After yesterday’s FCC meeting, it appears that Chairman Wheeler has a finely tuned microscope trained on broadcasters and a proportionately large blind spot for the cable television industry.
Yesterday’s FCC meeting was unabashedly pro-cable and anti-broadcaster. The agency decided to prohibit television broadcasters from engaging in the same industry behavior as cable, satellite, and telco television distributors and programmers. The resulting disparity in regulatory treatment highlights the inherent dangers in addressing regulatory reform piecemeal rather than comprehensively as contemplated by the #CommActUpdate. Congress should lead the FCC by example and adopt a “clean” approach to STELA reauthorization that avoids the agency’s regulatory mistakes.
The FCC meeting offered a study in the way policymakers pick winners and losers in the marketplace without acknowledging unfair regulatory treatment. It’s a three-step process.
- First, the policymaker obfuscates similarities among issues by referring to substantively similar economic activity across multiple industry segments using different terminology.
- Second, it artificially narrows the issues by limiting any regulatory inquiry to the disfavored industry segment only.
- Third, it adopts disparate regulations applicable to the disfavored industry segment only while claiming the unfair regulatory treatment benefits consumers.
The broadcast items adopted by the FCC yesterday hit all three points.
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A public policy collaborator and sparring partner wrote me just now, saying: “I don’t imagine you guys spend much time looking at media monopolies!”
Think about it.
Jesse Walker has a terrific feature story looking “Beyond the Fairness Doctrine” in this month’s issue of Reason magazine. I highly recommend it. It’s an in-depth exploration of what an Obama Administration means for the future of tech and media policy. Walker rightly opens the piece by noting that “The fairness doctrine is still dead, and it probably will stay dead even if Barack Obama becomes president.” The danger, however, is that an Obama FCC will still pursue a variety of onerous regulatory objectives that could do a great deal of damage to markets and free speech.
Walker touches upon the various issues that will likely be a priority for an Obama Administration and the Left-leaning media reformistas like Free Press, Media Access Project, Public Knowledge, and New America Foundation. Those policy issues include: net neutrality, “localism” mandates and increased “community oversight” regulations, media ownership rules, minority ownership requirements, increased merger meddling, spectrum policy, and other new “public interest” obligations.
Of course, as Walker also correctly points out, it is difficult to see how things could get much worse than they have been under Bush Administration’s FCC and the leadership of Chairman Kevin Martin. Walker was kind enough to quote my thoughts on this point: “Martin is the most regulatory Republican FCC Chairman in decades,” I told him. “He wants to control speech and will use whatever tools he has to get there.”
I stand by those words, but I am also aware that things could get worse — much worse — under a Democratic FCC influenced by radical Leftist activists like Free Press. Indeed, in our new book A Manifesto for Media Freedom, Brian Anderson and I inventory the many looming threats to media and technology freedom that exist today and show how most of them arise from the Left. As Walker notes in his article, however, it is unlikely that a re-empowered Democratic FCC would come right out of the gates with the same sort of command-and-control approaches they’ve employed in the past. And we’ll still have to worry about some right-of-center lawmakers and regulatory joining some of these misguided campaigns. “The real danger,” Walker concludes in his piece, “is more subtle and more mundane. It’s a bipartisan bureaucracy slowly, steadily increasing its power.” Make sure to read Jesse’s entire piece. Great stuff.
In a City Journal article earlier this year, I wondered “how long some local papers have left when they are barred from restructuring their businesses or partnering with other local media operators to stem the bleeding and reinvent their business models.” I was responding to the Senate’s smack-down of a half-hearted reform effort that FCC chairman Kevin Martin pushed through in November 2007, which proposed relaxing the FCC’s newspaper/broadcast cross-ownership rule. That rule, unrevised since going into effect in 1975, prohibits a newspaper operator from also owning a radio or television station in the same media market. However, waivers were granted to grandfather in some combined newspaper and broadcast operations that had existed long before the ban took effect. Martin’s proposal was to simply tweak the rule to permit similar combinations in just the nation’s 20 largest media markets.
Martin’s limited liberalization proposal, however, led to howls of disapproval from FCC democrats like Michael Copps and many folks on both side of the aisle in Congress. Supposedly, this was nothing more than a “giveaway” to the newspaper industry, which critics said was doing just fine. It really makes you wonder if any of those critics even both reading the news about newspapers today.
As I have documented here on many occasions, as well as in my big Media Metrics report, the newspaper industry is in huge trouble with every financial variable of importance rapidly heading south. Alan Mutter does a good job here of summarizing “the secular forces dragging down newspapers: Declining readership, shrinking advertising, high fixed costs and growing online competition that makes it increasingly difficult to charge the premium ad rates that were possible prior to the Internet.” As a result of these forces, everyday brings another headline like this one today in the New York Times: “The Star-Ledger of Newark Plans 40% Cut,” or this one in the Wall Street Journal: “Some Newspapers Shed Unprofitable Readers.” The numbers are just miserable, and they just get worse and worse.
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Of the titles I included in a mega-book review about Internet optimists and pessimists that I posted here a few months ago, I mentioned Lee Siegel’s new book, Against the Machine: Being Human in the Age of the Electronic Mob. It is certainly the dourest of the recent books that have adopted a pessimistic view of the impact the Internet is having on our culture, society, and economy. Because Siegel’s book is one of the most important technology policy books of 2008, however, I decided to give it a closer look here.
Siegel’s book essentially picks up where Andrew Keen’s leaves off in
Cult of the Amateur: How Today’s Internet is Killing our Culture (2007). I posted a two-part review of Keen’s book here last year [Part 1, Part 2], but here’s a quick taste of Keen’s take on things. He argues “the moral fabric of our society is being unraveled by Web 2.0” and that “our cultural standards and moral values are not all that are at stake. Gravest of all,” Keen continues, “the very traditional institutions that have helped to foster and create our news, our music, our literature, our television shows, and our movies are under assault as well.”
As I noted in my earlier “Net optimists vs. pessimists” essay, after reading
Cult of the Amateur, I didn’t think anyone else could ever be quite as over-the-top and Chicken Little-ish as Keen. But after working my way through Siegel’s Against the Machine, I realized I was wrong. It made Keen seem downright reasonable and cheery by comparison! Keen and Siegel seem to be in heated competition for the title “High Prophet of Internet Doom,” but Siegel is currently a nose ahead in that race.
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Back in the mid- and even late 1990s, I was engaged in a lot of dreadfully boring telecom policy debates in which the proponents of regulation flatly refused to accept the argument that the hegemony of wireline communications systems would ever be seriously challenged by wireless networks. Well, we all know how that story is playing out today. People are increasingly “cutting the cord” and opting to live a wireless-only existence. For example, this recent Nielsen Mobile study on wireless substitution reports that, although only 4.2% of homes were wireless-only at the end of 2003…
At the end of 2007, 16.4 percent of U.S. households had abandoned their landline phone for their wireless phone, but by the end of June 2008, just 6 months later, that number had increased to 17.1 percent. Overall, this percentage has grown by 3-4 percentage points per year, and the trend doesn’t seem to be slowing. In fact, a Q4 2007 study by Nielsen Mobile showed that an additional 5 percent of households indicated that they were “likely” to disconnect their landline service in the next 12 months, potentially increasing the overall percentage of wireless-only households to nearly 1 in 5 by year’s end.
And one wonders about how many homes are like mine — we just keep the landline for emergency purposes or to redirect phone spam to that number instead of giving out our mobile numbers. Beyond that, my wife and I are pretty much wireless-only people and I’m sure there’s a lot of others like us out there.
Anyway, I’ve been having a strange feeling of deva vu lately as I’ve been engaging in policy debates about the future of the video marketplace. Like those old telecom debates of the last decade, we are now witnessing a similar debate — and set of denials — playing out in the video arena. Many lawmakers and regulatory advocates (and even some industry folks) are acting as if the old ways of doing business are the only ways that still count. In reality, things are changing rapidly as video content continues to migrate online.
I was reminded of that again this weekend when I was reading Nick Wingfield’s brilliant piece in the
Wall Street Journal entitled “Turn On, Tune Out, Click Here.” It is must-reading for anyone following development in this field. As Wingfield notes:
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I’m pleased to announce the publication of A Manifesto for Media Freedom, which I co-authored with Brian C. Anderson of the Manhattan Institute. Brian serves as editor of Manhattan Institute’s excellent City Journal and he is the author of best-selling books like South Park Conservatives and Democratic Capitalism and Its Discontents.
In this little manifesto, we highlight one of the central ironies of the Information Age. Namely, that despite “the breathtaking abundance of new and old media outlets for obtaining news, information, and entertainment…”
many people hate this profusion, and never more than when it involves political speech. The current media market, they charge, doesn’t represent true diversity, or isn’t fair, or is subject to manipulation by a small and shrinking group of media barons. They want the government to regulate it into better shape, which just happens to be a shape that benefits them. Doing so… would be a disaster, a kind of soft or not-so-soft tyranny that would wipe out whole sectors of media, curtailing free speech and impoverishing our democracy.
In other words, instead of celebrating the unprecedented cornucopia of media choices at our collective disposal, many policymakers and media critics are calling for just as much media regulation as ever. We itemize these threats in our chapters and they include: efforts to revive the “Fairness Doctrine”, media ownership regulations, “localism” requirements, Net neutrality mandates, a la carte regulations, cable and satellite censorship, video game censorship, regulation of social networking sites, campaign finance-related speech restrictions, and so on.
In each case, we advance a pro-freedom paradigm to counter the advocates of media control. What do we mean by the “media freedom” that we advocate as the alternative to these new regulatory crusades? Here’s how we put it in the book:
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Terrific piece here from Ed Felten on how new technologies and cultural trends are undermining traditional conceptions of “media localism.” It’s a theme I have written on at length, most recently in this essay on “Our Continued Wishful Thinking about ‘Media Localism‘.” Anyway, as Felten correctly notes in the conclusion of his essay:
New technologies undermine the rationale for localist policies. It’s easier to get far-away content now — indeed the whole notion that content is bound to a place is fading away. With access to more content sources, there are more possible venues for local programming, making it less likely that local programming will be unavailable because of the whims or blind spots of a few station owners. It’s getting easier and cheaper to gather and distribute information, so more people have the means to produce local programming. In short, we’re looking at a future with more non-local programming and more local programming.
That’s exactly right. As Grant Eskelsen and I argue in Chapter 6 of our new Media Metrics book:
The decline of “localism” in media is a much-lamented but quite natural phenomenon as citizens gain access to news and entertainment sources of broader scale and scope. Although it is impossible to scientifically measure exactly how much “local” fare citizens demand—and defining the term is another challenge—we know that they still receive a wealth of information about developments in their communities. However, it is also evident that, left to their own devices, many citizens have voluntarily flocked to national (and even international) sources of news and entertainment. […]
[But] the demise of “localism” has been greatly exaggerated. The
relative decline in local media is simply a natural development resulting from the voluntary choices made by millions of American citizens, but the tools for producing, distributing, and acquiring local content are more robust than ever.
Faithful readers will recall that, several months ago, I penned a 7-part “Media Metrics” series that took a hard look at the health of the media marketplace. Today, the Progress & Freedom Foundation is releasing a greatly expanded version of these essays that I have put together with my PFF colleague Grant Eskelsen. In this 100-page special report, “Media Metrics: The True State of the Modern Media Marketplace,” we begin by noting that heated debates about the state of the media marketplace continue to rage in Washington, and opinions seem to range from grim to outright apocalyptic. As we note on pg. 1:
Many people—including a large number of legislators and regulators—argue that America’s media marketplace is in a miserable state. Some claim that citizens lack choice in media outlets and that options are just as scarce as ever. Others believe that media “localism” is dead or that many groups or niches go underserved because of a lack of true “diversity” in media. Others argue that the market is hopelessly over-concentrated in the hands of a few evil media barons who are hell-bent on force-feeding us corporate propaganda. And still others say that the quality of news and entertainment in our society has deteriorated because of a combination of all of the above. It all sounds quite troubling, but is any of it true?
After taking an objective look at the true state of America’s media marketplace, we conclude that such pessimism is unwarranted. Indeed, a careful review of the facts reveals that—contrary to what those media critics suggest—we have more media choice, more media competition, and more media diversity than ever before. Indeed, to the extent there was ever a “golden age” of media in America, we are living in it today. The media sky has never been brighter and it is getting brighter with each passing year.
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