http://www.washingtonmonthly.com/features/2004/0407.turner.html
So when the FCC received a glut of applications for new television stations after World War II, the agency set aside dozens of channels on the new UHF spectrum so independents could get a foothold in television. That helped me get my start 35 years ago. Congress also passed a law in 1962 requiring that TVs be equipped to receive both UHF and VHF channels. That's how I was able to compete as a UHF station, although it was never easy. ... And in 1972, the FCC ruled that cable TV operators could import distant signals. That's how we were able to beam our Atlanta station to homes throughout the South. Five years later, with the help of an RCA satellite, we were sending our signal across the nation, and the Superstation was born.
That was then.
Today, media companies are more concentrated than at any time over the past 40 years, thanks to a continual loosening of ownership rules by Washington. The media giants now own not only broadcast networks and local stations; they also own the cable companies that pipe in the signals of their competitors and the studios that produce most of the programming. To get a flavor of how consolidated the industry has become, consider this: In 1990, the major broadcast networks--ABC, CBS, NBC, and Fox--fully or partially owned just 12.5 percent of the new series they aired. By 2000, it was 56.3 percent. Just two years later, it had surged to 77.5 percent.
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In the media, as in any industry, big corporations play a vital role, but so do small, emerging ones. When you lose small businesses, you lose big ideas. People who own their own businesses are their own bosses. They are independent thinkers. They know they can't compete by imitating the big guys--they have to innovate, so they're less obsessed with earnings than they are with ideas. They are quicker to seize on new technologies and new product ideas. They steal market share from the big companies, spurring them to adopt new approaches. This process promotes competition, which leads to higher product and service quality, more jobs, and greater wealth. It's called capitalism.
But without the proper rules, healthy capitalist markets turn into sluggish oligopolies, and that is what's happening in media today. Large corporations are more profit-focused and risk-averse. They often kill local programming because it's expensive, and they push national programming because it's cheap--even if their decisions run counter to local interests and community values. Their managers are more averse to innovation because they're afraid of being fired for an idea that fails. They prefer to sit on the sidelines, waiting to buy the businesses of the risk-takers who succeed.
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Throughout the 1990s, media mergers were celebrated in the press and otherwise seemingly ignored by the American public. So, it was easy to assume that media consolidation was neither controversial nor problematic. But then a funny thing happened.
In the summer of 2003, the FCC raised the national audience-reach cap from 35 percent to 45 percent. The FCC also allowed corporations to own a newspaper and a TV station in the same market and permitted corporations to own three TV stations in the largest markets, up from two, and two stations in medium-sized markets, up from one. Unexpectedly, the public rebelled. Hundreds of thousands of citizens complained to the FCC. Groups from the National Organization for Women to the National Rifle Association demanded that Congress reverse the ruling. And like-minded lawmakers, including many long-time opponents of media consolidation, took action, pushing the cap back down to 35, until--under strong White House pressure--it was revised back up to 39 percent. This June, the U.S. Court of Appeals for the Third Circuit threw out the rules that would have allowed corporations to own more television and radio stations in a single market, let stand the higher 39 percent cap, and also upheld the rule permitting a corporation to own a TV station and a newspaper in the same market; then, it sent the issues back to the same FCC that had pushed through the pro-consolidation rules in the first place.
In reaching its 2003 decision, the FCC did not argue that its policies would advance its core objectives of diversity, competition, and localism. Instead, it justified its decision by saying that there was already a lot of diversity, competition, and localism in the media--so it wouldn't hurt if the rules were changed to allow more consolidation. Their decision reads: "Our current rules inadequately account for the competitive presence of cable, ignore the diversity-enhancing value of the Internet, and lack any sound bases for a national audience reach cap." Let's pick that assertion apart.
First, the "competitive presence of cable" is a mirage. Broadcast networks have for years pointed to their loss of prime-time viewers to cable networks--but they are losing viewers to cable networks that they themselves own. Ninety percent of the top 50 cable TV stations are owned by the same parent companies that own the broadcast networks. Yes, Disney's ABC network has lost viewers to cable networks. But it's losing viewers to cable networks like Disney's ESPN, Disney's ESPN2, and Disney's Disney Channel. The media giants are getting a deal from Congress and the FCC because their broadcast networks are losing share to their own cable networks. It's a scam.
Second, the decision cites the "diversity-enhancing value of the Internet." The FCC is confusing diversity with variety. The top 20 Internet news sites are owned by the same media conglomerates that control the broadcast and cable networks. Sure, a hundred-person choir gives you a choice of voices, but they're all singing the same song.
The FCC says that we have more media choices than ever before. But only a few corporations decide what we can choose. That is not choice. That's like a dictator deciding what candidates are allowed to stand for parliamentary elections, and then claiming that the people choose their leaders. Different voices do not mean different viewpoints, and these huge corporations all have the same viewpoint--they want to shape government policy in a way that helps them maximize profits, drive out competition, and keep getting bigger.
