There's a great deal of griping about the media around these parts. And it's justified. Large segments of the traditional media just does not do a good job of adequately informing the general public about important political issues. We could spend all day critiquing the content that the traditional media puts out. And for those engaged in that project, I say: godspeed.
But with the beginning of the Obama Administration less than two short weeks away, it seems important to look at why it is that the media just does not provide us with the news that we want. In my opinion, the traditional media's failings have a lot to do with who owns the stations and newspapers that put out the news. More and more, the answer to the question of who owns the media is easy: huge multinational corporations. These conglomerates have been allowed to consolidate their holdings and take control of larger and larger segments of them media because regulators and legislators in Washington (with the assistance of the federal courts) have allowed it to happen.
While there is an ongoing debate about the merits of allowing greater concentration of media ownership, there is simply no denying that there have been successive waves of media consolidation that have washed over all of the most prominent media outlets in the traditional broadcast and print mediums. Overall, the number of independent television station owners has dropped 40% since 1995, and the number of commercial radio station owners has declined by 34% since 1996.
As one stark piece of evidence that illustrates this larger movement towards more concentrated ownership, consider that following 1996 legislation that removed the cap on the number of radio stations that can be owned by one corporation, Clear Channel Communications can now potentially reach over a third of the U.S. population and has over 100 million listeners.
This consolidation of media ownership is the direct result of deregulatory policies put into place by both Congress and by the Federal Communication Commission’s (the "FCC") media ownership rules instituted since the mid-1980s. Overall, these policies reflect a trend in which policymakers at the legislative and administrative levels have seemingly moved away from a concern with how to structure media ownership in such a way that will make it more responsive to and reflective of the needs of a democratic society in favor of legislation and regulation that is more focused on large multinational conglomerates’ ability to maximize profits.
While this focus may have paved the way for corporate mergers and media outlet combinations that increase supposed efficiencies that can be achieved by slashing news staffs and reducing the resources available to report on issues of importance to local communities, it has done little to advance ordinary citizens’ First Amendment interests in the kinds of free and diverse communications that are actually useful in the process of self-governance. This deregulatory era has been helped along by the marked decline in the belief that the government has a role in ensuring that communities have a robust number of independent voices that can act as a safeguard against the accumulation of concentrated power over the communicative mediums that have influence over public opinion and a concomitant – and unfortunate – focus on merely creating a set of market conditions that will make large media firms more competitive with each other.
With the election of a Democratic President and the changes that a new administration will make to the composition of the FCC, along with the newly enlarged Democratic majorities in both congressional chambers, it seems like an opportune time to assess the policies that have paved the way for greater media consolidation, to evaluate why media ownership regulation is important and whether such regulation of traditional media outlets like broadcast stations and newspapers is even necessary any longer, and to set out a couple of different specific policy proposals that might restore some needed balance to the media ownership landscape.
For this reason, I'm going to be posting a series of diaries that will: 1) trace the recent deregulatory trend; 2) suggest that this trend is potentially dangerous to maintaining an informed citizenry that is capable of self-governance; 3) argue that regulation of broadcast media and newspapers remains necessary for the time being; and 4) provide possible avenues of reform that could lead towards the growth of new media with the potential to erase some of the negative effects of the more recent trend towards increased consolidation.
Where It All Went Wrong: The Deregulatory Trend of the Last Three Decades
The FCC is statutorily required to oversee "interstate and foreign commerce in communication" by crafting regulations that are consistent with "the public interest, convenience and necessity." The Supreme Court has ratified the idea that, in determining what kinds of regulations are necessary in the public interest, the FCC fulfills its statutory mandate by considering "the right of the viewers and listeners" over and above the rights of the broadcasters. This primary concern with the rights and interests of the public is the basis for a model of broadcasting in which the broadcaster must serve the community in which it is located, an idea that in turn paved the way for the regulation of the corporate entities that owned broadcast stations in order to promote a more open communications structure that would provide the public with the best possible service.
In order to try and ensure that the media owners in a particular community actually served the public by providing it with access to a diversity of programming and viewpoints, the FCC crafted regulations aimed at limiting the ownership of multiple media outlets in one community by one single entity based on the theory that a greater diversity of owners would provide more voices and disperse the concentration of economic power.
The FCC has a long history of regulating media concentration through a patchwork of rulemaking and ad hoc licensing decisions that began with the first national ownership limits, the Chain Broadcasting Rules (which, among other things, prohibited FM radio station owners from owning more than six stations nationally), which they passed in 1941, followed by the approval of various measures that, for example, placed a hard cap on the number of a particular type of media outlet one company could own, limited local duopolies, and instituted various cross-ownership rules that limited one entity’s ownership or control of more than one type of media within a local market.
From the inception of its initial regulation of broadcast, the Supreme Court gave the FCC a wide berth in setting limits on media ownership. Two important decisions, National Broadcasting Co. v. United States and FCC v. National Citizens Committee for Broadcasting, both accepted the basic premise that promoting a diversity of voices in the marketplace was an important governmental goal and that limits on ownership worked to further diversity. In addition, the Supreme Court approved of the ownership restrictions implemented by the FCC as long as the agency could identify a reasonable or rational basis for claiming that the regulations furthered the desired diversity.
However, this relatively uninterrupted period of FCC regulation of broadcast regulation and the subsequent court ratification of the ownership restrictions that those regulations put in place began to come to an end with the deregulatory trend that began with the election of Ronald Reagan in 1980, a trend that has carried through to the early part of the 21st century and the presidency of George W. Bush. For its part, the FCC began to systematically dismantle its structural regulations in the 1980s. Chairman Mark Fowler, a Reagan appointee, pushed back against the idea that broadcasters should serve as community trustees, arguing that this view should be replaced by "a view of broadcasters as marketplace participants," with communications policy deferring to market force.
Fowler ushered rulemakings through the Commission that raised the national ownership cap for FM, AM, and television stations from seven of each kind per owner with a cognizable ownership interest, to a maximum of twelve of each per owner. The FCC did, however, respond to congressional pressure and temper the reach of this national level deregulation of television station ownership by also passing a rule that prohibited any one entity from owning or controlling television stations that reached 25% of the national audience.
It was not long before Congress joined the FCC in the march towards a deregulated media marketplace that allows for greater ownership consolidation. After Republicans gained control of Congress during the 1994 midterm elections, they passed (and President Clinton signed) the 1996 Telecommunications Act ("the 1996 Act"), which has had a profound effect on the FCC’s regulation of media consolidation. The Act officially sanctioned a "pro-competitive, de-regulatory national policy framework designed to accelerate" the development of advanced telecommunications technologies by "opening all telecommunications markets to competition."
In practical terms, these stated goals had a number of legislative consequences. First, the Act eliminated the twelve-station rule that limited the number of media outlets of a particular type that a given entity could own nationwide. For television stations, the legislation replaced this strict numerical limit with an expanded audience reach cap for national television stations that permitted a single broadcaster to reach up to 35% of American households. It also completely eliminated the national cap on radio station ownership, which allowed one entity to acquire a virtually unlimited number of radio stations across the nation.
Finally, and perhaps most importantly, § 202(h) of the 1996 Act instructed the Commission that it was required to conduct biennial rulemaking proceedings (since changed to quadrennial reviews) in order to determine whether any of its ownership rules "are necessary in the public interest as the result of competition." Section 202(h) instructs the FCC that, during these reviews of the ownership rules, it "shall repeal or modify any regulation it determines to be no longer necessary in the public interest" because of "meaningful economic competition between providers of such [broadcast] service."
Both the Commission and the courts have assumed that this statutory provision erects a strong presumption in favor of deregulation since it requires that the FCC either justify or eliminate any regulations that limit the concentration of media ownership. During the course of the subsequent reviews mandated under the 1996 Act, the FCC has made several attempts to revise its ownership caps, which have, in turn, led to court battles over both the rules’ retention and their elimination or modification.
In two decisions handed down in 2002, Fox Television Stations v. FCC and Sinclair Broadcast Group, Inc. v. FCC, the D.C. Circuit overturned FCC attempts to justify the existence of a particular portion of its ownership rules, rejecting the FCC’s assumptions that any regulation that works towards limiting ownership concentration automatically furthers diversity.
The Fox Television Stations case involved a review of the FCC’s decision in its 1998 Biennial Review to retain the cable/broadcasting cross-ownership and national television ownership rules. Working under the assumption that the 1996 Act "carries with it a presumption in favor of repealing or modifying the ownership rules," the court remanded the national television rule to the FCC for further consideration largely because it insisted that the FCC did not take the large number of new television stations that had been created into account in its decision.
In addition, the court decided to take the relatively drastic step of completely vacating the cable/broadcast cross-ownership rule, finding both that the FCC’s decision was arbitrary and capricious under the APA and that the retention of the rule violated Section 161 of the 1996 Act.
In Sinclair Broadcast Group, Inc., the Court of Appeals considered the FCC’s decision to relax the television duopoly rule in markets in which there are eight independently owned television stations. In its Order, the FCC set out that it would only count broadcast television voices in determining if the eight voice threshold had been met in a given market because of what it felt was uncertainty regarding whether cable stations provided meaningful alternatives to broadcast channels. The court rejected this approach, holding that the Commission’s exclusion of cable from the voice count was irrational, especially given the fact that the FCC never provided any evidence that would provide a reasoned basis why broadcast outlets, but not cable stations, should be counted as independent voices in a market.
In other words, the panels in both of Fox Television Stations and Sinclair Broadcast Group, Inc., seemingly responding to the statutory language of the 1996 Act and its presumption that ownership limits should be repealed unless it could be shown that they served the public interest, demanded that the FCC provide hard evidence that demonstrated how the ownership limits under review would actually lead to a greater number of viewpoints in the market.
Notwithstanding the deregulatory language of the 1996 Act, it is certainly not clear if the appeals courts in these cases showed sufficient deference to the FCC’s stated rationale for the ownership rules, especially given the standard of review set out in National Broadcasting Co. and National Citizens Committee for Broadcasting. Regardless, it is apparent that the FCC struggled mightily with this more searching review of the reasoning behind its ownership restrictions.
Tomorrow, I'll post another diary, outlining the FCC's rulemaking response to these decisions, and the Prometheus Radio Project case that overturned significant portions of the rules that they passed.