January 29, 2003

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Meet the new press
Corporate media are spending big money in D.C. so it can give you less news. And it's found a very good friend in FCC chair Michael Powell.

By Camille T. Taiara

IMAGINE SURFING YOUR favorite Web sites at work only to find the exact same news, by the same reporters, as what you read in your local daily paper that morning. You tune in to the radio during your drive home and hear the same stories no matter how many times you turn the dial. Talking heads repeat the same information, word for word, on TV later that evening. You have nowhere to turn for something – anything – different. It's not just a nightmare prophesied by George Orwell. It's also a dream come true for the most powerful media behemoths. And it may very well be on its way.

On Sept. 10, 2002, FCC chair Michael Powell announced that his agency is reviewing six of its remaining controls regulating the radio, television, and print media industries with an eye toward eliminating them. Among some of the most significant regulations on the chopping block are (1) a rule prohibiting one company from owning both a daily newspaper and a television station in the same local market, (2) a 35 percent cap on the number of households any one broadcast company can reach nationwide, and (3) a regulation barring the four major TV networks from merging with one another. According the commission's own characterization, the review represents "the most comprehensive look at media ownership regulation ever undertaken by the FCC."

The decision, which hasn't received anywhere near the publicity it deserves, could lead to just a couple of telecommunication conglomerates controling virtually everything we hear, see, and read.

As it is, the Telecommunications Act of 1996 lifted the cap on how much of the national market any one radio company can control and increased the number of stations it could operate in a given region. The move proved to be a boon to media giants. Now "ten large parent companies ... control about two-thirds of both listeners and radio revenues," according to a recent report issued by the Future of Music Coalition. Clear Channel Communications Inc. alone grew from 40 stations nationwide to 1,240. That's "30 times more than congressional regulation previously allowed," the report's authors write.

Conglomerates in the television and newspaper industries have already benefited from a gradual relaxation of regulatory controls over time – and from the government's refusal to enforce its own antitrust rules. The Consumer Federation of America found that the number of television station owners has decreased from 540 to 360 over the past 25 years. The figures are even more dramatic for newspapers, which, they found, have seen a drop from more than 860 owners to fewer than 300. "Today, 98 percent of Americans live in communities with only one local newspaper," according to a report by the Center for Public Integrity (CPI), an investigative group focusing on government accountability.

The result: less local news and entertainment, more canned, syndicated material, and independent viewpoints edged out by an increasingly centralized corporate rhetoric.

For years the top handful of media moguls have been lobbying the government to take the next logical steps and lift the remaining restrictions. The more they are allowed to dominate the media, the more of a stranglehold they have on advertising – and on any public discourse that might imperil their big-business interests.

Bob McChesney, author of Rich Media, Poor Democracy and one of the nation's most renowned media critics, compares the move to a scene from The Godfather Part II. "Powerful lobbies behind closed doors are carving up the cake," he tells us.

If ever there was an FCC chair to do corporate America's bidding, it's President Bush appointee Michael Powell. Before Bush handed him the FCC's top seat, Powell was the only FCC commissioner to advocate allowing America Online to merge with Time Warner without so much as a review. The deal earned his father, defense secretary and former AOL board member Colin Powell, an extra $4 million on his AOL stock options, according to the Center for Responsive Politics.

Michael Powell is a self-described disciple of the "free market" and has admitted to having "no idea" what the public interest is. He doesn't appear overly concerned with finding out.

"The time has come to honestly and fairly examine the facts of the modern marketplace and build rules that reflect the digital world we live in today, not the bygone era of black-and-white television," Powell wrote in a Jan. 21 editorial in USA Today.

His assessment isn't entirely incorrect. The FCC's regulatory scheme was built around print, television, and radio as distinct industries requiring different sets of rules. With the migration from analog to digital technologies, these industries are merging, and many of the controls regulating them should indeed be revised.

But "changing technology means more than ever that we need more people competing in the field," argues Ben Bagdikian, former dean of the UC Berkeley Graduate School of Journalism and author of The Media Monopoly, one of the most influential books ever written on the media industry. "When you get a new technology, you want new, young, smaller groups that are quicker on their feet and able to come up with new ideas. Whereas the few existing giant corporations want to control the change, limit it as much as possible so they minimize their costs of conversion. They control the way it's going to their advantage and not the public's advantage."

Indeed, telecommunication conglomerates have already staked their claims on much of the digital TV spectrum – again, behind closed doors and with the aid of the feds. In 1997, the FCC handed over $70 billion worth of the digital spectrum to analog television station owners – for free – thereby not only cheating the public out of any financial returns but also effectively safeguarding the future of digital television for the media giants rather than using the new technology to allow more, independent broadcasters to enter the market.

Media giants have similarly come to dominate the top sites on the Internet since its inception a decade ago. "What [Powell] conveniently evades is that the very same people who have controlled most of the old media, such as AOL Time Warner and G.E.'s NBC, have bought stakes in most of the newer media," says Jeffrey Chester, executive director of the Center for Digital Democracy, a Washington, D.C.-based public interest group that works on media issues. "So this so-called alternative has already been reduced to merely an extension of the traditional media's power."

Not only did media giants help bankroll the Telecommunications Act, but they were also pivotal in defeating the Campaign Reform Act of 2002, which would have required TV stations to offer political campaign ads at reduced rates.

"Pretty much anything that affects their business interests, they're able to bend Congress or the FCC to their will," says Bill Allison of the CPI. "It's hard to think of an issue in the past 10 or 15 years where the broadcasters and the other media companies wanted something and they didn't get it."

Allison points to the media industry's lobbying infrastructure – one of the most powerful on Capitol Hill. In a study titled "Off the Record," the CPI found that the 50 largest media companies and the trade associations that represent them spent $111.3 million lobbying Congress and the executive branch from 1996 to 2000. The industry is also a generous contributor to politicians' campaign chests – including more than $1 million each to Bush and Gore in the 2000 presidential campaign.

Of course, the media corporations have another, added advantage on Capitol Hill. "They have a commodity that every politician needs, which is access to the voters through news coverage and advertising," Allison says. "So just by virtue of what they do, they have influence."

Critics charge the FCC with skewing its entire review process in favor of deregulation. As part of its review process, the FCC commissioned 12 studies of the current media marketplace and the effects of consolidation. Among the studies' principal findings: The number of overall media outlets has increased and, with it, the range of programming available to consumers. If people do not get news from TV, they'll look for it on the Internet, radio, or in newspapers. And concentration is not responsible for recent increases in ad rates.

"The way the studies were presented was that ... there's no need for rules restricting concentration," says Dean Baker, codirector of the Center for Economic and Policy Research, who conducted an analysis of the studies. Instead, Baker found plenty of evidence to the contrary.

One study, "Consumer Substitution Among Media," by Joel Waldfogel of the University of Pennsylvania, purports to show that most media are interchangeable: a reduction in news on television simply leads consumers to look elsewhere for that information. But Baker found that the study's data actually show that "the more news people get on television, the more they're going to turn to the newspaper or radio or the Internet. In effect, his results show the exact opposite of what the FCC wants to say." What's more, "[Waldfogel's] results also show that if you're cut out from any one source, you're likely to simply get less news in general."

As additional evidence, Baker points to a separate study by the very same author, in which Waldfogel looked at the effects of the nationwide spread of the New York Times. In that study, Waldfogel proved that to the extent college-educated people were relying more heavily on the New York Times, they were less likely to pick up their local daily and, as a result, less likely to participate in local politics.

Nielsen Media Research performed another of the FCC studies on the exchangeability of news sources. In that analysis, Nielsen simply conducted a poll in which it asked people if they would look for news elsewhere should it not be available on their local TV station. The majority said they would. "That's not evidence that they actually behave that way," Baker says. "If you went to people just after New Year's and asked them if they were going to lose weight this year, most people would say yes."

As for any increase in program diversity, Baker explains that the added variety is actually taking place within a very narrow field. That commercial television stations offer game shows, dramas, and comedies or different radio stations air top-40 country, rock, and easy listening doesn't constitute a qualitative measure of diversity in those industries. Rather, consolidation has led to fewer sources providing content for more outlets.

As Jeff Chang reports in "Urban Radio Rage," consolidation in the radio industry has led to the growth of business practices like voice tracking, in which programs are prerecorded by jocks in another city to sound as if they are local and live.

When the same parent company owns multiple TV and/or radio stations, in the same market, it often consolidates multiple newsrooms into one – creating unemployment and a single source of information for two or more outlets that could otherwise provide alternate perspectives.

In San Francisco, Campbell reports, the CBS station, KPIX, channel 5, and the UPN affiliate, Channel 44, share newscasts. Both stations are owned by Viacom, which also owns Infinity Broadcasting. And Infinity owns seven radio stations in the city. "In our union negotiations, KPIX has proposed that people who work for CBS television can be assigned to file reports for radio," Campbell tells us. "They're just recycling content. You're getting the same editorial perspective on a CBS radio station as you would on KPIX as you would on the CBS Web site as you do on the UPN station, Channel 44." Viacom is also the parent company of Metro Network/Shadow Broadcasting Services, which provides news to radio stations as well.

All together, the number of newsrooms nationwide has already been reduced by 15 percent since 1977, according to the Consumer Federation of America – despite the fact that the overall number of news outlets has increased. Fairness and Accuracy in Reporting found that less than 4 percent of the nation's TV and radio stations are owned by ethnic minorities, who are much more likely to provide programming of interest to diverse populations.

"The majority of Americans don't see alternative ideas," Bagdikian says. "They hear the voices of the establishment.... Every massive corporation wants a government that's going to be sympathetic, with minimal interference with their expansion and profits. Any contrary views have trouble getting [covered]."

Had the FCC been serious about examining the effects of conglomeration on the media, Baker says, it should have looked at how the major commercial stations cover issues in which they have a financial interest. "Look at the coverage of the FCC," he says. "Look at something that's important to one of their big advertisers.... [And] compare coverage in markets in which there are several strong papers and stations against those with only one major paper and a few stations."

When one company owns multiple media outlets, not only is it able to cut costs by consolidating its content production, but it's also able to offer a better deal to advertisers by offering them several outlets in which to run their ads at once. "It's the Wal-Mart pricing phenomena," Campbell says. "When Wal-Mart comes into a new market, they keep their prices low, and they drive out their competition. Once the mom-and-pop businesses are out of business, they have a virtual [stranglehold on the local market]."

Even the study commissioned by the FCC to analyze concentration's effect on advertising prices found that ad rates in the radio industry have skyrocketed since Congress passed the Telecommunications Act – by a full 68 percentage points more than the overall rate of inflation. "They then did some statistical work to try to say this had nothing to do with concentration, that it was explained by economic growth," Baker says. But Baker compared the figures against ad rates during other periods of economic growth prior to deregulation and found that prices decreased during those times.

Most Americans aren't even aware of what the FCC is doing. Not surprisingly, media coverage of the issue has been minimal at best, considering what's at stake, and the FCC hasn't been exactly proactive in getting the word out or procuring public input. Powell announced only one public hearing on the review process, to take place in Richmond, Va., Feb. 27 – and that only after pressure from FCC commissioner Michael Cotts and various media watchdog groups. In the meantime various media-watchdog, labor, and industry groups held their own public hearing at New York's Columbia University Jan. 16. Another is scheduled for Feb. 18 at the University of Southern California in Los Angeles; and Media Alliance is working with other groups to hold a similar hearing in San Francisco sometime in March.

Read through the FCC's "Notice of Proposed Rulemaking" for the current review, or through one of Powell's editorials in USA Today, and one feature stands out: over and over again, the public is referred to not as participants, not as citizens, but as mere consumers. Yet the media aren't just another industry selling just another product. They're selling ideas and images and a window into the world outside our living rooms – and they're using a public resource, the airwaves, to do it.

"There is a serious problem when the agency designated to regulate telecommunications in the public interest considers Americans first as consumers or 'customers,' rather than as citizens," Fairness and Accuracy in Reporting says in the comment it filed with the FCC.

The government tends to appoint people to its regulatory boards who understand the industry as a business, Bagdikian says. But "the impact of broadcasting isn't just selling goods," he explains. "They also have enormous political influence, in the sense of they decide what they'll cover and what they won't cover, whom they'll cover and whom they won't cover. And they have a socializing impact. Kids have grown up seeing television characters as models of human behavior. So their 'consumers' are more than simply people who are going to make purchases as a result of that. They are also people whose lives are influenced by it."

Given the media industry's critical role in fostering democracy and socializing future generations, analysts like Bagdikian say, the FCC is asking the wrong questions these days. In the years after its creation in 1934, Bagdikian recounts, "at the end of what was then the three-year period of a license, [the FCC] would ask, What did you do for the community?" Bagdikian and others argue the FCC should return to that tradition and, once again, take its mandate to regulate media in the public good seriously. Rather than placing the onus on the public to "prove" regulation hurts the public interest, the FCC should demand the media corporations prove they are giving the public a benefit in exchange for the right to use the public airwaves.

Should the FCC opt to slash its own regulations instead, it will be almost impossible to bring the media conglomerates – one of the most powerful industries in the nation – back under its command. In the words of McChesney, "It would be like trying to put toothpaste back in the tube."

To file a comment with the FCC, go to www.media-alliance.org. The deadline is Feb. 3. E-mail Camille T. Taiara at camille@sfbg.com.