Media Consolidation: Grabbing Control of America

 

By Lynda Bryant-Work


“Our founding fathers could not have foreseen that freedom of the press might eventually

be threatened just as much by media consolidation as by government.”

Marshall Herskovitz

Relaxed media ownership over time has led to companies narrowing the depth of news information and opened the door to biased reporting of the news.

Laws that were in place to prevent monopolies and consolidation of ownership, or media cross-ownership, have through the years, put five companies in charge of the national distribution of information presented to the public.

These businesses include broadcast and cable television, film, radio, newspaper, magazine, book publishing, music, video games, and various online entities.

While the number of media outlets has increased, fewer companies own them. In 1983, 90 percent of US media was controlled by 50 companies; today, 90 percent is controlled by just five companies.

The Communications Act of 1934 was the first law that all communications rules began with and created the Federal Communications Commission (FCC). It was created to regulate telephone monopolies and the licensing for broadcasting and were designed to serve “the public interest, convenience, necessity.”

For this reason of serving the public interest, it was decided,

“it would not be in the public’s interest for a single entity to hold more than one broadcast license in the same community because a diverse array of owners would lead to a diverse array of program and service viewpoints.”

In 1975, the FCC passed the newspaper and broadcast cross-ownership rule, creating a ban prohibiting the ownership of a daily newspaper and any full-power broadcast station that serviced the same community.

Newspapers, explicitly prohibited from federal regulation due freedom of the press in the First Amendment, were out of the FCC’s jurisdiction, but the FCC could use the ownership of a newspaper as a preclusion against owning radio or television licenses, which the FCC could and did regulate in a local market.

Media ownership graphic

Then along came the Telecommunications Act of 1996 to influence media cross-ownership.

A requirement of the act was that the FCC must conduct a biennial review of its media ownership rules “and shall determine whether any of such rules are necessary in the public interest as the result of competition.” The Commission was ordered to “repeal or modify any regulation it determines to be no longer in the public interest.”

While touted as a step to foster competition, the Act led to the merger of several large companies, a trend that continues. More than 4,000 radio stations were bought out, and minority ownership of TV stations dropped to its lowest point since 1990.

Since the Telecommunications Act, restrictions on media merging have decreased. Although merging media companies seemed to provide some positive outcomes for the companies, there were many negative outcomes for other companies, viewers and future businesses.

In September 2002, the FCC issued a Notice of Proposed Rulemaking stating that the Commission would re-evaluate the media ownership rules specified in the Telecommunications Act of 1996.

In June 2003, after deliberations which included a single public hearing and the review of nearly two million pieces of correspondence from the public opposing further relaxation of the ownership rules, the FCC voted 3-2 to repeal the newspaper/broadcast cross-ownership ban, saying the newspaper/broadcast cross-ownership rule was no longer necessary in the public interest to maintain competition, diversity or localism.

But, in 2007 the FCC revised its rules, deciding it would take it “case-by-case” and determine if the cross-ownership would affect the public interest, permitting a company to own a newspaper and broadcast station in any of the nation’s top 20 media markets as long as long as there were at least eight media outlets in the market.

The Prometheus Radio Project argued the relaxed rule would pave the way for more media consolidation, while broadcasters pointed to increased competition from new platforms – and wanted the rules relaxed even more.

Ignoring public opinion, the FCC defended its right to change the rules either way.

The FCC in December 2007 voted to relax its existing ban on newspaper/broadcast cross-ownership, including a statute forbidding a single company to own both a newspaper and a television or radio station in the same city.

An FCC rule implemented in 1985 also came under fire, that stated television stations broadcasting on UHF would be discounted because UHF was considered inferior to VHF or broadcasting analog television, but with the transition to digital, UHF became considered superior for transmission. The FCC noted it was being used as a loophole by broadcasters to contravene its market share rule and increase their market share through consolidation… exceeding the caps. The FCC banned the rule.

However, in April 2017, under the Trump administration FCC commissioner Ajit Pai, the rule was reinstated along with a plan to evaluate increasing the national ownership cap, which would lead to further consolidation in broadcast television.

A challenge to the rule was filed in May 2017.

This was issued by The Institute for Public Representation (a coalition of public interest groups) requested an emergency motion to stay the UHF discount order to delay its re-implementation. The groups re-affirmed the rule was technologically obsolete and was restored for the purpose of allowing media consolidation.Media Consolidation Social Control graphic

The challenge and subsequent stay motion was partly filed as a reaction to Sinclair Broadcast Group’s proposed acquisition of Tribune Media (more than 230 stations) to expand the group’s national reach to 78 percent of all U.S. households.

On June 1, 2017, the District of Columbia Court of Appeals issued a seven-day administrative stay to the UHF discount rule-making to review the motion. The D.C. Court of Appeals denied the motion though the merits are still subject to a court appeal proceeding scheduled for a later date.

The drive towards consolidated media continues.

In spite of a 2008 study that found news stations operated by a small media company produced more local news and locally produced video than large chain-based broadcasting groups, the push is toward consolidation. The FCC countered that larger media groups produced better quality local content.

Research by Philip Napoli and Michael Yan showed that larger media groups actually produced less local content and, in a different study, they also showed that,

“ownership by one of the big four broadcast networks has been linked to a considerable decrease in the amount of televised local public affairs programming.” 

The primary reason the FCC gives for deregulation is with more capital, broadcasting organizations can produce more and better local content. However, the research studies by Napoli and Yan showed that once teamed-up, they produced less content.

While the FCC argues more deregulation is necessary, studies have failed to show it is beneficial, with less local content and voices being replaced with national-based voices sending out mass-produced, hand-picked content.

 

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