people feel it in that the news is oftentimes not a local radio broadcast anymore; it's not a local newscast anymore; it's syndicated, and the reason it's syndicated is because it's cheaper to deal in, and these giant companies can homogenize and do it more cheaply by spreading out over the whole country.

• TERENCE SMITH:

  Do you see this already?

• KEN AULETTA:

  Well, of course we see it. We see it all the time. I mean, you have to live with some contradictions here and some paradoxes. It is true, as these people who are arguing for lifting some of these restrictions, will say, it is no doubt true that you have as a viewer and a reader more choices today.

  I know on the Internet – and I can call up most any newspaper in the world – I can get radio on the Internet, so I am not deprived of the source of information. And that's a fair argument they make.

  On the other hand, we witness at the same time greater concentration of power. If you look at station ownership, be it radio or television, or you look at newspaper ownership, you see that much fewer people own those means of communications today than was true ten, twenty, thirty years ago. And what is the price you pay for that?

  So even though you have more choices, the Internet, cable news channels that didn't exist ten years ago, at the same time are the choices better? And I would argue they're often not better, because they're homogenized, and they're preoccupied with cost constraints and cost control so the networks cut down on overseas news coverage, [and] people say after September 11, how come we didn't know this? Well, one of the reasons we didn't know this is because the public wasn't interested enough, but another reason they didn't know it is because the network cuts back on its national news coverage.

• TERENCE SMITH:

  Right. And they did so for economy?

• KEN AULETTA:

  You bet. So it went to the bottom line. It improved the profit performance. It was good for the business, but was it good for journalism? Was it good for the public? That's the question.

• TERENCE SMITH:

  So the net effect of this is more choices but fewer voices?

• KEN AULETTA:

  You can literally say you actually have more voices, but they are the same voices increasingly. I mean, it's very hard to tell the distinction between MSNBC and CNN and CNBC, when you turn on that cable channel, and it's hard to tell the difference between the networks. They are short pieces. They tend not to be – with the exception of the aftermath of 9/11 – they tend not to be international news; they tend to be softer news. And that is true of magazines and it is true of newspapers, and where did the phrase come from – news you can use – it used to be that in journalism the assumption was that you're a professional and part of your job was to tell the reader or viewer, the listener, what you think is important that happened today. Increasingly today that is not the impetus in journalism.

• TERENCE SMITH:

  There is a notion that Disney, looking at ABC, would love to get out of the business. Do you share that?

• KEN AULETTA:

  See, I think this is where you have to accept some level of paradox too. Actually I don't, because I think that news brings something to ABC, and I think they feel – a lot of these owners feel contradictory feelings. On the one hand, they're frustrated by news expenses, they don't love it the way Bill Paley loved news at CBS. But they, on the other hand, they know the news brings a prestige and a brand identification. Peter Jennings is known in more homes than Mel Gibson is, I assure you, or Julia Roberts. And so is Dan Rather and so is Tom Brokaw, and that's important.

• TERENCE SMITH:

  Let me ask you about some of the conflicts, both real and potential, that arise when a company has under its umbrella a movie studio, newspapers, television, a network, affiliates, possibly a cable system, because this is the world we're moving to now. How does a critic, say a television or movie critic on a newspaper review a film produced by a studio owned by its parent company?

• KEN AULETTA:

  Conflicts are inherent in this and troublesome. Now, in fairness, you could go to Time Magazine, and they could say they're part of their sister company, the Warner Brothers, and they review Warner movies and sometimes harshly, which is true, and that's true of a lot of other publications that are part of parent companies. The problem is the stuff you don't – that's obvious – and they will often disclose that, just as The [Wall Street] Journal will or The [New York] Times will say, we have a business interest, this person is on our board, when they write a story.

  The problem is, what happens when a star of a TV show is on the "Today" Show or "Good Morning America," and you don't realize that they're really shilling for their network because it's on their network – and what about the stars that don't get on because they're not on the network?

  And what happens when you're an independent producer in Hollywood, and you want to produce a TV series and they say, if you want to produce a TV series and be on one of the networks or cable channels, we have to own you, or own a piece of you, so you can't be in business anymore; you have to join us and be part of our family because we're going to pick our own shows? And roughly three-quarters of all the new shows being selected this spring will be owned all or in part by the networks. Now, that's a blatant conflict of interest.

  What happens if you go to Raleigh in the Carolinas and AOL-Time Warner sets up a local cable news channel, News 12, and they give it the 12th position on the dial, and then a competing cable service, which is not owned by AOL-Time Warner, what channel position do they get – they're channel 254. Now, is that fair? But if you own the cable box, you can choose to favor your own product. Does the public know about that? They should know about that.

• TERENCE SMITH:

  What are you deprived of in that scenario that you just discussed?

• KEN AULETTA:

  I may be deprived of choice, I may be deprived of quality programming. If independent producers are being squelched and chased out of business, am I getting enough voices, am I getting enough novelty? Who's the person who's going to push the envelope and do something risky and different? Am I going to get that? Who is going to do the longer TV documentary that I don't get anymore, because the broadcast owners or the cable owners don't want an hour-long newscast because they're afraid of boring their viewers?

• TERENCE SMITH:

  And what about other types of conflicts? For example, how objective is a sports reporter when his company — the paper or the conglomerate that owns the paper – owns the ball club?

• KEN AULETTA:

  Oh, it's an increasing problem. I mean, The New York Times not only owns The Boston Globe, they now own a piece of the Boston Red Sox. The Atlanta Braves are owned by AOL-Time Warner. The Chicago Tribune owns the Chicago Cubs. Comcast owns Philadelphia sports teams. They often even name the arenas.

  So the reader or viewer has a real reason to say, "Hey, am I going to get the truth, am I going to get an independent sportscaster or writer tell me what's really going on and is Giambi really playing as well as he's supposed to be playing first base for the Yankees?"

• TERENCE SMITH:

  What's the answer?

• KEN AULETTA:

  I don't know, but I think in some cases the answer is that these guys are going to shill; in other cases they're going to tell the truth.

• TERENCE SMITH:

  But the point is you don't know?

• KEN AULETTA:

  You don't know, and that's worrisome, and what's happening is it's all … a piece of the same thing, Terry, which is that everywhere you look — it's not just in the media world; it's in the investment banking world and the supermarket world and a lot of other worlds — but everywhere you look, these businessmen are driven by a determination. And from their vantage point, it's a right determination. How do I maximize my profit? How do I satisfy my shareholders that want to see my stock go up?

  And you do that by decreasing news, by increasing the things that make more money for you. But the problem is that in the society, you want the government sometimes and you want the public sometimes to be able to say, "Hey, wait a minute, Mr. Businessman, you're too narrow; we want you to think a little more broadly about things like community and values and about good, solid, independent journalism, things that don't go to your bottom line necessarily."

• TERENCE SMITH:

  There was that famous phrase in the legislation "to protect the public interest, convenience, and necessity" – an outdated concept?

• KEN AULETTA:

  Well, I don't think it is. But obviously increasingly certainly the Bush administration seems to think it is, and many people in public life think it is. I think it's not. The problem is – and this is another conundrum I think you face, Terry, in that the rationale for having that Act, that law in the '20s was you were using the public airwaves for broadcasting radio first and then television.

  Increasingly you're not using the public airwaves — [instead, you're using] cable, or you're using the Internet, electrical lines, et cetera, and – or you're a newspaper, which has total freedom – but once the rationale comes to question to regulate broadcast radio and television and not regulate cable or newspapers, if it's all in the public interest that you're worried about – and I think we have to be honest here and say this is really complicated stuff.

  With TV or radio [one could] say "you're getting public airwaves, you give us something back; that was the original bargain you made in 1927 with the Radio Act, and let's continue that bargain." And then you say to the cable people, "wait a second, you're getting something, you're ripping up our streets to put in your cable wires, you give us something back." In fact, they agreed to give something back – public access channels are a product of that. So I think you have a right to say that.