HOLLYWOOD — Is it a rush to judgment or a long-overdue overhaul of archaic rules?Increasingly vocal pundits are arguing both sides of this question as June 2 approaches: That’s the deadline set by the FCC to decide what to do about decades-old regs that limit broadcast reach and ownership. What’s at issue? How many media outlets one company can own in the same market and a national cap barring one broadcaster from owning TV stations that reach more than 35% of the national audience. Another rule up for review bars a broadcaster from owning a newspaper in the same major market. The most impassioned voices have been coming down on the Bush administration against a relaxation of these rules. But then again, an equally impassioned set of voices was raised in protest against a war in Iraq, and they fell on deaf ears. The Bushies ignored those protestations, and they show every sign of doing the same on media deregulation. Naysayers argue that the June 2 deadline is arbitrary and that the media issues need to be more amply aired — again just as anti-war protesters argued that the timing of an invasion was at best premature. Given the political parallels, it is not surprising that the FCC itself is split, with the two Democrat members of the commission, Jonathan Adelstein and Michael Copps, coming down against further relaxation of the rules. But make no mistake: Any substantial change to these rules will unleash a new wave of consolidation, just as the repeal of the financial interest and syndication rules 10 years ago led to the Disney-ABC and Viacom-CBS combos — and the dismantling of a thriving indie production biz. What has happened in radio — where unprecedented deregulation in 1996 opened the door to two or three behemoths controlling the airwaves — could also befall television. If the strident, often intolerant tone of talk radio is any indication, TV news could also become “unfair and unbalanced.” But proponents of change argue that the rules are outdated and cite the proliferation of new cable and satcasting outlets. Speaking at a hearing in Los Angeles last week, ABC exec Mark Pedowitz asserted that the government’s efforts so far to deregulate TV have succeeded, with FCC figures showing the average cable system delivering 82 channels. “Proponents of re-regulation simply cannot make the case that consumers had greater choice in the ‘Golden Age’ of TV,” he argues. But even as unlikely a critic as Barry Diller told PBS’s Bill Moyers last week that having 80 or 90 outlets is not exactly choice if the same three or four congloms control all of them and mostly repurpose their own shows to fill the additional channels. What’s hard to pin down is just how much diversity or creativity does not make it onto the airwaves because of consolidation. It’s easy to point to what is on air — thank god for the Bochcos and the Wolfs and even Fox, which on the entertainment side of its biz boasts “The Simpsons” and “The Shield” — but it’s hard to argue about what isn’t there. In some of the more provocative anti-dereg remarks — which are not likely to win the speaker many friends at the studios and even fewer in D.C. — Jonathan Taplin, a vet producer and currently CEO of video on demand provider Intertainer, suggests there has been a long-standing, politically conservative effort to move the media toward consolidation. “I believe it was a very brilliant strategy planned by Newt Gingrich and the Republican right in the early ’80s with two major allies in the media business: Lowry Mays at Clear Channel and Rupert Murdoch at News Corp.,” he told the L.A. gathering. Step one was to get rid of the Fairness Doctrine, which was instituted in 1949 and was for 30 years the sine qua non test for renewing broadcast licenses. With Gingrich and company pushing hard and a Republican FCC, the fairness doctrine was phased out in 1987. Step two was to remove media ownership caps. Gingrich shepherded through his newly controlled congress the Telecommunications Act of 1996, which essentially eliminated the public service obligations of local stations — and benefited, among others, May’s Clear Channel and Murdoch’s Fox netlet. These two actions, killing the fairness doctrine and deregulating ownership rules, have led us to what Taplin argues is “media oligopoly.” “If the FCC and Congress continue to roll over for the media cartel, our democracy is in peril. Two companies will own 80% of the nation’s radio stations. Five companies will own 80% of the nation’s TV stations. Four companies will own 70% of the nation’s cable systems.” Taplin’s contention should unsettle some folks in supposedly liberal, Democrat-dominated Hollywood, many of whom work for congloms but who quite possibly have never considered that media consolidation may be a blatant political calculation. But even without subscribing to this theory, it may be that — despite what the Bushies say — consolidation is not all that great for business. More often than not, it narrows opportunities and rewards those who don’t rock the boat. That may be why 88% of respondents to a survey of senior execs just conducted by the Hollywood Radio and TV Society said they believed consolidation was harming the industry.
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- Bridgewater Associates, Westport, Connecticut
- Company Confidential, Aspen, Colorado
- Save the Children, Fairfield, Connecticut