FCC Opens Way for Media Conglomerates

The Federal Communications Commission voted Tuesday to allow companies that own television stations in the country's 20 largest markets also to own newspapers. The vote to overturn a 32-year-ban on such multi-media ownership saw the FCC's three Republicans in favor and two Democrats vehemently opposed.

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BILL WOLFF, host:

The Federal Communications Commission has voted to relax the rules on media consolidation. It has overturned a ban which prevented companies that owned a television station in the country's 20 largest markets from also owning a newspaper. It's a 32-year-old ban overturned yesterday. The vote was 3 to 2 down party lines, with Republicans in favor and Democrats vehemently opposed.

Here to tell us what it all means is the great David Folkenflik. He reports on media for NPR.

Hi, David.

DAVID FOLKENFLIK: Good morning, William. How are you?

WOLFF: I have never been better, to be talking to you on this morning.

Tell me what this means. So…

FOLKENFLIK: I mean, I think what this means is that the FCC is giving the green light for the big to get bigger. If you look over recent decades in the media, as in many other industries, whether if you think about the oil or film or whatever, there's been an extraordinary range of consolidation. And this is a measured relaxation in the sense that there are a lot of restrictions and stipulations it, at least at first blush, appears to be limited to the top 20 markets in the country. You know, cross-ownership is this thing where you can't own the newspaper and a television station in the same town.

Well, you know, actually, in a lot of markets, that's already the case. This was passed 32 years ago, this ban. And so a lot of companies were grandfathered in. A lot of companies were given waivers, particularly if you think of the Tribune Company, when it bought the L.A. Times' parent company and got a bunch of really high-level newspapers, the Hartford Courant, Newsday, the Baltimore Sun, which is my old paper, the L.A. Times. Suddenly it owned, and very intentionally, it owned newspapers and television stations in the same town.

WOLFF: And the danger there, David, is essentially that the newspaper will then not report fairly on the television station and the vice versa, is that the fear?

FOLKENFLIK: Well, actually, funny - you should raise that. I was in that precise position when I was at the Baltimore Sun, which had just been purchased by Tribune, and suddenly we were in a partnership with Channel 2 in town. It was not actually owned by Tribune, although there was some discussion that that might possibly play out in the future, and people, you know, were instantly accusing me of it. I, you know, responded by breaking the news of the partnership and then making fun of the ownership of the newspaper - of the television station.

WOLFF: Atta boy.

FOLKENFLIK: But actually that's not it. The real question is whether there's diversity of voices in any given market. The FCC regulates broadcasting, and not newspapers. But the cross-ownership band is the notion of in any market, you know, are citizens being served by there being enough of an array of distinct voices journalistically, that if there's one way or approach or point of view from a media outlet, are there others to counter it? That is, you know, the old-fashioned marketplace of ideas.

This is saying some consolidation is necessary. Chairman Martin says it's important to consider the financial fortunes of newspapers because they've really been struggling. You know, the burst of Internet, where you have, essentially, a free of channel distributions, even of their information, they don't know quite how to charge it and still make money, and they don't know how to give it away free and get the same money from - in revenues from advertisers online. You think they really need this to be able to couple with TV stations, get more revenues, maybe save money in the backroom and keep newspapers vibrant. You know…

WOLFF: Well…

FOLKENFLIK: …it is a solution, by the way, that satisfies almost no one.

WOLFF: Well, I was going to ask, do newspapers fall under the aegis of the FCC? I thought…

FOLKENFLIK: Newspapers don't. But because of this rule that was created by their law that was created by Congress in 1975, I guess it was, about limiting the ability of companies to own both the newspapers and TV stations, you know, it got a foot in the door for regulation of what newspaper companies are allowed to own. That is, you know, it does very much does regulate what kind of broadcast outlets, companies that own newspapers in town can own.

So although it's not a direct part of the FCC's mandate to do this, to think about the vibrancy of newspapers, it, you know, the chairman can legitimately say, hey. I'm the guy in charge with looking out for the vibrancy of the media for Americans, and newspapers were part of my charge.

WOLFF: Well…

FOLKENFLIK: In this case, he's saying the top 20 markets, where there are eight voices when you combine primary newspapers and television stations, we mail out one of the smaller stations to be owned by the same company as the newspaper. To be honest, the newspaper companies say that doesn't go nearly far enough.

WOLFF: Huh.

FOLKENFLIK: They want to go in one of the markets, and they don't want the size of the stations to be regulated.

WOLFF: Well, not to be Ron Paul about it, but here are the Republicans, it seems, the White House and the Republicans on the FCC, seeming to prop up the newspaper business. I mean, that's their stated purpose, to help the newspaper business survive. Since when is the Republican side of the politics interested in intervening in commerce? I thought they were the laissez-faire party. It doesn't make sense to me.

FOLKENFLIK: Well, you know, I mean, it all depends on what your definition of a newspaper company is. This is not really so much for the pure newspaper company like the Washington Post company or the - well, it actually has, you know, a significant side business in education services - or, you know, something like McClatchy, which is essentially a pure newspaper company. This will really help in the short term, anyway, companies like the Tribune Company and News Corps.

WOLFF: Right.

FOLKENFLIK: The Murdoch's, you know, media conglomerate.

WOLFF: Right.

FOLKENFLIK: That, you know, has just purchased Dow Jones, and therefore will own New York Post and the Wall Street Journal and two major stations here in the nation's largest city, in New York. This basically is saying that's not going to be a problem.

There are a lot of smaller markets in which these companies operate, too. You know, Hartford in Connecticut is not in the top 20 markets, but if I'm remembering correctly, Tribune at the moment owns the Daily newspaper, the Weekly newspaper and two television stations there. You know, that's the kind of market where they're going to need some help to be able to hold on to that. They've been given a waiver, but, you know, long term, they want the ability to do that.

WOLFF: What?

FOLKENFLIK: You know…

WOLFF: Yes?

FOLKENFLIK: The funny thing is is that you - I haven't seen a lot of evidence supporting the fact that newspapers thrive more as a result of owning TV stations in town.

WOLFF: Well, you're going to have to keep track of it for us and come back and tell us more about it. I found this being an incredibly interesting story.

And thank you, David Folkenflik, the great NPR media reporter, for your insights this morning.

FOLKENFLIK: Always good to join you.

WOLFF: All right, man.

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