|
|
cross-owner cap
Rule bans owning paper and stations in a market
By Jeff Bercovici
Yesterday's federal Court of Appeals ruling addressed two long-standing gripes of media conglomerates--the broadcast market cap and the ban on cable companies owning TV stations--but it didn’t touch on a third, equally contentious, issue: cross-ownership of newspapers and radio or TV stations.
For more than 25 years, the Federal Communications Commission has prohibited cross-ownership, but the agency is now reviewing the ban, enacted with the aim of preserving a diversity of views and voices in each market.
Given the anti-regulatory inclinations of new chairman Michael Powell, it too may soon be lifted.
A coalition of consumer and public interest groups hope that won’t happen, and on Friday they filed comments with the FCC arguing that the ban is still very much needed.
The groups, which include the Media Access Project, Consumers Union and the Center for Digital Democracy, say that lifting the restrictions on cross-ownership would be disastrous for consumers, advertisers and independent media companies alike.
Under the scenario they present, eliminating the restrictions on cross-ownership would result in massive consolidation of station and newspaper ownership, a steep decline in journalistic standards and the quality of public debate, and a narrowing of the options available to advertisers and media planners.
As for the argument that markets self-regulate through competition in the absence of government regulation, it doesn't apply where media monoliths are concerned, says Cheryl Leanza, deputy director of the Media Access Project.
"The power that comes from joint ownership is extreme," says Leanza. "At this point, you're leveraging significant market power to the point where you can preclude a competitor from entering the market."
Already, media diversity is increasingly endangered. Two-thirds of newspaper markets are monopolies and another quarter are duopolies, according to Friday's filing.
Competition is a bit stronger among television stations. One-seventh of broadcast TV markets are monopolies, a quarter are duopolies and one-half are "tight oligopolies," according to the filing.
But that’s under today’s rules. Eliminating those rules "will trigger a wave of mergers that would compound economic pressures already weakening journalistic quality and antagonism in the media," according to the filing.
"Hundreds of newspapers would quickly merge with TV stations and by the time the dust settled, the number of independent owners of major local news media would be slashed by almost one-half."
To see the effects of such consolidation, one need look no further than the markets where TV stations and newspapers that were jointly owned when the ban went into effect were afforded "grandfather" status and exempted, says Leanza.
In Milwaukee, Journal Broadcast Corporation owns the only daily newspaper, the Milwaukee Journal Sentinel; the local NBC affiliate, WTMJ-TV,; and the radio stations WTMJ-AM and WKTI-FM.
When, in 1995, state legislators were debating a proposal to provide public financing for a new baseball stadium for the Milwaukee Brewers, whose games air on WTMJ-AM, newspapers and stations "marched in lockstep," endorsing a proposal. It passed by one vote.
It's not just public interest that suffers--advertisers get hurt too, says Leanza.
Quincy, Ill., is the smallest market in the nation with grandfathered cross-ownership. According to the filing, Quincy Newspapers Inc. was hit with an antitrust lawsuit after allegedly threatening to raise rates for advertisers unless they agreed not to advertise with a competitor.
The FCC is now considering the arguments of parties both in favor of and against lifting the ban.
February 20, 2002 © 2002 Media Life
-Jeff Bercovici is a staff writer for Media Life.
Printer-Friendly
Version | Send
to a Friend
Cover Page | Contact
Us
