This paper examines the Federal Communications Commission's 2003 broadcast ownership rule changes, which were mandated by the Telecommunications Act of 1996. It outlines what the new rules permit — including cross-ownership of newspapers and television stations, expanded national audience caps, and tightened radio ownership limits — and presents arguments from both critics and supporters. Critics warn of reduced media diversity, monopolistic advertising markets, and diminished minority ownership, while proponents argue the rules encourage competition and reflect a changed media landscape. The paper also considers the constitutional relationship between the FCC and Congress, noting the Senate's unusual vote to overturn the rules and President Bush's threatened veto of any repeal legislation.
This paper examines the Federal Communications Commission's recent rule changes regarding broadcast ownership in the United States. Specifically, it discusses what the rule changes involve, the arguments on both sides of the issue, and the relative relationship and authority between the FCC and Congress in this dispute. The FCC's new rule changes were initially mandated by the Telecommunications Act of 1996 and have created a storm of controversy since they were announced in June 2003. Congress intervened in the ruling, and the President vowed to veto any bill Congress passed to repeal the rules.
The controversy continues, but is it really necessary? Are the FCC rules truly so harmful, and do they spell the end of free enterprise in the media? Many people support the rules and feel they will bring more choice to the American media. The results remain to be seen; however, whatever happens, the new FCC rules have certainly aroused the passions of those who both support and oppose these changes.
The Federal Communications Commission (FCC) issued new rules regarding broadcast ownership in America, and those rules have generated great controversy since they were announced. Basically, the "FCC's rules make it easier for media corporations to buy more newspapers and television stations but tighten radio ownership rules" (Ahrens). Many critics believe that allowing large media corporations to purchase even more newspapers and television stations would not only create a monopoly in many areas, it would produce a significant lack of independent thought in news and media. With a few large corporations controlling essentially all media in many areas, free thought and expression could be replaced with a corporate spin on all available news.
Before the FCC passed the new rules, millions of Americans voiced their displeasure by writing letters and sending petitions to Washington. Nevertheless, the FCC chose to proceed, approving the new rules despite the growing public opposition. In an unusual move, the Senate voted to overturn the rules, "employing a little-used legislative tool for overturning agency regulations" (Ahrens). The Senate's vote, spearheaded by Senator Byron L. Dorgan of North Dakota, reflected the views of many constituents who had made their arguments against the rules before the FCC put them into effect.
Why are the new rules so controversial? The rules allow a newspaper to buy a television station in the same city, or vice versa — combinations known as "cross-ownership." The new rules also permit a broadcast network, such as ABC or Fox, to own a group of stations reaching up to 45% of the national audience, up from the previous cap of 35%. They allow one media company to own more than one station in many cities. Finally, the new rules tighten radio ownership rules, essentially capping national radio consolidation. This provision would also be overturned by Senator Dorgan's resolution, allowing radio conglomerates to continue growing (Ahrens).
In areas where one large media conglomerate owns several stations in the same city, the resulting coverage could become a homogenized blend of views, with each station closely resembling its sister outlets. Coverage could become indistinguishable from one station to the next. In fact, some large media corporations already employ a technique known as "Central Casting," in which most operations for all stations — including accounting, programming, graphics, and technical functions — take place in one central location, with only a skeleton crew operating remote stations in other cities (White). Multiple stations in the same viewing area could therefore take on a common look, feel, and design, effectively becoming "McDonald's-like" clones of each other. As one critic notes, "Some cities will even have the same newscasts running on two different stations in the same market, with the same edited stories, same graphics, same anchors and same production crews for both stations. The only difference will be the 'bug' graphic sitting on the screen the whole time" (White). It could become nearly impossible for a home viewer to discern which station they were watching, because they would all look alike.
In addition, these conglomerates would also command the advertising market in their areas and could conceivably set and hold prices at inflated levels, since there might be no alternative for local advertisers. This could harm the small advertiser who relies on television or radio as their primary advertising medium, and could ultimately lead to reduced advertising revenue for the conglomerates themselves as rising rates drive out advertisers who cannot afford them. This, in turn, could negatively affect business and economic activity in smaller communities.
Some groups also argue that the new rules represent a setback for diversity and minority ownership of media, as well as a threat to free speech. If larger conglomerates acquire more stations, the opportunities for small, independent owners diminish. Since women and other minorities already own relatively few stations, the prospects for expanded minority ownership and diverse viewpoints can only shrink further as larger companies move to acquire additional stations. Free speech is thus threatened because smaller voices will be drowned out by the larger voices of conglomerates and their centrally produced content.
While the new rules have generated considerable controversy and public outcry, not everyone finds them objectionable or sees the need to repeal them. "The new FCC rules were championed by FCC Chairman Michael K. Powell, who argued that consolidation was less a threat now than when the rules were enacted because consumers have many more choices for their news and entertainment" (Ahrens). Many agree with Powell and view the new rules as a necessary adaptation for the media business in the 21st century.
One writer argues that part of the reason there is so much controversy surrounding the new rules is that they would allow smaller media corporations — such as Fox and Clear Channel — to become larger players in the national market, and that established media giants such as ABC do not wish to face increased competition. As he writes:
"It's no mere coincidence that two of the companies handcuffed by the current caps are Fox Television and Clear Channel, America's largest owner of radio stations. Fox, with its refreshing lack of a leftist bias, has been gobbling up market share from the big three networks and CNN. Clear Channel, which operates approximately 1,200 radio stations nationwide, has ruffled some 'mainstream' media feathers with the pro-war slant and conservative disposition of many of its on-air personalities" ("Broadcast Deregulation Needed" A18).
Many proponents of the legislation also object to government interference in FCC business, arguing that the federal government already wields too much power and should not be meddling in media regulation. Moreover, it was Congress itself that mandated the FCC review its rules every two years. Following the passage of the 1996 Telecommunications Act, the FCC conducted a comprehensive review and arrived at what it considered necessary changes. As the FCC stated in its own press release:
"In the 1996 Telecommunications Act, Congress mandated that the FCC review its broadcast ownership rules every two years to determine 'whether any of such rules are necessary in the public interest as a result of competition.' The Act requires the FCC to repeal or modify any regulation it determines to be no longer in the public interest. The FCC's decision today found that all of the broadcast ownership rules continue to serve the public interest either in their current form or in a modified form" (FCC 1).
"Proponents cite competition and consumer media choice"
"FCC defends rules using Diversity Index and market data"
White, Charlie. "FCC and McBroadcasting: Take the Road Not Taken." Broadcastnewsroom.com. June 2003. 3 Nov. 2003.
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