Impending Cross-Ownership Ruling by Ken Pyle |
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| Next week’s impending ruling by the FCC could have the most significant impact on telecommunications, especially with regards to interactive television, since the 1996 deregulation act. The FCC will vote on whether to loosen restrictions on the maximum number and type of media outlets that a particular entity may own in local and national markets. Although this is a somewhat controversial issue and it is purported to be the most commented on issue in FCC history, it has not been front page news. The origination of these rules dates to thirties, when lawmakers feared monopolization of media in local markets. Over the years, the rules have been modified to reflect the introduction of new technologies and the proliferation of new media outlets, such as cable television systems. The rules limit ownership in three different categories:
Michael K. Powell, Chairman of the FCC, is leading the charge to change the rules. There are several arguments for changing the rules including that they are not justified by the law and that they don’t accurately reflect the multiple ways that media can be distributed with current or future technology. Opponents of next week’s rule changes include FCC commissioners Jonathan S. Adelstein and Michael J. Copps who have arguments with both the process for how the rules are being changed, as well as the actual rules. Jonathan Adelstein, in a May 21st broadcast on the Pacifica Radio Network, expressed concern that rule changes could lead to a “McDonaldization of all kinds of media.” Adelstein and Copps both expressed concern that the rules could effectively crush local outlets and would advance monopolization of the media. They see scant coverage of this issue by the major media and are concerned that this is evidence that the large media outlets will not report news items that are detrimental to their corporate interests. Their concern is that the proposed rule changes will lead to further media consolidation and more instants where “news” is not reported. On that same Pacifica Radio Program, Professsor Vu of Vanderbilt suggested that increased media cross-ownership at the local level can actually save local media. He gave an example of how local media can share news gathering resources such that both outlets become viable in a smaller market, whereas if they stood alone they would wither because the costs would be too great. This upcoming ruling presents an interesting philosophical and practical problem as to how to determine the proper level of government involvement in a private market. Throw in the fact that the FCC does have stewardship of the airwaves and this becomes a controversial issue. It is definitely of interest to independent telcos as they are seeing the impact of consolidation among programmers through programming tie-ins and increased costs. Regulating in a equitable manner is difficult, however, given the existing rules are quickly being passed over by technological advances [see Are those Mouse Ears or Rabbit Ears?]. So stay tuned for next week’s ruling. You can literally stay tuned by going to http://www.fcc.gov/realaudio. Copyright 2003 Viodi, LLC. All Rights Reserved |
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