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MAY 26, 2003
Beware Media Consolidation The Federal Communications Commission is about to vote on new ownership rules that would further the consolidation of America's media, putting more outlets in the hands of a few conglomerates. The agency is responding to federal court decisions telling it to examine existing ownership limits in light of the rise of the Internet, hundreds of new cable channels, and satellite TV. The FCC has concluded that these new technologies now provide more media outlets for the public and that increased media conglomeration would not harm the public's need to be informed. We beg to differ. Despite all the innovations of recent years, the vast majority of Americans do not get their news from cable channel 132 or news.bbc on the Web. During its review of media rules, the FCC found that 56% of those it surveyed in September, 2002, relied primarily on TV for their news and information, 23% on newspapers, 10% on radio, 7% for cable, and even less on the Internet. More consolidation of the media is likely to lead to less access to diverse sources of information. Many news outlets already recycle news from network broadcasts and newspapers. In radio, the lifting of ownership caps has clearly cut the diversity of music played. Broadcast networks and the conglomerates that own them say nothing less than free TV is at stake in the FCC's decision. They argue that cable is drawing away their audiences and cutting into revenues. Buying more TV and radio stations and newspapers would pump up profits and save free TV. It doesn't wash. The networks still retain the largest share of total national audience despite competition, and their rising advertising rates and profitability attest to that. The networks are also sitting on billions of dollars' worth of unused spectrum handed to them free by Congress. Wireless and Wi-Fi companies would pay dearly for it. The courts were right in asking the FCC to reexamine its rules in light of technological change. But the FCC is seriously miscalculating the effect of new technologies. In the Senate, Ted Stevens (R-Alaska) is joining Ernest F. Hollings (D-S.C.) in introducing a bill to maintain the current FCC rule that no single conglomerate can own TV stations that have more than 35% of the nation's TV audience. A similar bipartisan bill has been introduced in the House. The FCC should listen to the voice of the people.  Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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