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Media ownership rules are so '70s

Technology and public tastes have changed radically but regulations haven't kept pace.

October 14, 2006|Jon Healey | JON HEALEY is an editorial writer at The Times. jon.healey@latimes.com

AMERICAN presidents often complain about the press, but none in the modern era matched Richard M. Nixon's venom for the Fourth Estate.

Nixon's resentment of the Washington Post was so intense, recordings from the Oval Office show, that he and his aides plotted an unusual form of regulatory retaliation: forcing the Post to give up the TV and radio stations it owned in Washington, D.C., and Florida by blocking the renewal of its broadcast licenses.

But was that as far as the Nixon administration took it? Some think the White House went a step further and pressed for approval of a Federal Communications Commission rule barring newspapers from owning TV and radio stations in their market.

The cross-ownership rule, as it came to be known, was proposed in 1970 and adopted in 1975 -- and is still in effect today. And although it didn't apply immediately to most existing newspaper-broadcasting combinations, it nevertheless prompted Post Publisher Katharine Graham in 1978 to swap WTOP-TV, the Post's station in Washington, for WWJ-TV in Detroit.

It's tempting to view the rule as Nixon's belated revenge on the Post (and the newspaper industry in general). After all, the proposal was spawned by then-FCC Chairman Dean Burch -- a Nixon appointee who, on his third day in office, called the broadcast networks and demanded transcripts of the previous night's commentaries about a presidential speech on the Vietnam War. The idea of a strict newspaper cross-ownership ban also was backed by the Justice Department under Nixon.

Most of the evidence suggests, however, that the rule was not political skulduggery but merely a product of its time. An independent agency, the FCC has historically been more sensitive to pressure from Congress than the White House. And the cross-ownership ban was not just backed by the administration; it was supported by Republicans and Democrats alike on the commission and Capitol Hill.

"Kay Graham really didn't enter into the cranium of the FCC," Richard E. Wiley, the Republican who replaced Burch as the commission's chairman, said in a recent interview. "The commission was concerned about newspapers dominating TV."

Lawmakers and regulators have limited the number of TV and radio stations a single company could own almost since the technologies were invented, in hopes of assuring a robust supply of competing viewpoints. The limits have often eased as new technologies emerged -- newspapers were actually encouraged to own television stations in the early days of TV, and AM radio stations to launch FM ones -- then tightened as the technologies matured.

The tightening reached its zenith in 1970, when the FCC reduced the maximum number of broadcast outlets that any company could own in a local market from three (one AM, one FM and one TV) to one. Then, prodded by Burch and the Justice Department, the commission proposed to tighten the rules again, barring newspaper-broadcasting cross-ownership.

The commission's concern about the need for separate ownership of local media outlets was understandable, given how few there were at the time. TV stations affiliated with the three national broadcast networks were at the peak of their popularity in 1970, drawing 95% of the prime-time audience. Nearly 80% of the adult population read newspapers on the average weekday. There were virtually no cable TV networks and no public Internet at all, so local broadcasters and newspapers faced little competition from other information sources, particularly about local news.

But there were arguments even then against the rule. The percentage of TV stations owned by newspapers had declined sharply, from nearly 50% of all the outlets in 1948 to 14% in 1969. A study by the American Newspaper Publishers Assn. showed that those combinations weren't deterring others from competing -- more than 100 independently owned TV stations had begun operating in communities where a newspaper operated a TV station. And even FCC studies didn't support the claim that newspaper-TV combinations raised ad rates.

And how about today? Is there a need now for the cross-ownership rule? The FCC, which tried unsuccessfully to weaken the ban in 2002, is expected to take another crack at it soon, but it's not clear whether the effort can succeed.

Proponents of continuing the ban include numerous public-interest groups and advocates of media diversity. They argue that newspapers and local TV stations remain the dominant source of news for most people and that letting them combine would reduce competition and independent viewpoints.

But the other side argues that the media environment is dramatically different today -- so different that the rule is no longer necessary. The number of TV stations and radio broadcasters has increased by more than 50%, as has the number of TV broadcast networks. With most households receiving scores of channels via cable or satellite TV, the four largest networks now draw less than 50% of the prime-time audience.

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