Fact Sheet

The Federal Communications Commission, Congress and the courts routinely examine media ownership rules. These debates set policies that govern traditional media, while establishing a regulatory framework that will dictate the future of the telecommunications and media industries.

 Contents:

• A Few Not-So-Hypothetical Scenarios
• FCC on Media Ownership
• Why the Rule Changes? Why Now?
• Congress on Telecom
• A Brief History of the Last Media Ownership Proceedings: 2002-2004
• Stakeholders in This Process
• What You Can Do About It
• Resources

A Few Not-So-Hypothetical Scenarios

Imagine that a single company owns a local daily paper, two local TV stations, the cable system, the alternative weekly, the primary portal for the internet, and up to eight radio stations in your town. That company is based on the other side of the country, and answers to its advertisers and stockholders. How are they accountable to the needs of your community?

A profitable commercial all-classical radio station in Philadelphia is bought and sold four times in the span of two years during a flurry of buyouts and mergers between media companies. Each time it is bought and sold, the price of the station zooms up, and the owners want to make their money back. In an attempt to raise its market share and increase ad revenue, the various station owners switch formats from classical music to modern adult contemporary, to urban oldies. Five years later, the format has changed two more times. What happened to the classical music fans?

In the past two years, some of the biggest US telecommunications companies have suggested that they want to charge content providing companies like Google and Yahoo a fee for delivering data into consumers’ homes via their DSL/cable lines. They imagine an internet that has “express lanes” that are only accessible to those companies and consumers that pay their toll. What would happen to website access for those small companies, innovators, nonprofits and citizens that couldn’t afford this toll?

FCC on Media Ownership

At the FCC, the media ownership proceedings made famous in 2003 have begun again, this time with a new chairman, Kevin Martin.

During this biennial media ownership rulemaking, the debate continues about whether to relax or eliminate longstanding rules preventing media consolidation at both the local and national levels regarding TV, radio, newspapers and cable.

Currently these rules:

• prevent one broadcast network from owning another broadcast network;
• limit the number of local broadcast stations that any one broadcaster can own to systems serving 35 percent of the TV-viewing households in the U.S.;
• prohibit a company from owning cable TV systems and TV stations in the same community, and
• prohibit ownership of newspapers and TV stations in the same community.

FMC is particularly concerned with any effort to further relax the limits on how many radio stations a company can own in a specific market. Elements of the broadcast industry have been pushing hard to raise the cap from 8 in the largest market to as many as 12.

Why the Rule Changes? Why Now?

The original rationale for these rules was to guarantee a multiplicity of voices and prevent concentrations of power. The argument for removing them now is that many of these rules are out of date and need to be reexamined in an environment where consumers have access to a multitude of information sources — newspapers, cable, TV, radio and the Internet. Coincidentally, big media companies argue that the rules are artificially constricting their ability to grow and serve their consumer base, and have thus damaged their capacity to compete in the free marketplace. The Internet poses a particular threat, they claim, as a new source of competition that has eaten into their advertising revenue and pulled away their customers.

Congress on Telecom

While the FCC debates the rules that govern media, Congress is examining the rules that govern high-speed internet services. Different industries have been offering competing services under wildly different sets of rules. But as phone, cable and broadcast companies continue to converge and offer similar services, it is necessary to establish a comprehensive set of policy goals via legislation.

The trick, however, is to ensure that any new legislation avoids the pitfalls of the 1996 Telecommunications Act. In other words, while acknowledging that legislation may be necessary, we must ensure that it reinforces basic principles like equal access for all citizens and competition in the marketplace.

Network neutrality is one of the key issues being debated. Under current law, cable companies that provide Internet service to the home have the legal authority to control what content is available on their pipeline. Phone companies are pushing for the same legal rights for their DSL and fiber services. But imagine a marketplace where the dominant broadband providers can control your access to particular music services or CD stores — with the determining factor being how much those companies would pay for the right to access consumers. This type of marketplace would be devastating for local, independent and niche genres of music that have so greatly benefited from the openness of the current Internet architecture. FMC strongly supports network neutrality and is working in coalition with other media reform groups to push for the preservation of unfettered internet access.

A Brief History of the Last Media Ownership Proceedings: 2002-2004

• Fall 2002: FCC Chairman Powell announces intention to wrap all separate media ownership proceedings (broadcast, cable, network, cross-ownership) into one “mega proceeding”
• Winter 2003: FCC holds official public hearing in Richmond, VA. Commissioners Copps and Adelstein begin series of “unofficial” hearings across the country.
• Spring 2003: Hundreds of organizations — from the NRA and Parents Television Council to Move On and National Organization for Women — and millions of citizens file comments in the media ownership proceedings, with 97% of citizen commenters opposed to further media deregulation.
• June 2, 2003: On a party-line, 3-2 vote, the FCC adopts a wide-ranging plan that facilitates additional consolidation of television ownership, eliminates critical newspaper-broadcast cross-ownership rules and relaxes other important restrictions. Only radio is taken off the table.
• Summer-Fall 2003: Senate expresses outrage over FCC plan and eventually votes 55-40 to veto the rulemaking, the first time the Senate has wholly rejected a FCC decision.
• June 2004: The Third Circuit Court of Appeals rejects FCC rulemaking, sending media ownership rules back to FCC.

Stakeholders in This Process

Media Companies: owners of radio stations, cable and telephone companies, internet providers, TV stations, and newspapers.

The Federal Communications Commission is the agency charged with being the public’s caretaker of the public spectrum, which includes radio, TV, satellites, cable, wi-fi, and telephones. They run the media ownership proceedings.

Each Congressional representative is responsible to the districts which elect them. In 2006 Congress revisits the 1996 Telecom Act.

Media Reform Movement: Artists, writers, consumer groups, labor unions, religious organizations and elected officials who are concerned that FCC and Congressional actions will forever change the way media is controlled in this country have filed comments, written letters and participated in unofficial FCC hearings all across the country.

The Public – this is you.

What Musicians Can Do

Decisions about the rules governing the use of the public spectrum have, for many years, rolled through Congress and the FCC without much public debate. But as technology has become more powerful and has transformed the way people communicate and learn and live, the landscape has changed dramatically. Over the past five years, there’s been an unprecedented amount of attention on media ownership issues.

The FCC and Congress want to hear from concerned citizens and musicians about the potential impact that the lifting of these rules might have on your livelihood, your access to news and information, and your community.

Get educated, and reach out. Submit a comment online at the FCC. Participate in a public hearing and tell your stories about how your life or business or art has been affected by the dramatic changes in media ownership. Send a letter to the editor of your local paper. Elected officials read their local papers, so constituents’ voices can send a powerful message to policymakers.

Resources

FMC’s comprehensive 2006 report False Premises, False Promises: A Quantitative History of Ownership Consolidation in the Radio Industry
FCC Media Ownership lists the current media ownership rules which are being revisited
Free Press
Media Access Project

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