Dizzy data has FCC in a cap tizzy

Org published 12 studies on consolidation's impact

NEW YORK — Four of the five FCC commissioners Thursday said they’re stumped, frustrated and downright scared courts will toss out key restrictions on media ownership — unless they’re handed hard data showing the regulations protect the public interest.

It’s a complex case to make, which is why the Federal Communications Commission recently published 12 studies to get the ball rolling. But facts on just how consolidation has impacted the media biz can be controversial and contradictory. The commissioners seemed hungry for something definitive to help them take a stand, before the courts and before consumers.

“The rule falls unless otherwise justified. The court said we want empirical justification for the rules or we’ll eliminate it,” Federal Communications Commission chair Michael Powell said ominously during a forum on FCC Media Ownership Rules hosted by Columbia U. Law School. He and fellow commissioners Michael Copps, Jonathan Adelstein and Kevin Martin asked the participants for guidance.

They got plenty to chew on, although not much was new. Event featured all-day panels where public interest advocates, representatives from think tanks and Hollywood guild members (“Oz” creator Tom Fontana and actor Richard Masur) well outnumbered industry reps like Viacom’s Dennis Swanson, Fox Entertainment Group’s Ellen Agress and David Poltrack of CBS.

Powell himself had said he didn’t believe in public hearings, but he was apparently pressured into attending this one. The slowly germinating public interest in the issues may not change the outcome. But it is likely to slow the review process and quiet accusations of back room dealings between the FCC and the powerful interests it regulates.

Powell also criticized a congressional mandate requiring the FCC to conduct a biannual review of ownership rules, calling it “regrettable and destabilizing” to have to revisit the regs so often. “There will be rules when this is done,” he promised. “There won’t be a rule that lets one person own everything.”

Neophyte commissioner Adelstein, who was appointed in December, finds the task intimidating. “Imagine, the future of the media landscape and the future of our democracy is something in which you have one of five votes. I think we have too much responsibility and not much guidance.” The Supreme Court wants the commission to protect “the uninhibited marketplace of ideas,” to guard the public interest. “The courts want that quantified,” he said. But the FCC will be hard-pressed to “get answers to these kinds of questions in the time frame we have been given.”

Powell has asked for a vote on the regs this spring. Some rules under review include a 35% broadcast ownership cap; a ban on newspaper-TV cross ownership in one market; cable ownership caps (the FCC’s 30% cap was thrown out by a D.C. court); a dual network ownership rule; and restrictions on duopolies and triopolies.

5 giants dominate

Arguments for keeping or beefing up the regs haven’t changed much. Advocates insist five giant congloms — AOL Time Warner, Viacom, Walt Disney, News Corp. and GE/NBC — rule the media roost to a scary degree and that it’s folly to give them any more muscle. Local news and entertainment content have sunk to the lowest common denominator, they argue.

There may be hundreds of channels, but 90% of the 50 top nets are owned by the big five, as are the most popular Internet sites. There are few minority voices. TV producers like Fontana fumed at insider deals to repurpose shows from broadcast to cable.

Radio’s cautionary tale

Critics of consolidation have a potent weapon in the story of what’s happened in radio. Even many fans of deregulation don’t deny that giant Clear Channel Communications has distorted the radio business. Company amassed more than 1,000 stations since a first wave of deregulation hit after in the 1996 Telecom Act.

Trouble is, without facts and figures, caps and regulations can seem arbitrary. “You may agree a media company can become too big. But at what point — 35%, 42%, 50%?” said one Wall Streeter at the forum.

Fox’s Agress urged folks to “move away from big must be bad,” and claimed that current antitrust regulations that apply to all industries should be the only barrier to media consolidation.

“The FCC never thought there could be a fourth network,” she said. Fox was able to create a real competitor only because Financial Interest and Syndication rules fell, duopoly regs were relaxed, and the broadcast cap was raised, she added.

Swanson swore that CBS is devoted to local news and said the TV network biz is so expensive that nets need to own as many stations as they can. Besieged by hostile questions, he jibed the forum for a lack of balance on its panels.

Public demand

Poltrack said TV content is better than ever, and if people watch conglom fare, it’s because of its superior quality. He said networks often take stakes in shows because they can’t find partners willing to share the risk. And he maintained that nets are experimental in looking for new formats, like reality shows, to attract viewers.

“I know it puts actors out of work. I know it hurts the craft unions. But that’s what people want to watch.”

He said it’s no secret programs skew young to please Madison Avenue. “That’s the commerce of the business.”

USC is organizing another forum on FCC regs next month, and the FCC has planned a single hearing on the issues on its own account to be held in Richmond, Va.

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