You've seen the stories: lethal germs on your doorknob, secrets of child abductors, what your nail salon operator won't tell you, sleeping through smoke alarms, the deadly mold in your house, cell phones and cancer, or, yikes! your thong and your mental health.
Such stories show up like the seasons on local TV news -- but only during the months of February, May, July, and November, the so-called sweeps periods, during which Nielsen Media Research measures the audiences of TV stations and cable systems in all 210 markets across the U.S. The idea is to schedule shock-and-awe stories during those four months to boost ratings for those periods and thus raise advertising rates and profits. Everybody, inside the industry and out, knows that this system is a fraud: advertisers are cheated, and the public is either frightened out of its wits by alarmist, hair-raising news features, or inured to real news, or both. "It's a horrible way to do our business," says Forrest Carr, news director of WFLA in Tampa, Florida. "Completely artificial. Cheap ratings ploys, sensationalism, turning handsprings during those four months." Many Americans are fear-ridden, according to Barry Glassner, a sociology professor at the University of Southern California, in his book The Culture of Fear. He cites evidence that news media are both the cause of people's fears and the reason they're convinced those fears are valid.
But don't despair! Help has arrived. Nielsen is rolling out a new process for measuring local TV audiences that will abolish sweeps periods in the markets where it is used. Boston has had it since January 2002. Before the year is out Los Angeles, Chicago, San Francisco and New York will have signed on. The other top ten cities in the U.S. -- Philadelphia, Washington, Detroit, Atlanta and Dallas-Ft. Worth -- will get it during the next few years.
The secret weapon? A streamlined iteration of the People Meter that provides instantaneous, continuous ratings and demographics -- every single day all year round, instead of just four months of the year. Think of it. Stations will have an avalanche of tabulated, overnight data not only on how many people watch their news programs, but also who: men 18-39, women with incomes of $40,000-$60,000, folks who prefer oatmeal to cornflakes, religious fundamentalists. That's high-priority information for advertisers and for TV news directors trying to shape their newscasts to attract the most desirable (and the most) viewers. ("Advertisers who want to reach left-handed Lithuanian Lutherans will be able to do so," jokes Jon Currie, a Los Angeles-based consultant to TV stations.) That is crucially important because local news broadcasts are by far a station's biggest source of revenue. So: goodbye sweeps stunts, hello sanity in the newsroom. Things are looking up, right?
But wait. Two flies swim in that ointment. Stations, in their competitive zeal, may now be tempted to stunt 365 days a year instead of just in sweeps periods, making local TV news a lot sillier and more angst-ridden than ever. That's possible but not likely; it would exhaust news staffs, and cost too much. Second: Nielsen has no immediate plans to expand local People Meter service beyond the top ten cities, which account for only 30 percent of U.S. households. That means that 70 percent of all homes will still get the same old fear mongering during four months of the year. CBS, ABC, NBC, and Fox will continue to bloat their affiliates' ratings with extravaganzas in sweeps months: Oscars, Grammys, drama show cliffhangers, finales of reality shows, docudramas ripped from the headlines (Jessica Lynch, Elizabeth Smart), bigfoot celeb interviews (Monica, Barbra, Britney) on the primetime newsmagazines, and lesbian kisses, à la Ally McBeal. (A few Hispanic and African-American groups fear that local People Meters will under-report viewing by minorities, and thus eventually reduce the number of shows reflecting their interests. Nielsen insists that minorities will be counted more accurately, not less.)
In Boston, which pioneered the new system, TV news is stunt-free. "It's been beneficial," says Paul La Camera, president and general manager of WCVB, the ABC affiliate. "It's a much more rational way to run a news operation. We spread our intensity now across the entire year."
He can't remember, La Camera says, when his station last broadcast a news story about salad bars that kill.
Neil Hickey is CJR's editor at large.
Since the dawn of television, almost six decades ago, every TV station in America has had the capacity to beam out just one program at a time -- Gunsmoke or The Huntley-Brinkley Report or Survivor or 60 Minutes. That was then; welcome to now: the Digital Era of broadcasting. The so-called analog, one-channel version of television will soon be as archaic as a 1950 Studebaker. Since the passage in 1996 of a new Telecommunications Act, all of the country's television stations are allowed to reach their viewers on as many as six channels -- simultaneously! Benefits for the public have been slow in coming, but suddenly "multicasting" -- that's the hot new word -- is on the lips of everybody in TV land.
Take WRAL in Raleigh, North Carolina, for example, a pioneer in the new age of broadcasting. Last year, on one of its new digital outlets, a service called NewsChannel, the station aired live, full coverage of the murder trial of a well-known local figure accused, and eventually convicted, of killing his wife. It was a story of broad local interest, but one for which the station would not have preempted popular CBS shows on its lone analog channel.
In Fresno, California, station KFSN has been multicasting for a year and a half, using one of its channels for news, public-affairs shows, and political debates. During the California recall election, it employed the channel for continuous, real-time election results. ABC, which owns KFSN, plans to create similar channels in the nine other cities where it owns stations.
When CBS canceled coverage of important NCAA basketball games in April 2003 to report the Iraq war, WKMG in Orlando, Florida, shifted the games to one of its multicast channels for fans who needed their basketball "fix."
At its stations in Indianapolis and Fort Wayne, Indiana, LIN Television Corp. (it owns twenty-six other TV outlets) is airing a local, twenty-four-hour weather channel. For the last four years, during the NCAA's March Madness tournament, those stations have aired four games simultaneously on their multicast channels.
The New York Times, which owns eight TV stations, has told the Federal Communications Commission that it wants to forge "super local" news channels to beam zoned coverage at small, discrete geographic areas within its stations' signal areas; and to sell advertising to small businesses that currently can't afford commercials on the main channels.
PBS, with its 349 affiliates, is a major player in digital multicasting, sending informational and educational programs 24/7 on multiple channels simultaneously. One of its station groups, South Carolina Educational Television Network, offers gavel-to-gavel reporting on the South Carolina General Assembly. A cluster of public stations in Idaho, Nevada, Utah, and Wyoming operate a mini-network delivering news of interest to westerners. In January the Knight Foundation gave PBS $200,000 to help set up a new digital channel for news and public affairs. Hodding Carter III, president of the foundation, said he expected that PBS would produce "sustained electronic journalism serving the public interest" at a time when "sleaze repeatedly trumps substance" in much of broadcast news.
A new and potentially promising day has dawned. This tectonic shift will profoundly transform the TV news service we've known, and sometimes loved, since the 1940s. Besides local twenty-four-hour all-news and all-weather channels, stations will be able to devise local versions of C-SPAN covering state legislatures and city councils, public hearings, community board meetings, court trials, school board sessions, school lunch menus, school closings, public event schedules, updates on terror alert levels, and disaster warnings, along with documentaries on issues of local concern, free airtime for office-seekers, children's news and educational shows, and almost anything else station owners can dream up -- with simultaneous translation into other languages for the benefit of local non-English-speaking minorities. Then there's the datacasting of text: stock market quotes, sports statistics, classified advertising, radio and TV program schedules, and even electronic newspapers. Not all multicasting will be public-spirited; stations also will be squeezing as much profit as possible from those new channels by selling advertising on some of them, and by airing infomercials, home shopping, pay-per-view movies, and local versions of HBO that viewers will have to pay for.
But local news and public affairs could be big winners. "The inherent characteristics of the digital broadcasting system will change broadcast news forever," the Radio and Television News Directors Foundation decided in a 1998 study.
Raleigh's WRAL was the first station in the U.S. to go fully digital. John Greene, its vice president for special projects, says that multicasting gives his station "greater versatility and flexibility, and an opportunity to do much more localism." WRAL's twenty-four-hour NewsChannel went on the air August 1, 2001, and since then has aired numerous election specials; live coverage of controversial hearings on the FCC's media ownership rules; live broadcasts during the Iraq war of United Nations Security Council meetings and related White House and Pentagon news conferences; hearings of the North Carolina supreme court; opening ceremonies of the North Carolina state fair; and scores of other stories of particular interest to local viewers.
John Tupper, past chairman of the Fox board of affiliates and owner of KNDX in Bismarck, North Dakota, says that "the sky's the limit" in thinking up ways to better serve local audiences with digital technology. John Lawson, president of the Association of Public Television Stations, calls multicasting "public television's second chance." Public stations typically haven't attracted large audiences on a regular basis, he points out, "but digital allows us to fulfill the promise that the founders of public television had back in the 1950s, namely to provide a wide range of services to people who may be underserved."
Despite such optimism, it's still 5 a.m. in the Digital Era. Among most broadcasters, promise exceeds performance so far. About 1,200 of the country's 1,600 television stations have made the expensive transition to the digital mode. Roughly 215 stations currently are multicasting, according to Decisionmark Corporation, an Iowa-based media technology company. More than 130 are offering news on those collateral channels. High-definition (HDTV) television sets -- those equipped to receive the new channels -- so far have reached only about five million of the nation's 106 million households, but sales are zooming. The public will buy almost six million digital sets in 2004, says the Consumer Electronics Association, 8.3 million in 2005, 11.9 million in 2006, and 16.2 million in 2007. Many consumers who still own good old-fashioned, soon-to-be-obsolete, analog sets (which a few manufacturers already have stopped making) have bought cheap (under $100) converter boxes that let them view the multicast channels.
Meanwhile, all the bright promise of multicasting's future could come to a crashing halt, depending on who wins a battle of the behemoths between broadcasters and cablecasters. Those two powerful industries are throwing elbows at each other over how all these new channels will reach the public. Broadcasters want the FCC to force cable operators to carry all the new multicast channels, instead of just the one-per-station they've been retransmitting for decades. That debate bears the unwieldy moniker "multicast must-carry" and both camps are calling it a matter of life and death for their future good health. (Despite its importance, hardly a soul among the public is aware of the controversy; mainstream media have typically ignored it as being too arcane for normal human beings.)
The antagonists: in this corner, the National Association of Broadcasters, often called Washington's most powerful lobby. It wants the FCC to decree that local cable companies be obliged to carry most of the broadcasters' multicast channels (not the infomercials or pay-per-view streams) because otherwise viewers will have to revert to old-style antennas and the promise of multicasting will never be realized.
"We think, as an industry, that there will be an absolute explosion in all types of programming, including public-interest programming, if digital must-carry is adopted by the FCC," Dennis Wharton, an NAB vice president told CJR. "The possibilities are huge. I don't think there's any question that many broadcasters will be willing to use their multicast spectrum for political debates, city council meetings, mayoral elections." As for the pending FCC ruling: "If the FCC is truly interested in the public interest, broadcasters will win this one on the merits."
And in the other corner: the National Cable Television Association, another powerhouse Washington lobby. It believes that the government shouldn't go around telling a major media industry what it can and cannot put on its wires into the 70 percent of U.S. homes that pay for cable service. That offends their First Amendment rights, say the cablers. "We favor making these decisions based on marketplace forces, and letting the negotiations happen at a business-to-business level," says Brian Dietz, a cable association spokesman. (Cable already carries more than 300 multicast channels nationwide, the result of friendly deals between stations and local cable companies. WRAL in Raleigh is an example.) An FCC mandate would give broadcasters "a free ride on cable," Dietz says, and they might use the new channels for a lot of programs that cable subscribers don't want to see. There are now more than 300 cable networks, he points out. Adding scores of others in every market would only confuse and irritate cable viewers, and might prevent the birth of worthy new cablenets in the future.
All this, as usual, is less about principle than about money; it's an aspect of the love-hate synergy that has marked the two industries' relationship for more than thirty years. TV station owners see a potential pot of gold in advertising (and other) revenue from the digital channels, but know they'll never attain it without cable's cooperation -- either voluntary or forced. Cable folk perceive the birth of a monster competitor that's dangling all the right carrots now, but which may also fabricate free, over-the-air, advertiser-supported streams of movies and ancient sitcoms and old game shows to compete with cable's movies and ancient sitcoms and old game shows.
And so the game is afoot, with the FCC expected to rule in the next few months. The volume of public-service multicasting now available to viewers is a mere drop in the digital bucket compared to what the broadcasters have sworn they'll create -- not hundreds of multicast channels, but many thousands nationwide -- if only the FCC will vote their way. In filings to the commission in January, networks and their affiliates pounded home their case. "These opportunities for additional services cannot succeed," says the NBC affiliates' bulky brief, unless cable passes them along to their subscribers. Without that, broadcasters will "withhold or withdraw" the necessary investment because cable operators "occupy a bottleneck position" and can "snuff out" the bright promise of multicasting.
Until late last year, the smart money was betting that the broadcast people would emerge victorious. And that's still the safest bet. But a third pugilist has now entered the ring: a coalition of consumer activists -- many of the same people who fought the FCC to a standstill last year on the rowdy media ownership dust-up (see "Tripping up Big Media," CJR, November/December 2003). Their plea: Don't give broadcasters automatic access to cable -- worth billions of dollars to them -- without a payback to the public, a quid pro quo that they'll deliver "verifiable and quantifiable" amounts of public-interest programming in return.
The activists fear that broadcasters will promise anything to gain access to those crucial cable homes, and having got it, will conveniently forget about their pledges. "They promise a lot but they have a terrible record of keeping promises," says Jeffrey Chester, executive director of the Center for Digital Democracy. "But on this issue they'll have to blink and swallow some castor oil to get what they want." He's against handing the broadcasters the key to a "digital Fort Knox" free of charge.
So is J.H. Snider, a senior research fellow at the New America Foundation Spectrum Policy Program, who favors either new and verifiable public-interest obligations, or a 5 percent spectrum fee on broadcasters' gross revenue, with the money going to the funding of public-interest programs and to help low-income people buy converter boxes. Meredith McGehee, president of the Alliance for Better Campaigns, says she sees this debate as a chance "to engage the question: Are we going to have meaningful public-interest obligations or not. That's the heart of it -- citizens being able to get from television the information they need to be informed and engaged voters."
A similar view comes from the Consumer Federation of America, whose report on the squabble says that the shift to digital broadcasting, which is mandated by the government, "represents a major change in the commercial nature of the industry that requires aggressive policy to promote the public interest"; and that obligations should be imposed on the people who stand to benefit the most, namely broadcasters.
Unsurprisingly, broadcast people hate the notion of the government's telling them what to put on their multicast channels. Would they accept any mandated obligations at all in return for multicast must-carry? "That's a good question and one we're struggling with right now," said a senior broadcast official who requested anonymity. "There are serious First Amendment implications if the FCC specifically writes into the rules types and percentages of programming that we have to create." He noted that, ironically, local cable companies also will wrap themselves in the First Amendment if the commission tries to force them to carry the new channels on their wires.
Meanwhile, on stations like Raleigh's WRAL, the public is getting the merest taste of what the Digital Era holds for them. The U.S. government, as usual, can either be part of the problem or part of the solution in getting the best deal for the people.
How We Got Digital
All the current arguments about broadcasting's new era -- and what's in it for the public -- began in 1996 when the government ordered every television station in the U.S. to switch from analog to digital transmission over a period of years. To make the transition possible, all stations received, free of charge, an additional channel with the option of using it for high-definition television (HDTV) or of slicing that valuable bit-stream into a half-dozen standard-definition (SD) channels -- or a varying combination of both.
Politicians, media theorists, and consumerists of left, right, and center quickly demanded a payback from the TV people -- in the form of public interest programs -- in return for the gift of publicly owned spectrum that could have earned the U.S. Treasury up to $70 billion on the auction market. Vice president Al Gore sponsored a blue-ribbon panel -- some of whose twenty-two members were broadcasters -- with the fancy title Advisory Committee on Public Interest Obligations of Digital Television Broadcasters. But the committee's report, torturously arrived at, was inconclusive and wishy-washy, recommending only a "minimum commitment to public-affairs programming . . . with some emphasis on local issues and needs." Compliance would be voluntary and impose no "undue burden" on the broadcasters.
The report was filed away and hasn't been heard about since. But the "multicast must-carry" wrangle recently has heated up the debate about exacting a few ounces of public-service flesh from broadcasters in return for what a former FCC chairman called "beachfront property on the Cyber Sea."
Fox's Digital Grab
The three old-line networks -- ABC, CBS, and NBC -- are consulting with their affiliated stations about how best to utilize the multicast channels. So is Fox, but that Murdoch-owned network has a different (some say larcenous) approach. Fox has written provisions into its contracts with affiliates giving it 100 percent control over the stations' multicast capacity. Fox stations can forfeit their extremely valuable rights to the network programs (The Simpsons, Cops, big league sports) if they don't agree to the network's demand.
Some legal scholars say that those contracts are unlawful on their face. The Washington law firm of Covington & Burling, on behalf of the Network Affiliated Stations Alliance, filed a "petition for inquiry" with the FCC arguing that Fox's insistence on "absolute dominion" over a station's digital real estate frustrates the licensee's obligation to address local concerns. (So far, the FCC hasn't ruled on the petition.)
"It's a brazen thing to do," Jonathan E. Blake, a Covington & Burling attorney told CJR. "A station owner's judgment could be overruled about what's best for the public in that community."
We asked Fox what it had to say about its contract arrangement with affiliates. "Absolutely nothing," said Scott Grogin, a spokesman, in a phone interview. "It's a private contract and there would be no reason to discuss it with anyone."
Neil Hickey is CJR's editor at large.
By the deadline for submissions, February 3, oceans of legal briefs had poured in from unions, trade associations, consumer activists, think tanks, academicians; the Newspaper Association of America, National Association of Broadcasters, Newspaper Guild, National Organization for Women, Sony, American Federation of Television and Radio Artists, National PTA, American Psychological Association, National Association of Hispanic Journalists, United Church of Christ, and roughly 13,000 other groups and individuals.
All of them pointed out, in differing ways, that the FCC was embarking on nothing less than the most massive reexamination of media ownership rules in the agency's history, and that the outcome could have the most profound effects on how Americans get their news and information. Many of them argued that loosening the rules would cause a far greater concentration of media power in the hands of fewer and fewer huge companies -- even more concentration than already exists -- and the withering away of competition and diversity of viewpoints. Powell said that he and his fellow commissioners would review all the comments and evidence and hand down the new rules in late spring. And so the battle was joined, growing louder through the fall and winter.
While the FCC chief wanted to hold only two public hearings in New York City and Richmond, Va., on the rule change, Democratic commissioners, Jonathan Adelstein and Michael Kopps, organized additional meetings in Duke University, Seattle, Wash., San Francisco, and Los Angeles to ensure greater public involvement. Over the past few months, the opposition to the proposed rule changes has steadily gathered momentum, binding together a broad and diverse group of allies. The last round of public hearings in San Francisco and Los Angeles on Apr. 26 and 27, attracted a large number of both ordinary citizens and activists speaking out passionately against media consolidation.
Thus far, there is little indication that Powell has changed his mind. Over the same weekend, he told Newspaper Association of America convention that the FCC plans to remove the cross-ownership ban which prevents newspapers form owning radio and TV stations in the same area. But with the FCC decision a mere month away, the fight over the future of U.S. media is growing ever more urgent with each passing day.
And the lines have been drawn. It is a strange battle, in a way, pitting journalists against their bosses, breaking up old alliances, and gathering momentum as the day of reckoning approaches.
In mid-January, Senator John McCain, the new chairman of the Senate Commerce Committee, grilled all five FCC commissioners about the "monumental decisions" they were about to make that "will shape the future of communications forever." A Democratic senator, Byron Dorgan of North Dakota, called for more voices in the nation's media, but not from "one ventriloquist." A passionate, daylong seminar was held at Columbia's law school ("the most important meeting taking place anywhere in America today," Commissioner Michael Copps told the symposiasts). In late February, the FCC held a hearing of its own in Richmond, Virginia, followed by two others (at the University of Washington and Duke) organized by Copps personally. Copps, a Democratic appointee, complained that the policy review was moving too fast, and that the issues should be ventilated far more publicly before any decisions were made. Powell sternly disagreed, saying that "you don't need a nineteenth century whistle-stop tour to hear from America."
Powell has regularly pointed out that reviewing the rules is no pet project of his own, but was mandated by the Telecommunications Act of 1996 (signed by President Clinton), requiring him to reexamine FCC regulations every two years and get rid of the dead wood. Also, the U.S. Court of Appeals for the D.C. Circuit has ordered the FCC to justify several of the rules or junk them.
Still, Powell's own view ("validate or eliminate" has been his cry) is that much ownership regulation no longer makes sense because it dates from the era when channels of information were scarce. Now, cable, the Internet, and direct-broadcast satellites are commonplace. His legal adviser, Susan Eid, puts it this way: "The chairman has long since advocated that, if you're going to do an honest evaluation of the rules, you have to look at the marketplace as it exists today, not how it looked thirty or forty years ago when we had black-and-white TV, no remote control, and three choices of TV programs." The presumption is on repeal of the rules, she says, unless hard evidence proves they serve the public interest. Powell has been at pains to reassure his critics that he plans no scorched-earth policy that would lay waste all regulation. But defenders of the public interest -- Consumers Union, Consumer Federation of America, the Center for Digital Democracy, and many others -- fear that the FCC, with its GOP majority (three Republicans, two Democrats), will predictably facilitate Big Media's yen for the "efficiencies," the "synergies," and bottom-line values that come with gigantism. They fear those values will prevail at the expense of what's best for people who want to know what's going on in the world. Those advocates were not reassured in October when the FCC released twelve new elaborate studies of the media marketplace that, in total, suggested that media consolidation isn't such a bad idea. The consumerists countered that the studies were tainted and tilted, and that they telegraphed the commission's hidden intentions to favor Big Media at the expense of the public when the time comes to change the rules.
'Awful Things Will Happen'
One of the most contentious of the FCC regulations forbids a single company to own a newspaper and a television station in the same community. The Newspaper Association of America, whose member papers account for almost 90 percent of U.S. daily circulation, is ferociously campaigning to exterminate that rule. The twenty-seven-year-old ban is so archaic that it should end "without further comment or analysis," says the NAA's brief, because a mountain of evidence proves that cross-ownerships improve the quality and quantity of news and public affairs reporting without posing any real threat to competition and viewpoint diversity. John Sturm, president of the NAA, recalls that the cross-ownership rule was born in a different world a quarter century ago, and that "whatever it was designed to prevent or remedy is irrelevant now." He points to forty communities in the United States that have cross-ownerships (which existed before the rule, or got special waivers). No harm, he insists, has come to the public in those markets. "Our opponents' arguments are all theoretical -- no data, just words. 'Awful things will happen,' they warned. Well guess what? Nothing awful has happened. What more evidence do we need? Case closed."
That doesn't satisfy Linda Foley, president of the 35,000-member Newspaper Guild, who fires from the opposite battlement: More cross-ownerships means jobs will be lost, and news consumers will receive a more homogenized diet of news and opinion. "The biggest impact is that we would have fewer and fewer people on the local level deciding what the news agenda is." The NAA-Guild difference of opinion dramatizes an unbridgeable chasm: The owners of newspapers generally want the ban lifted and the journalists who work for those papers generally don't. Reporters, columnists, and editorial writers -- predictably -- tend to think it's an unwise career move to publicly oppose their bosses' position on the matter, which may be why journalists have mostly failed to inform Americans about what's at stake here.
A few do speak out. At Knight Ridder's Philadelphia Inquirer, Henry Holcomb, a business writer, told CJR he worries about a corporate mentality that may try to "squeeze as many dollars as possible" out of a newspaper/TV combination and "blur all of the distinctive ways we try to stimulate and inform the public." Would TV people who acquired a newspaper be respectful of what they don't know about newspapering, he wonders? Will they understand the subtleties of print culture?
One voice in the wilderness among newspaper proprietors is Frank Blethen, publisher of The Seattle Times, whose family has controlled the paper for generations. "Our opposition to cross-ownership runs against our own business interests," he says. Repeal of the rule would substantially increase the value of the Times. "It would eliminate a competitor and give us more control over the marketplace. If that's all we cared about, we'd be for it."
But he's sure that these clusters don't produce good journalism. "The Blethen family could benefit financially from repeal of cross-ownership," he says, "but I guarantee you that the citizens of Seattle would not benefit from it." Large newspaper chains and TV station groups covet these combinations out of self-interest, not the public interest, he says, because owning lots of media in one market lets you control advertising rates. "It's the public company mentality, that you have to keep getting bigger as the only way to drive earnings, stock prices, and the ceo's stock options." Editors of chain-owned newspapers are mostly silent about cross-ownership, Blethen says. "We're creating a whole generation of publishers and editors who don't have the independence to speak out on these issues on behalf of the public."
New Sources Of News?
As long ago as 1978, the Supreme Court in FCC v National Citizens Committee for Broadcasting, wrote: "It is unrealistic to expect true diversity from a commonly owned station-newspaper combination. The divergence of their viewpoints cannot be expected to be the same as if they were antagonistically run." Defenders of the rule offer evidence that newspapers and television stations are by far the most popular sources of news and thus ought not be melded into one voice. But backers of deregulation are fond of pointing out that the Internet, cable, and direct broadcast satellites offer an array of choices that didn't exist a few decades ago, so no great damage is done by losing a journalistic voice or two in a community. Hold on, says the opposition: Virtually all of the major Internet sites that people use for news are owned by Big Media; the editorial content is indistinguishable from what those broadcasters and newspapers put out. Moreover, they point out, most Internet users go to the Web for national and international news, not local. And besides that, the Internet is not a mass medium, no matter what you may have heard: Little more than half of U.S. households have Internet connections, and among minorities and poor people, the figure is a lot lower.
On the cable side, concentration is already apparent: Two owners, Comcast and AOL Time Warner, serve 40 percent of cable households. All of the cable news networks -- CNN, CNN Headline News, Fox, MSNBC, CNBC, CNNfn -- are owned by three conglomerates: AOL Time Warner, GE, and News Corporation. Direct broadcast satellites? Two companies control virtually the entire industry, and recently, one of them (EchoStar) tried unsuccessfully to buy the other (DirecTV). Thus, most sources of news are tapped from the same old barrels.
'More Voices, Not Fewer'
Are TV networks too big for their boots? TV stations think so. The 1996 Telecom Act lets media companies like Viacom, GE, Disney, and News Corp. -- which own, respectively, CBS, NBC, ABC, and Fox -- accumulate stations to their hearts' content, as long they reach no more than 35 percent of U.S. households. The networks have lobbied furiously to own more stations because many of those local outlets have huge profit margins of 40 percent or more (networks make far less), and because owning them would give the networks more power than they already have over what gets on the air nationally. To bolster their push to lift the ownership caps, networks claim that their owned-and-operated stations produce better local newscasts than independent stations do. No they don't, insist the indies. At the moment, CBS owns twenty-one stations; ABC, ten; NBC, thirteen; and Fox, thirty-three. Most other commercial stations have affiliate contracts with a network, but are owned by companies like A.H. Belo, Hearst-Argyle, Cox, and Post-Newsweek. Station groups like those think the TV networks already have too much influence, and believe that letting them gobble up more TV stations will give them a stranglehold on programming -- news, public affairs, and entertainment.
The dispute has driven a wedge between the National Association of Broadcasters (whose board of directors is dominated by independent station owners) and the big TV networks, causing CBS, NBC, and Fox to quit the NAB in a huff. Dennis Wharton, an NAB vice-president, says: "We think the thirty-five-percent cap has been good for localism." An influential group called the Network Affiliated Stations Alliance, which represents 600 stations, agrees. Its chairman, Alan Frank, the president of Post-Newsweek's station group, tells CJR: "We feel it's important for democracy that we have more voices, not fewer. Further consolidation is not good for the country. Our system of broadcasting is set up very clearly as being locally based. That's its strength."
The affiliated stations argue that independent stations are far more able than network-owned stations to preempt the network's prime-time programs when a major news story of local importance breaks. Still, networks often use sanctions built into affiliate contracts to muscle stations into running the network's menu of entertainment shows instead of local news coverage.
In September 2002, CBS strong-armed a Florida affiliate into airing the season premiere of 48 Hours instead of an important gubernatorial debate. NBC, during the 2000 political campaign, pressured its affiliates to run a baseball playoff game instead of a presidential debate. (Some refused.) ABC's affiliate in Dallas, home of American Airlines, had to fight the network for a few minutes of airtime during Monday Night Football halftime to present local news updates on the November 12, 2001, crash of an American Airlines jet. But the simple truth is that stations rarely preempt the network for local coverage lest they enrage viewers devoted to Survivor, The Bachelorette, and Joe Millionaire.
As with most of the ownership rules, the underlying debate is less about principle than about whose financial ox would be gored if the 35 percent cap were eliminated or eased. Affiliates (but not network-owned stations), collectively, haul in tens of millions of dollars every year for renting their airtime to the networks. That so-called "compensation" is found money for the affiliates and goes straight to the bottom line. They don't want to lose it. Networks, on the other hand, say they can't afford to pay it any longer and have made it no secret that they want to stop. Thus, the more stations a network can own outright, the more it can improve its revenue stream, eliminate compensation, and obviate those pesky preemptions that undermine audience ratings and advertising income. Hostile guns from many quarters are bearing on the 35 percent rule; however, the smart money is betting that the FCC will hedge its bet and raise the limit to 40 percent or 50 percent rather than discard it altogether.
'How Dare You?'
Among the other ownership rules, public advocates are especially averse to the notion of one company owning two television stations in the same community (so-called duopolies) and to letting any of the Big Four TV networks -- CBS, ABC, NBC, Fox -- buy out one of the others.
In 1999, the FCC relaxed its rules to allow common ownership of two TV stations in the same market as long as one of them isn't among the community's four leading stations, and eight others remain. About seventy-five such duopolies exist. For journalists, that often means combining news staffs and resources, reducing the richness of a community's news diet. In Los Angeles, for example, CBS's two stations share a news director, and so do Fox's. In New York, Fox's two stations will soon be under one roof. (Since 1995, the number of entities owning commercial TV stations has dropped 40 percent.)
The NAB argues that the FCC ought to okay these media marriages because some small TV stations are losing money, and if they go out of business, the community will lose one newsroom covering the local scene. In a new tack, the NAB recently upped the ante and began campaigning for triopolies in areas where stations are on shaky financial ground. (Viacom's president, Mel Karmazin, told a media conference in December: "How dare they say you can have only two stations in a market?")
At the national level, far more conspicuous consequences for news would result if, let us say, CBS took over NBC. (Viacom, CBS's parent, once expressed such an interest.) That can't happen now, but if the rule is altered, two news divisions inevitably would become one, giving viewers less choice in hearing about wars, elections, national policy, and the Washington ballyhoo. (Meanwhile, Dan Rather and Tom Brokaw would suffer the indignity of sharing the anchor chores.)
In April 2002, NBC acquired Telemundo, the Spanish-language network, and promptly merged the two networks' newsrooms in Miami. The assumption, says Herta Suarez, AFTRA's national director of special projects, is that NBC will do the same in cities such as Los Angeles and Chicago, where both networks have news operations. "This will reduce opportunities for journalists to work," she says, "and also what the public will learn." (Suarez also laments that NBC pays Latino staffers less than Anglos for the same work.) Juan Gonzalez, president of the National Association of Hispanic Journalists, says that the goal of giving Americans a diversity of opinions and analyses "has been virtually forgotten."
A 'Tragic Mistake?'
At the Columbia law school forum in January, chairman Powell confessed he is no fan of Congress's mandate that he review media ownership rules every two years. It's "regrettable and destabilizing" he said, to go through this torturous process so often. He added: "There will be rules when this is done [but] there won't be a rule that lets one person own everything."
That reductio ad absurdum was marginally reassuring to his opponents, but they hoped he would remain tightly focused on the crucial underlying principle, that the whole point of devising public policy is to do what's best for the people, not to guarantee corporations their desired "efficiencies" and "synergies," which is none of the FCC's business.
As USC's filing to the commission put it, the agency's mandate to regulate is driven by the First Amendment rights of the public, not the media owners. Safeguarding those rights has "been understood to permit restricting the media industry's natural desire to concentrate ownership in order to achieve economies of scale." Sandra Ortiz, author of the USC brief and executive director of the university's communications law center, says that the once-revered concept of local media ownership has become "so rare as to be almost quaint."
The Newspaper Guild's comments to the commission are equally unambiguous: "Media owners claim that relaxation of ownership rules will allow them to realize 'synergies.' [But] the commission's charge is to protect and enhance media diversity, competition, and local identity -- not efficiency." AFTRA points out that media conglomerates, in hot pursuit of higher profits, customarily put heavy pressure on their newspapers and broadcast stations to cut costs, with negative consequences on the journalism. Once upon a time, says the union, broadcast stations competed for audience by doing the best possible local news. But media companies that dominate a market have little incentive to spend money on enterprisers and investigations. Depriving people of that "is to enter onto a slippery slope that will leave the public wondering whose 'truth' is being told."
Allowing further media concentration would be a "tragic mistake," says the veteran editor Gene Roberts, now a journalism professor at the University of Maryland. "Communities deserve to be looked at with different eyes. Even with the best integrity and most solid news principles in the world, what looks like a story to one person may not to another." Easing the rules, says Roberts, is "just going to make an already bad situation even worse. There's very little news competition in most parts of the country, and we're about to have even less."
That's how it looks now, anyway. Five unelected appointees, whom most Americans have never heard of, will make those decisions in the next few months. If they get it right this time, the hornets won't swarm quite so furiously two years from now when the rules come up for review all over again.
Neil Hickey is CJR's editor at large.
In a windowless, sprawling newsroom the size of a football field below street-level in Manhattanâ€™s Rockefeller Center, scores of youngish writers, editors, producers and technicians are scurrying about amid a warren of workstations. The pace quickens as prime time in the East, 7 to 11 p.m., approaches. Along one wall, a row of office â€œpodsâ€ enclose the staffs for Fox News Channelâ€™s New York-based on-air personalities: Neil Cavuto, John Gibson, Shepard Smith, Bill Oâ€™Reilly. Against the opposite wall is the â€œwar room,â€ where top editors meet to decide what stories get covered and by whom. Occupying the â€œend zoneâ€ of this bustling rectangle is an expansive glass-enclosed master control room, with its towering wall of blinking television monitors, from which Fox News -- the nationâ€™s number one cable news network -- sends its television pictures to 80 million homes.
Three floors above, forty-nine-year-old John Moody sits in a smallish office at an impeccably neat desk before three muted television screens, tuned to CNN, MSNBC and Fox. Moody is the former Time bureau chief in Eastern Europe and Latin America (and author of a pair of novels) who runs Foxâ€™s day-to-day news coverage. He is pondering the question: How did the upstart and reviled (in many quarters) FNC, which came on the air in late 1996, so quickly and unpredictably triumph in the ratings over its two competitors: CNN, the granddaddy of cable news networks, begun in 1980; and MSNBC, which arrived (early 1996) with a silver spoon in its mouth, put there by its parents, two of the richest companies in U.S. business history (General Electric and Microsoft), and having NBC News (also owned by GE) as a sibling?
Few in the press gave FNC much of a chance in that field of three, Moody recalls, but they hadnâ€™t counted on the resourcefulness of Roger Ailes, the networkâ€™s chairman -- named by Electronic Media magazine as the most powerful figure in TV news for the last two years -- or on Rupert Murdochâ€™s determination to mount a successful cable news operation (and, by the by, to spank his old nemesis, CNNâ€™s founder, Ted Turner, who had predicted CNN would â€œsquash Murdoch like a bugâ€). â€œWe had a message,â€ says Moody. â€œMore than a slogan, itâ€™s a way of looking at the news business -- â€˜fair and balancedâ€™ -- and it rang a chord with American viewers who were tired of being lectured to, of being told that snail darters are more important than jobs. If thereâ€™s a reason for our success, itâ€™s that we speak to people, not down to them.â€
Despite all evidence to the contrary, Fox executives resent the charge (or pretend to) that Fox is unequivocally a politically conservative network. (â€œI absolutely, totally deny it,â€ Ailes roared to Brillâ€™s Content in 1999. In Nov., Ailes drew hostile fire when it came to light that he had volunteered policy advice to President George W. Bush.) Critics brand FNC with the scarlet â€œC,â€ Moody claims, because â€œwe donâ€™t accept the standard liberal truisms. They want no tinge of doubt, for example, that Nelson Mandela is the best thing that ever happened to South Africa. Iâ€™m not sure thatâ€™s true. They insist that the most pressing health issue in the U.S. is AIDS. I think more people would rather cure cancer. They want homosexuals treated not just as equals, but given special treatment. On the street where I live, most people would say â€˜no thank youâ€™ to that idea. So if we are accused of being conservative itâ€™s because we havenâ€™t fallen for the same truisms that have masqueraded as journalism for the last twenty-five years.â€
News In a Penny Arcade
The matter of FNCâ€™s political orientation or lack of it is, in fact, a sideshow issue in the fierce rivalry raging between CNN and Fox, with MSNBC a distant third. In Jan. 2002, FNC for the first time began attracting larger audiences than CNN. In prime time, the network is averaging 1.4 million viewers to CNNâ€™s 901,000 and MSNBCâ€™s 379,000. On election night 2002 between 8 p.m. and 3 a.m. Eastern Time, Fox enjoyed a 35 percent increase in its audience size over the 2000 election night. CNN was down 59 percent and MSNBC fell off 65 percent. Foxâ€™s emergence as the most watched cable news network is the more remarkable because CNN reaches 9 million more homes. (Foxâ€™s viewers are also more affluent, with $64,500 average income among 25- to 54-year-olds, versus $62,000 for CNN and $59,500 for MSNBC. And CNNâ€™s viewers are a lot older: 61.1 years on average, to Foxâ€™s 57.4 and MSNBCâ€™s 52.3.)
But the big story in cable news is the effect that supercharged competition is having on the quality of the prime time cable news schedule. All three networks are battling with the same weapons: talk, opinion, punditry, debate -- not to mention the psychedelic, color-saturated graphics, a rataplan of computer-generated sound and screens so crowded with info-bits, including a traveling zipper of text across the bottom, that they look like pinball machines in a penny arcade. (CNNâ€™s Lou Dobbs and Aaron Brown donâ€™t disguise their disdain for the so-called â€œcreepy crawler,â€ which challenges people to read, listen and watch video all at the same time. Dobbs has encouraged viewers to block out the bottom of their screens with duct tape. Brown responded to the news that CNN research showed that 67 percent of viewers prefer the crawl: â€œPrefer it to what? Freeze-dried coffee?â€)
Robert Lichter, president of the Washington-based Center for Media and Public Affairs and a paid consultant to Fox, says: â€œIâ€™ve never been able to figure out how competition makes cars better and television news worse.â€ He means that the struggle to grab viewers is currently dragging the whole cable news environment down. â€œIn other industries, competition creates new and different products. In television, it makes all the products look the same. Thatâ€™s weird.â€
Weird or not, TV watchers are showing up in ever greater numbers for the nightly circuses on cable news. Phenomenally, the average audience has doubled just in the last two years from 1.1 million to 2.2 million, according to Nielsen Media Research figures. It now appears that by 7 p.m., many Americans have ingested all the news they care to hear -- on car radios, the Rather-Brokaw-Jennings programs, the Internet -- and are ready to settle back after dinner to enjoy gladiatorial slugfests and verbal duels to the death about a narrow range of news events (snipers, Gary Condit, Winona Ryder, JonBenet Ramsey, Elian Gonzalez) rather than detailed, substantive reporting about whatâ€™s really going on in Europe, Africa, Latin America, Asia and here at home.
Thus, at 7 p.m., CNNâ€™s Crossfire, with Robert Novak, Paul Begala, Tucker Carlson, James Carville and guests, stages an OK Corral political shootout between Left and Right, marked by shouted crosstalk before a live audience. Foxâ€™s Shepard Smith fronts the networkâ€™s flagship newscast of the evening, a grab-bag crammed with more than a hundred news and news-feature snippets, many of them just seconds long, interrupted by pounding tympani, terrifying bursts of video-parlor graphics and sound, along with the oft-repeated mantra â€œWe report, you decide.â€ At 8 p.m., Foxâ€™s Bill Oâ€™Reilly, the king of prime time cable, plays the angry-white-male defender of commonsensical values to an audience (2.4 million) that leaves CNNâ€™s Connie Chung (739,000) and MSNBCâ€™s hapless, overcaffeinated Phil Donahue (379,000) with the crumbs. Other loudly confrontational tussles arrive at 9: Foxâ€™s right-wing Sean Hannity and left-leaning Alan Colmes, opposite MSNBCâ€™s hardballing wonk, Chris Matthews. Over at CNN at that hour, Larry Kingâ€™s relatively somnolent style makes him seem increasingly like a senior citizen who has wandered into a heavy-metal concert. Bracketing CNNâ€™s prime time schedule at 6 and 10 is a pair of substantial, more traditional newscasts: Lou Dobbs Moneyline and NewsNight with Aaron Brown, with reports from CNNâ€™s bureaus around the world. Foxâ€™s curtain-raiser at 6 is a newscast cum pundit-fest, orchestrated by the networkâ€™s main man in Washington, the conservative anchor Brit Hume, with panelists Fred Barnes, Morton Kondracke and Mara Liasson.
So how come Foxâ€™s schedule is the big crowd-pleaser? The networkâ€™s success is arguably more the result of packaging and personalities than right-wing politics. â€œTheyâ€™re fast, theyâ€™re funny, and theyâ€™re furious,â€ says Reese Schonfeld, the founding president of CNN. â€œTheyâ€™re also very slick and beautifully produced.â€ He thinks that Ailes -- a former adviser to Nixon, Reagan, and Bush One -- performed remarkably in overtaking an established brand like CNN in just six years.
Waltzing With MSNBC
An evening of cable news watching can leave one overstimulated and underinformed -- endless garbaging of opinion with little hard information except for scraps of news at the top of the hour. (More hard news is conveyed in the daytime, when audiences are tiny and the stakes lower.) No long-form documentaries on subjects of crucial importance to the nation interrupt the weekday prime time personality parade. Long gone is a CNN newsmagazine, NewsStand, which utilized the massed firepower of Time Inc. to bring a jot of variety to the schedule. Creating documentaries and covering news is expensive, says Richard C. Wald, a long-time ABC News executive, now a professor at Columbiaâ€™s journalism school. â€œTalk is cheap.â€
CNNâ€™s boss, chairman Walter Isaacson -- the former editor of Time, drafted in July 2001 by AOL Time Warner to energize CNN -- is at pains to build space between his networkâ€™s talkers and those of the other two. Nobody tunes in Connie Chung and Larry King to learn their opinions, Isaacson told cjr. The task of the ChungKing shows is to elicit the guestsâ€™ (usually fervent) views. In the same time period, Oâ€™Reilly and Hannity & Colmes on Fox and Donahue-Matthews on MSNBC market their own views as the stuff and substance of their programs. â€œWeâ€™ve moved away, while the other networks have moved toward, the idea of giving opinions,â€ says Isaacson. â€œWe want journalists who are there to listen to other peopleâ€™s news and information and opinions. To say that all talk is the same is missing the point of what cable is about and what the mission is about.â€ Point taken, Crossfire notwithstanding.
The big mystery over at MSNBC is: How come that network, with its enviable pedigree, has demonstrated so little audience appeal that experts are wondering if thereâ€™s really room in this combat zone for three cable news networks? In Apr., Erik Sorenson, the president of MSNBC, told USA Today: â€œFox is doing the tango while CNN and MSNBC are waltzing. Weâ€™re doing a beautiful waltz, but the tango is the dance of the day.â€ In October, GEâ€™s chief executive, Jeffrey Immelt, dissed his own journalists when he appeared on Fox to announce his dismay over MSNBCâ€™s performance. â€œI think the standard right now is Fox,â€ he told Neil Cavuto, the networkâ€™s business anchor. â€œI want [MSNBC] to be as interesting and edgy as you guys are.â€ The remark sent morale at MSNBC even lower. Microsoftâ€™s ceo, Steve Ballmer, has confessed several times that if he had it to do over again, Microsoft wouldnâ€™t team up with NBC News. The company had put up $500 million to buy into cable news, and continues to pay GE a $30 million license fee each year for access to NBC News coverage. The question becomes: Will Microsoft continue its partnership with GE indefinitely, and if so, why?
The idea behind a Microsoft/GE liaison was that NBC News would be the newsgathering mother ship for multiple appendages -- MSNBC, CNBC, MSNBC.Com, the NBC affiliates -- and that synergy (a term now in some disrepute) would make the whole greater than its parts; also, the deal would usefully conjoin computers and television in marvelous new ways. That structure was brilliant in theory, says Merrill Brown, former editor-in-chief of MSNBC.Com, but the partners are still struggling to figure out how to make it actually work. Unlike the other two cablenets, MSNBC has virtually no capacity of its own to cover major events, and relies almost entirely on NBC News for major stories like wars and election nights.
In July, MSNBC revamped its prime time schedule, banishing Brian Williams and his respectable 8 p.m. newscast to CNBC and thrusting Phil Donahue into combat against Oâ€™Reilly and Chung. It was a disastrous misstep, sending all the wrong messages about the networkâ€™s putative dedication to news. Removing Williams -- destined to be Tom Brokawâ€™s successor after the 2004 elections -- â€œreduced the journalism quotient of the entire network,â€ says Jack Myers, editor of the trade journal The Myers Report, â€œdepriving it of a journalist who had visibility and credibility.â€ Donahue started strong, then quickly lost most of his audience, leaving him with a viewership almost too tiny for Nielsen to measure. Barring major improvement, Donahue will disappear from MSNBCâ€™s schedule early in 2003, possibly replaced by former Governor Jesse Ventura of Minnesota.
Enter Jerry Nachman, hired by MSNBC in May as vice-president and editor-in-chief. Nachman, a rough-and-tumble hard-news guy, a former editor of the New York Post, has been a TV news director, radio and TV street reporter and staff writer on Politically Incorrect with Bill Maher, and owns a Peabody and an Emmy. Whatâ€™s MSNBCâ€™s strategy for getting into the ballgame? â€œI honestly donâ€™t think there is a strategy yet,â€ Nachman replied in mid-October. â€œBut the hole in the middle of that line of scrimmage is so big -- between what Fox does with its daunting, jangly pinball machine and what CNN offers -- that somewhere in there is the right place for us to be. Some mix of opinion and hard news.â€ Viewers gravitate to Oâ€™Reilly, Nachman says, irrespective of the dayâ€™s topic. â€œThey want to see him. We donâ€™t have anyone like that yet.â€
The people who have owned and operated MSNBC are afflicted with what Nachman calls â€œimpulse control disorderâ€ -- they mess with the schedule and donâ€™t give programs enough time to find their audience. Oâ€™Reilly earned low numbers on Fox for years, Nachman recalls, but the network stuck with him and eventually he became the most popular figure on cable news. â€œWhen the viewers go to Fox or CNN they pretty much know what theyâ€™re going to get. Weâ€™ve been a work in progress too long. We need to work it out sooner rather than later.â€
Even though CNN runs second to Fox in the ratings, it is number one in credibility among all television news sources -- broadcast or cable -- according to a Pew Research Center poll released in August. Thirty-seven percent of Americans who have an opinion on the matter say they believe â€œall or mostâ€ of what CNN tells them. MSNBC gets 28 percent and FNC 24 percent. Isaacson, who took over the reins at CNN in July 2001, is happy to expand on that. â€œJust because youâ€™re getting the highest rating,â€ he says, â€œdoesnâ€™t mean youâ€™re doing the right thing. Ratings donâ€™t necessarily translate into money or success or respectability or good journalism. I could get extremely good ratings by putting on every car chase, plus wrestling and SpongeBob.â€
Moneyline, in fact, attracts a smallish audience at 6 oâ€™clock, but its affluent viewers are highly desirable to advertisers, so the program is a major money maker. For such reasons -- and others, relating to CNNâ€™s presence in more cable households than its competitors -- the network boasts higher revenue than both Fox and MSNBC. â€œUnder most ways of defining whoâ€™s winning,â€ Isaacson says, â€œweâ€™re very healthy, very profitable, and growing, opening more bureaus around the world.â€ CNNâ€™s global reach is, in fact, far greater than that of any other TV news organization: forty-two bureaus, thirty-one of them abroad. CNN International, launched five years after CNN, is the worldâ€™s only global, twenty-four-hour news network, reaching more than 160 million households in 212 countries and territories. For years, CNN has enjoyed pride of place in hotspots like Baghdad and Havana.
The threat of war in Iraq is the armature for a mega-merger that could forever alter the balance of power in the cable news wars. Covering the conflict would drain tens of millions of dollars from news budgets. ABC News is the latest suitor for CNNâ€™s hand in a marriage that might save each of them $100 million a year. It would create a news powerhouse that would combine the star power of ABC News -- Jennings, Koppel, Sawyer -- with the global reach and 24/7 ubiquity of CNN. Experts differ mightily on whether itâ€™s a good idea or a dreadful one. The decision to wed or to break off the engagement will be made for monetary reasons, not journalistic ones. Michael Eisner, chairman of Disney (parent of ABC), wants the nuptials badly and so do top-echelon executives at AOL Time Warner, parent of CNN. The question is: Once in the bedroom, who will do what to whom? Who gets to be on top? Who gets operating control? A deal would give ABC News a global audience and CNN would get access to virtually all 110 million U.S. TV homes, rather than just the ones it reaches now via cable and home satellite. CNNâ€™s operating profit of $200 million on revenues of $1.6 billion dwarfs that of ABC News.
Eisnerâ€™s devotion to news is famously minimal: he tried to bump Ted Koppel from Nightline and hire David Letterman; insiders suspect heâ€™d dearly love to be rid of ABC News. Both Disney and AOL Time Warner shareholders are mutinous at the calamitous decline in the companiesâ€™ stock values. A merger would signal Wall Street that they are serious about taking dramatic action. Trade union issues are a roadblock: much of ABC News is unionized, much of CNN isnâ€™t. Also: the combined salaries of ABCâ€™s handful of news â€œstarsâ€ -- some of them in the $10 million a year range -- equal a large percentage of CNNâ€™s entire operating budget.
A few Wall Street analysts are leery of the whole idea. Tom Wolzien of Sanford C. Bernstein can claim special insights because, as an NBC News executive for sixteen years, he was involved in three unsuccessful attempts to marry CNN to NBC News. An ABC deal with CNN might not produce the savings both imagine, he believes, or generate the expected spike in the companiesâ€™ stock prices. In a research report, Wolzien identified two possible cost-saving options: ABC News remains a Disney property but shuts down many of its foreign and domestic bureaus and gets most of its news from CNN. Or: Disney divests itself completely of ABC News and hands the whole news operation over to CNN. Either way, Wolzien concludes, â€œthe marriage could easily turn out to be less than one made in heaven.â€
Consumer activists are standing on tiptoe, shouting responses to the question: â€œDoes anyone know any reason why this couple should not be joined in matrimony?â€ Jeffrey Chester, director of the Center for Digital Democracy, a Washington-based watchdog group, expresses sentiments echoed by Consumers Union, the Consumer Federation of America and other activists. The marriage would harm the public interest by reducing the number of news outlets, he claims, and besides that, Disney promised when it bought ABC -- and AOL vowed when it acquired Time Warner -- that the deals would add depth and diversity to Americansâ€™ news diets. Theyâ€™re reneging on those promises, says Chester, and the Justice Department and the FCC should block the merger.
Others object for less lofty reasons. â€œI think itâ€™s an awful idea,â€ says Reese Schonfeld. â€œThe problems can be worked out on paper but never in the real world.â€ Says Jack Meyers: The plan is â€œculturally inconceivable.â€
Will CNN and ABC News actually hook up and thus permanently alter the balance of power in the cable wars? The answer: a firm â€œmaybe.â€
Hammering the Big Story
Cable news generates far more buzz than broadcast news, even though ABC, CBS, and NBC have most of the marquee names and a total audience that makes the cablenets look like scrawny new kids in the neighborhood. Rather-Brokaw-Jennings attract an average of 34.7 million unique viewers. Thatâ€™s more than ten times the 3.2 million people watching CNN, FNC, and MSNBC -- plus CNN Headline News and CNBC -- from 6:30 to 7 p.m., according to figures compiled by CBS News. But cable news is edgier, noisier, more outrageous, more tendentious -- and itâ€™s there all the time.
For three weeks in Oct., for example, the cablenets virtually ignored all other news except the search for the alleged snipers, John Allen Muhammad and John Lee Malvo. Nielsen figures showed that viewers immediately switched to a rival network whenever one of them bailed out of that story to give other news. Cableâ€™s producers read the handwriting on the wall -- as they had many times in the past, with O.J., Monica, Chandra and others -- and remorselessly hammered the sniper story, giving short shrift to the coming Nov. elections. It paid off. Cable news won its largest average daily audiences of 2002; on Oct. 24, the day of the capture, 1.7 million people watched FNC, CNN attracted 1.3 million, and MSNBC got nearly 700,000, all record numbers.
CNNâ€™s Isaacson admits that his network sometimes runs too hard with a story. Every time heâ€™d tell his producers to scale back coverage of the snipers, however, another victim was shot. â€œEverybody in the newsroom would go nuts, and Iâ€™d say, â€˜Okay, Okay, never mind.â€™â€ Cable news networks have learned to lie in wait for the next big story and then smother it. One such mega-story lifts all boats. In between, their ratings sag. Says Robert Lichter: â€œThe problem for cable journalism is that, too often, all resources are funneled toward the one story thatâ€™s increasing ratings for everybody. The same journalists who claim to be proud of their high calling will shrug and say, â€˜The Nielsens made us do it.â€™ Thereâ€™s a hypocrisy there. Economics trumps quality.â€
The next real test of the power balance in cable news looms, as war with Iraq becomes more likely. CNN, with far greater reach and resources, wants to own the story, as it did in the Persian Gulf in 1991 before FNC and MSNBC were born. That conflict made CNN a major player in global news for the first time. If, as CNN expects, viewers defect to it in droves during the action, the network could once again become the cable news leader by holding onto a percentage of them when the war ends. Eason Jordan, the executive who oversees CNNâ€™s international newsgathering, is leading a full-court press in the effort to assure that the network will dominate coverage in a war on Iraq. â€œItâ€™s a struggle every day to maintain our presence there,â€ he says. Hard-line factions within the Iraqi government view all journalists as spies. On one of Jordanâ€™s dozen trips to Baghdad, a member of the so-called Revolutionary Command Council accused him not only of spying but of being the CIA station chief for Iraq. Wolf Blitzer, Christiane Amanpour, and Richard Roth are among CNN correspondents whoâ€™ve been banned from the country for coverage the Iraqis deem unfriendly.
â€œIf the balloon goes up in Iraq,â€ says Garrick Utley, a CNN contributor, â€œit will be fascinating to see who comes out on top in the ratings.â€ The old-line warhorses at ABC, CBS, and NBC will be moving their heavy chariots into position, making it a six-horse race instead of three.
But cable news practitioners feel sure that they are the future and that the Rather-Brokaw-Jennings axis is increasingly an anachronism, despite the current numbers. â€œAt this moment, weâ€™re in the early stages of a big changeover,â€ says Jack Abernethy, Foxâ€™s executive vice president. Heâ€™s wagering that cable, not broadcasting, will become the principal source of television news in peace as well as in war.
That sounds like a good bet -- if you plan to be around long enough to collect.
Neil Hickey is CJR's editor at large.
HICKEY: Is this court ruling as important as people say? Media consolidation has been going on for decades.
Yes, because, among other things, it's one more clear signal that many judges, regulators, and politicians want to roll back most of the remaining rules that traditionally have assured us a robust marketplace of ideas. Too few companies controlling the flow of news, information, and even entertainment is unhealthy. Big isn't necessarily bad, but big contains the seeds of mischief that can hurt a republic like ours. Back in 1945, the Supreme Court, in a case called Associated Press v. U.S., wrote that "the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public." That's still the guiding principle underlying this whole discussion.
HICKEY: Specifically, what's wrong with a company - any of the major broadcast networks, for example - owning a TV station and a cable system in the same market?
From their point of view, everything is right with it. They could create all-news local cable channels and then combine those newsrooms with the ones in the TV stations, increase revenue by selling commercials on both channels, reduce the news staff, maybe eventually shift the whole news operation to cable and use that valuable local airtime for shows like Wheel of Fortune, Entertainment Tonight, and Jeopardy. On a more cosmic level: AOL Time Warner, the world's biggest media company - which up until now has been prevented from owning TV stations in cities where it also owns cable systems - could go out and buy NBC, which owns a string of TV stations in major cities. In the deal, it would also pick up MSNBC and CNBC. That would make AOL Time Warner - already the world's largest media company - more gargantuan than it already is, even though its stock market value has plunged.
HICKEY: Why NBC?
Because NBC is the only network that's not already owned by a big media conglomerate. Viacom owns CBS, and Disney owns ABC. But GE, which owns NBC, is an industrial company, and there have been hints for years that it would unload NBC if the time and the price were right.
HICKEY: What about the other court ruling - the one that sends the FCC back to the drawing board to justify its 35 percent limit on the number of households any network or station group can reach?
That's big stuff. For one thing, it means that ABC, CBS, NBC, and Fox will have a whole new lease on life. They could go on shopping sprees, buying up many of the independently owned stations that are now their affiliates, thus increasing profitability and negotiating power with program suppliers. Don't forget, the broadcast networks used to control 95 percent of the TV audience, and it's now less than 50 percent because so many viewers have drifted away to cable and the Internet. So those networks want to find new revenue sources, and a potentially big one is owning a lot of television stations - particularly now that all TV stations are going digital and will be able to broadcast on several channels simultaneously.
HICKEY: But suppose the FCC goes back to the drawing board and decides that the best and fairest policy is to keep the 35 percent cap?
Forget it. Michael Powell, the Republican FCC chairman, is allergic to regulations. His stated mantra is "validate or eliminate," by which he means: get rid of rules that block media companies from achieving their full growth potential. [See cjr, July/August 2001] Even before he became chairman, he blistered his fellow commissioners for their "stubborn refusal to fully consider the competitive landscape" when they voted to retain the rule a few years ago. Another time, he said that limits on ownership of media properties are as outdated as the 1950s TV series The Lone Ranger. He aims to reduce media regulations to the bare minimum. The only question is, Will he favor raising that 35 percent figure significantly or junking limits altogether?
HICKEY: Either way, the networks win big?
The more stations a network owns, the bigger its profits. Many stations have profit margins over 50 percent. At Rupert Murdoch's News Corporation, for example, his thirty-three television stations produce more cash flow than any of his other divisions, including Fox News Channel and the Fox TV network. The top ten companies that own stations increased their share of the industry's $20 billion annual revenues from 41 percent in 1995 to 54 percent today. But besides that, networks want more stations so they can reach more viewers with promotional announcements for their evening newscasts, their newsmagazines, their morning shows, and their entertainment schedule. That builds audiences, which translates into higher ad rates. So you see the synergy. Some station owners are eager to sell out to the networks and grab those high sale prices. Others will be fighting to retain their independence.
HICKEY: If a network actually owns a station - instead of just having it as an affiliate - it completely controls what that station puts on the air?
Right. An affiliate, on the other hand, is free to perform public service, if it wants to, by preempting the network's prime-time schedule of sitcoms and cop shows for news and documentaries on matters of importance to the community. But don't hold your breath. TV stations have a vested, selfish interest in carrying their networks' regular schedule, no matter how banal the programs are, because that's what most people want to watch. The number of hours of network preemption for coverage of local issues could fit in the navel of a gnat.
HICKEY: What about ownership of a newspaper and TV station in the same market? Where does that stand?
The FCC is still mulling it over. But the handwriting is on the wall. That ban appears doomed. Newspaper owners and broadcasters both are against it, and they wield a lot of influence. The Newspaper Association of America, for example, says that forbidding such cross-ownership is "outdated and unnecessary in today's diverse mass media marketplace." A major coalition of consumer advocates, however, claims that lifting the ban would trigger an avalanche of mergers that would hurt journalism. "Hundreds of newspapers would quickly merge with TV stations," says their filing to the FCC, "and by the time the dust settled, the number of independent owners of major local news media would be slashed by almost one-half." And besides that, the activists say, newspapers would become lapdogs instead of watchdogs because they'd self-censor themselves to protect their bosses' interests.
HICKEY: Whatever happened to that rule preventing one company from owning two TV stations in the same city?
That so-called "duopoly" rule got shot down in 1999. It's now okay to own two stations as long as the market still has a reasonable number of competing voices. One month after the FCC changed the rule, Viacom bought CBS in a major media merger. Their overlapping ownership of stations no longer prevented the deal. On April 2, that "competing voices" restriction was declared "arbitrary and capricious" by the same federal court that overturned the 35 percent cap, and the judges ordered the FCC to either justify the rule or abolish it.
HICKEY: Any other deregulatory actions we should know about?
A year ago, the court abolished a 30 percent cap on the number of U.S. households a cable company could reach. That was big. And watch for this one: it may yet be possible for a major broadcast network to buy one of the other major networks. ABC buys CBS, for example, or NBC buys ABC.
HICKEY: Are there any strong voices out there fighting this deregulatory trend?
Yes, and ironically they cross party lines. Democrats usually favor retaining regulations and Republicans don't. But Senator Trent Lott, the Republican Senate minority leader, agrees with Senator Ernest F. Hollings, Democratic chairman of the Senate Commerce Committee, that the 35 percent cap should remain. So does William Safire, the conservative columnist on The New York Times, who calls Michael Powell a "roundheeled" pushover for the big media companies, and claims the chairman is steering the FCC toward "terminal fecklessness." The National Association of Broadcasters - not known for liberal policies - also is campaigning to retain the cap, and has expressed disappointment that the cable/broadcast cross-ownership rule was vacated. Three networks - CBS, NBC, and Fox - have quit the NAB in protest over the association's support of the 35 percent cap.
HICKEY: Isn't there any upside to abolishing a lot of old regulations?
Sure, there can be. A newspaper buying a TV station, for example, might impose more rigorous, higher journalistic standards on the TV newsroom and help create better newscasts. A rich media company buying up small stations in the boondocks might easily invest a lot of money in those stations to improve their news programs. Also, major media companies are better able to fight nuisance lawsuits against their properties, where local independents might just fold and settle to save legal fees. "You can't be journalistically vigorous if you aren't economically strong," Michael Gartner, a former president of NBC News, wrote recently in USA Today. That sometimes means accepting the embrace of a distant media giant.
HICKEY: If this subject is so important, how come the general public knows so little about it?
Because broadcast and cable news people practically never cover it. Many of them say it's too complicated, too boring, too hard a story to tell in TV terms. A skeptic might say they lay off it because TV news organizations are owned by the very companies that stand to reap the rewards of deregulation if nobody wakes citizens up to the realization that these issues affect them personally in important ways.
HICKEY: How do newspapers handle the story?
The great majority bury it in the business pages, if they treat it at all. Don't forget, many big newspaper companies own television stations and stand to benefit from deregulation. News Corporation owns thirty-three stations, for example; Tribune Company has twenty-three; Gannett owns twenty-two; The New York Times Company, eight; Post-Newsweek, six. Some newspaper companies may decide to buy up many more television stations. Or they might be seen as attractive takeover targets themselves by AOL Time Warner, GE, Disney, whomever.
HICKEY: Is the correct position in all this that, ideally, we should try to restore all the rules that the courts and the FCC have struck down?
No, because that's not realistic. The deregulatory trend has proceeded so far in the last half-dozen years - since passage of the 1996 Telecommunications Act - that it's irreversible. The goal, however, is: don't throw out the baby with the bathwater. Reasonable people on both sides can agree on minimum, necessary rules to preserve a diversity of news and opinion. Many ownership regulations are decades old, when sources of news were a lot scarcer. Now, there's a superfluity of news outlets rather than a scarcity, but they are owned by fewer and fewer companies.
HICKEY: What should we think of Chairman Powell?
He's very intelligent, very quick, like his father, the secretary of state, and an eloquent spokesman for deregulation. In March, on CNBC's Capital Report, he put it succinctly: "My concern has been, rather than slavishly defending the rules because they're associated with worthy goals, that someone has got to be courageous enough to [find] a more reasonable way to regulate in the context of the modern media marketplace." He wants to "recalibrate" media rules, he says, in light of the "extraordinary changes" in the media landscape. On other occasions, he has said we don't need a lot of regulations because antitrust laws are sufficient to prevent dangerous media monopolies.
HICKEY: But hasn't the Bush administration reorganized antitrust procedures to give the Justice Department sole oversight of mass-media mergers, ending the system whereby the Federal Trade Commission also has jurisdiction in these deals?
Yes, and some insiders see that change as a subtle tactic to expedite mergers. The FTC is an independent, bipartisan agency, but the Justice Department is part of the executive branch and run by presidential appointees who obviously get their marching orders from the White House. Senator Hollings was very unhappy with the new arrangement, saying it raises conflict-of-interest issues, and he demanded to know which outside consultants and lobbyists were in on the decision.
HICKEY: What's the worst-case scenario in all this?
That some transnational company that knows little and cares less about your community, and whose main allegiance is to its stockholders and advertisers, will own your local daily and weekly newspapers, all your television and radio stations, the cable system, the Internet service provider, several of the national networks that serve you, your local video stores and movie houses, many of the magazines and books you read, and all of the sports teams in your area. That would allow endless cross-promotions of the owner's interests, and probably very little hard news about anything having negative impact on advertisers or on the company itself. Everything you read or see, every opinion, every image, and every jot of information would arrive through one corporate filter.