Coming This Fall ... More Media Deregulation

For those disturbed by CNN and the networks' framing of the Sept. 11 terrorist attack through such Hollywood-inspired slogans as "American Under Attack" and "America Strikes Back," there is cause for even greater concern. This fall, two media ownership rules will be reconsidered by the Federal Communications Commission, and given the commission's Republican majority, both will likely be thrown out.

First up for review is the 25-year-old rule barring any single media company from owning both a newspaper and a radio or television station in the same market. The other rule likely to be tossed stipulates that no media company can reach more than 35 percent of U.S. television households. Striking either of these rules would lay the groundwork for even more media mega-mergers; striking both at the same time would virtually guarantee it.

"It is very likely that the television market will resemble the auto industry, where there are only three or four major players," Scott Cleland, an analyst for the Precursor Group, a Washington-based research group, told the Los Angeles Times on Oct. 22.

Americans don't pay much attention to the FCC, which is good for the media industry. It's also good for the FCC, which is now headed by Michael K. Powell (son of Colin), since Powell tends to view the media industry like a media executive. At a luncheon sponsored by the Hollywood Radio and Television Society on Oct. 19, Chairman Powell made clear that he is no foe of media consolidation, and even sees consolidation as a means for diversification (sort of like those who see doing away with affirmative action as a means for improving equal opportunity).

"Media and television are more diverse in 2001 than any other time in our history," said Powell, as if he were a character out of an Orwell novel. "With more diversity, there's more fragmentation, and with fragmentation it's hard to make money." He continued, "It seems to me when you're dealing with rules that were written ... in a different market and economic market, you'd want your government to put them back on the table."

You can see media executives heads wag, can you not? Especially since media companies have been quick to report their heavy losses from round-the-clock reporting of the post-Sept. 11 disaster. Mel Karmazin, president of Viacom, and Jack Fuller, president of the Tribune Company, had been arguing to the Senate as early as July that concentration limits were contributing to intolerable business hardships, calling them, in Karmazin's words, "irrational, anti-competitive and an obstacle to expanded choice" (even though in Viacom's case, profits are up). Now, in light of the estimated $100 million news companies spent covering the war against terrorism and the estimated $500 million in advertising revenue lost, they have even more to cry about -- and they can do it in the name of public service.

Speaking at a Goldman-Sachs investor briefing on Oct. 2, Karmazin said, "We think that Washington is going to be a whole lot more receptive to a new round of deregulation ... the only thing that we will go to Washington to do again is sit there and tell them that we really need another round of deregulation far more than they have thought about in the past."

FCC Chairman Powell may believe, in twisted fashion, that today's television news exemplifies the greatest diversity of voices in history and that consolidating the media business from its current fragmented state of eight or nine giants to a streamlined cast of four will ensure a greater cross-section of views. But history shows otherwise. Since the initial media deregulation of the Ronald Reagan era, changes in FCC ownership policy have brought about drastic budget cuts in the news departments of TV networks because they are now owned by entertainment conglomerates like Disney that focus on the bottom line.