Monday, December 17, 2007

Eyes on: Media Consolidation

By Faith Chatham - DFWRCC - Dec. 17, 2007

I grew up in a one newspaper "Market". There were two radio stations in my hometown and we received the broadcasts of three television stations in a neighboring city. The television stations were located in another state so it had to be a big breaking story for news from my hometown to get air time.

My first job was writing for the teen page at the hometown newspaper. I also did odd jobs (pulling ads mats, running copy, pulling tears for reporters and advertisers). During the next 20 years I'd work for four major newspaper chains and several marketing/advertising agencies/creative shops. I learned some things at that first publication which seemed to remain the same over the years. Our hometown newspaper was owned by a large national media chain. I returned to work there while in college and immediately following graduation. When the paper published endorsements of political candidates, I remember there was always rumbling and an uproar in the news room. Folks would mutter: "I don't support him! Do you? Absolutely not!" The hum would continue throughout the building. The people who worked at the paper overwhelmingly supported different candidates that those endorsed by the newspaper. Endorsements were determined by the owners. Owners didn't work in our building. They didn't live in our town. We weren't important enough to have an "owner" on our staff. The "brass" rarely came to our town or passed through our building. In the 1960ies and 1970ies the influence of media owners over news coverage of elections and the endorsements of the publication was a fact noted by reporters and politicans.

The two radio stations in my hometown were owned and managed by men who frequently disagreed with each other. There were diverse veiwpoints on civic and political issues which were determined by these two long-time residents of our town. They managed the station, reported the news and directed the news staff. Even competitive newspaper staffers listened to their broadcasts because some issues just weren't covered by our publication. It was refreshing that the news they carried was not dictated by absentee corporate owners.

Media chains began to "diversify" by buying radio, television and newspapers in the same market. Laws were passed to help insure that one large corporation would not be able to control all of the media in any market. Over the years, enforcement of some of these protective rules has become more lax. The current Chairman of the Federal Communication Commission, Kevin Martin, has announced that he favors media consolidation in major markets.

In 2006, many populist Democratic candidates found that they got fairer news coverage in rural Texas media than they received in the larger media markets. Most of these candidates were vehmently critical of the proposed Trans Texas Corridor. Spanish and Australian toll operators were courted by Rick Perry and the Texas Department of Transportation for participating in this lucrative mega infrastructure project. Shortly after election day in 2006 many of the small town rural newspapers which were critical of the Trans Texas Corridor were bought by one Australian media corporation. Many of these communities are one newspaper markets. The impact of foreign ownership on these publications on local, state and national political campaign news coverage is yet to be determined.

Ownership of media influences programming and civic and political news coverage. Cutting staff to cut cost influences programming and news coverage. Filling time and space with syndicated programming eliminates local coverage.

As cable television has grown and delivery of programming has increased through the internet, some argue that there is less necessity for regulations restricting ownership of multiple media in the same market. These arguments are based on the flawed premise that citizens have access to cable and the internet. If radio, television and newspapers in the same market are controlled by the same owner, those who cannot afford cable or a computer and the internet are restricted to receiving only the news chosen by one owners.

It is important that we keep our eyes on discussion of media ownership consolidation in Congress and in the FCC.

At last week's hearing of the Senate Commerce Committee on media consolidation FCC Chairman Kevin Martin's proposed rules changes for media ownership led to discussions of exercise of legislative financial checks on the FCC through appropriations and funding.

Obama, Kerry Threaten FCC Funding Over Ownership Vote

WASHINGTON -- December 17, 2007: The heat has been turned up even higher on FCC Chairman Kevin Martin and his plan to have the commission vote Tuesday on his proposed changes to the FCC's media-ownership rules as Senator and Democratic presidential candidate Barack Obama (D-IL, pictured) and Sen. John Kerry (D-MA) have said they will ask the Senate Appropriations Committee to deny funding to implement the new rules if Martin goes ahead with the vote.

Last week Martin testified before the Senate Commerce Committee -- after a contentious exchange with Kerry -- that he planned to proceed with the vote on his proposal to partly relax the long-standing newspaper-broadcast cross-ownership ban by allowing cross-ownership in the top 20 markets if certain conditions are met.

Obama and Kerry's letter to Martin, dated December 14, says "the intent of the Senate Commerce Committee was made clear" when it passed the Media Ownership Act.

The Media Ownership Act was introduced by Sens. Byron Dorgan (D-ND) and Trent Lott (R-MS) a few days before Martin's proposal was made public. It would, among other things, require the FCC to establish an independent panel on female and minority ownership and await that panel's recommendations before voting on any changes to the ownership rules. The Senate Commerce Committee passed that bill on December 4.

The letter to Martin continues, "We understand that for a variety of reasons you are being asked to postpone the vote to permit more time for the commission to fully understand how a relaxation in the cross-ownership rules will impact other important issues such as localism." A localism proceeding and study are also required by the Media Ownership Act.

"It is our hope that the sum of these objections will convince you to delay this vote until a time following the commission's consideration of other pressing matters," Obama and Kerry write. "Specifically, we believe that moving forward with this change will have a direct and detrimental impact on the state of media diversity."

The letter concludes by warning Martin, "Should you decide to move forward with this vote against the expressed bipartisan, bicameral intent of Congress, we will approach Appropriations Chairman Byrd with a request that funds be denied for the implementation of this rule."
Read more in Radio Ink

Other coverage of the exchange between Martin and members of the Senate Commerce Committee:
Commerce's FCC Hearing Gets Heated
By Radio Ink - Dec. 17, 2007
WASHINGTON -- December 13, 2007: At Thursday morning's Senate Commerce Committee oversight hearing with the FCC, Sen. John Kerry (D-MA), after asking the other FCC Commissioners a few questions, said to FCC Chairman Kevin Martin, "Sen. [Trent] Lott, Sen. [Ted] Stevens, Sen. [Daniel] Inouye, others on the committee, with long experience on this committee, editorial comment across the country, countless organizations, countless numbers of witnesses, have all objected to the way the FCC is about to proceed" -- that is, by holding a vote on December 18 on Martin's controversial revision to the newspaper-broadcast cross-ownership rules.

Kerry noted that the committee has asked the FCC to complete localism and diversity proceedings before allowing more media consolidation, then began what became the hearing's most contentious exchange by saying, "Who is it that created the FCC, Mr. Chairman?" Martin replied, "Congress created the FCC." To which Kerry said, "And Congress created the FCC for what purpose?" "To regulate the telecommunications and media areas," said Martin.

"In the interest of the American people," Kerry responded. "In the public interest, yes," said Martin.

Kerry continued, "The Congress has expressed its will here with respect to this potential action, has it not?"

"This committee has passed a bill out of the committee that said there should be a process in place for media-ownership reviews," Martin replied. But he added that Congress also expressed its will with the Telecom Act in 1996, which mandated periodic reviews of the media-ownership rules.

Martin had begun his earlier, prepared testimony with remarks on the uncertain financial future of the newspaper industry, and, in response to that, Kerry said, "Nowhere in the FCC rules, either in 1934 or in 1996, is there anything that suggests you have a rationale or a motivation to save newspapers."

Martin replied, "I think we have an obligation to understand what the impact that some of our rules have on the industries that we regulate" -- including the impact on newspapers of the 1975 newspaper-broadcast cross-ownership ban.

"The purpose of that was not with respect to the regulation of newspapers," Kerry said. "The purpose of that was with respect to the consolidation of power in the dissemination of information."

'No Absolutely Understandable Rationale'

Later, Kerry said, "You're in the middle of an analysis of diversity and localism, and, notwithstanding that your responsibility is to the public, to make sure that diversity and localism are well served, you're about to make a decision, for no absolutely understandable rationale and against the will of Congress and most of the witnesses, to actually increase the concentration, which will make worse the localism and diversity issues, without even having completed those studies."

Kerry asked Martin if he'd agree to postpone the localism vote until the studies are completed, but didn't wait for a reply.

Moving on to the waiver process for the cross-ownership rules in smaller markets, Kerry said to Martin, "It will allow you to make any kind of political decision you want with respect to the waiver." Martin pointed out that the commission has always had a waiver process and said that, with its presumption against public interest for waivers in smaller markets, his proposal is "actually tightening it."

Kerry asked FCC Commissioner Michael Copps if he agreed, and Copps replied, "I don't think we even have anything that would qualify as a waiver." The waiver conditions are, he said, "so porous as to be, I think, meaningless."

After another exchange about the newspaper industry, Kerry asked Martin about the rules vote, "Why do you choose to swim against the tide in something so important?" He went on, "It disturbs me greatly that you're so headstrong about this, with even your own commission split. Why not try to get a unanimous commission?"

Though Martin said it would be "great" if there were a consensus and said he's discussed what could lead to a unanimous approach with his fellow Commissioners, he said, "I'm not convinced that there's much prospect [of a consensus]."

With regard to the waiver process, he said he's willing to work with the other Commissioners on "what they're characterizing as loopholes." He went on, "But that would mean they'd actually have to engage in the process, not merely demand additional process and additional time over the next six to nine months."

'A Braver Man Than I Am'

Sen. Barbara Boxer (D-CA) referred in her remarks to two unreleased FCC studies that, were, she said, "shoved in a drawer because their conclusions ran counter to certain interests." The FCC Inspector General found no evidence of wrongdoing in its investigation of the disposition of those studies, but Boxer, after noting that the FCC appointed the Inspector General, said, "Well, I just want to say that this is the fox guarding the chicken coop."

Boxer said she intends to introduce legislation to have an independent Inspector General appointed for the agency. Sen. Maria Cantwell (D-WA) asked Martin if there are any circumstances under which he'd delay a vote on the ownership rules, to which Martin said it's possible, but added, "At this point, I would anticipate that we will be moving forward, and at this point, that's my plan."

After another tense exchange, with Sen. Bill Nelson (D-FL) concerning the release of 1,400 pages of FCC records -- Martin responded that the papers in question were either copyrighted material or "deliberative process" material that the agency is not required to release -- Sen. Claire McCaskill (D-MO) addressed her concerns about transparency at the agency and got the agreement of each Commissioner in turn that they would not object to having all their votes made public. McCaskill ended by saying to Martin, "I will tell you, you are a remarkable public leader, if, in light of public opposition and the bipartisan opposition that you have heard today, to what you are about to do on December 18 -- if you move ahead and do it, you're a braver man than I am."

Read more on Radio Ink

Coverage of Martin's proposed rule changes:
WASHINGTON -- November 13, 2007: FCC Chairman Kevin Martin "believes that any further relaxation in the radio or television broadcast markets should not be allowed," says an FCC announcement released Tuesday morning. "He therefore proposes to make no changes to the local television 'duopoly' rule, the local radio ownership rule, and the local radio-television cross ownership rule currently in force."

What Martin is asking for is an end to the newspaper-broadcast cross-ownership ban, but only in the top 20 Nielsen markets and only if certain conditions are met.

The conditions: A transaction must involve a major newspaper and only one TV or radio station. If it's a TV station, there must be at least eight independently owned and operating major media voices (defined as including major newspapers and full-power commercial TV stations) in the DMA after the transaction, and the TV station must not be among the top four ranked stations in the DMA.

"All other proposed newspaper-broadcast transactions would continue to be presumed not in the public interest," says the FCC.

The FCC would also consider the level of media concentration in the market, evidence that the combined entity would increase the amount of local news in the market, commitments by the newspaper and broadcast outlet to continue to exercise independent news judgment, and the financial condition of the newspaper. In the case of a newspaper in financial distress, the commission would look into the owner's commitment to investing in newsroom operations.

The change is designed primarily to aid a newspaper industry that's struggling with the explosion of new media outlets.

In a New York Times op-ed, published Tuesday and distributed with the FCC announcement, Martin writes, "At least 300 daily papers have stopped publishing over the past 30 years. Those newspapers that have survived are struggling financially."

After citing some statistics on declining newspaper circulation and the rise of other media, Martin says, "If we don’t act to improve the health of the newspaper industry, we will see newspapers wither and die."

Martin goes on to describe his proposal, then continues, "This relatively minor loosening of the ban on cross-ownership of newspapers and TV stations in markets where there are many voices and sufficient competition to allow for new entrants would help strike a balance between ensuring the quality of local news while guarding against too much concentration."

The FCC is inviting public comment on Martin's proposal; comments are due by December 11.

Most immediately affected by Martin's proposed rules change would be Tribune Co., which is in the process of going private in a sale to Chicago real estate entrepreneur Sam Zell. Tribune has grandfathered exemptions to the newspaper-broadcast ban in several markets, which, under the old rules, would not be passed on to Zell without special waivers.

Under Martin's proposal, Tribune's new owner could be able to hang on to its newspaper and broadcast properties in Chicago, Los Angeles, New York, and Miami -- but not in Hartford, which, as Hartford-New Haven, is Nielsen market 29.

Read more in Radio Ink

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