Experts debate upcoming FCC ruling

By CHRISTIAN BOURGE, UPI think tanks correspondent  |  May 29, 2003 at 10:17 AM
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WASHINGTON, May 29 (UPI) -- The debate over whether the Federal Communications Commission should loosen restrictions on the ownership of newspaper and broadcast media outlets raises difficult questions about the consolidation of communications industries in the United States, according to analysts at a think tank forum.

Jim Snider, a senior research fellow at the centrist New American Foundation, said that the debate over media consolidation and concentration has ignored an important factor: the danger of media bias. He said the broadcast industry's influence over communications policy not only affects what content is presented to the public but also whether important new technologies can be effectively adopted.

"When we think about the dangers of media concentration, we think of specific people getting too much power," Snider said. The forum, conducted Wednesday, on competition in the converging arenas of telecom and mass media was sponsored by NAF.

"We do not think that there is an entire industry (whose wants are) adverse to the American public," he said.

The FCC is expected to vote Monday to loosen many of the 28-year-old restrictions that prevent a single company from owning both a newspaper and broadcast outlet in the same market. The proposed changes would also allow the major broadcast networks to expand their ownership of local television stations.

Support at the FCC for lifting the restrictions is expected to fall along partisan lines, with the three Republicans at the five-member commission supporting the loosening of the restrictions while the two Democrats on the body oppose the changes. The Telecommunications Act of 1996 requires the FCC to address its media ownership regulations every two years

The current review of the complex rules has sparked a major policy battle over the economic and public interest issues involved. However, central to the debate are other issues concerning the convergence of Internet, telecommunications and media policy and the governance of new and well-established communications sectors.

FCC Chairman Michael Powell has pushed the changes and said that the decades-old restrictions are no longer enforceable because they represent an era when there were three commercial television networks. His position is part of his overall agenda for telecommunications deregulation.

Proponents of loosening the regulations -- including the nation's major media corporations -- say that reforms are needed to address an evolving media market forever changed by the impact the cable and satellite television and the Internet have had on the way media is distributed to the public.

James K. Glassman, resident fellow at the conservative American Enterprise Institute, said that loosening regulations and allowing for open competition across the media sector -- as well as in related telecommunications industries -- was critical to ensuring progresses in the converging media, telecom and Internet communications sectors.

"I am not sure why we have media ownership rules at all," he said.

Not all those in the media sector support the move, Barry Diller, chief executive of USA Interactive and long a major player in broadcast media, has said that more regulation, not less, is what is really needed. He argues that media consolidation has resulted in five major media concerns controlling 90 percent of what is presented to the U.S. public over the airwaves, to the detriment of the public service factor that once was a required focus of the industry.

Those opposed to the proposed changes have made a major push in recent weeks to warn of the dangers of Powell's plan. The coalition working against the changes is made up of groups from across the political spectrum including the National Rifle Association, consumer advocates such as Common Cause, local broadcasters, and religious groups. Besides organizing e-mail campaigns directed at the FCC and Capitol Hill, the groups have also taken out television, radio and newspaper ads arguing against the move.

They say the changes would result in a merger frenzy similar to the one following the deregulation of the FCC's radio ownership rules in 1996, which has left just a few corporations in control of many of the nation's radio stations. Opponents argue that further consolidation of television and newspaper media into large media conglomerates would limit the content and ideas brought into the public sphere, especially at the local level. In addition, they say that the resulting mergers would lead to more sensationalism and lower television broadcast standards as local media outlets no longer act as checks on each other.

Glassman said that although such restrictions may once have been needed, bureaucrats at the FCC no longer must decide whether the public interest is being served by local media outlets. He pointed out that at his small home town in Connecticut, he has access to more than 200 channels of satellite television and several small local newspapers. This is supplemented by the wealth of information available on the Internet.

Mark Cooper, director of research at the Consumer Federation of America, pointed out that although there are many more channels than their once were, most of them are owned by the same set of companies, even some of the broadcast networks. At the same time, sources of alternative information such as the Internet do not have the same public impact as broadcast media.

"You can not tell me the Internet is equivalent to a broadcast signals ... that is a bunch of bunk," Cooper said. "There is scarcity in speech and that is the central concern."

Snider said that ownership of a newspaper by broadcast interests affects coverage of broadcast industries and shows the limits of allowing the changes to go through. In a study he co-wrote in 1997, he found that newspaper coverage of the 1996 debate over whether the federal government should sell $70 billion worth of digital broadcast spectrum to local broadcasters or auction off the licenses for the spectrum for a profit was negatively affected by whether broadcasting interests held an interest in the newspaper.

Randolph May, director of communications policy studies at the free market-oriented Progress & Freedom Foundation, said that there are important First Amendment issues raised by the FCC's control over who can own a broadcast network or other media outlet. He said that the conflict becomes unavoidable because questions about what content is produced by the companies involved -- and their perceived ideological slant -- always become part of the debate.

"We can argue about how many diverse sources of information there are but we must recognize the facts on the other side." May said. "Implicit in what is being said about the need for government control of this industry is the idea that content will be regulated."

The major industry players say they need the regulatory changes in order to compete with Internet and cable providers. However, those sectors face FCC market restrictions as well. Some free market-oriented analysts question the logic of easing the regulations on broadcast media ownership without opening up the spectrum controlled by the broadcasters to other uses, and eliminating the protections provided to cable franchises that allow them to monopolize markets.

Snider noted that although the telecommunication and media industries have been converging in recent years, it has not helped increase accessibility to high speed Internet access. He said that part of the reason for this is the political clout that the broadcasters have in Washington and the control this gives them over the communication policy debate.

"Broadcasters control the gateway into constituents' homes," said Snider.

He added that the broadcasters have been very involved in keeping cable television wiring from being opened to access from outside companies who hope to provide competing high-speed Internet access products. Snider said this sort of protectionist thinking has dominated the industry's positions across the communications policy arena.

In addition, he said the broadcast television industry controls largely unused spectrum in local markets, which many believe would be better utilized for wireless broadband applications. Snider said that this unused spectrum is perfect for providing high-speed wireless Internet connections, the so-called "last mile" of broadband.

"It is ideally suited for the last mile of broadband solutions," said Snider. "The broadcasters have been vehemently opposed to allowing other industries use that scarce spectrum. It is a fantastically underutilized resource."

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