250 people attended a "Town Meeting on the Future of the Media" held at Old Dominion University in Virginia on Thursday, March 30th. There they heard FCC Commissioner Michael Copps talk about the government agency's controversial proposal to relax media ownership limits, a plan which Copps opposes. The event was co-sponsored by Old Dominion and Free Press, a media reform group.

"I believe that if we roll up our sleeves," Copps told the gathering, "all of us – workers, artists, elected officials, regulators, consumers, citizens everywhere – can settle this issue of who is going to control our media and for what purposes, and we can settle it in favor of airwaves of, by and for the people of this great country."

Two key questions stand out among the many that the FCC faces. Should the Commission drop its ban on media "duopoloies"?—a company owning two or more TV stations in the same market. And should the FCC rescind its prohibition on a firm owning a newspaper and a TV station in the same market?

In 2003 the FCC ruled 'yes' on both of these questions, but a Federal Court stayed the decision, arguing that the agency's logic had been flawed. Now the Commission is going to tackle the issue again. Media companies and public interest groups are lining up to tell the FCC what they think.

 

On March 24th, the Media General corporation submitted a 60 page position paper to the FCC urging the Commission to abandon the TV/newspaper cross-ownership ban. The firm owns almost 150 newspapers and 26 TV stations, mostly around the southeastern United States.

"Media General’s experience demonstrates that significant relaxation, if not elimination, of the rule will improve and enhance the delivery of local news in communities of all sizes and will not harm competition in local advertising markets," the company's brief argues. "Small market relief is critical."

Adam D. Thierer also questions these rules. A senior fellow at the Progress and Freedom Foundation in Washington, D.C., Thierer is author of Media Myths: Making Sense of the Debate Over Media Ownership. Progress and Freedom describes itself as "a market-oriented think tank that studies the digital revolution and its implications for public policy." This is the second of a series of interviews on the media ownership debate.

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LL-FCC: As the FCC returns to deliberating on media ownership limits, what outcome do you hope for in the process?

Adam D. Thierer: There is the chance now that we are finally going to get the fifth FCC Commissioner confirmed here soon so that there will be enough votes on the Commission for advancing some sort of media ownership liberalization agenda, albeit one that is far narrower than the agenda that Chairman Michael Powell tried to push through during his tenure.

What appears to be happening is that FCC Chair Kevin Martin has, by most accounts, decided to narrow the focus, probably to the newspaper cross-ownership rule, which of course deals with the ownership of a newspaper and a broadcast entity, either a radio or a television station within the same media market. Since 1975 this has been illegal, except for certain markets where waivers were obtained by existing providers. But since then there has been no change in the rule, and most people believe that rule is ripe for review.

LL-FCC: Is that what you think?

AT: I think it is ripe for review. I think it is one that is doing quite a bit of damage because, let's face it, the newspaper market is one that is changing more rapidly than any other and is encountering some really difficult competition that threatens its future. I think that most people realize that it would be better to have consolidated ownership of a newspaper than no ownership at all.

And that's really the tough choice that some regulators or lawmakers are going to have to face up to. Consolidation is not necessarily a dirty word. There are great benefits that come along with greater scale and scope in a cost-intensive industry like newspapering. But in some cases it's just the only option that exists. Either an existing owner in that market takes over that paper. Or that paper potentially just goes under.

LL-FCC: A lot of people, even conservatives, as you point out in your book Media Myths, responded to the FCC's media liberalization proposals with alarm. They worried that TV duopoloies and cross-owned TV/newspaper systems could mean more and more media controlled by fewer and fewer sources. Don't you think that that fear is at least understandable?

AT: Well, I think that there has always been a lot of fear about media. The debate over media ownership is equally as much a debate about social policy objectives or political objectives as it is economic policy. And what I mean by that is that everyone has an axe to grind with media for one reason or another. Media is everywhere. It's something we care deeply about. And we all have opinions about it, and that goes for people on the left, right, and center and everywhere in between. And I think the debate over media ownership last time around became very much a political or social debate about the power of media in our lives, or specific things that people thought they wanted to see more or less of in today's media universe.

What I argue is do we have more options relative to the past? Do we have more media diversity? Because these rules were put in place to achieve the objective of keeping at least a certain amount of diversity alive and well in each media marketplace. In a world of media scarcity like we had in the past, those rules probably made a certain amount of sense, but today scarcity is the last word that comes to anyone's lips when you talk about media. If anything we talk about media abundance or information overload. And so in that environment, do these rules continue to make sense if they single out certain old providers relative to newer ones, such as things like cable, and satellite, and the Internet, and various other new forms of media?

LL-FCC: But the court that struck down the FCC's rulings pointed out that the main flaw of the Commission's decisions was that its studies assumed all media to be equal in impact. Do you really think that Fox Television and, say, my Web site (www.lasarletter.com), are equivalent in scope and reach?

AT: Of course not. And of course there will always be some media providers and owners that will always be more powerful and influential than others. That's the case in every industry in America, of course; it's just that some people believe media are special, or different, or should be regulated differently. My argument is that to the extent market power becomes a problem, we have a solution to that, it's called the anti-trust laws. But instead what we do is we regulate preemptively in a prophylactic way to say 'That shalt not do x, y, and z.' And my argument is that you really don't need those sort of preemptive, prophylactic limits in a world where you have more competition and diversity developing.

And indeed, the very existence of those limits at some point potentially threatens some of the vitality or livelihood of some of those older media operators. And potentially raises some serious First Amendment issues. Because it is my contention that if you can regulate the size and shape and ownership of the soapbox upon which someone stands to deliver their speech, it means that you can potentially regulate their speech in important ways too.

LL-FCC: How do you think that the debate over ownership limits will be different this time than it was five years ago?

AT: I think the difference this time around is that Chairman [Kevin] Martin will have learned the lesson that Chairman [Michael] Powell taught him. Chairman Powell decided to approach the issue of media ownership liberalization in a comprehensive way by roping all of the rules together and saying 'In a world where we have convergence and intensive cross platform competition, these rules need to be considered in the aggregate as one.'

That was correct in theory, and it was a disaster in application or practice. The reality was that that gave the opponents of liberalization a big, juicy target to go after in the courts and man did they hit a bulls eye when they went after it. Chairman Martin has learned that lesson, I believe, and has decided to go about it the old way, which is to disaggregate these issues, take them on a case by case or one-by-one basis, and look at each rule as is needed and determine where you can make a little bit of inroad and achieve some reform successfully.

The newspaper rule, in that regard, is the easiest place to start, for the simplest reason: newspapers are in the most trouble. And at some point that rule has to be loosened if for no other reason than that and the fact that it hasn't been tinkered with at all since 1975.

One final point to bring up: that newspaper cross-ownership rule also has a number of holes in it that make it look quite silly—namely, it has a bunch of waivers. So that you can look in certain markets like Chicago, where the Tribune Company is allowed to own both a local television station and an important one, WGN, and a local paper, the Chicago Tribune. It's not the only local paper, of course. The point is that there are a number of waivers or exemptions to this rule which in some ways make a mockery of it. And it just doesn't seem fair that some of the older players were able to be grandfathered in while newer players cannot.

LL-FCC: You referred at the beginning of this interview to the likely presence of a fifth commissioner to the FCC. Do you have any thoughts about the potential impact of President Bush's nominee, Robert M. McDowell, on this debate? He seems like a bit of a wild card.

AT: That's exactly the way that I was going to put it, that McDowell is a bit of a wild card. We have a really good feel for his beliefs on traditional telecommunications policy issues. We have absolutely no idea what his views on media policy issues are. So he comes in as a wild card, but he is at least nominally a Republican and in theory should be on Kevin Martin's side on most of these issues. But again, that's just a hunch based on his party affiliation. And does not mean that it is a done deal, especially with the way some of these issues break down on the Commission these days. You never quite know on some of these media issues.

LL-FCC: Kevin Martin didn't necessarily vote with Michael Powell on some of those telecom questions.

AT: Yes. There was one issue in particular where he jumped ship and sided with the Democrats that really hurt Powell. People remember that, but it's important to recall that that really was an exception to the rule and when it came to media ownership, Kevin [Martin] marched in lock-step with Powell. It's just that now that he's Chairman I don't think he's going to repeat the mistake of bundling all the rules together again and giving the opponent such a big target. If you take them one-by-one you make it easier to mount your own court defense when they are challenged and you give the opponents less to gripe about.

I think it is worth pointing out that no matter what Chairman Martin does to even narrow the scope of the reform, any reform on the media ownership front proposed by the FCC will encounter significant hostility within some quarters of Congress. It remains to be seen how that plays out. I do not believe that Congress would necessarily have the votes to block a narrow action by the FCC. But sometimes that's not what is most important. As you know in the world of communications and media policy, sometimes you go about accomplishing other objectives by using leverage that you have in a different debate. And so the debate over media ownership, say, could be used as leverage in the debate over indecency policy, or a la carte. That's the way it works all too often in Washington. You hang the sword or threat of regulation or something else on one side in order to get something else accomplished on the other side.