“Updating” Media Ownership Rules — Is That Like Boiling a Frog?

It’s an old cliche that it’s easy to boil a frog. Don’t drop the frog in the boiling water — he’ll just climb out. Drop him in the pot and raise the temperature a little at a time. Before he knows it, he’ll be dead.

We have that with media consolidation and the non-stop relaxation of the rules. But instead of calling it “boiling,” proponents of consolidation call it “updating.” This attempt to describe relaxing the ownership rules to allow more consolidation as “updating,” when the evidence shows that the last round of consolidation kicked off by the 1996 deregulation has been a disaster for the industry and a disaster for democracy, came up again at yesterday’s media ownership hearings.

Powell tried to frame it as a debate about evidence v. “emotionalism.” He lost because the evidence did not justify his efforts to relax the rules. Now FCC Chairman Martin is trying to frame this as “updating” the rules, when a real “update” would mean forcing the biggest companies to sell off assets to scale back to a healthier size.

My analysis below . . .

Proper credit to Chairman Martin for holding the first public hearings in a neutral and transparent manner. Plenty of witnesses opposed to relaxing the ownership rules were on the schedule and in the crowd — although the media report that critics of allowing further consolidation dominated the standing room only crowd. Of note, Holywood’s writers, actors and independent producers were united in explaining that consolidation has eliminated opportunity for creative content and homogenized entertainment to utter blandness and innanity deemed acceptable by the few corporations that run things now.

My one modest complaint is with Martin’s opening statement. Martin characterized the 2004 Prometheus decision, the court case that reversed the last FCC attempt to relax ownership rules, as “upholding” the FCC’s decision to eliminate the Newspaper-Broadcast cross-ownership ban (the rule that prevents someone from owning a daily newspaper and a television station in the same market). Martin called this a recognition that the FCC must “update” the rules to reflect the modern media marketplace.

I would characterize what the court did a little differently. The Prometheus rejected the argument that the First Amendment requires a cross-ownership ban. Accordingly, the court explained, the FCC could, on a proper record, relax the newspaper cross-ownewrship ban. But the FCC had failed to justify its decision to relax cross-ownership in the 2003 Order, so the court reversed the FCC’s decision and remanded for another try.

My point is simply that nothing requires the FCC to change the cross-ownership rule. To the contrary, it can only relax the rule if the FCC finds that changing the rule affirmatively serves the public interest. Given the state of the media landscape these days, I’d say “updating” the rules means undoing the damage that deregulation has done.

Supporters of permitting further media consolidation often try to frame this as a debate about “updating” the rules, as if the only direction an “update” would include is in the direction of further media consolidation. After all, look at all these blogs blah blah blah, 100 cable channels, blah blah blah, podcasting, blah blah blah.

Meanwhile, a serious examination of just about every objective measure shows that media have gotten worse along every dimension since we kicked off a huge consolidation spree in 1996. According two unreleased FCC Reports, consolidation leads directly to a loss of local news and radio consolidation has had detrimental effects on the radio industry as a whole. Minority ownership and ownership by women of media outlets has dropped below previous pathetic levels to almost statisticly non-existent.

Another key thing to update is something called the UHF discount. Stations above channel 13, the Ultra-High Frequency (UHF) stations count as only half a station for purposes of the national ownership limit. Why? Because in the mid-1980s, when we went from a numeric limit (no more than 7 stations) to an audience limit (can reach no more than 25%), UHF stations had lower power and had much smaller audience share compared to the VHF (mostly network affiliated) stations.

That’s just not true today. Most folks get their TV through cable or satellite, so the actual coverage is pretty irrelevant. UHF stations have gotten network affiliations, have gotten significant power/coverage bosts as part of the digital transition, and generally are close in value to VHF stations. But under the discount, they still only count as half a station. This loophole has allowed folks like Sinclair to own many more stations than they otherwise would be allowed to own.

So certainly we should “update” the media ownership rules. Just don’t confuse “update” with “relax.” The Prometheus court addressed this question head on in 2004 and concluded that the FCC should take whatever action it found served the public interest — tighten the rules, loosen them, or leave them alone.

Hopefuly, Chairman Martin will come to the same conclusion. An “update” means setting limits that make sense today. And the evidence is pretty clear that the current rules don’t need to be relaxed to be “updated.”

Stay tuned . . . .