Groups Ask FCC to Preserve Cross-Ownership Rules

FOR IMMEDIATE RELEASE
Friday, February 15, 2002

CONTACT:
Gene Kimmelman or David Butler
(202) 462-6262
Consumers Union Washington DC Office

PUBLIC INTEREST GROUPS ASK FCC TO PRESERVE CROSS-OWNERSHIP RULES,
HEED THE LESSONS OF ENRON
FCC must preserve cross-ownership rules to ensure local newspapers and broadcasters
remain separate watchdogs over one another

For immediate release Contact: Gene Kimmelman
Friday, February 15, 2002 202-462-6262

WASHNINGTON, DC – A coalition of public interest organizations today asked the Federal Communications Commission (FCC) to preserve its ban on local newspaper-broadcast cross-ownership.

The coalition said that there is a critical need for local newspapers and broadcasters to remain independent in order to report on each other’s news coverage and business interests.

The groups compared the separation of local papers and broadcasters to the glaring lack of separation between the Enron Corporation and the accountants at Arthur Andersen, who were paid as consultants to advise Enron about its controversial business practices, but failed as auditors to inform investors of Enron’s shaky finances.

Specifically, the groups said that local newspapers and broadcasters operate independently from one another in a way that allows one to report on how the other covers the news and how the other’s business interests influence its coverage. As a point of comparison, accountants at Arthur Andersen received millions of dollars for consulting work at Enron. But when they were supposed to take on the watchdog role and audit Enron, the accountants failed to report the company’s precarious financial situation, and investors and employees paid a huge price.

In a response to an FCC request for public comments about the newspaper-broadcast ownership ban, the coalition wrote, "The FCC is obligated by both the U.S. Constitution and the Communications Act to ensure that the main sources of independent news and information in this country will not be undermined by allowing cross-ownership."

The filing noted that "since the rule took effect in 1975, the U.S. has lost 66% of independent newspaper owners and 34% of broadcast television owners." The groups argued that "lifting the ban will trigger a wave of mergers that would compound the economic pressures already weakening journalistic quality and antagonism in the media."

The coalition includes Consumers Union, Consumer Federation of America, Media Access Project, Center for Digital Democracy, The Office of Communication of the United Church of Christ, Association for Independent Video and Filmmakers, National Alliance for Media Arts and Culture, and the Alliance for Community Media.

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Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers

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