Copyright 2002 The Denver Post Corporation The Denver
November 24, 2002 Sunday 1ST EDITION
SECTION: BUSINESS; Pg. K-01
LENGTH: 1771 words
Feds may propel media mergers Views differ on impact of relaxing rules
BYLINE: Anne C. Mulkern , Denver Post Washington
BODY: 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
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
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
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
'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
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