Case Overview, Newspaper Crossownership

           As the mass media matured rules were adopted to prevent any one media company from acquiring too many outlets in any one media market. The purpose of these laws and regulations was to ensure that residents of a community were not limited to a single point of view. One corporation owning all the newspapers, television, and radio stations could project one editorial position through all its outlets, stifling a discussion of diverse points of view on issues of its choosing. Yet this basic policy has evolved in an inconsistent pattern, with different levels of ownership concentration allowed depending on the locale and type of media outlet owned. The FCC liberalized restrictions so that one company can now own a TV and radio station in the same market. A single company can now own two TV stations in the same market. And there are 40 grandfathered markets where owners were not required to entirely divest cross-ownership when restrictions were enacted that would have otherwise required such sales.
           One restriction that has remained in place is the prohibition against a newspaper owning a TV or radio station in the same market. A newspaper may own TV and radio stations in other markets, just not in the community where the paper is published. Although the law allows newspaper companies to own many different papers in different cities and TV networks to own many stations outright in addition to their licensing agreements with a nationwide set of affiliates, single newspaper-TV or radio combinations are forbidden. New electronic media have made the current set of policies seem even more incoherent. Media baron Rupert Murdoch has built an especially broad and impressive array of media properties, including a national broadcast network (Fox), cable television channels, some prominent newspapers, and (pending regulatory approval) a satellite TV system.
           Unsurprisingly, newspaper companies have chafed at the cross-ownership restrictions. As a lobbyist for newspapers noted, "The rules don't fit the current situation. A rule that prohibits cross-ownership is remarkable today. . . [when the rule was written] newspapers were seen as a monopoly on local news. It's just not so anymore." He added, "With the Internet and cable, there's a plethora of media voices. It's anachronistic."
           Yet some remain unconvinced. Said one consumer activist, "Right now four or five media companies own almost all of the media outlets in the country, and letting newspapers buy out local TV stations will only make the problem worse. It will only drive up costs." The national television networks are firm opponents of any change as they don't want their local outlets owned by other powerful media corporations.
           When Congress passed the 1996 Communications Act it instructed the Federal Communications Commission (FCC) to review its media ownership rules. The FCC did so in 1998 but made no change in the existing rules for newspapers. Newspaper companies have lobbied Congress to intervene with the FCC or change the rules itself. In the 107th Congress newspapers were pleased that John McCain (R- AZ), chair of the Senate Commerce Committee, introduced legislation sympathetic to their interests. But when James Jeffords of Vermont switched from being a Republican to being an independent, Republicans lost control of the previously evenly divided Senate. Democrats showed less interest in such legislation. During 2001-02, no change was made on newspaper cross-ownership by either the Congress or the FCC.