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Copyright 2002 The Denver Post Corporation  
The Denver Post

November 24, 2002 Sunday 1ST EDITION


LENGTH: 1771 words

HEADLINE: Feds may propel media mergers Views differ on impact of relaxing rules

BYLINE: Anne C. Mulkern , Denver Post Washington Bureau

WASHINGTON - Federal regulators are about to make a sweeping  decision affecting what Americans see on television, hear on radio  and read in newspapers.

The Federal Communications Commission is expected within the next  few months to relax - and potentially even eradicate - a  27-year-old rule designed to preserve competition in the news  business.

The move is likely to spark an explosion of media mergers. A  handful of corporations could control the bulk of the media in  major markets, including Denver and Colorado Springs.

Whether such a change ultimately benefits or harms consumers is a  matter of much debate and an issue for the Federal Communications  Commission to decide.

'When we're done with this, there will be half as many media  owners as exist now, and they'll be twice as large,' said Mark  Cooper of the Consumer Federation of America, which opposes  changing rules to allow further media consolidation. 'If you let  them, they will merge.'

The FCC is reviewing six rules that govern media ownership.

Under those rules, with a few exceptions, newspaper owners cannot  hold television or radio stations in the same markets and vice  versa.

The FCC is reviewing a 35 percent cap on the total viewers  nationwide one corporation can reach, a rule that in general  prohibits a company from owning two TV stations in one market, a  cap on radio station ownerships and a rule that bars the major TV  networks -- ABC, CBS, NBC and Fox - from becoming part of the same  parent corporation.

The FCC said it has not reached any conclusions. It commissioned 12  studies looking at the media market. The results for the most part  appear to support a lifting of the rule. The FCC said it welcomes  the submission of conflicting studies.

Last week, Commissioner Michael Copps said he would hold public  hearings on the issue, even if other commissioners refused to go  along.

Most analysts believe, however, that the final result is  inevitable. FCC Chairman Michael Powell - backed by the Bush  administration - has indicated that he believes the rules need to  be reconsidered.

And there are powerful forces at play. Corporations pressuring the  FCC include the Tribune Co. (owner or part owner of the Chicago  Tribune, Los Angeles Times and other newspapers; 22 cable and  broadcast outlets; and numerous entertainment ventures), Gannett  Corp. (owner of USA Today, more than 100 other newspapers and 15 TV  stations), AOL Time Warner (owner of HBO, CNN, dozens of magazines  and other entertainment outlets), News Corp. (owner of Fox News and  other entities), General Electric (the parent company of NBC),  Disney (the parent company of ABC) and Viacom (parent company of  CBS).

One of the biggest opponents to media consolidation - South  Carolina Democratic Sen. Ernest Hollings - lost significant clout  in the Nov. 5 election. With the Republican majority in the Senate,  he no longer chairs the Senate Commerce Committee. He also lost his  majority status on the Senate Appropriations Committee, which  decides funding for the FCC. Hollings has single-handedly stopped  FCC decisions he disliked by using a legislative technique to block  FCC funding.

The new chairman of the Senate Commerce Committee, Arizona  Republican John McCain, said he was concerned about consolidation  in radio, in particular domination by Clear Channel Communications.  But, in general, McCain is seen as a deregulator and free-market  advocate.

If the media ownership rules are relaxed, experts said, media  companies will work with each other to try to gain monopoly  dominance in different markets.

'It's going to be a disaster for independent voices and diversity  of voices,' said Frank Blethen, publisher and chief executive  officer at the Seattle Times Co., a family-owned chain of three  papers. 'We're going to see a feeding frenzy among big media  corporations swapping TV stations and swapping newspapers.'

MediaNews Group, owner of The Denver Post, and E.W. Scripps Co.,  the owner of the Rocky Mountain News, have said they are interested  in acquiring local TV and radio stations if the ban is lifted. That  could affect which news stories are covered, and how they are  reported.

'There is a general push among newspaper companies that already  own print and broadcast properties in the same market to combine  operations as much as possible,' said Ben Bagdikian, a University  of California at Berkeley professor and author of books on media  consolidation. 'For consumers, it will further reduce choice.'

In Tampa, Fla., for example, reporters for The Tampa Tribune work  with those for the NBC affiliate owned by the same chain, Media  General. The paper and news station work off the same daily budget  of news stories. Bagdikian says that leads to shorter, less  detailed news stories and homogenous coverage.

Experts point to radio consolidation in the last few years as an  example of what will happen if the FCC loosens rules for the rest  of the media. The Telecommunications Act of 1996 loosened  restrictions on radio station ownership and a wave of consolidation  followed. Clear Channel Communications quadrupled its holdings.  Many of their stations within the same genres use similar playlists  and the same disc jockeys.

Clear Channel, in its filings with the FCC, says that competition  is robust and there is no need for 'regulation in the name of  diversity or competition.'

Media companies say that the present FCC rules - in addition to  being outdated and arbitrary - actually block better news coverage.  By pooling resources of news outlets, they say, media owners could  provide broader and more in-depth news coverage. They say they can  offer better advertising packages.

'In markets where consolidated media was grandfathered in, it's  made for better TV stations, better newspapers, better radio,'  said William Dean Singleton, chairman of the board of the Newspaper  Association of America and vice chairman and chief executive  officer of MediaNews Group. 'Every single study that's been done  by the FCC or otherwise points to better media when they're  consolidated.'

Proponents of lifting the rules also say current regulations don't  take into account technology. Internet, digital radio and  nonbroadcast television, they say, provide new choices for  consumers.

'There are more ways around the media behemoth than ever before,'  said Colorado talk radio personality Jon Caldara, president of the  Golden-based Independence Institute, which favors free-market  government policies. 'There's no way that the mean, old, big  companies are going to box the market out of choice.'

Consumer groups, some independent radio and newspaper owners and  some labor groups oppose lifting the ban. They say such mergers  would mean large corporations could control too much of the media,  subjecting it to pressures that dilute or eliminate coverage of  controversial issues. They fear that it will also mean fewer news  voices, which could mean some opinions aren't expressed.

Publisher Blethen said the desire for media companies to acquire  matching newspapers, TV and radio stations in the same cities is  purely profit driven. If they can cut competition, he said, they  can raise advertising rates and reduce news resources.

'It's laughable to even suggest that journalism has anything to do  with it,' he said. 'The record is just the opposite. The fewer  owners we've seen, the larger the owners have become, the worse the  journalism has gotten.'

'No matter how objective you are, each person sees things  differently and emphasizes things differently,' said Joan  Panzella, an Erie resident who opposes changing FCC rules.

Panzella watches news programs; reads newspapers, magazines and  online reports; and listens to talk radio. She figures that she  gets close to the truth by distilling information from all those  outlets.

'The more diversity you have, the more opinions you have,'  Panzella said.

Panzella is one of 42 Colorado residents who have written the FCC  to say they oppose lifting the ban on cross-ownership. Private  citizens, consumer groups, media owners and labor unions have filed  more 1,500 letters and documents - pro and con - in the case.

Lafayette resident Paula Heeren, 54, also opposes further  consolidation. She fears big corporations with a profit motive will  swallow up Denver and Colorado media outlets and that local news  will be reduced. Already, she said, there is too much coverage of  crime and 'info-tainment,' and not enough coverage of local  government and issues specific to Colorado.

"When (the owners of the corporation) live in New York, or  Australia, what do they care about Denver or Colorado?" Heeren  said.  Properties owned by some media companies   Colorado major media ownership:

Clear Channel Communications owns these radio stations:

Cortez - KISZ-FM


Durango - KPTE-FM, KDGO-FM


Vail - KSKE-FM

Freedom Communications:

The Gazette - Colorado Springs

Gannett Co:

Fort Collins Coloradoan

Denver's Channel 9, the NBC affiliate

MediaNews Corp:

The Denver Post, Fort Morgan Times, Journal Advocate (Sterling),  Lamar Daily News

E.W. Scripps Co.:

Rocky Mountain News, Daily Camera (Boulder), Broomfield Enterprise,  Louisville Leader, Lafayette Ledger, Erie Examiner, Superior  Citizen

Cox Communications:

The Daily Sentinel, Grand Junction

Cox Cable has interests in programming companies including: 24  percent interest in Discovery Communications Inc. (also owned by  Liberty Media and NewChannels Corp.)

Landmark Communications Inc.:

Evergreen Newspapers (Canyon Courier, Columbine Community Courier)

Metro West Newspapers (Brighton)

Tribune Co. (owner of Chicago Tribune and Los Angeles Times):

Denver's Channel 2, the WB affiliate

Digital City Denver

News Corp: (has interests in several professional sports teams)

Fox Broadcasting Co.

Denver's Channel 31, the Fox affiliate

New York Post

McGraw-Hill: (owner of magazines, including Business Week)

Denver's Channel 7, the ABC affiliate.


Denver's Channel 4, the CBS affiliate

LOAD-DATE: November 25, 2002

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