Fed Ruling Could Make More Media Monoliths

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The big TV networks say they need to be able to buy more local stations in order to compete with the cable networks.

One Big Voice?

Feds Consider Dropping Rules on Media Ownership

The federal government is weeks away from a decision that could affect what Americans see, hear and read in the media for years to come.


On June 2, the Federal Communications Commission will decide whether to relax media ownership rules that restrict the reach of the nation's networks and newspapers.

One rule designed to ensure diversity on the public airwaves limits the number of local television stations that networks can own.

The rules date back to 1941, when Franklin Roosevelt was president and only two television networks existed.

Those who want to relax the restriction argue that the rules are now obsolete, in these days of cable TV, satellite TV, radio and the Internet.

"These rules have to be modified to reflect the media environment that our children see, not that ones that our grandparents saw," said FCC Chairman Michael Powell.

Opponents worry about the fallout from more media consolidation.

"If you want homogenized music, if you want no localism in your political viewpoint, if you want no localism in your coverage, fine, then vote for the changes," said FCC Commissioner Michael Copps.

Currently television networks are allowed to own local stations that, combined, reach no more than 35 percent of viewers nationwide. The commission reportedly will consider increasing that to 45 percent.

The commission may also increase the number of television stations that one company can own in a single city.

Fit to Print

The other major rule up for review dates from the 1970s. It bans newspaper companies from owning television or radio stations in the same city where the newspaper is published. The FCC is expected to consider doing away with that ban in large and medium-sized cities.

In Chicago, the Tribune Co. owns the city's largest newspaper, as well as a radio and TV station. This arrangement, in place before the FCC ban, was grandfathered in.

The company, which has lobbied hard to do away with the so-called cross-ownership ban, takes the position that the newspaper and TV newsrooms work together, which benefits the public.

"Stations owned by newspaper did more news and public affairs and presented in a superior fashion than any other category of ownership," said Shaun Sheehan, a company vice president.

Sheehan disputed concerns that consolidation would lead to less diversity in the media. "I think this great fear of somehow, this monolithic force is going to take over the world, is way overblown," Sheehan said.

The big networks including ABC, which is owned by the Walt Disney Co. are also in favor of relaxing the rules. Network executives argue that networks need to buy more local stations to ensure the survival of free, over-the-air television as it competes with cable TV.

"It is almost impossible to run an entertainment network today at a profit. The profit comes through the stations," said Rupert Murdoch, chairman and CEO of News Corp., which own the Fox network.

But opponents argue that the airwaves are public and that the public good is at stake. They point to what happened when rules on radio ownership were relaxed in 1996. Since the change, a huge consolidation of the industry has taken place with about 30 percent fewer radio owners now.

Anybody There?

Take the example of Minot, N.D. Six of the seven radio stations there are owned by the same company Texas-based Clear Channel. Clear Channel grew from 43 stations to nearly 1,200, after the government eased limits on radio ownership.

Residents of Minot point to what happened when a train derailed one night in January 2002, spreading a toxic cloud over the town. Many residents turned to the radio for news, but they heard only computerized music.

Jennifer Johnson, a second-grade teacher in Minot, was huddled in her basement with the radio on. "I didn't know what had happened and I didn't know what to do, and that's what scared me more than anything," she said.

Minot police could not reach the one Clear Channel employee on duty. "We have for as long as I can remember told people, when there's an emergency turn your radio on. The information will be there," said police Lt. Fred DeBowey.

Clear Channel officials said it was a miscommunication between authorities and the radio stations, which they said has now been cleared up.

Company CEO Lowry Mays declined to talk to ABCNEWS. But he he told Fortune magazine: "We're not in the business of providing news and information. We're in the business of selling our customer's products."

It's that focus on profit rather than the public good that worries those opposed to further media consolidation. But both sides do agree on one point: that whatever the commission decides, the decision will be appealed in the courts.