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from: Technology Daily

Democratic Gains Alter Media Ownership Debate

By David Hatch

(Tuesday, January 16) For television, radio and newspaper outlets seeking regulatory relief from the FCC, the timing of the agency's comprehensive review of ownership limits could not be worse.

When FCC Chairman Kevin Martin, a deregulatory-minded Republican, initiated the review last year, the business-friendly GOP controlled both chambers of Congress. But now the Democrats are in charge, and some are flexing their muscle on the issue.

"I think the election [result] is going to add additional challenges" for stations seeking relief, National Association of Broadcasters spokesman Dennis Wharton conceded.

"If Martin had known the Democrats were going to take over Congress, certainly he would have moved things along faster," quipped Andrew Schwartzman, president and chief executive officer of the public-interest law firm Media Access Project, which opposes easing the rules. Schwartzman predicted that the agency, which will issue new reports on media ownership this spring, will not conclude its review until the third quarter of 2007.

Learning From The Past

In 2003, then-FCC Chairman Michael Powell, a Republican, pushed through revised restrictions on a 3-2 party-line vote. The changes would have allowed one entity to own up to three TV stations, eight radio stations, the daily newspaper and cable system in a single market. But Powell prompted a backlash from lawmakers in both parties, watchdogs and citizens worried that the new thresholds would trigger consolidation and lead to more homogenized content.

In 2004, responding to a challenge spearheaded by low-power radio operators, a federal appeals court sent most of the changes back to the agency for reconsideration. The court said the FCC had failed to provide sufficient analysis to justify altering the rules.

Martin is now overseeing a review of those items, but having learned from Powell's problems, he is taking a fresh approach that includes seeking input from all sides. The FCC plans six nationwide hearings, with two already having been held in Los Angeles and Nashville, Tenn.

"The goal of these hearings is to more fully and directly involve the American people in the process," Martin said in Tennessee. "I have said many times before, but it bears repeating: Public input is critical to our process."

As a commissioner, Martin supported Powell's initiative. But at his September re-nomination hearing -- under questioning from Sen. Byron Dorgan, a North Dakota Democrat and staunch critic of media consolidation -- he said he was no longer comfortable with his 2003 vote.

While the media-ownership review has just begun, Martin already has altered it in response to Democratic-led demands. In December, Dorgan spearheaded a request from senators in both parties for the FCC to complete a pending inquiry into how TV broadcasters can best serve their local communities before tackling media ownership. Martin pledged to heed the request.

Late last month, the FCC posted internal studies on media ownership to its Web site. The move followed a September flap in which Sen. Barbara Boxer, D-Calif., accused the FCC of having spiked a 2004 report on the benefits of locally produced television news to communities. Martin, who claimed to be unaware of the report, immediately posted it to the site.

The new Democratic heads of the Senate and House commerce committees, which oversee the agency, and other lawmakers are expected to keep a watchful eye on the FCC's approach to media-ownership revisions. Adding to the pressure, Martin's Democratic colleagues, Jonathan Adelstein and Michael Copps, have been strengthened by their party's takeover of Congress, though the GOP still has a 3-2 majority at the agency.

The Stakes In The Debate

During an impromptu Jan. 10 interview, Copps told Technology Daily that as part of the review he will press for more public-interest obligations for broadcasters, which will be capable of offering multiple stations when they switch to digital signals in early 2009. During a speech the same day, Copps suggested that increased consolidation may be fueling more gratuitous violence and sex on television as media conglomerates appeal to the lowest common denominator.

Religious groups, meanwhile, raised concerns at a Jan. 8 press briefing in New York about the impact that loosening the rules could have on religious programs and stations, which increasingly worry about being squeezed off the TV dial.

Among the items up for review, the most controversial is the ban on one entity controlling a TV or radio outlet and newspaper in the same market. Combinations that pre-date 1975 have been grandfathered, and the FCC has issued permanent and temporary waivers to aid struggling papers and stations.

"I have various problems about how allowing more cross-ownership serves the public interest," Copps said. "When that happens, you're investing one player with just really excessive power in a specific media market, and you further encroach upon localism and diversity in that market."

"The irony is, what you're hampering is the only free media," countered Shaun Sheehan, a vice president at Tribune Company, which has been lobbying for years to end the cross-ownership ban so it can permanently absorb TV stations it inherited through its purchase of Times Mirror.

The FCC also is re-evaluating whether to extend its duopoly rules, which allow common ownership of two TV stations in large cities, to small- and medium-sized markets. NAB argues that when a successful TV station purchases a struggling one in the same market, program quality improves. Many stations face tremendous costs as they transition to digital, the group said. But critics accuse NAB of exaggerating the degree to which local stations are hurting financially.

In addition, the agency must re-examine its limits on co-owning TV and radio outlets in one market and review whether "triopolies," ownership of three stations in the largest markets, should be permissible.

Congress removed a key item from reconsideration. The FCC had voted in 2003 to increase the cap on the national audience reach of network-TV-owned stations from 35 percent of TV households to 45 percent. But lawmakers subsequently set it at 39 percent, meaning it is not under FCC review.

The Fight For Reform

Both sides are prepping for an all-out fight. Last month, nearly a dozen advocacy and academic groups released a book, "The Case Against Media Consolidation: Evidence On Concentration, Localism And Diversity," that details their opposition to further relaxation of the rules.

The watchdog Free Press also hosted a media reform conference in Memphis, Tenn., to sound the alarm about concentration. At the event, advocacy groups released six studies that seek to rebut industry claims that broadcast outlets are struggling to compete in today's Internet-driven world.

"The FCC must study the impact of consolidation on the diversity of media ownership and implement a plan to increase minority and female ownership of broadcast stations," Consumers Union, Free Press, Rainbow/PUSH Coalition Founder Jesse Jackson and other concerned parties demanded in a Jan. 12 letter to the FCC.

Proponents of easing the rules argue that with the growth of subscription television, the Web and emerging technologies, such as high-definition and satellite radio, the media universe is more diversified. "Many of these rules have been in place for 30 to 40 years," lamented NAB's Wharton, adding that "the program choice has exploded, but the rules have remained the same."