The Mother of All Deregulation Schemes

Media Rants By Tony Palmeri

[note: This essay will appear in the June, 2003 edition of The Valley Scene]

My favorite definition of insanity is "doing the same thing over and over and expecting a different result." Truckloads of government policies fall under that definition, but none more than big business "deregulation." The last 20 years of economic history in the United States represents an era replete with repeated instances of taxpayers bailing out deregulated industries while corrupt CEOs escape prosecution and descend from the corporate boardroom on a golden parachute.

By the time you read this, the Federal Communications Commission (FCC) may have already put in place the Mother of All Deregulation Schemes: a relaxing of media ownership rules in order to allow far greater concentration of media power in the hands of fewer and fewer large companies. Barring some miracle, the 5 member FCC will approve the scheme on June 2.

Web sources list the specific rules adopted by the FCC from 1941 to 1975 that restrict ownership of radio and TV stations. Each is slated to be overturned on June 2:

• Local Radio Ownership Rule (1941): limits the number of commercial radio stations one company may own, operate or control in a single market, based on how many stations the market has.
• National TV Ownership Rule (1941): prohibits a company from owning television stations that would reach more than 35 percent of U.S. television households.
• Dual Television Network Rule (1946): prohibits a merger between or among the four major networks, ABC, CBS, NBC and Fox.
• Local TV Multiple Ownership Rule (1964): limits a company to owning no more than two TV stations in the same market. It may own two stations only if one is not among the highest four ranked stations in the area and provided the market still has at least eight other independently owned TV stations.
• Radio/TV Cross-Ownership Restriction (1970): limits the number of radio and TV stations one company may own in the same market.
• Newspaper/Broadcast Cross-Ownership prohibition (1975): forbids a company from owning a full-service radio or TV station and a daily newspaper in the same city.
  

Removing ownership restrictions on media corporations is like removing the protective glass surrounding a hockey rink. Without the glass, everyone has a chance of getting pucked. Media owners that should be in the penalty box for roughing up the public discourse instead get to score a hat trick of monopoly, oligopoly, and television/newspaper duopoly. If you want to know what it's like to be body checked by someone twice your size wielding a hockey stick, just wait until the Gannett Corporation owns not only every major newspaper in the Fox Valley, but television stations too. Gannett, which already owns 22 television stations and 100 daily newspapers in the United States, actively supports repealing the cross-ownership prohibition.

If media ownership concentration and the further eroding of democracy doesn't concern you, consider what the new rules will mean for consumers. Commercial media reap profits mostly through revenue gained from selling space for advertising. If one company owns all the major media outlets in a given market, the lack of competition provides that company with the power to fix advertising rates. That means the rates will skyrocket. That means the advertiser will pass the increase on to consumers. That means you lose.

How did we get to this point? The problem rests with the FCC and the lobbying power of major media.

The FCC is supposed to manage the airwaves in the interests of the general public. Yet since its creation, it has served mostly the interests of huge media corporations. According to a recent study by the Center for Public Integrity (CPI), "FCC officials have taken more than 2,500 trips paid for by companies and trade groups from the telecommunications and broadcasting industries, and the agency increasingly relies on industry-generated data to justify sweeping deregulation proposals." And get this: the media industry has shelled out over $2.8 million in travel and entertainment expenses for FCC commissioners and staffers over the last 8 years.

And what about the lobbying power of the media industry? William Dean Singleton, vice chairman and CEO of MediaNews Group in Denver, and immediate past chairman of the Newspaper Association of America, has called the newspaper/television cross-ownership ban "archaic and wholly unnecessary." Singleton brags about his insider connections. According to the Columbia Journalism Review (CJR), "Over the last decade, he has personally discussed the cross-ownership rule with Vice President Al Gore and a long list of senators, including Bob Dole. He has also taken it up with his 'good friend,' George W. Bush. 'I've discussed it with him on numerous occasions,' says Singleton. 'I've discussed it with his staff. I know the people at the FCC on a first-name basis now.'" Singleton told CJR that when the ownership restrictions are overturned, he will immediately purchase TV stations in markets where he already owns newspapers.

While it may be too late to stop this insanity, we must continue to fight for public control of the airwaves. Please visit http://www.mediareform.net/ for a good primer on how to get active on what might be the most vital issue of the 21st century. To take on the FCC truly will require that we organize the Mother Of All Protest Movements.

Return to Commentary