Mergers There Are Several Legal

Mergers

There are several legal and ethical implications to consider when weighing the issue of further media consolidation. Media companies are generally in favor of lobbying the FCC to allow more consolidation. This applies to large firms such as AOL/Time Warner and Viacom as well as smaller companies such as Sinclair Broadcasting and the Tribune Group.

Our firm, DWI, opposes consolidation but is under pressure to change that position.

Legally, media industry consolidation falls under the auspices of two primary bodies. One is the FCC, which has placed limits on media ownership in any given market. The other is the antitrust unit of the Department of Justice, which would weigh any mega-merger against the provisions of the Sherman and Hart-Scott-Rodino Acts.

At present, the FCC is being asked to loosen ownership restrictions, but any merger would still be subject to approval from the FTC and the Department of Justice.

There are several ethical considerations as well. Most Americans oppose further mergers in the media business. These mergers are considered by many to be against the public interest. Several interest groups have emerged to stand against media consolidation, due to fears about such matters as the erosion of news coverage quality and media independence. There are presently barriers to horizontal mergers, prohibiting ownership of both print and television media in a given market, guaranteeing different voices in news. The Senate this past year nullified an FCC attempt to remove this barrier.

The issue is considered by to central to the state of democracy, for two reasons. One is the freedom of the press. Media concentration reduces press freedom and reduces the quality of discourse. Media outlets can promote their own political agendas without competition, shaping opinions of the nation's citizens. The second reason is that the United States was founded in part to curtail the powers of corporations over the people. The separation of government and business was an essential component of our democratic system.

For DWI and other media companies, however, there is another ethical consideration relating to the freedom to conduct business in the best manner possible. Government interference is our operations is an impediment to business, reduces efficiency and reduces returns for shareholders. It is important that we be allowed to pursue our business interests with a minimum of government interference. Given that the FTC and DoJ already enforce antitrust legislation, it seems unethical that the FCC also enforce such codes, specifically focused on our particular business.