This fall, with little fanfare, the Federal Communications Commission (FCC) has proceeded with plans to overhaul and possibly eliminate its remaining ownership regulations for media companies. These include regulations which currently prohibit one company from owning newspapers and TV stations, or TV stations and cable systems, in the same market; which restrict the number of TV stations one firm can own so that it cannot reach more than 35 percent of the nation’s population; and which restrict the percentage of the nation’s population that one cable TV company can reach to a similar level.
Michael Powell, the Republican FCC Chairman and the son of Secretary of State Colin Powell, ison record as favoring the elimination of all these regulations. So are the other Republicans who currently comprise the majority of the five-person commission. Thus, barring significant political opposition, a vast relaxation of ownership regulations is certain to ensue. The process should be completed early in 2002.
In every corner of the market, one analyst noted, the big will get bigger and broader, thereby changing the underlying economics. Considering that the last wave of media ownership deregulation under Bill Clinton spawned a massive round of industry consolidation, further developments along these same lines are profound in their implications. Already all of the major film studios, all of the TV networks, many of the cable TV systems, the vast majority of cable TV channels, most of the music companies, a great deal of book and magazine publishing, and much else, are controlled by the ten largest media conglomerates. Another 15 or 20 firms own practically all of the remainder.
Today most of these ten giant media conglomerates rank among the 200 largest firms in the world; several are in the top 50. Forty years ago only a couple might have ranked among the top 500. These firms barely existed in their present form as recently as 1985; they are the product of media deregulation.
And these firms are about to get bigger, a lot bigger. Following the proposed round of further deregulation, look for the largest newspaper chains (there are now five or six chains that dominate the industry) to link up with larger firms, and expect the giants to gobble up the remaining independently owned TV stations.
The media giants claim that deregulation will spur competition, lower prices, and improve service. If there were any truth to that proposition, these corporations and their lobbyists would not be pushing so hard for it. The truth is that deregulation simply permits these firms to get so much larger that they have less fear of direct competition, and more ability to hyper-commercialize their content to extract greater profit.
One look at radio broadcasting, which was significantly deregulated in the 1996 Telecommunications Act, demonstrates this process clearly. In the past few years a significant percentage of the country’s radio stations have been gobbled up by a handful of colossal firms, like Clear Channel and Viacom, that own hundreds of stations and up to eight in each of the cities where they operate. These radio behemoths use their market power to increase standardized fare, reduce the amount of (more costly) local programming, and ratchet up the amount of advertising and overall commercialism. Small stations cannot compete so they sell out, and listeners everywhere pay the price.
The media giants also claim that the emergence of the Internet renders concerns about media concentration moot. After all, they say, what does it matter if a few companies have massive empires when there are millions of web sites competing for our attention, and when the cost of launching a web site is so nominal?
The problem with this argument is that the market-driven Internet has so far not spawned a new generation of commercially viable media content providers. Capitalism trumps technology. It is now clear that if we want the Internet to provide a well-funded alternative to corporate media fare, explicit policies will be required to encourage that development.
There are some, even among those critical of the American media system, who believe that concerns about media concentration are overblown. After all, they say, media was not any better a generation or two ago when there was greater competition. Along these same lines, they argue that the current output of the romanticized small commercial media is often worse than that provided by the huge media conglomerates.
These comments are beside the point. It is true that market concentration is not the only factor that determines media content. Even the more competitive markets have flaws inherent in their being commercially driven. That is why we need to develop a significant range of independent, nonprofit and noncommercial media. And in some instances concentrated ownership is not even a particularly important factor in explaining media performance. But in nearly every instance where concentrated ownership has a clear effect, as in radio broadcasting, the effect is negative. Where there is doubt, there should be a very substantial bias toward multiplicity rather than concentration in media. It is a core liberal and democratic value.
Nor does media concentration affect merely media content. It also means that the largest firms become increasingly powerful in Washington DC, disproportionately influential with government officials. Insofar as our current media system is in reality far more the product of government policies than it is of some alleged free market, media concentration leads to exceptionally corrupt policy-making. Laws and regulations are made in the public’s name, but without the public’s informed consent.
Proponents of media ownership deregulation do make two valid points. First, the emergence of digital technologies, which undermine the distinctions between media, is making traditional regulations obsolete. Second, it is unfair that some media companies and industries cannot compete on equal terms with firms that have the good fortune of being in less regulated media sectors.
The solution to this problem is not to abandon media ownership regulations altogether, but rather to revise them in order to take into consideration the new technologies, and then to develop regulations that apply across all media and that serve the desired values. Such ownership regulations will in all likelihood not be generated in forums currently provided by the FCC, where high-roller lobbyists make their case before FCC members with virtually nonexistent public attention or debate.
Robert McChesney is a professor of Communication in the Institute of Communications Research at the University of Illinois, Urbana-Champaign, and a co-editor of Monthly Review.