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SEPTEMBER 22, 2003
By Catherine Yang Commentary: How Michael Powell Could Have the Last Laugh Federal Communications Commission Chairman Michael K. Powell looks like a man on the run. Since he passed sweeping rules in June enabling greater media consolidation, an angry public has ignited a fast-burning backlash against his deregulatory agenda. On Sept. 3, at the urging of public interest groups, the U.S. Court of Appeals in Philadelphia stayed the rules until it could finish reviewing them. The next day, the Senate Appropriations Committee voted to bar the FCC from implementing a new rule allowing TV networks to own stations covering up to 45% of the U.S. audience. And on Sept. 16, the full Senate followed suit. But while the opponents of media consolidation seem to be gaining ground fast, they shouldn't be too quick to declare victory. In fact, Capitol Hill's expected repudiation of the networks' 45% limit risks letting the steam out of the debate -- and leaving Powell's laissez-faire legacy intact. Until now, lawmakers and the anti-Big Media insurgents have focused on gutting this one rule. The 45% cap has become a rallying symbol, but the regulations that would truly reorder America's media landscape and affect local communities have flown under the radar. These would allow companies to snap up not only two to three local TV stations in a market but also a newspaper and up to eight radio stations. If the courts and Congress are worried about the dangers of media consolidation, they'll have to resist calling it a day after dispensing with the network cap and go after the rules with real bite. As it stands now, TV's Big Four networks will be losers among media outlets -- thanks mostly to vociferous lobbying by independent TV affiliates. With strong ties to lawmakers who depend on them for campaign coverage, the affiliates have succeeded in getting a House vote against the 45% rule and will likely see a rerun of that episode when the Senate votes by October. But with Fox (FOX ) and CBS (VIA ) already each owning stations that cover about 40% of the nation's audience, "going up another 5% isn't going to make a dramatic difference," says Scott A. Stawski, a media consultant at Inforte (INFT ) in Chicago. In contrast, opening the floodgates to allow local behemoths to combine newspapers, TV, and radio stations under one roof would change media ownership in towns and cities, concentrating it in the hands of a few. Even in midsize cities, such as San Antonio, for instance, one company might own the leading newspaper, two TV stations, eight radio stations, and several cable channels. Powell argues the explosion of cable networks and the Internet brings a wide choice of media to communities, even if there's a spate of mergers. And -- no surprise here -- most media companies agree. Yet there's little doubt that, once given the go-ahead, these rules would spur local consolidation. Owning a second or third station in a market is irresistible for TV station owners, which can slash expenses by a third by ditching duplicate cameramen, studio technicians, and reporters. The economics of newspaper-broadcast cross-ownership may be dicier, but publishers such as Tribune (TRB ) Co., Gannett (GCI ) and Media General (MEG ) want stations where they publish -- if for nothing more than to cut costs in back-office operations. True, the new media giants could conceivably plow their savings back into improving local news coverage. But public companies are more likely to use them to boost returns to shareholders. "If they can downsize the operational budget through having fewer people cover the news, they'll do it," says Jill Geisler, head of the leadership program at the Poynter Institute, which promotes journalism standards. But even asking whether TV duopolies and newspaper-TV combos can produce better news may be beside the point. "The test is how many different voices we have," says James F. Goodmon, CEO of Capitol Broadcasting Co., a Raleigh (N.C.)-based TV station group that is opposed to the FCC's rules. "What's good news to you is bad news to me. I'm really worried about someone deciding what good news is." The courts and Congress, too, should guard against a Powell doctrine that could end up muffling more voices than it adds.  Yang covers the FCC from Washington.
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