There’s an inherent paradox in the Federal Communications Commission’s (FCC) media ownership regulations and the new Notice of Inquiry that the agency has just launched looking into those rules. Like everything else the FCC has been doing lately, this NOI poses hundreds of questions about the topic at hand. In this case, the agency is interested in knowing what the impact of its byzantine regulatory regime for media ownership has been. Complicating matters even more is that fact that the FCC wants people to provide detailed answers about the impact of these rules on amorphous values like “diversity” and “localism.” So, the agency asks, what has been the impact of the local TV ownership rule, the local radio ownership rule, the newspaper/broadcast cross-ownership rule, the radio/TV cross-ownership rule, the dual network rule, and so on, on the marketplace, competition, diversity, localism, etc.
But therein lies the fundamental paradox of the FCC’s inquiry and the media ownership regulations in general:
So long as the rules are preemptive and prophylactic in character, we will never get clear answers to the questions the agency poses. By definition, the agency’s media ownership rules make experimentation with new business models illegal. It is per se criminal to enter into combinations that the agency has presumptively divined to be counter to “the public interest,” whatever that means. Thus, we can never get definitive answers to the questions the agency poses when “the marketplace” isn’t a truly free marketplace at all. It is a regulatory construct artificially constrained in countless ways.
So, what’s the answer here? In a word: Antitrust. While I’m no fan of over-zealous antitrust regulation, it has one huge advantage over the media ownership regime that the FCC enforces: It doesn’t preemptively seek to determine supposedly sensible market structures or ownership patterns. The threat of antitrust intervention can be a very dangerous thing, and wrecking-ball style antitrust interventions are rarely sensible, but at least the DOJ and FTC aren’t turning the regulatory dials on a massive media marketplace industrial policy the way the Federal Communications Commission does with its media ownership regulations. Continue reading →
“We’re from government and we’re here to help save journalism.”
That seems to be the hot new meme in media policy circles these days. Last week, it was the Federal Communications Commission (FCC) kicking off their “Future of Media” effort with a workshop on “Serving the Public Interest in the Digital Era.” This week, it’s the Federal Trade Commission’s (FTC) turn as they host the second in their series of workshops on How Will Journalism Survive the Internet Age? Meanwhile, the Senate has already held hearings about “the future of journalism,” and Senator Benjamin L. Cardin (D-MD) recently introduced the “Newspaper Revitalization Act,” which would allow newspapers to become nonprofit organizations in an effort to help them stay afloat.
I have no doubt that many of the public policymakers behind these efforts have the best of intentions and really are concerned about what many believe to be a crisis in the field of journalism. But here are my three primary concerns with Washington’s sudden interest in “saving journalism”: Continue reading →
I’ve just released a new PFF white paper looking at the hysteria that has often accompanied major media mergers and then taking a look at the marketplace reality years after the fact. Here‘s the PDF, but I have also pasted the entire thing down below.
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A Brief History of Media Merger Hysteria:
From AOL-Time Warner to Comcast-NBC
by Adam Thierer
Although the pending union of Comcast and NBC Universal has not yet made it to the altar, Chicken Little-esque wails about the marriage have already begun in earnest. For example, the pro-regulatory media organization Free Press has already set up a website to complain about the deal.[1] And Jeff Chester, executive director of the Center for Digital Democracy, has called it “an unholy marriage.”[2] The fever only promises to spread once the deal is formally announced, and a lengthy fight over the deal is expected at the Federal Communications Commission (FCC) and whichever antitrust agency reviews the deal.[3]
But reality tends to play out somewhat less dramatically than the script penned by the media worrywarts. It’s worth looking back at some of the more prominent examples of media merger hysteria in recent years to understand why such panic is unwarranted, and why a deal between Comcast and NBC Universal is unlikely to lead to the sort of problems that the pessimists suggest.[4] Continue reading →
For some time now here at the TLF, we have been documenting the track record of various government-owned or subsidized utility projects — municipal wi-fi projects, locally-owned telecom ventures, city or state fiber projects, and so on. We’ve attempted to see if the rhetoric matches the reality when it comes to the grandiose promises made about government investment or ownership of communications or broadband networks being our ticket to high-tech paradise.
The results? Well, the record speaks for itself. It’s been one miserable failure after another. And yet the high-tech pork barrel rolls on and taxpayers are all too often stuck picking up the tab.
I just wanted to make everyone aware of the fact that I finally got around to collecting most of our essays on the subject here into an “Ongoing Series” page that will be permanently housed here. (As far as I can tell, we’re up to about 18 or 19 installments). I encourage my TLF contributors to help me contribute entries to the series and I also invite our readers to continue to submit examples of these experiments so we can continue to document their failure. Of course, if there are success stories, we’d like to hear about those too. But that will likely be a much shorter series!
On this episode “Tech Policy Weekly,” Technology Liberation Front contributors Ryan Radia and Berin Szoka join me for a discussion of the flare-up over Facebook’s recent changes to the data retention provisions of its Terms of Use agreement and whether there are any serious privacy issues in play here—or if this is all much ado about nothing. [Ryan blogged about it here, and I did here.]
Earlier this month, Facebook announced changes to the way it handled or retained user data on its site after a user quits Facebook, raising questions about who actually owns that data and whether any privacy issues were raised by the company’s new policy. Following some intense scrutiny in the blogosphere, Facebook decided this week to revert to their old terms of service until they figured out a new approach to data management and ownership.
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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.
Continue reading →
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