Here is my June 3rd, National Post column:
Media ownership makes for strange bedfellows. Ted Turner, Consumers Union, columnist William Safire, and Lawrence Lessig of Stanford have all tumbled into bed opposing proposed changes in media regulation that would allow marginally more industry concentration.
Few stories from critics could resist containing comments about how few critics were talking about this important subject. I lost count at twenty articles. While that is neatly self-refuting, it is also ignorant of the facts. I counted on Lexis-Nexis 174 stories about this subject in the last six months, including a paroxysm of broadcast coverage in recent weeks on NPR, PBS, ABC Nightline, and CNN. If this is a story that is somehow being ignored, then I’m happy more stories aren’t ignored like this – it would be hard to find information on anything else.
The proposed changes are mild. Michael Powell, the chairman of the FCC, wants merely to relax antiquated ownership restrictions somewhat. Currently owners of U.S. television outlets are limited to being able to own broadcast television stations cumulatively reaching 35% of U.S. households; the new rules would let that number inch up to 45%. Subject to restrictions, some firms in some markets may be permitted to own as many as three local television stations rather than the current limit of two. “Why does a television need to control three television stations anywhere?” thundered dissenting Democratic FCC commissioner Michael Copps, sounding more than a little like Maude Barlow’s bastard offspring.
The proposed changes, however tentative, don’t stop there. In most markets, but not all, media firms would be permitted to own both a television station and a newspaper outlet. Heaven forfend! The U.S. would turn into Canada!
Something needs to be done. Broadcast policy is, after all, a mess of overlapping jurisdictions. There overlapping media acquisition restrictions, one from the FCC and another one at the Department of Justice. These are smart, well-trained people, and it is very expensive having them all chase around analyzing the same media transactions under two different sets of ownership rules.
For their part critics alternate between anti-business rhetoric – broadcasters make too much money – and the usual empty clichés. In the latter case, the words are always the same: “massive … radical … diversity … centralization …. uniformity … monopoly.” But no-one attempts to add a factual patina to the litany. What does diversity mean? How has media concentration damaged diversity in the past?
As The Economist magazine recently pointed out, the FCC has data on that question. The FCC’s own documents show a large increase in the numbers of both media outlets and media owners in these decades of media deregulation. In studying ten local U.S. markets, the FCC discovered that since 1960 the number of media outlets has grown by nearly 200%. At the same time, the number of owners has grown by 139%. With an exploding array of satellite and Internet-based media flavors appearing everywhere you look it is increasing difficult to justify the FCC’s intrusive role in anointing media owners.
And then there is that anti-business angle. Critics of the media ownership rule-changes – including FCC commissioners Mr. Cops and particularly Mr. Adelstein – stagger around demonstrating economic incompetence. For example, Mr. Adelstein argued at one point on Monday prior to the vote that television stations are hardly suffering. After all, he said, consider their large revenues. “When they show up at our offices asking to hand back their licenses”, he said, “then I’ll think they’re hurting.”
Revenues have no consistent relationship with profits, as we were all reminded during the dot-com days. Pretending otherwise is silly. And it is even more specious to suggest that until broadcasters are looking to exit the business that the current regulatory regime is the best one. By that mis-measure all regulations are acceptable until we are up to our ears in bankruptcies.
The preceding said, I still don’t agree with the proposed changes. Of all people, it was FCC commissioner Mr. Adelstein who best captured one of my main reasons in his rambling twenty-minute speech. “Why 45% caps rather than the existing 35% caps?, he asked.
He was right – for all the wrong reasons. A drifting Mr. Adelstein went on to pine for keeping things the way they were, but my beef is that the changes are, as he suggested, baseless. Why 45% indeed? Why not, as Mr. Powell is said to have preferred, doing away with ownership restrictions altogether? I would prefer to have existing anti-trust laws hold sway, and failing that, some combination of anti-trust laws and a diversity of ownership index proposed by Mr. Powell.
The vote on Monday went 3-2 in favor of the ownership changes. As is increasingly de rigeur in such things, two pink-clad protesters in the room then broke into song, singing, “Deregulation of mass communication is the end of democracy.” How do I know? I watched it all on television, something I couldn’t have done in the far more concentrated media business of even a decade ago.