I recently finished reading Daniel M. Kimmel entertaining new history of the rise of the Fox television network entitled The Fourth Network: How Fox Broke the Rules and Reinvented Television. While many younger Americans can’t remember a time when multiple networks and cable channels were not at their disposal, for most of television’s history, citizens had only three primary commercial options from which to choose. After inept regulatory policies caused the demise of the DuMont Television Network in the 1950s, no one thought a fourth network was feasible in America. Perhaps that explains why it took a non-American to think outside the box and roll the dice on the launch of a new network in the U.S.
In the mid-1980s, Australian media entrepreneur Rupert Murdoch launched the Fox Television Network, mostly to howls of laughter as Kimmel points out. But Fox and Murdoch would have the last laugh as the network became a force to be reckoned with in less than a decade. If the FCC had strictly enforced its media ownership rules against Fox and Murdoch, however, it might have never been so. At the time, Fox and Murdoch faced even more restrictive media ownership rules than they do today, including tighter caps on the number of TV stations a network could own, regulations governing their financial interest in independent or syndicated programming (the “Fin-Syn” rules), and also foreign ownership regulations limiting a foreigner’s ownership stake in an American media company.
Luckily, Fox and Murdoch were able to get waivers or favorable rule changes that enabled them to get the new network up and running. For example, media guru Ben Compaine points out that the Fox network made its debut in 1986, “not coincidentally the same year that the FCC increased the number of stations a single entity could own from seven to 12. This change gave News Corp. the leverage to use a core of stations it owned to launch a network. The FCC also granted a waiver from rules that prohibited the older networks from owning their programming. News Corp. had previously bought 20th Century Fox and its television production unit, providing the company a base from which to make the costly start-up of a national network more feasible. Fox showed the way for similar ventures by station-owning and content-controlling media companies to start the WB and UPN. New, competitive networks had long been the holy grail of those who criticized television programming as dull and uninventive; they were created by deregulation and market forces, which many critics (then and now) view as the enemy.”
Thus, the relaxation of media ownership regulations were essential in getting Fox off the ground. Getting around the ownership restraints helped Fox acquire a core number of seed stations to help increase the new network’s visibility in markets across America and ensure a steady stream of advertising support. Kimmel points out that Murdoch was also able to evade newspaper-broadcast cross-ownership rules and got around foreign ownership concerns by eventually becoming an American citizen.
Today, the Fox Television network carries major sporting events–including the World Series and the Super Bowl–and produces some of television’s top-rated dramas and reality shows. Most of its affiliates also offer nightly local news casts an hour earlier that the “Big 3,” an innovation Fox brought to television. These innovations and added diversity would not have been possible if the FCC would have strictly enforced its media ownership regulations. Only by loosening the controls was this new competition to the Big 3 possible. Deregulation, in other words, increased diversity.
Media critics might argue that even if ownership regulations don’t help boost diversity, at least they won’t discourage it. But the story of how Rupert Murdoch created Fox Television and brought a fourth television network to America illustrates how ownership rules can actually discourage greater media diversity. If you don’t believe me, read Kimmel’s Fourth Network for all the details. If nothing else, just read it to find our what an ass Barry Diller really is and how much everyone at Fox hated him. Entertaining stuff.