Posted by: jennajournalism | July 19, 2009

Mid Term Post – Media Ownership

With the popularity of mass retail stores like Walmart and Target, shoppers today can visit one location for all their needs: clothes, food, electronics, and home goods. The American media industry is heading down a similar path in which giant corporations own a variety of news mediums and programming outlets. This trend is due in part to the Federal Communications Commission’s decisions over the past decade to deregulate media ownership rules, allowing media moguls to own more and more other news enterprises in the same market, or coverage area.

The concept of deregulation in the media might seem consistent with and a necessary component of the nation’s unique and constitutionally protected free press. Absence of government oversight in news content, for example, is widely accepted by the courts and legislators as an important ideal of a free press. Federal decisions not to interfere with media ownership, however, remain hotly debated, as legislators and media advocacy groups fight to overturn the latest FCC deregulation policies, agreed to in 2007. With the loosening of media ownership regulation, the industry has absorbed consequences contrary to the commissioners’ intentions and the country’s democratic and entrepreneurial ideals. America’s most popular news source – television – has lost quality and diversity, competition among news enterprises has diminished, and the number of independent producers has declined, illustrating a need for some federal regulation of media ownership to maintain free speech and entrepreneurship.

To gain a better understanding of the current state of America’s media, it is important to understand the history of regulatory actions toward the media. From approximately 1900 to 1940, access to airwaves for radio and television production was a scare public good. Government regulation was necessary to ensure that the limited number of broadcast frequencies would represent a wide spectrum of interests. As some television and radio stations began to consolidate and networks, such as Columbia Broadcast System and National Broadcasting Company, evolved, the FCC sought to ensure diversity in the media by limiting the number of stations owned by any single organization and the size of the audience within range of any one organization. The early rules dating to the 1940s dealt individually with dual radio ownership and dual television ownership. By the 1970s, regulations restricted cross-ownership of radio stations and television stations, as well as newspaper and broadcasting mediums.

Within the last decade, however, the federal government has favored deregulation, citing advancement in technology multiplying available channels and the number of voices. The FCC found that the number of outlets had more than tripled between 1960 and 2000, according to Doris Graber’s Mass Media and American Politics. In 1995, the FCC eliminated financial interest and syndication rules, permitting major television networks to own production studios. In 1996, Congress passed the landmark Telecommunications Act, easing broadcast ownership restrictions and deregulating cable television. Media ownership rules were relaxed three more times by the FCC, though a federal court did request further review following the June 2003 passage of loosened broadcast ownership guidelines. Following the various deregulation policies, six major conglomerates, or corporations consisting of a number of subsidiary companies or divisions in a variety of industries, have emerged within the media. Examples include News Corporation, which owns FOX television network, The Wall Street Journal newspaper, and Twentieth Century Fox productions, and Time Warner Incorporated, which owns Time magazine, CNN, and Warner Brothers productions.

Despite new technologies multiplying available channels and the number of media voices – the most common themes proponents say warrant deregulation of media ownership – the same environment that once resulted in the establishment of media monopolies and stifled competition has been maximized by deregulation. As professor and media analyst David Croteau said during the February 2003 FCC broadcast ownership hearing, “The fundamental questions about new media technologies have remained the same, including: Who will own and control them? What purpose will they serve? Whose views and visions will be represented in the new medium?” Deregulation allows corporations to pounce on the environment of available media outlets with no fear of the law or regard for their audience as they seek to increase profits. Interestingly, the public seems to be against a media landscape where just a few companies own many different news outlets. Following the June 2003 FCC passage of loosened media ownership rules, the Pew Research Center for the People and the Press found that 40 percent of people who knew nothing about the issue had a negative impression of the ruling, 57 percent of those who had some knowledge were displeased, and 70 percent of people who said they knew a lot about the issue viewed it negatively compared to 6 percent who saw the ruling as positive.

Because the free press is the only “business explicitly protected in the U.S. Constitution,” professor Croteau argues that “we must be especially vigilant in protecting and preserving the public interest as it relates to this vitally important industry.” Free from government control under the era of deregulation, the media is now subject to private control. The “big brother” of deregulation has become the few individuals or corporations who manage a majority share of audience and new outlets. While turning over most authority of media ownership to the media enterprises themselves might appear to make the free press even more free, the latest deregulation policies have produced undemocratic consequences in our media industry that warrant consideration of restoring media ownership regulations. The negative impacts vary, but include under served entrepreneurial producers and newscasters, minimized competition, and lower quality and less diversified television production.

When discussing television production since deregulation, it is necessary to note the medium’s importance to the public. Of the five major mediums for delivering news, network television and cable television are the most popular among consumers, according to a 2008 survey by the Pew Research Center. The survey found that 52 percent of people said they regularly used local network television for news, 39 percent watched cable television, 37 percent accessed the Internet, 35 percent listened to the radio, and just 34 percent read newspapers regularly for news. As the nation’s most popular sources of news, network and cable television need competition and diversity, and it is incumbent upon the government to ensure those ideals for the deserving public. Without regulation, there are more media-mergers and fewer organizations controlling television. In 2004, for example, according to the Pew Project for Excellence in Journalism, the 10 biggest television companies owned 30 percent of all stations, reaching 85 percent of all U.S. households. Entrepreneurs are blocked out from showcasing their diverse offerings to America’s widest audience, and stations owned by the same corporation tend to produce parallel and comparable programming. A February 2003 report by the Pew Project found that television stations controlled by large group owners generally produced lower-quality newscasts than their smaller rivals, despite access to more money. When news production is just one part of a company’s repertoire (in 2004, television networks made up less than 30 percent of their corporate owners’ business), the necessary amount of time, staffing, and resources for producing high-quality news reports are not always devoted. Additionally, the news packages produced by television stations under a conglomerate tend to be very similar if not the same. The Pew analysis, one of the largest reviews ever conducted to analyze the relationship between the size of television station owners and the quality of news, was based on several hundred hours of newscasts on 172 stations nationwide.

FCC deregulation policies have promoted concentration of media ownership, thus undermining competition. While the expansion of cable and the rise of the Internet have produced more news outlets, these outlets, along with radio stations and newspapers, continue to be maintained and controlled by the same few and select companies. In 2003, network and cable television owners controlled 90 percent of the most popular cable channels, while the Internet’s most popular websites were mostly owned by the same media companies dominating other parts of the industry. A majority of cable subscribers, about 85 percent, were served in 2003 by just 10 cable operators, with 56 percent receiving cable from the top three providers, according to a consumer report cited in Issues in Media, a collection of articles from CQ Researcher. In 2008, the top 20 radio companies controlled more than a fifth of all stations nationwide, and Clear Channel Communications held a presence in 120 of the top 300 markets by owning 636 radio stations. In 2007, just 21 companies controlled 66 percent of daily newspaper circulation. Access to news production is now largely determined by an individual or a company’s financial and technical ability. Conglomerates overshadow entrepreneurial news producers, gain notoriety, and absorb most benefits of the business, such as the rights to exclusive stories and most of the advertising revenue. Apparently observing the lack of competition among cable television stations, the FCC attempted to reverse its deregulation push, adopting a rule banning any cable company from serving more than 30 percent of the nation’s cable subscribers. Cable providers, however, are fighting the vote. In deregulating cable, for example, the FCC has created a monster that depends on and even expects media-mergers. In another apparent move to foster competition and increase opportunities for minorities, the FCC in November 2007 reduced the rate cable companies charged independent programmers who were seeking to buy time on unused channels. The competition that deregulation proponents argued would increase following relaxed ownership policies has proven to be competition among the giants only.

The 1995 elimination of financial interest and syndication rules, specifically permitting television broadcasters to own production studios, has driven out independent producers. Contrary to diversity goals, the bulk of entertainment programming comes from within a conglomerate’s companies, not from independent producers. In fact, of the 40 new series airing on the four major broadcast networks in 2002, 77.5 percent were owned in whole or part by the same four networks, according to Jonathan Rintels, president and executive director of the Center for the Creative Community. Furthermore, in 2003, television networks owned nearly 80 percent of their prime-time programming, four times as much as they did when the financial interest and syndication rules were in place, discouraging the development of programming from multiple, independent producers. A common resort for independent producers has been to produce their programs on the Internet, where they receive considerably less coverage and profit.

Deregulation of media ownership has most negatively affected the nation’s capitalist ideals, including the entrepreneurial spirit, belief in competition, and commitment to diversity. While the media moguls have consumed barrels of profits, their widespread purchasing ability has stymied new entries in the communications industry. Today, there are actually fewer views and public interests broadcast over the increased media “airwaves.” The entrepreneur who has a different opinion or represents a minority deserves the chance to produce a television show, newscast, or movie of his or her own influences and would most benefit from reinstating regulatory policies of media ownership. Regulating media ownership is in the public’s interest because it adheres to democratic and capitalist ideals.

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