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Michael Hiltzik GOLDEN STATE

Media Put on a Show to Change FCC Rules

May 01, 2003|Michael Hiltzik

One of the guilty pleasures of covering business comes from hearing executives try to defend some openly venal and self-interested strategy as being all about the public interest.

Often the strategy in question is aimed at exterminating rivals -- naturally described as a means of enhancing competition. This is how the seven Baby Bells, into which the AT&T trust was shattered by court order in 1984, have managed to reassemble themselves into four near-monopolies, like globules of mercury coalescing back into bigger blobs. It's all about making them into stronger competitors, see?

The most pernicious such masquerade currently onstage involves the U.S. media business, where what was once a vast landscape of independent TV and film studios, broadcast networks, cable channels, cable and satellite systems and newspapers is homogenizing into half a dozen enormous conglomerates. Federal regulations designed to limit such concentration have been around for decades -- some date back to the 1940s -- but they have been steadily eroding as surely as the polar ice shelf.

With a vote scheduled June 2, the Federal Communications Commission is poised to eliminate or liberalize the whole roster of rules governing how many local TV stations or how many radio and TV stations in the same market one entity can own. The agency also is contemplating gutting rules that prohibit co-ownership of TV stations and newspapers in the same city or the ownership of more than one TV network.

This plays into the hands of the media bigs, who argue that the proliferation of news and entertainment programming -- hundreds of TV channels, thousands of radio stations and the Internet -- has turned these rules into antiques.

"The indisputable fact is that American consumers today enjoy a greater quantity, quality and variety of television programming than at any time in our nation's history," Mark Pedowitz, executive vice president of ABC Entertainment TV, kept repeating, like a mantra, at a public forum on media concentration sponsored this week by USC and the FCC. He also sought sympathy for the "deteriorating economics" of running a TV network, which boils down to the necessity of having to pay more and more to the producers of monster hits such as "Friends" and "ER."

What he didn't say was that an increasing share of this diverse entertainment and news production and distribution is controlled by a small cadre of big companies, including his employer, Walt Disney Co. Nor did he acknowledge the social rationale for fighting such concentration.

As it happens, a majority of the FCC also is trying to keep those elements out of the discussion, partially by leaving murky exactly what the commission is planning to enact next month.

"We are on the verge of dramatically altering the nation's media landscape, and we don't even have a draft proposal to vote on," said FCC Commissioner Michael Copps, one of two dissenters on the five-member panel. "What's at stake are fundamental values and democratic virtues."

Copps is eloquent on the subject of what is fueling this headlong rush to vote, which is being pushed by FCC Chairman Michael K. Powell. Simply put, it's the desire of the leading media companies to grow even bigger.

Powell, for his part, has clearly fallen under the same spell as many other Washington regulators in the deregulatory age: He believes his proper role is to help businesses make money by cooking up a public-interest rationale for dismantling the rules, when he should be forcing them to tailor their financial expectations to the demands of the public weal.

There's no question that lifting the caps would set off a land rush that would make the Oklahoma sooners of 1889 look like a bunch of loafers. Among the companies chafing under the restraints are Viacom Inc. and Rupert Murdoch's News Corp., whose broadcast empires exceed the FCC's limit on nationwide audience reach. Tribune Co. is hoping that repeal of the newspaper-TV cross-ownership ban will allow it to hang on to TV stations in cities where it also owns newspapers -- New York; Hartford, Conn.; Miami; and L.A., where it owns The Times.

The FCC has not spent much time exploring how increasing media concentration will affect -- just to name a few stakeholders -- independent TV and movie producers (who will have fewer bidders for their wares), small businesses (which will pay higher prices for ad time), local politicians and community activists (who are bound to be ignored by the national owners of local stations), and the average TV viewer (who will be confronted with a larger selection of interchangeable garbage).

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