Keeping politicians' hands off the Net & everything else related to technology
Did you know that you have only 412 days left of analog-TV viewing pleasure?
Yes, it’s true (unless lawmakers change their minds in response to lobbying from, e.g., circa-1968-Zenith-owning grandmothers from the Heartland flown in by the NAB). In 412 days, your old analog set will pick up nothing but soothing, gentle static (let’s hear it for user-generated content).
For some, this may be a relief–it will be, after all, locally-produced static.
In my 2004 book, Media Myths: Making Sense of the Debate over Media Ownership, I pointed out that mergers and acquisitions represent just one of many strategies media companies utilize to respond to consumer demand and new market challenges. Other strategies include spin-offs and line-of-business divestitures on the one hand, and new technological investments or expanded product or service offerings on the other.
But those other strategies never seem to attract the same amount of attention as mergers and acquisitions even though they are far more common. In fact, as media guru Ben Compaine correctly observes, “Break-ups and divestitures do not generally get front-page treatment.” Such stories usually get buried in papers and magazines, or get a small mention at the bottom a news website, if at all.
That’s why I started this series of “media DE-consolidation series” of essays a few years ago. I wanted to highlight the other side of the story and show how the media marketplace is far more dynamic than critics care to admit. In fact, as FCC Commissioner Robert McDowell noted recently in an excellent speech on the true state of the media market, “Traditional media’s numbers are shrinking,” and “The ironic truth is: in many cases, media consolidation has actually become media divestiture. Companies such as Disney, Citadel, Clear Channel and Belo actually have been shedding properties to raise capital for new ventures.”
That’s exactly right, and the many other entries in this series prove that point. We’re in the midst of a massive wave of media divestitures and downsizing. And today we have another example with News Corp’s announcement that it will be shedding 8 of its Fox-affiliated TV stations in mid-sized markets.
The FCC voted today to allow a single entity to own a newspaper as well as a broadcast TV or radio station in the same market under certain conditions, and some people seem truly alarmed.
Democratic FCC commissioner Jonathan Adelstein worried that the FCC “has never attempted such a brazen act of defiance against Congress. Like the Titanic, we are steaming at full speed despite repeated warnings of danger ahead. It might yet sink. We should have slowed down rather than put everything at risk,” according to Broadcasting & Cable.
Many people were similarly horrified in 1987 when the FCC repealed the Fairness Doctrine, which required broadcasters to air contrasting viewpoints on “vitally important controversial issues of interest in the community.”
Former FCC chairman Dennis Patrick recalled the bitter controversy, questionable motives and a demonstrably successful outcome resulting from the repeal during a wonderful lecture this past summer at an event sponsored by the George Mason University School of Law.
Patrick recalled how the FCC tried to duck the issue for years because it was so controversial, but the courts forced it to do something. What he and his fellow commissioners wanted (or thought they needed) to do wasn’t popular on Capitol Hill.
The Federal Communications commission on Tuesday eased restrictions on the ability of newspaper companies to own television and radio stations in the same market, by a 3-2 vote.
After the vote becomes effective, newspapers would be allowed to own stations within the 20 largest broadcast markets. Mergers of newspapers and broadcast stations would still be allowed in smaller markets, although subject to some regulatory constraints.
Since the so called “cross-broadcast” ownership rule was put in place in 1975, newspapers have been barred from owning a radio or television stations unless such combinations existed prior to the rule’s application, or subsequently received a waiver of the rules.
The vote to ease the newspaper ownership restrictions split the commission on party lines, with the Republicans voting for the measure, and the two Democrats offering stinging dissents. The action, and the comments by the commissioners, was a sign of the politically controversial nature of media ownership in recent years.
Matt Lasar has put together a very entertaining article illustrating how “Faux Celebrity FCC Filings [are] on the Rise.” What he’s referring to is the fact that just about anyone can file comments with the FCC, even fake celebrities or dead historical figures.
The whole process has become a complete joke. Some of my research on the FCC’s indecency complaint process has illustrated how one group–the Parents Television Council (PTC)–has essentially been able to stuff the complaint ballot box at the FCC by filing endless strings of computer-generated complaints from its website. The PTC then fires off letters to the FCC and Congress that essentially say, “Look! Millions of Americans out outraged by the content on TV and are clamoring for regulation!” In turn, that nonsense gets included in the congressional record when legislation is introduced, and politicians claim “the American people have spoken” and are overwhelming in favor of regulation.
It’s all nonsense, of course, because the vast majority of those “complaints” were just the same PTC form letter. But the same games are at work in the debates over media ownership policy and Net neutrality regulation. Jerry Brito and Jerry Ellig have shown that, in the FCC’s Net neutrality proceeding, “Close to 10,000 comments were submitted to the FCC, yet all but 143 were what the FCC calls “brief text comments,” many of which were form letters generated at the behest of advocacy groups.” The same thing is at work in the media ownership debate. A couple of radical anti-media activist groups stuff the ballot box with computer-generated complaints. And the Washington Post recently ran a piece raising questions about how the public filing process is potentially being abused in the XM-Sirius merger fight.
But Matt Laser documents how truly absurd this process has become when the likes of Paris Hilton, Donald Trump, Joseph Stalin, and even Jesus Christ end up submitting “comments” for the “public record.” Here’s some of the highlights from Lasar’s writeup:
The big news this week in communications policy circles was the hullabaloo at the FCC over cable regulation. FCC Chairman Kevin Martin suffered a major setback in his attempt expand regulation of the video marketplace when he failed to get the votes he needed to impose new mandates on cable TV operators. Specifically, Chairman Martin was seeking to breath new life into an arcane provision of a 1984 law–the so-called “70/70” rule–that would have given him much greater regulatory authority over the day-to-day dealings of the cable market.
But the war certainly isn’t over. The day after losing that skirmish, Chairman Martin made it clear he would be pursuing other forms of regulation for the cable sector, including an arbitrary 30% ownership cap on the reach of any cable operator. And the Chairman’s crusade for a la carte mandates on cable will no doubt continue since it has been on his regulatory wish list for some time now, and many other groups support his efforts.
These cable TV regulatory proposals have always been fueled by the same two arguments: (1) cable TV operators have a stranglehold on market entry by new video providers and, (2) because of that, media diversity has suffered. For example, the New York Times editorial board opined this week that: “Twenty-five years ago, cable carriers promised to provide consumers with a wealth of new programming options. Today, the carriers and their packages of unwanted channels are obstacles to choice.” This is the same logic that animates Chairman Martin’s crusade against cable and the efforts of his pro-regulatory allies, most of whom are radical Leftist media critics.
But that logic is dead wrong.
As I mentioned yesterday, James Gattuso and I penned an editorial for National Review this week about the growth of FCC regulation and spending in recent years. In the op-ed, we also noted that, “For whatever reason, a disproportionate number of these [new regulatory proposals] have been aimed at cable television, so much so that press and industry analysts now speak of Chairman Martin’s ongoing ‘war on cable.'”
Today, the editors at National Review have chimed in with an editorial of their own on the issue entitled, “Pulling the Cable on Martin’s Crusade.” Specifically, the editors address what most pundits believe really motivates the Chairman’s crusade against cable: His desire to force cable companies to offer consumers channels on “a la carte” basis in an effort to “clean up” cable TV. “Martin should abandon this particular crusade,” the NR editors argue. “While we are sympathetic to parents’ desire to get the channels they want without having to buy access to racier fare, using economic regulation to restructure an industry is the wrong approach.” They continue:
This is just a quick follow-up to the post I made earlier in which I mentioned the new editorial James Gattuso and I penned for National Review about the growth of FCC regulation and spending in recent years. A few people asked me where we got the numbers we used in the piece regarding the growth of the FCC’s budget over time. Here are the relevant numbers and a graph charting that growth. The numbers can all be found in the the FCC’s annual budget reports.
Next time some pro-regulatory advocate says that the agency is engaged in “radical deregulation” or something absurd like that, show them these numbers. There’s still a whole lotta regulatin’ going on over there!
This week in National Review Online, Cesar Conda and Lawrence Spivak ran an editorial entitled “Kevin Martin’s Pro-Market FCC,” arguing that the current FCC has generally been deregulatory and free market-oriented. Today, James Gattuso and I have set the record straight regarding just how off-the-rails this current FCC has really gone…
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November 29, 2007
TV Train Wreck
Martin, markets, and the potential for regulatory disaster.
By James Gattuso & Adam Thierer
Like cops shooing away onlookers at the scene of an accident, Cesar Conda and Lawrence Spivak argue (“Kevin Martin’s Pro-Market FCC”) that there’s no reason for conservatives to be concerned about the Federal Communications Commission (FCC). Under Chairman Kevin Martin, they say, the FCC has been “characterized by a consistent pro-entry/pro-consumer welfare mandate, the very hallmark of economic conservatism.”
In other words: “Just move along. Nothing to see here.”
Despite Conda and Spivak’s exhortations, however, there is much for the curious crowd to see in the train wreck that is the FCC. The most recent derailment began earlier this month, when Martin leaked plans to invoke an obscure provision of the Communications Act, and to assert nearly unlimited powers to regulate cable television if more than 70 percent of households subscribe to cable.
I want join James Gattuso in recommending that you read FCC Commissioner Robert McDowell’s outstanding speech on media policy issues that he delivered at a Media Institute event yesterday. I just want to highlight two of the myths he debunked in his speech, (myths which I had discussed in my 2005 book Media Myths: Making Sense of the Debate over Media Ownership):
Myth #1: The public has not been given a chance to be heard. As McDowell points out, no issue has been more thoroughly studied in the history of the FCC:
In my 17 years of being in and around the FCC, I can’t think of any issue that has been examined more thoroughly. I can’t remember any proceeding where the Commission has solicited as much comment and given the American people as much opportunity to be heard. If anyone knows of an FCC proceeding where there has been more opportunity for debate over an 11-year period, please let me know.
That’s exactly right, but the anti-media zealots like to propagate the myth that the public has somehow been frozen out of the process, or that important constituencies have not been heard from during these debates. It’s nonsense.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
