grinner
05-12-2003, 03:44 PM
U.S. media may soon be transformed
By Jim Kirk and Steve Johnson | Tribune staff reporters
Posted May 11, 2003
STORIES
Once upon a time, regulation seen as a force for good
May 11, 2003
RULES UNDER REVIEW
# Newspaper-broadcast concentration: A corporation can't own a daily newspaper and a radio or TV station in the same market.
# National TV concentration: No corporation may own stations that together reach more than 35 percent of U.S. TV households.
# TV duopoly protection: A corporation can't own more than one of the top four TV stations in a market.
# Multiple-network concentration: None of the four largest networks-ABC, NBC, CBS and FOX-may merge with another.
# Radio-TV concentration: No corporation may own more than two TV stations and six radio stations in the same market, or, in large markets, one TV station and seven radio stations.
# Local radio concentration: In large markets, no corporation may own more than eight radio stations.
The way Americans receive their news and entertainment could change dramatically if a federal panel relaxes rules that would make it easier for big media players to become even bigger while also lifting a ban on the same company owning a newspaper and a TV station in the same market.
The rule changes, which many expect to be approved by the Federal Communications Commission, despite steadily growing opposition, also could dramatically reshape the nation's media business.
Some of the industry's biggest companies have the most at stake in the deregulation vote, which is expected June 2. Those companies include Tribune Co., which owns the Orlando Sentinel and the South Florida Sun Sentinel; Viacom, which owns CBS; and News Corp., which owns Fox. In recent years, all have lobbied the commission heavily to open up the industry.
Critics contend that deregulation would mean much more generic programming on consumers' TV screens and a likely narrowing of news coverage, especially in smaller cities. They also fear it would spell the end of locally produced shows that have endeared TV stations to their communities.
And they worry that the convergence of TV and newspapers in a single market could reduce the range of viewpoints on important local issues.
But supporters of deregulation say the rules, some of which date to the 1940s, are antiquated and unfairly restrain so-called mature media -- newspapers, radio and broadcast TV -- as they compete with newer media such as the Internet and cable TV.
The proposed changes have set off a rare public war at the FCC, pitting Republican Chairman Michael Powell, who is pushing for more deregulation, against two Democratic commissioners who think the public hasn't heard enough about what might be proposed. Republicans hold a 3-2 majority on the commission charged with overseeing the nation's airwaves.
Last month, Powell, the son of Secretary of State Colin Powell, reiterated his desire to deregulate the industry. But Commissioner Michael Copps, who has been hosting forums on the issue across the country, wants the public to hear more before the FCC decides what he considers the agency's most important issue in years.
"The commission doesn't have all of its ducks in a row in terms of having the feedback this issue merits," Copps said. "One of the reasons it's frustrating is that in less than a month from today, the deal would be done, the vote would be cast and . . . I don't know the details of what is going to be proposed."
Much of the world does have an inkling, though.
Besides doing away with or relaxing the rule prohibiting the same company from owning a newspaper and TV station in the same market, the FCC is expected to consider lifting the cap on the percentage of households that owners of broadcast TV stations can reach in the country. One plan would raise the limit to 45 percent from the current 35 percent.
The commission also is expected to consider easing the restrictions on the number of radio stations that a company can own in one market.
Tribune, Viacom and Fox have a lot riding on the outcome. Tribune would be forced to sell either its newspaper or its TV station in four markets where it owns both -- Los Angeles, New York, South Florida and Hartford, Conn. -- if the cross-media rules established in 1975 were left intact.
In addition, both Viacom and Fox already exceed the 35 percent broadcast TV cap under temporary waivers and are pushing for a higher permanent limit.
Though most industry watchers think Powell will likely get the deregulation he seeks, the issue has garnered curiously little media attention -- and, until recently, scant public scrutiny.
"You can't conclude people don't care if people don't even know what's going on," said Danny Schechter, a liberal media critic.
A February poll by the media watchdog organizations of the Pew Charitable Trusts found that 72 percent of Americans had heard "nothing at all" about the issue, and many of those who claimed familiarity did not, upon further questioning, understand it well.
"If the American people had heard as much about the proposed rule changes in their media landscape as they have about Laci Peterson in the last few months, this would be a front-and-center issue," said John Nichols, co-author of two books about media.
Nevertheless, media analysts are expecting a rush of merger activity worth tens of billions of dollars similar to the unexpected frenzy of consolidation in radio following a far-reaching 1996 deregulation of that industry.
That kind of rapid consolidation, critics complain, has led to the homogenization of music programming, along with the loss of a local content and personalities on many of the country's radio stations.
For Copps, it's not the deal-making that's a concern; it's what he fears will happen after the deals close. "Things like the impact on local information and local news and alternative viewpoints," he said. "What is the impact on small and medium sized [media] businesses? Could a new Ted Turner come along with a new CNN? A lot of people say not."
Others contend that another big impact will be the loss of media jobs and a general lowering of the quality of information and entertainment that many Americans will receive. Already, companies that own more than one TV station in the same market often share news resources.
There also are fears that, as in radio, some stations would drop newscasts altogether.
But supporters of consolidation say the rules need to be relaxed to level a playing field that becomes more restrictive every time new technology emerges.
Tribune executives said the cross-ownership rule is an unfair restraint at a time when broadcast regulations have been eased. And they dispute arguments that deregulation would reduce the diversity of news and opinion.
"The voices that have been raised on this issue never cite any data," said Dennis FitzSimons, Tribune's chief executive. The number of U.S. media outlets has grown, he said, not contracted.
"There were three networks in 1975," he said. "We've seen the addition of Fox, the WB, UPN, three Hispanic networks. There has been enormous fragmentation since the rule was put in place."
Newton Minow, the former FCC chairman and, more recently, a member of Tribune's board of directors, recalled testifying before Congress on cross ownership in the early 1960s.
"I said my instinct, and what I had seen around the country, was that newspaper-owned broadcast properties were more news-oriented, more public interest-oriented," Minnow said. "I still believe that."
Jim Kirk and Steve Johnson are business reporters for the Chicago Tribune, a Tribune Publishing newspaper.
By Jim Kirk and Steve Johnson | Tribune staff reporters
Posted May 11, 2003
STORIES
Once upon a time, regulation seen as a force for good
May 11, 2003
RULES UNDER REVIEW
# Newspaper-broadcast concentration: A corporation can't own a daily newspaper and a radio or TV station in the same market.
# National TV concentration: No corporation may own stations that together reach more than 35 percent of U.S. TV households.
# TV duopoly protection: A corporation can't own more than one of the top four TV stations in a market.
# Multiple-network concentration: None of the four largest networks-ABC, NBC, CBS and FOX-may merge with another.
# Radio-TV concentration: No corporation may own more than two TV stations and six radio stations in the same market, or, in large markets, one TV station and seven radio stations.
# Local radio concentration: In large markets, no corporation may own more than eight radio stations.
The way Americans receive their news and entertainment could change dramatically if a federal panel relaxes rules that would make it easier for big media players to become even bigger while also lifting a ban on the same company owning a newspaper and a TV station in the same market.
The rule changes, which many expect to be approved by the Federal Communications Commission, despite steadily growing opposition, also could dramatically reshape the nation's media business.
Some of the industry's biggest companies have the most at stake in the deregulation vote, which is expected June 2. Those companies include Tribune Co., which owns the Orlando Sentinel and the South Florida Sun Sentinel; Viacom, which owns CBS; and News Corp., which owns Fox. In recent years, all have lobbied the commission heavily to open up the industry.
Critics contend that deregulation would mean much more generic programming on consumers' TV screens and a likely narrowing of news coverage, especially in smaller cities. They also fear it would spell the end of locally produced shows that have endeared TV stations to their communities.
And they worry that the convergence of TV and newspapers in a single market could reduce the range of viewpoints on important local issues.
But supporters of deregulation say the rules, some of which date to the 1940s, are antiquated and unfairly restrain so-called mature media -- newspapers, radio and broadcast TV -- as they compete with newer media such as the Internet and cable TV.
The proposed changes have set off a rare public war at the FCC, pitting Republican Chairman Michael Powell, who is pushing for more deregulation, against two Democratic commissioners who think the public hasn't heard enough about what might be proposed. Republicans hold a 3-2 majority on the commission charged with overseeing the nation's airwaves.
Last month, Powell, the son of Secretary of State Colin Powell, reiterated his desire to deregulate the industry. But Commissioner Michael Copps, who has been hosting forums on the issue across the country, wants the public to hear more before the FCC decides what he considers the agency's most important issue in years.
"The commission doesn't have all of its ducks in a row in terms of having the feedback this issue merits," Copps said. "One of the reasons it's frustrating is that in less than a month from today, the deal would be done, the vote would be cast and . . . I don't know the details of what is going to be proposed."
Much of the world does have an inkling, though.
Besides doing away with or relaxing the rule prohibiting the same company from owning a newspaper and TV station in the same market, the FCC is expected to consider lifting the cap on the percentage of households that owners of broadcast TV stations can reach in the country. One plan would raise the limit to 45 percent from the current 35 percent.
The commission also is expected to consider easing the restrictions on the number of radio stations that a company can own in one market.
Tribune, Viacom and Fox have a lot riding on the outcome. Tribune would be forced to sell either its newspaper or its TV station in four markets where it owns both -- Los Angeles, New York, South Florida and Hartford, Conn. -- if the cross-media rules established in 1975 were left intact.
In addition, both Viacom and Fox already exceed the 35 percent broadcast TV cap under temporary waivers and are pushing for a higher permanent limit.
Though most industry watchers think Powell will likely get the deregulation he seeks, the issue has garnered curiously little media attention -- and, until recently, scant public scrutiny.
"You can't conclude people don't care if people don't even know what's going on," said Danny Schechter, a liberal media critic.
A February poll by the media watchdog organizations of the Pew Charitable Trusts found that 72 percent of Americans had heard "nothing at all" about the issue, and many of those who claimed familiarity did not, upon further questioning, understand it well.
"If the American people had heard as much about the proposed rule changes in their media landscape as they have about Laci Peterson in the last few months, this would be a front-and-center issue," said John Nichols, co-author of two books about media.
Nevertheless, media analysts are expecting a rush of merger activity worth tens of billions of dollars similar to the unexpected frenzy of consolidation in radio following a far-reaching 1996 deregulation of that industry.
That kind of rapid consolidation, critics complain, has led to the homogenization of music programming, along with the loss of a local content and personalities on many of the country's radio stations.
For Copps, it's not the deal-making that's a concern; it's what he fears will happen after the deals close. "Things like the impact on local information and local news and alternative viewpoints," he said. "What is the impact on small and medium sized [media] businesses? Could a new Ted Turner come along with a new CNN? A lot of people say not."
Others contend that another big impact will be the loss of media jobs and a general lowering of the quality of information and entertainment that many Americans will receive. Already, companies that own more than one TV station in the same market often share news resources.
There also are fears that, as in radio, some stations would drop newscasts altogether.
But supporters of consolidation say the rules need to be relaxed to level a playing field that becomes more restrictive every time new technology emerges.
Tribune executives said the cross-ownership rule is an unfair restraint at a time when broadcast regulations have been eased. And they dispute arguments that deregulation would reduce the diversity of news and opinion.
"The voices that have been raised on this issue never cite any data," said Dennis FitzSimons, Tribune's chief executive. The number of U.S. media outlets has grown, he said, not contracted.
"There were three networks in 1975," he said. "We've seen the addition of Fox, the WB, UPN, three Hispanic networks. There has been enormous fragmentation since the rule was put in place."
Newton Minow, the former FCC chairman and, more recently, a member of Tribune's board of directors, recalled testifying before Congress on cross ownership in the early 1960s.
"I said my instinct, and what I had seen around the country, was that newspaper-owned broadcast properties were more news-oriented, more public interest-oriented," Minnow said. "I still believe that."
Jim Kirk and Steve Johnson are business reporters for the Chicago Tribune, a Tribune Publishing newspaper.